EXHIBIT 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") dated as of April
6, 2004 is made and entered into by and between Synergy Pharmaceuticals Inc., a
company incorporated under the laws of the state of Delaware (the "Company"),
and Xxxxxx Xxxxxxxxxx, Ph.D., an individual (the "Executive").
WITNESSETH:
The Company desires to employ the Executive, and the Executive wishes
to accept such employment with the Company, upon the terms and conditions set
forth in this Agreement.
In consideration of the mutual promises and agreements set forth herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
1. Employment. The Company hereby agrees to employ Executive, and
Executive hereby accepts such employment and agrees to perform Executive's
duties and responsibilities in accordance with the terms and conditions
hereinafter set forth.
1.1 Duties and Responsibilities. Executive shall serve as
Senior Vice President, Drug Discovery. During the Employment Term (as defined
below), Executive shall perform all duties and accept all responsibilities
incident to such position and other appropriate duties as may be assigned to
Executive by the Chief Executive Officer of Callisto Pharmaceuticals, Inc. (the
"Parent") from time to time. The Company and/or Parent shall retain full
direction and control of the manner, means and methods by which Executive
performs the services for which he is employed hereunder and of the place or
places at which such services shall be rendered.
1.2 Employment Term. The term of Executive's employment under
this Agreement shall commence as of April 6, 2004 (the "Effective Date") and
shall continue for 12 months, unless earlier terminated in accordance with
Section 4 hereof. The term of Executive's employment shall be automatically
renewed for successive one (1) year periods until the Executive or the Company
delivers to the other party a written notice of their intent not to renew the
"Employment Term," such written notice to be delivered at least sixty (60) days
prior to the expiration of the then-effective "Employment Term" as that term is
defined below. The period commencing as of the Effective Date and ending 12
months thereafter or such later date to which the term of Executive's employment
under the Agreement shall have been extended by mutual written agreement is
referred to herein as the "Employment Term."
1.3 Extent of Service. During the Employment Term, Executive
agrees to use Executive's best efforts to carry out the duties and
responsibilities under Section 1.1 hereof and, subject to Section 1.1, to devote
substantially all Executive's business time, attention and energy thereto.
Executive further agrees not to work either on a part-time or independent
contracting basis as a financial consultant for any other business or enterprise
during the Employment Term without the prior written consent of the Parent's
Board of Directors (the "Board"), which consent shall not be unreasonably
withheld.
1.4 Base Salary. The Company shall pay Executive a base salary
(the "Base Salary") at the annual rate of $150,000 (U.S.), payable at such times
as the Company customarily pays its other senior level executives (but in any
event no less often than monthly). The Base Salary shall be subject to all
state, federal, and local payroll tax withholding and any other withholdings
required by law.
1.5 Incentive Compensation. Executive shall be eligible to
earn a cash bonus of up to 15% of his base salary for each twelve-month period
during the Employment Term upon the attainment of certain performance
milestones. The first year's milestones are set forth below and milestones for
subsequent years shall be mutually determined at the beginning of such year by
Executive and the Chief Executive Officer of Parent. Executive's bonus, if any,
shall be subject to all applicable tax and payroll withholdings.
For the year ending on the first anniversary of the
date of this Agreement, Executive
shall earn:
(a) 3.33% of his cash bonus for a successful Bavari model with
superantigen monoclonal;
(b) 3.33% of his cash bonus for the Parent being entitled to
and receiving an NIAID grant that supports further development of
superantigen monoclonal;
(c) 3.34% of his cash bonus for a successful botulism concept
test with lead peptide; and
(d) 5% of his cash bonus for performing a successful
ulcerative colitis model with SP304.
In addition, at any time the Company is entitled to and
receives a research grant award for which the Executive is named as
Principal or Co-Principal Investigator, Executive shall be entitled to
a bonus, the amount of which shall be determined by the Chief Executive
Officer of the Parent. It is acknowledged by the Company and the
Executive that the Executive shall receive a bonus of $25,000 upon the
Company being entitled to and receiving an NIAID biodefense partnership
grant award.
