EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit 10.1
*Portions of this
exhibit marked [*] are requested to be treated
confidentially.
This
EXECUTIVE EMPLOYMENT AGREEMENT (this “ Agreement”) is
made as of March 19, 2018 (the “Effective
Date”) by and between CorMedix Inc., a Delaware
corporation with principal executive offices at 000 Xxxxxxx Xxxxx,
Xxxxx 0000, Xxxxxxxx Xxxxxxx, XX 00000 (the “Company”), and
Xxxxxxxxx Xxxxxx (“Executive”).
Each of the Company and Executive is referred to herein as a
“Party” and
together they are referred to as the “Parties.”
TERMS
In
consideration of the foregoing premises and the mutual covenants
and agreements herein contained, the Parties, intending to be
legally bound, agree as follows:
1. Employment.
(a) Services.
Executive will serve as the Company’s Executive Vice
President and Head of Clinical Operations commencing on March 19,
2018 (the “Start Date”).
Executive will report directly to, and be subject to the
supervision of, the Company’s Chief Executive Officer
(“CEO”).
Executive will perform such services for the Company and have such
powers, responsibilities and authority as are customarily
associated with the position of Executive Vice President and Head
of Clinical Operations and shall perform such other duties as may
otherwise be reasonably assigned to the Executive from time to time
by the CEO.
(b) Acceptance.
Executive hereby accepts such employment subject to the terms of
this Agreement.
2. Term.
The
duration of employment under this Agreement shall commence on the
Start Date and shall continue for a term of three (3) years
thereafter, unless sooner terminated pursuant to Section 8
(such three-year period referred to herein as the
“Initial
Term”); provided, however, that on the expiration of
the Term, the Term shall be extended automatically for additional,
successive one-year periods (such extended periods referred to
herein as the “Extended
Term”), unless one Party shall notify the other in
writing at least ninety (90) days before the initial expiration of
the Initial Term or the expiration of any successive one-year
period during the Extended Term that this Agreement shall not be so
extended after such expiry (a “Notice of
Nonrenewal”). The Initial Term and the Extended Term
collectively shall be referred to herein as the “Term.”
Notwithstanding anything to the contrary contained herein, the
provisions of this Agreement specified in Sections 5, 6, 9,
10, 11, 12, and 13 shall survive the expiration or
termination hereof.
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3. Duties;
Place of Performance.
(a) Duties.
Executive will be employed on a full-time basis. Executive (i)
shall devote all of her business time, attention and energies to
the business and affairs of the Company, shall use her best efforts
to advance the interests of the Company, and shall perform her
duties diligently and to the best of her ability, in compliance
with the Company’s policies and procedures and the laws and
regulations that apply to the Company’s business; and (ii)
shall not be engaged in any other business activity, whether or not
such business activity is pursued for gain, profit or other
pecuniary advantage, that will interfere with the performance by
Executive of her duties hereunder or Executive’s availability
to perform such duties or that Executive knows, or should
reasonably know, will adversely affect, or negatively reflect upon,
the Company. Executive may serve as a director on for profit
boards, or on an advisory committee thereof, including for other
pharmaceutical and life science companies, with the advance consent
of the Company’s Board of Directors (the “Board”), such
consent not to be unreasonably withheld.
(b) Place
of Performance. The duties to be performed by Executive
hereunder shall be performed remotely, subject to reasonable travel
requirements on behalf of the Company, and provided that the
Company can require Executive to work at the Company’s
headquarters for a reasonable number of days per
month.
4. Compensation.
As full
compensation for Executive’s performance of services as an
employee of the Company, the Company shall pay Executive as
follows:
(a) Base
Salary. During the Initial Term, the Company shall pay
Executive an annual base salary of Two Hundred Eighty Thousand
Dollars ($280,000) (as it may be increased from time to time as
provided hereunder, the “Base Salary”),
less applicable withholdings and deductions. Payment shall be made
in accordance with the Company’s normal payroll practices.
Upon the expiration of the Initial Term, the Company’s Board,
or its Compensation Committee, shall review the Base Salary to
determine whether an increase in the amount thereof is warranted in
its sole discretion. The Base Salary will not be decreased unless
(i) all officers and/or members of the Company’s executive
management team experience an equal or greater percentage reduction
in annual base salary and/or total compensation; and (ii)
Executive’s Base Salary reduction is no greater than
twenty-five (25) percent.
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(b) Annual
Bonus. Subject to the following provisions of this
Section
4(b), Executive shall be eligible to receive an annual
target bonus, less applicable withholdings and deductions, in an
amount not to exceed thirty (30) percent of the Base Salary then in
effect, as determined by the Board (or its Compensation Committee)
in good faith based upon the achievement, during the year in
question, of both personal and Company-wide objectives established
by the Company’s CEO after consultation with Executive and
approved by the Board (or its Compensation Committee) at the
beginning of each year. The Company will endeavor to establish a
given year’s performance objectives within the first 30 days
of the year. For calendar year 2018, the
bonus will be pro-rated based on the portion of the year actually
worked, and initial performance objectives will be established
within 30 days after the Start Date. Executive must be employed by
the Company through December 31 of a given year in order to earn
the annual bonus for such year; provided that, in accordance with
Section 9(c), Executive will be eligible to receive a prorated
annual bonus where Executive’s employment is terminated by
the Company other than as a result of Executive’s death or
Disability, other than by Notice of Nonrenewal and other than for
Cause, or where Executive terminates Executive’s employment
for Good Reason (as defined below) before the final day of the
bonus year. The annual bonus for a given year will be paid no later
than March 15 of the year following the year to which it
relates.