1.6 Options. The Board, or the Committee, if any, if given the
authority over the Parent's 1996 Incentive and Non-Qualified Stock Option Plan,
in the form that such plan was assumed by the Parent, will make an initial grant
of options to the Executive as follows:
(a) a non-qualified performance ten year option to
purchase up to 100,000 Parent Common Shares at an exercise price of
$1.50 per share, which shall vest pursuant to the following schedule:
Assuming the Executive is employed by the Company on the vesting dates,
(i) 50,000 options will vest on June 13, 2004; and (ii) 50,000 options
will vest on December 13, 2004. In the event prior to December 13,
2004, the Executive is terminated by the Company pursuant to Section
4.1 of this Agreement, the 50,000 options scheduled to vest on December
13, 2004 shall immediately vest and become exercisable as of such
termination date.
(b) On the anniversary date of the commencement of
the Employment Term, the Board or the Committee, as the case may be,
shall grant to the Executive 50,000 options exercisable at the fair
market value of the common stock of the Company at such time with
vesting to be based on performance milestones to be mutually determined
by the Board or the Committee, as the case may be, and the Executive at
such time.
1.7 Other Benefits. During the Employment Term, Executive
shall be entitled to participate in all employee benefit plans and programs made
available to the Company's senior level executives as a group or to its
employees generally, as such plans or programs may be in effect from time to
time (the "Benefit Coverages"), including, without limitation, medical, dental,
hospitalization, short-term and long-term disability and life insurance plans,
accidental death and dismemberment protection and travel accident insurance.
Executive shall be provided office space and staff assistance appropriate for
Executive's position and adequate for the performance of his duties and
responsibilities.
1.8 Reimbursement of Expenses; Vacation; Sick Days and
Personal Days. Executive shall be provided with reimbursement of expenses
related to Executive's employment by the Company on a basis no less favorable
than that which may be authorized from time to time by the Board, in its sole
discretion, for senior level executives as a group. Executive shall be entitled
to vacation and holidays in accordance with the Parent's normal personnel
policies for senior level executives, but not less than two (2) weeks of
vacation per calendar year, provided Executive shall not utilize more than ten
(10) consecutive business days without the express consent of the Chief
Executive Officer of the Parent. Unused vacation time will be forfeited as of
December 31 of each calendar year of the Employment Term. Executive shall be
entitled to no more than an aggregate of ten (10 ) sick days and personal days
per calendar year.
1.9 No Other Compensation. Except as expressly provided in
Sections 1.4 through 1.8, Executive shall not be entitled to any other
compensation or benefits.
2. Confidential Information. Executive recognizes and acknowledges that
by reason of Executive's employment by and service to the Company before, during
and, if applicable, after the Employment Term, Executive will have access to
certain confidential and proprietary information relating to the Company's
business, which may include, but is not limited to, trade secrets, trade
"know-how," product development techniques and plans, formulas, customer lists
and addresses, financing services, funding programs, cost and pricing
information, marketing and sales techniques, strategy and programs, computer
programs and software and financial information (collectively referred to herein
as "Confidential Information"). Executive acknowledges that such Confidential
Information is a valuable and unique asset of the Company and Executive
covenants that he will not, unless expressly authorized in writing by the
Company, at any time during the course of Executive's employment use any
Confidential Information or divulge or disclose any Confidential Information to
any person, firm or corporation except in connection with the performance of
Executive's duties for and on behalf of the Company and in a manner consistent
with the Company's policies regarding Confidential Information. Executive also
covenants that at any time after the termination of such employment, directly or
indirectly, he will not use any Confidential Information or divulge or disclose
any Confidential Information to any person, firm or corporation, unless such
information is in the public domain through no fault of Executive or except when
required to do so by a court of law, by any governmental agency having
supervisory authority over the business of the Company or by any administrative
or legislative body (including a committee thereof) with apparent jurisdiction
to order Executive to divulge, disclose or make accessible such information. All
written Confidential Information (including, without limitation, in any computer
or other electronic format) which comes into Executive's possession during the
course of Executive's employment shall remain the property of the Company.