(c) Stock
Options. The Company will grant to Executive stock options
to purchase Three Hundred Ten Thousand (310,000) shares of the
Company’s outstanding common stock (the “Options”). The
Options shall be granted pursuant to and subject to the terms and
conditions of the Company’s 2013 Stock Incentive Plan, as
amended (the “Plan”) and
shall be further subject to the terms of stock option agreements to
be entered into between Executive and the Company. The exercise
price of the Options will be equal to the closing price of the
Company’s common stock on the applicable date of grant on the
New York Stock Exchange (“NYSE”). The
Options will be divided into “Time Options” and
“Milestone Options” as described below. The
“Time
Options” will be 186,000 of the total Options, and
will vest over four (4) years in four (4) equal annual installments
on the first four anniversaries of the Start Date, subject to
Executive’s continued employment with the Company. The
“Milestone
Options” will be the remaining 124,000 of the total
Options, and will vest as follows: (i) 40,000 of the Milestone
Options will vest upon [*]; and (ii) 84,000 of the Milestone
Options will vest upon [*], or (B) [*], provided, with respect to
each tranche of the Milestone Options, Executive remains an
employee of, or a consultant to, the Company through the applicable
vesting date, and provided further that such Milestone Options will
be forfeited if performance of the objectives associated with the
Milestone Options is not achieved by the end of the applicable
periods as described in clauses (i) and (ii) above.
(d) Withholding.
The Company will withhold from any amounts payable under this
Agreement such federal, state and local taxes as the Company
determines are required to be withheld pursuant to applicable
law.
(e) Expenses.
The Company will reimburse Executive for all normal, usual and
necessary expenses incurred by Executive in furtherance of the
business and affairs of the Company, including without limitation
reasonable travel, lodging, meals, and entertainment upon timely
receipt by the Company of appropriate vouchers or other proof of
Executive’s expenditures and otherwise in accordance with any
expense reimbursement policy as may from time to time be adopted by
the Company. Such reimbursements will be made in a timely manner
within 30 days of the date of submission of the relevant
documentation relating to the expense incurred and in accordance
with the policies of the Company, but in no event later than
December 31 of the year following the year in which Executive
incurs such expense. The amount of expenses
eligible for reimbursement during one year will not affect the
expenses eligible for reimbursement in any other year, and is not
subject to liquidation or exchange for another
benefit.
[*] Confidential
treatment requested; certain information omitted and filed
separately with the SEC.
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(f) Other
Benefits. Executive shall be entitled to all rights and
benefits for which she shall be eligible under any benefit or other
plans (including, without limitation, dental, medical, medical
reimbursement and hospital plans, pension plans, employee stock
purchase plans, profit sharing plans, bonus plans, prescription
drug reimbursement plans, short and long term disability plans,
life insurance and other so-called “fringe” benefits)
as the Company shall make available to its senior executives from
time to time. All such
benefits are subject to the provisions of their respective plan
documents in accordance with their terms and are subject to
amendment or termination by the Company without Executive’ s
consent.
(g) Vacation.
Executive shall be entitled to a vacation up to four (4) weeks per
annum, of which no more than two (2) weeks may be taken
consecutively, in addition to holidays observed by the Company and
reasonable periods of paid personal and sick leave. All such paid
time off shall accrue and be used in accordance with the
Company’s established policies and procedures.
(h) Future
Equity. After the Initial Term, Executive shall be eligible
for future equity grants, in the discretion of the Board (or its
Compensation Committee).
5. Confidential
Information and Inventions.
(a) Confidential
Information; Non-Disclosure and Non-Use. Executive
recognizes and acknowledges that in the course of her duties she
will receive confidential or proprietary information of the
Company, its affiliates or third parties with whom the Company or
any such affiliates has an obligation of confidentiality.
Accordingly, during and after the Term, Executive agrees to keep
confidential and not disclose or make accessible to any other
person or entity or use for any other purpose other than in
connection with the fulfillment of her duties under this Agreement,
any “Confidential and Proprietary Information” (defined
below) owned by, or received by or on behalf of the Company or any
of its affiliates. The term “Confidential and
Proprietary Information” shall include, but shall not
be limited to, confidential or proprietary scientific or technical
information, data, formulas and related concepts, business plans
(both current and under development), client lists, promotion and
marketing programs, trade secrets, or any other confidential or
proprietary business information relating to development programs,
costs, revenues, marketing, investments, sales activities,
promotions, credit and financial data, manufacturing processes,
financing methods, and any and all information relating to the
operation of the Company’s business which the Company may
from time to time designate as confidential or proprietary or that
Executive reasonably knows should be, or has been, treated by the
Company as confidential or proprietary. Executive expressly
acknowledges that the Confidential and Proprietary Information
constitutes a protectable business interest of the Company.
Confidential and Proprietary Information encompasses all formats in
which information is preserved, whether electronic, print, or any
other form, including all originals, copies, notes, or other
reproductions or replicas thereof. Except in connection with the
execution of Executive’s duties to the Company, Executive
agrees: (i) not to use any such Confidential and Proprietary
Information for himself or others; and (ii) not to take any Company
material or reproductions (including but not limited to writings,
correspondence, notes, drafts, records, invoices, technical and
business policies, computer programs or disks) thereof from the
Company’s offices at any time during her employment by the
Company.
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(b) Return
of Property. Upon request during employment and immediately
at the termination of her employment for any reason, Executive will
return to the Company all Confidential and Proprietary Information
in any form (including all copies and reproductions thereof) and
all other property whatsoever of the Company in her possession or
under her control. If requested by the Company, Executive will
certify in writing that all such materials have been returned to
the Company. Executive also expressly agrees that immediately upon
the termination of her employment with the Company for any reason,
Executive will cease using any secure website, computer systems,
e-mail system, phone system or voicemail service provided by the
Company for the use of its employees. Notwithstanding the
foregoing, Executive may retain her address book to the extent it
only contains contact information.
(c) Exceptions.
Confidential and Proprietary Information does not include any
information that: (i) at the time of disclosure is generally known
to, or readily ascertainable by, the public; (ii) becomes known to
the public through no fault of Executive or other violation of this
Agreement; or (iii) is disclosed to Executive by a third party
under no obligation to Executive’s knowledge to maintain the
confidentiality of the information. The restrictions in
Section
5(a) above will not apply to any information the extent that
that Executive is required to disclose such information by law,
provided that the Executive (x) notifies the Company of the
existence and terms of such obligation, (y) gives the Company
prompt notice to seek a protective or similar order to prevent or
limit such disclosure, and (z) only discloses that information
actually required to be disclosed. Notwithstanding the foregoing,
nothing in this Agreement is meant to prohibit Executive from
reporting possible violations of federal law or regulation to any
governmental agency or entity, including but not limited to the
Department of Justice, the SEC, the Congress, and any agency
Inspector General, or making other disclosures that are protected
under the whistleblower provisions of federal law or regulation.
Executive shall not be required to obtain the prior authorization
of the Company to make any such reports or disclosures and is not
required to notify the Company that she has made such reports or
disclosures.
(d) Notice
Of Immunity From Liability For Confidential Disclosure Of A Trade
Secret To The Government Or In A Court Filing. Pursuant to
the Federal Defend Trade Secrets Act of 2016, Executive shall not
be held criminally or civilly liable under any federal or state
trade secret law for the disclosure of a trade secret that (a) is
made (i) in confidence to a federal, state or local government
official, either directly or indirectly, or to an attorney; and
(ii) solely for the purpose of reporting or investigating a
suspected violation of law; or (b) is made in a complaint or other
document filed in a lawsuit or other proceeding, if such filing is
made under seal. An individual who files a lawsuit for retaliation
by an employer for reporting a suspected violation of law may
disclose the trade secret to his or her attorney and use the trade
secret information in the court proceeding, if the individual (a)
files any document containing the trade secret under seal; and (b)
does not disclose the trade secret, except pursuant to court
order.
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(e) Inventions.
Executive agrees that all inventions, discoveries, improvements and
patentable or copyrightable works (“Inventions”)
initiated, conceived or made by her in the course of her employment
with the Company, either alone or in conjunction with others,
during the Term shall be the sole property of the Company to the
maximum extent permitted by applicable law and, to the extent
permitted by law, shall be “works made for hire” as
that term is defined in the United States Copyright Act (17 U.S.C.,
Section 101). The Company shall be the sole owner of all patents,
copyrights, trade secret rights, and other intellectual property or
other rights in connection therewith; provided, however that this
Section
5(e) shall not apply to Inventions which are not related to
the business of the Company and which are made and conceived by
Executive not during normal working hours, not on the
Company’s premises and not using the Company’s tools,
devices, equipment or Confidential and Proprietary Information.
Subject to the foregoing, Executive hereby assigns to the Company
all right, title and interest she may have or acquire in all
Inventions; provided, however, that the Board may in its sole
discretion agree to waive the Company’s rights pursuant to
this Section
5(e).
(f) Further
Actions and Assistance. Executive agrees to cooperate
reasonably with the Company and at the Company’s expense,
both during and after her employment with the Company, with respect
to the procurement, maintenance and enforcement of copyrights,
patents, trademarks and other intellectual property rights (both in
the United States and foreign countries) relating to the
Inventions. Executive shall sign all papers, including, without
limitation, copyright applications, patent applications,
declarations, oaths, formal assignments, assignments of priority
rights and powers of attorney, that the Company reasonably may deem
necessary or desirable in order to protect its rights and interests
in any Inventions. Executive further agrees that if the Company is
unable, after reasonable effort, to secure Executive’s
signature on any such papers, any officer of the Company shall be
entitled to execute such papers as her agent and attorney-in-fact
and Executive hereby irrevocably designates and appoints each
officer of the Company as her agent and attorney-in-fact to execute
any such papers on her behalf and to take any and all actions as
the Company reasonably may deem necessary or desirable in order to
protect its rights and interests in any Inventions, under the
conditions described in this Section
5(f).
(g) Prior
Inventions. Executive will not assert any rights to any
invention, discovery, idea or improvement relating to the business
of the Company or to her duties hereunder as having been made or
acquired by Executive prior to her work for the Company, except for
the matters, if any, described in Appendix A
to this Agreement.
(h) Disclosure.
Executive agrees that she will promptly disclose to the Company all
Inventions initiated, made, conceived or reduced to practice by
her, either alone or jointly with others, during the
Term.
(i) Survival.
The provisions of this Section 5
shall survive any termination of this Agreement.
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6. Non-Competition,
Non-Solicitation and Non-Disparagement.