Unless expressly authorized in writing by the Company, Executive shall not
remove any written Confidential Information from the Company's premises, except
in connection with the performance of Executive's duties for and on behalf of
the Company and in a manner consistent with the Company's policies regarding
Confidential Information. Upon termination of Executive's employment, the
Executive agrees to immediately return to the Company all written Confidential
Information (including, without limitation, in any computer or other electronic
format) in Executive's possession. As a condition of Executive's continued
employment with the Company and in order to protect the Company's interest in
such proprietary information, the Company shall require Executive's execution of
a Confidentiality Agreement and Inventions Agreement in the form attached hereto
as Exhibit "A", and incorporated herein by this reference.
3. Non-Competition; Non-Solicitation.
3.1 Non-Compete. The Executive hereby covenants and agrees
that during the term of this Agreement and for a period of one year following
the end of the Employment Term, the Executive will not, without the prior
written consent of the Company, directly or indirectly, on his own behalf or in
the service or on behalf of others, whether or not for compensation, engage in
any business activity, or have any interest in any person, firm, corporation or
business, through a subsidiary or parent entity or other entity (whether as a
shareholder, agent, joint venturer, security holder, trustee, partner,
consultant, creditor lending credit or money for the purpose of establishing or
operating any such business, partner or otherwise) with any Competing Business
in the Covered Area. For the purpose of this Section 3.1, (i) "Competing
Business" means any biotechnology or pharmaceutical company, any contract
manufacturer, any research laboratory or other company or entity (whether or not
organized for profit) that has, or is seeking to develop, one or more products
or therapies that is related to azaspiranes and guanylyl cyclase receptor
agonists and (ii) "Covered Area" means all geographical areas of the United
States, Ireland, Germany and other foreign jurisdictions where Parent or Company
then has offices and/or sells its products directly or indirectly through
distributors and/or other sales agents. Notwithstanding the foregoing, the
Executive may own shares of companies whose securities are publicly traded, so
long as ownership of such securities do not constitute more than one percent
(1%) of the outstanding securities of any such company.
3.2 Non-Solicitation. The Executive further agrees that as
long as the Agreement remains in effect and for a period of one (1) year from
its termination, the Executive will not divert any business of the Company
and/or its affiliates or any customers or suppliers of the Company and/or the
Company's and/or its affiliates' business to any other person, entity or
competitor, or induce or attempt to induce, directly or indirectly, any person
to leave his or her employment with the Company and/or its affiliates.
3.3 Remedies. The Executive acknowledges and agrees that his
obligations provided herein are necessary and reasonable in order to protect the
Company and its affiliates and their respective business and the Executive
expressly agrees that monetary damages would be inadequate to compensate the
Company and/or its affiliates for any breach by the Executive of his covenants
and agreements set forth herein. Accordingly, the Executive agrees and
acknowledges that any such violation or threatened violation of this Section 3
will cause irreparable injury to the Company and that, in addition to any other
remedies that may be available, in law, in equity or otherwise, the Company and
its affiliates shall be entitled to obtain injunctive relief against the
threatened breach of this Section 3 or the continuation of any such breach by
the Executive without the necessity of proving actual damages.
4. Termination.
4.1 By Company and/or Parent. The Company and/or Parent,
acting by duly adopted resolutions of the Board of the Parent, may, in its
discretion and at its option, terminate the Executive's employment with or
without Cause, and without prejudice to any other right or remedy to which the
Company or Executive may be entitled at law or in equity or under this
Agreement. In the event the Company and/or Parent desires to terminate the
Executive's employment without Cause, the Company shall give the Executive not
less than ninety (90) days advance written notice of such termination.
Termination of Executive's employment hereunder shall be deemed to be "for
Cause" in the event that Executive violates any provisions of this Agreement, is
guilty of any criminal act other than minor traffic violations, is guilty of
willful misconduct or gross neglect, or gross dereliction of his duties
hereunder or refuses to perform his duties hereunder after notice of such
refusal to perform such duties or directions was given to Executive by the Board
of the Parent.
4.2 By Executive's Death or Disability. This Agreement shall
also be terminated upon the Executive's death and/or a finding of permanent
physical or mental disability, such disability expected to result in death or to
be of a continuous duration of no less than twelve (12) months, and the
Executive is unable to perform his usual and essential duties for the Company.