(a) Executive
understands and recognizes that her services to the Company are
special and unique and that in the course of performing such
services Executive will have access to and knowledge of
Confidential and Proprietary Information. Executive agrees that,
during the Term and the twelve (12) month period immediately
following Executive’s separation from employment (the
“Termination Restriction
Period”), whether such separation is voluntary or
involuntary, she shall not in any manner, directly or indirectly,
on behalf of himself or any person, firm, partnership, joint
venture, corporation or other business entity (“Person”),
enter into or engage in any business involving the development or
commercialization of a preventive anti-infective product that would
be a competitor of Neutrolin or a product containing taurolodine or
any other product being actively developed or produced by the
Company as of the date of Executive’s termination of
employment (the “Business of
Company”), either as an individual for her own
account, or as a partner, joint venturer, owner, executive,
employee, independent contractor, principal, agent, consultant,
salesperson, officer, director or shareholder of such Person, in
any capacity that requires or could result in Executive’s
intentional, unintentional, or inevitable use of the Confidential
and Proprietary Information and/or requires Executive to perform
services substantially similar to those performed for the benefit
of the Company during the Term, within the United States and the
European Union, provided, however, that nothing shall prohibit
Executive from performing executive duties for any Person that does
not engage in the Business of Company. Executive acknowledges that,
due to the unique nature of the Business of the Company, the
Company has a strong legitimate business interest in protecting the
continuity of its business interests and its Confidential and
Proprietary Information and the restriction herein agreed to by
Executive narrowly and fairly serves such an important and critical
business interest of the Company. Notwithstanding the foregoing,
nothing contained in this Section 6(a)
shall be deemed to prohibit Executive from acquiring or holding,
solely for investment, publicly traded securities of any
corporation, some or all of the activities of which are engaged in
the Business of Company so long as such securities do not, in the
aggregate, constitute more than four percent (4%) of any class or
series of outstanding securities of such corporation; or being a
passive investor holding less than four percent (4%) of a private
equity, venture capital or other commingled fund; and further
notwithstanding the foregoing, nothing contained in this
Section
6(a) shall preclude Executive from becoming an employee of,
or from otherwise providing services to, a separate division or
operating unit of a multi-divisional business or enterprise (a
“Division”) if:
(i) the Division by which Executive is employed, or to which
Executive provides services, is not engaged in the Business of
Company, (ii) Executive does not provide services, directly or
indirectly, to any other division or operating unit of such
multi-divisional business or enterprise engaged in or proposing to
engage in the Business of Company (individually, a
“Competitive
Division” and collectively, the “Competitive
Divisions”) and (iii) the Competitive Divisions, in
the aggregate, accounted for less than one-third of the
multi-divisional business or enterprise's consolidated revenues for
the fiscal year, and each subsequent quarterly period, prior to
Executive's commencement of employment with or provision of
services to the Division.
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(b) Reasonableness
of Restriction. Executive hereby acknowledges and agrees
that the covenant against competition provided for pursuant to
Section
6(a) is reasonable with respect to its duration, geographic
area and scope. In addition, Executive acknowledges that the
Company engages in the Business of Company throughout the United
States and the European Union. If, at the time of enforcement of
this Section 6, a
court holds that the restrictions stated herein are unreasonable
under the circumstances then existing, the Parties hereto agree
that the maximum duration, scope or geographic area legally
permissible under such circumstances will be substituted for the
duration, scope or area stated herein.
(c) Non-Solicitation.
During the Term and the applicable Termination Restriction Period
(as defined herein), Executive shall not, directly or indirectly,
on her own behalf or on behalf of any person or entity, without the
prior written consent of the Company:
(i) solicit
or induce any employee, consultant or independent contractor of the
Company or any of its affiliates to leave the employ of (or end a
contracting relationship with) the Company or any affiliate; or
hire for any competitive purpose any employee consultant or
independent contractor of the Company; or hire any former employee
who has left the employment of the Company or any affiliate of the
Company within six (6) months of the termination of such employee's
employment with the Company or any such affiliate for any
competitive purpose; or hire any former consultant or independent
contractor who has ended his or her consultancy or contracting
relationship with the Company or any affiliate of the Company
within six (6) months of the end of such consultancy or contracting
relationship for any competitive purpose; or hire any former
employee of the Company in knowing violation of such employee's
non-competition agreement with the Company or any such affiliate;
or
(ii) solicit,
divert or take away, or attempt to divert or take away, the
business or patronage of any agent, client or customer of the
Company which was served by the Company during the twelve-month
period prior to the termination of Executive’s employment
with the Company; or induce, encourage, or attempt to induce or
encourage any client or customer of the Company which was served by
the Company during the twelve-month period prior to the termination
of Executive’s employment with the Company to reduce, limit,
or cancel its business with the Company.
For
clarity, the foregoing shall not be violated by general
advertising, by serving as a reference upon request or by actions
taken in the good faith performance of Executive’s duties to
the Company.
(d) Non-Disparagement.
Executive agrees that she shall not directly or indirectly
disparage, whether or not truthfully, the name or reputation of the
Company or any of its affiliates, including but not limited to, any
officer, director, employee or shareholder (provided Executive has
had material dealings with such shareholder) of the Company or any
of its affiliates; provided that, nothing in this Section shall be
construed to interfere with Executive’s right to engage in
protected concerted activity under the National Labor Relations
Act. Notwithstanding this Section
6(d), nothing contained herein shall apply to statements
made by Executive (x) in the course of her responsibility to
evaluate the performance and/or participate in any investigation of
the conduct or behavior of officers, employees and/or others, (y)
as part of any judicial, administrative or other legal action or
proceeding, or (z) in rebuttal of false or misleading statements by
others, and nothing shall be construed to limit or impair the
ability of Executive to provide truthful testimony in response to
any validly issued subpoena or to file pleadings or respond to
inquiries or legal proceedings by any government agency to the
extent required by applicable law. These non-disparagement
obligations will cease to apply two (2) years after
Executive’s termination of employment.
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(e) Enforcement.
In the event that Executive breaches or threatens to breach any
provisions of Section 5 or
this Section 6,
then, in addition to any other rights the Company may have, it
shall be entitled to seek injunctive relief to enforce such
provisions. In the event that an actual proceeding is brought in
equity to enforce the provisions of Section 5 or
this Section 6,
Executive shall not urge as a defense that there is an adequate
remedy at law nor shall the Company be prevented from seeking any
other remedies that may be available to it.
(f) Remedies
Cumulative; Judicial Modification. Each of the rights and
remedies enumerated in Section 6(e)
shall be independent of the others and shall be in addition to and
not in lieu of any other rights and remedies available to the
Company at law or in equity. If any of the covenants contained in
this Section 6,
or any part of any of them, is hereafter construed or adjudicated
to be invalid or unenforceable, the same shall not affect the
remainder of the covenant or covenants or rights or remedies, which
shall be given full effect without regard to the invalid portions.
If any of the covenants contained in this Section 6 is
held to be invalid or unenforceable because of the duration of such
provision or the area covered thereby, the Parties agree that the
court making such determination shall have the power to reduce the
duration and/or area of such provision and in its reduced form such
provision shall then be enforceable.
(g) Survival.
The provisions of this Section 6
shall survive any termination of this Agreement.
7. Representations
and Warranties.
Executive hereby represents and warrants to the Company as
follows:
(a) Neither
the execution or delivery of this Agreement nor the performance by
Executive of her duties and other obligations hereunder conflict
with or constitute a default or breach of any covenant or
obligation under (whether immediately, upon the giving of notice or
lapse of time or both) any prior employment agreement, contract, or
other instrument to which Executive is a party or by which she is
bound.
(b) Executive
has the full right, power and legal capacity to enter and deliver
this Agreement and to perform her duties and other obligations
hereunder. This Agreement constitutes the legal, valid and binding
obligation of Executive enforceable against her in accordance with
its terms. No approvals or consents of any persons or entities are
required for Executive to execute and deliver this Agreement or
perform her duties and other obligations hereunder.
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(c) Executive
will not use any confidential information or trade secrets of any
third Party in her employment by the Company in violation of the
terms of the agreements under which she had access to or knowledge
of such confidential information or trade secrets.
8. Termination.
(a) Cause.
Executive’s employment hereunder may be terminated by the
Company immediately for “Cause” (defined below). Any of
the following actions by Executive shall constitute
“Cause”:
(i) The
willful failure, disregard or refusal by Executive to perform her
material duties or obligations under this Agreement (other than as
a result of Executive’s mental incapacity or illness, as
confirmed by medical evidence provided by a physician selected by
the Company), if such failure, disregard or refusal is not cured
(if curable, as determined in the reasonable discretion of the
Board) within 30 days after receiving written notice from the Board
specifying each such deficiency;
(ii) Any
willful, intentional or grossly negligent act by Executive having
the effect of materially injuring (whether financially or
otherwise) the business or reputation of the Company or any of its
affiliates (other than acts that were performed in a good faith
attempt to advance the business interests of the
Company);
(iii) Executive’s
conviction of any felony involving moral turpitude (including entry
of a guilty or nolo contendere plea);
(iv) The
Executive’s qualification as a “bad actor,” as
defined by 17 CFR 230.506(a);
(v) The
good faith determination by the Board, after a reasonable and
good-faith investigation by the Company, that Executive engaged in
some form of harassment or discrimination prohibited by law
(including, without limitation, harassment on the basis of age, sex
or race) unless Executive’s actions were specifically
directed by the Board;
(vi) Any
material misappropriation or embezzlement by Executive of the
property of the Company or its affiliates (whether or not a
misdemeanor or felony); or
(vii)
A material breach of this Agreement by Executive in the event
Executive has failed to cure such breach (if curable, as determined
in the reasonable discretion of the Board) within 30 days after
receiving written notice from the Board specifying such
breach.
(b) Death.
Executive’s employment hereunder shall be terminated upon
Executive’s death.
(c) Disability.
The Company may terminate Executive’s employment hereunder
due to Executive’s “Disability” (defined below)
while Executive is so Disabled. For purposes of this Agreement, a
termination due to Executive’s “Disability”
shall be deemed to have occurred if the Executive has not been able
to perform her material duties for 90 consecutive days or 90 days
in a 180 day period, due to the condition of Executive’s
physical, mental or emotional health, taking into account the
Company’s obligations under the applicable provisions of the
Americans with Disabilities Act, as amended, the Family and Medical
Leave Act, and any similar applicable law.
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(d) Good
Reason. Executive may terminate her employment hereunder for
“Good Reason” (as defined below) pursuant to the
procedures set forth in this Section
8(d). In order for Executive to resign for Good Reason,
Executive must provide written notice to the Board of the existence
of the Good Reason condition within sixty (60) days of the initial
existence of such Good Reason condition. Upon receipt of such
notice, the Company will have thirty (30) days during which it may
attempt to remedy the Good Reason condition. If so remedied,
Executive may not resign for Good Reason based on such condition.
If the Good Reason condition is not remedied within such thirty
(30) day period, Executive may resign based on the Good Reason
condition specified in the notice effective no later than thirty
(30) days following the expiration of the thirty (30) day cure
period. The term “Good Reason”
shall mean any of the following occurring without the
Executive’s consent:
(i) any
material breach of this Agreement by the Company;
(ii) any
material diminution by the Company of Executive’s
responsibilities or authority;
(iii)
a material reduction in Executive’s annual Base Salary unless
(i) all officers and/or members of the Company’s executive
management team experience an equal or greater percentage reduction
in annual base salary and/or total compensation; and (ii)
Executive’s Base Salary and/or total compensation reduction
is no greater than twenty-five (25) percent; or
(iv) a
material reduction in Executive’s target bonus level unless:
(i) all officers and/or members of the Company’s executive
management team experience an equal or greater percentage reduction
related to target bonus levels; and (ii) Executive’s target
bonus level reduction is no greater than twenty-five (25)
percent.