4.3 Compensation on Termination. In the event the Company
and/or Parent terminates Executive's employment, all payments under this
Agreement shall cease, except for Base Salary to the extent already accrued. In
the event of termination by reason of Executive's death and/or permanent
disability, Executive or his executors, legal representatives or administrators,
as applicable, shall be entitled to an amount equal to Executive's Base Salary
accrued through the date of termination, plus a pro rata share of any annual
bonus to which Executive would otherwise be entitled for the year during which
death or permanent disability occurs. Upon termination of Executive, if
Executive executes a written release substantially in the form attached hereto
as Exhibit "B", of any and all claims against the Company and/or its affiliates
and all related parties with respect to all matters arising out of Executive's
employment by the Company (other than Executive's entitlement under any employee
benefit plan or program sponsored by the Company in which Executive
participated), unless the Employment Term expires or termination is for Cause,
the Executive shall receive, in full settlement of any claims Executive may have
related to his employment by the Company, Base Salary for thirty (30) calendar
days from the date of termination, provided Executive is in full compliance with
the provisions of Sections 2 and 3 of this Agreement.
4.4 Voluntary Termination. Executive may voluntarily terminate
the Employment Term upon sixty (60) days' prior written notice for any reason;
provided, however, that no further payments shall be due under this Agreement in
that event except that Executive shall be entitled to any benefits due under any
compensation or benefit plan provided by the Company for executives or otherwise
outside of this Agreement.
5. General Provisions.
5.1 Modification; No Waiver. No modification, amendment or
discharge of this Agreement shall be valid unless the same is in writing and
signed by all parties hereto. Failure of any party at any time to enforce any
provisions of this Agreement or any rights or to exercise any elections shall in
no way be considered to be a waiver of such provisions, rights or elections and
shall in no way affect the validity of this Agreement. The exercise by any party
of any of its rights or any of its elections under this Agreement shall not
preclude or prejudice such party from exercising the same or any other right it
may have under this Agreement irrespective of any previous action taken.
5.2 Notices. All notices and other communications required or
permitted hereunder or necessary or convenient in connection herewith shall be
in writing and shall be deemed to have been given when hand delivered or mailed
by registered or certified mail as follows (provided that notice of change of
address shall be deemed given only when received):
If to the Company, to: Synergy Pharmaceuticals Inc.
[address]
If to Executive, to: Xxxxxx Xxxxxxxxxx
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Or to such other names or addresses as the Company or Executive, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.
5.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey.
5.4 Further Assurances. Each party to this Agreement shall
execute all instruments and documents and take all actions as may be reasonably
required to effectuate this Agreement.
5.5 Severability. Should any one or more of the provisions of
this Agreement or of any agreement entered into pursuant to this Agreement be
determined to be illegal or unenforceable, then such illegal or unenforceable
provision shall be modified by the proper court or arbitrator to the extent
necessary and possible to make such provision enforceable, and such modified
provision and all other provisions of this Agreement and of each other agreement
entered into pursuant to this Agreement shall be given effect separately from
the provisions or portion thereof determined to be illegal or unenforceable and
shall not be affected thereby.
5.6 Successors and Assigns. Executive may not assign this
Agreement without the prior written consent of the Company. The Company may
assign its rights without the written consent of Executive, so long as the
Company or its assignee complies with the other material terms of this
Agreement. The rights and obligations of the Company under this Agreement shall
inure to the benefit of and be binding upon the successors and permitted assigns
of the Company, and the Executive's rights under this Agreement shall inure to
the benefit of and be binding upon his heirs and executors. The Company's
subsidiaries and controlled affiliates shall be express third party
beneficiaries of this Agreement.
5.7 Entire Agreement. This Agreement supersedes all prior
agreements and understandings between the parties, oral or written. No
modification, termination or attempted waiver shall be valid unless in writing,
signed by the party against whom such modification, termination or waiver is
sought to be enforced.
5.8 Counterparts; Facsimile. This Agreement may be executed in
one or more counterparts, each of which shall for all purposes be deemed to be
an original, and all of which taken together shall constitute one and the same
instrument. This Agreement may be executed by facsimile with original signatures
to follow.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date first written above.
SYNERGY PHARMACEUTICALS INC.
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
Chairman
/s/ Xxxxxx Xxxxxxxxxx
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Xxxxxx Xxxxxxxxxx, Ph.D.
Exhibit A
Confidentiality Agreement and Inventions Agreement
Exhibit B
Release