(e) Without
Cause. The Company may terminate Executive’s
employment (i) effective upon written notice to Executive at any
time for any reason other than for Cause or Executive’s
Disability, or (ii) by providing a Notice of Nonrenewal to the
other Party pursuant to the terms of Section
2.
(f) Resignation.
Executive may resign for a reason other than Good Reason at any
time upon thirty (30) days written notice of termination to the
Company, or by providing a Notice of Nonrenewal to the other Party
pursuant to the terms of Section
2.
9. Compensation
upon Termination.
In the
event Executive’s employment is terminated, the Company shall
pay to Executive the Base Salary and benefits otherwise payable to
her under Section 4
through the last day of her
actual employment by the Company, along with the annual bonus as
described in Section 4(b)
for any completed fiscal year not yet
paid, in addition to any reimbursable business expenses
subject to Company policy and any amounts due under any benefit
plan or program in accordance with its terms (together, the
“Accrued
Compensation”). Except for the Accrued Compensation,
rights to indemnification and directors’ and officers’
liability insurance, and as otherwise required by law, Executive
will have no further entitlement hereunder to any other
compensation or benefits from the Company except as expressly
provided below:
(a) Death
or Disability. If Executive’s employment is terminated
as a result of her death or Disability, the Company shall pay to
Executive or to Executive’s estate, as applicable, the
Accrued Compensation.
(b) Cause.
If Executive’s employment is terminated by the Company for
Cause, Executive shall not be entitled to receive any payments or
benefits other than the Accrued Compensation, rights to
indemnification and directors’ and officers’ liability
insurance and as otherwise required by law. All equity awards
granted to Executive by the Company that have not vested as of the
date of termination shall be forfeited to the Company as of such
date.
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(c) Other
than for Cause, Non-Renewal, Death or Disability. If the
Company terminates Executive’s employment, other than as a
result of Executive’s death or Disability, other than by
Notice of Nonrenewal and other than for Cause, or if Executive
terminates Executive’s employment for Good Reason,
then conditioned upon Executive
executing a Release (as defined below) following such termination,
the Company will provide to Executive the following separation
benefits: (i) payment of the Accrued Compensation, rights to
indemnification and directors’ and officers’ liability
insurance and any rights or privilege otherwise required by law,
(ii) payment to Executive of nine (9) months of her Base Salary,
(iii) payment to Executive on a prorated basis of the target bonus
for the year of termination based on the actual achievement of the
objectives referenced in Section 4(b),
(iv) if Executive timely elects continued health insurance coverage
under COBRA, payment to Executive of a portion of the premium
necessary to continue such coverage for Executive and
Executive’s eligible dependents that is equal to the portion
paid for by the Company during Executive’s employment, until
the conclusion of the time when Executive is receiving continuation
of Base Salary payments or until Executive becomes eligible for
group health insurance coverage under another employer’s
plan, whichever occurs first, provided however that the Company has
the right to terminate such payment of COBRA premiums on behalf of
Executive and instead pay Executive a lump sum amount equal to the
COBRA premium times the number of months remaining in the specified
period if the Company determines in its discretion that continued
payment of the COBRA premiums is or may be discriminatory under
Section 105(h) of the Code, and (v) all Time Options that are
scheduled to vest on or before the next succeeding anniversary of
the date of termination shall be accelerated and deemed to have
vested as of the termination date; provided that, for the avoidance
of doubt, the Milestone Options whose vesting requirements have not
been successfully met as of the date of Executive’s
termination of employment or resignation with Good Reason will not
accelerate. The separation benefits
set forth above are conditioned upon Executive executing a
release of claims against the Company, its parents, subsidiaries
and affiliates and each of its officers, directors, employees,
agents, successors and assigns in form acceptable to the Company
(the “Release”)
within the time specified therein, which Release is not revoked within any time period allowed for
revocation under applicable law. The salary continuation described
in Section
9(c)(ii) above will be payable
to Executive over time in accordance with the Company’s
payroll practices and procedures beginning on the sixtieth
(60th) day following the termination of Executive’s
employment with the Company, provided that the Company, in its sole
discretion but in accordance with Internal Revenue Code Section
409A, may begin the payments earlier.
(d) By
Notice of Non-Renewal. If, pursuant to Section
8(f), Executive terminates her employment hereunder by
written notice of termination without Good Reason or if either
Party terminates Executive’s employment by providing a Notice
of Nonrenewal to the other Party, Executive shall not be entitled
to receive any payments or benefits other than the Accrued
Compensation, rights to indemnification and directors’ and
officers’ liability insurance and as otherwise required by
law.
(e) This
Section
9 sets forth the only obligations of the Company with
respect to the termination of Executive’s employment with the
Company, and Executive acknowledges that, upon the termination of
her employment, she shall not be entitled to any payments or
benefits which are not explicitly provided in this Section 9,
except as required by law or the terms of another employee plan,
program or arrangement covering her.
(f) The
obligations of the Company that arise under this Section 9
shall survive the expiration or earlier termination of this
Agreement.
10. Change
In Control.
(a) Change
In Control Defined. The term “Change In
Control” shall have the same meaning as defined in the
Plan, as in effect on the date of this Agreement.
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(b) Consequence
upon Executive’s Termination Without Cause or
Executive’s Resignation With Good Reason. Upon
Executive’s termination of employment by the Company without
Cause or Executive’s resignation of employment with Good
Reason within twenty-four months after a Change In Control, the
Company shall provide Executive the following separation benefits:
(i) payment of the Accrued Compensation, rights to indemnification
and directors’ and officers’ liability insurance and
any rights or privilege otherwise required by law, (ii) payment to
Executive of her Base Salary and full target bonus over a period of
nine (9) months, (iii) payment to Executive on a prorated basis for
any partial bonus earned by Executive based on the achievement of
the objectives referenced in Section
4(b), (iv) if Executive timely elects continued health
insurance coverage under COBRA, payment to Executive of the entire
premium necessary to continue such coverage for Executive and
Executive’s eligible dependents until the conclusion of the
time when Executive is receiving continuation of Base Salary
payments or until Executive becomes eligible for group health
insurance coverage under another employer’s plan, whichever
occurs first, provided however that the Company has the right to
terminate such payment of COBRA premiums on behalf of Executive and
instead pay Executive a lump sum amount equal to the COBRA premium
times the number of months remaining in the specified period if the
Company determines in its discretion that continued payment of the
COBRA premiums is or may be discriminatory under Section 105(h) of
the Code, and (v) all unvested Options held by Executive shall be
accelerated and deemed to have vested as of the date of the
Executive’s termination of employment. All Options that have
vested (or been deemed pursuant to the immediately preceding
sentence to have vested) as of the date of Executive’s
termination of employment shall remain exercisable until the
earlier of the date that is twelve (12) months following such
termination or the expiration date applicable under the respective
Option grant(s). The separation
benefits set forth above are conditioned upon Executive
executing a Release within the time specified therein, which
Release is not revoked within any time
period allowed for revocation under applicable law. The salary
continuation described in Section
10(b)(ii) above will be payable
to Executive over time in accordance with the Company’s
payroll practices and procedures beginning on the sixtieth
(60th) day following the termination of Executive’s
employment with the Company, provided that the Company, in its sole
discretion but in accordance with Section 409A (defined below), may
begin the payments earlier.
(c) Potential
Adjustments due to Tax Implications. Notwithstanding
anything in this Agreement or any other agreement between Executive
and the Company to the contrary, but subject to this Section
10(c), the Company will effectuate the acceleration
contemplated under Section
10(b) and will make the payments and other acceleration of
benefits under this Agreement and other compensatory arrangements
without regard to whether Section 280G of the Code would limit or
preclude the deductibility of such payments or benefits. However,
if reducing or eliminating any payment and/or other benefit
(including the vesting of her options or other equity compensation)
would increase the “Total After-Tax Payments” (defined
below), then the amounts payable to Executive will be reduced or
eliminated as follows (or in such other manner as Executive may
specify at the applicable time if permitted to do so without
violation of Internal Revenue Code Sections 280G, 409A and 4999) to
the extent necessary to maximize such Total After-Tax
Payments:
(i) first,
by reducing or eliminating any cash payments or other benefits
(other than the vesting of any options or stock) and
(ii) second,
by reducing or eliminating the vesting of options and stock that
occurs as a result of a Change in Control or other event covered by
Section 280G of the Code in reverse order of vesting and with
grants whose parachute value is calculated without regard to
Treasury Regulations 280G-1 Q&A 24(c) being reduced prior to
those subject to Q&A 24(c).
13
The
Company’s independent, certified public accounting firm will
determine whether and to what extent payments or vesting are
required to be reduced or eliminated in accordance with the
foregoing. If there is ultimately determined to be an underpayment
of or overpayment to Executive under this provision, the amount of
such underpayment or overpayment will be immediately paid to
Executive or refunded by her,
as the case may be, with interest at the applicable federal rate
under the Code. The term “Total AfterTax
Payments” means the total value of all
“parachute payments” (as that term is defined in
Section 280G(b)(2) of the Code) made to Executive or for
her benefit (whether made
under the Agreement or otherwise), after reduction for all
applicable federal taxes (including, without limitation, the tax
described in Section 4999 of the Code). The cost of the accountant
shall be paid by the Company and the accountant shall deliver to
the parties its calculations in a form that can be relied upon for
filing of tax returns. The calculations made pursuant to this
section shall be made by allocating the full summary compensation
table value (from the latest filed proxy) or an estimate thereof of
the Executive’s annual total compensation to the
noncompetition provisions set forth in this Agreement.
11. Indemnification.
The
Company shall defend and indemnify Executive in regard to her
capacities with the Company, its affiliates and its benefit plans
to the fullest extent permitted under the Delaware General
Corporate Law (the “DGCL”). The
Company shall also establish a policy for indemnifying its officers
and directors, including but not limited to Executive, for all
actions permitted under the DGCL taken in good faith pursuit of
their duties for the Company, including, but not limited to, the
obtaining of an appropriate level of directors and officers
liability insurance coverage and including such provisions in the
Company’s bylaws or certificate of incorporation, as
applicable and customary. Executive shall be designated as a named
insured on such directors and officers liability insurance policy.
Executive’s rights to, and the Company’s obligation to
provide, indemnification shall survive termination of this
Agreement.
12. Compliance
with Code Section 409A.
(a) Intent
of the Parties. The intent of the Parties is that the
payments, compensation and benefits under this Agreement will be
exempt from or comply with Section 409A of the Internal
Revenue Code of 1986, as amended, and the regulations and guidance
promulgated thereunder (collectively “Section 409A”)
and, in this connection, the Agreement shall be interpreted to be
exempt or in compliance with Section 409A. Further, if any benefit
or payment payable under this Agreement is deemed to not comply
with Section 409A, the Company and Executive agree to
renegotiate in good faith any such benefit or payment (including,
without limitation, as to the timing of any severance payments
payable hereunder) so that either (i) Section 409A will not apply
or (ii) compliance with Section 409A will be achieved; provided,
however, that any resulting renegotiated terms shall provide to
Executive to the greatest extent possible the after-tax economic
equivalent of what otherwise has been provided to Executive
pursuant to the terms of this Agreement, and provided further, that
any deferral of payments or other benefits shall be only for such
time period as may be required to comply with
Section 409A.
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(b) Potential
Delay of Payment(s) and Adjustments. For the avoidance of
doubt, the Parties intend that payments of the separation benefits set forth in
Section
9 and Section 10
above satisfy, to the greatest extent possible, the exemptions from
the application of Section 409A provided under Treasury Regulation
Sections 1.409A-1(b)(4), 1.409A-1(b)(5), and 1.409A-1(b)(9). If any
payment, compensation or other benefit provided to Executive in
connection with her separation from service is determined, in whole
or in part, to constitute “nonqualified deferred
compensation” within the meaning of Section 409A and
Executive is a “specified employee” within the meaning
of Section 409A, no part of such payments shall be paid before the
day that is six (6) months plus one (1) day after the termination
date or her earlier death (the “New Payment
Date”). The aggregate of any payments that otherwise
would have been paid to Executive during the period between the
termination date and the New Payment Date shall be paid to
Executive in a lump sum on such New Payment Date. Thereafter, any
payments that remain outstanding as of the day immediately
following the New Payment Date shall be paid without delay over the
time period originally scheduled, in accordance with the terms of
this Agreement.
(c) Separation
from Service. Notwithstanding anything to the contrary set
forth herein, any payments and benefits provided under Section 9 or
Section
10 above that constitute “deferred compensation”
within the meaning of Section 409A will not commence in connection
with Executive’s termination of employment unless and until
Executive has also incurred a “separation from service”
(as such term is defined in Treasury Regulation Section
1.409A-1(h)), unless the Company reasonably determines that such
amounts may be provided to Executive without causing Executive to
incur additional tax under Section 409A.
(d) Installments.
If any payment, compensation or other benefit required by the
Agreement is to be paid in a series of installment payments, each
individual payment in the series shall be considered a separate
payment for purposes of Section 409A.
13. Miscellaneous.
(a) Governing
Law. This Agreement and all questions relating to its
validity, interpretation, performance, remediation, and enforcement
(including, without limitation, provisions concerning limitations
of actions) shall be governed by and construed in accordance with
the substantive laws of the State of Delaware, notwithstanding any
choice-of-law doctrines of that jurisdiction or any other
jurisdiction that ordinarily would or might cause the substantive
law of another jurisdiction to apply.
(b) Personal
Jurisdiction. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY ACTION OR PROCEEDING RELATING IN ANY WAY TO THIS AGREEMENT
MAY ONLY BE BROUGHT AND ENFORCED IN THE STATE OR FEDERAL COURTS
LOCATED IN SOMERSET COUNTY, NEW JERSEY, TO THE EXTENT SUBJECT
MATTER JURISDICTION EXISTS THEREFORE. THE PARTIES IRREVOCABLY
SUBMIT TO THE JURISDICTION OF SUCH COURTS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING. THE PARTIES IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT THEY MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH ACTION OR
PROCEEDING IN SUCH COURTS, AS WELL AS ANY CLAIM THAT ANY SUCH
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
ANY INCONVENIENT FORUM.
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(c) Service
of Process. THE PARTIES FURTHER IRREVOCABLY CONSENT TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN THE
MANNER AND TO THE ADDRESS SPECIFIED IN SECTION
13(h) OF THIS AGREEMENT.
(d) Waiver
of Jury Trial. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT
THEREOF. EACH OF THE PARTIES HERETO FURTHER WARRANTS AND REPRESENTS
THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
(e) Assignment.
This Agreement, and Executive’s rights and obligations
hereunder, may not be assigned by Executive. The Company may assign
its rights, together with its obligations, hereunder only in
connection with any sale, transfer or other disposition of all or
substantially all of its business or assets and to an assignee who
assumes such obligations by law or in writing. Subject to the
foregoing, this Agreement shall be binding upon and inure to the
benefit of the Parties hereto, and their respective heirs, legal
representatives, successors and assigns.
(f) Amendment.
This Agreement cannot be amended orally, or by any course of
conduct or dealing, but only by a written agreement duly executed
by the Parties.
(g) Waiver.
The failure of either Party to insist upon the strict performance
of any of the terms, conditions and provisions of this Agreement
shall not be construed as a waiver or relinquishment of future
compliance therewith, and such terms, conditions and provisions
shall remain in full force and effect. No waiver of any term or
condition of this Agreement on the part of either Party shall be
effective for any purpose whatsoever unless such waiver is in
writing and signed by such Party. Unless the written waiver
instrument expressly provides otherwise, no waiver by a Party of
any right or remedy or breach by the other Party in any particular
instance shall be construed to apply to any right, remedy or breach
arising out of or related to a subsequent instance.
(h) Notices.
All notices, demands or other communications desired or required to
be given by a Party to the other Party shall be in writing and
shall be deemed effectively given upon (i) personal delivery to the
Party to be notified, (ii) upon confirmation of receipt of fax or
other electronic transmission, (iii) one business day after deposit
with a reputable overnight courier, prepaid for priority overnight
delivery, or (iv) five days after deposit with the United States
Postal Service, postage prepaid, certified mail, return receipt
requested, in each case to the Party to be notified at the
Company’s principal executive officers in the case of the
Company and at the latest address of the Executive on the books of
the Company in the case of the Executive; or to such other
addresses and to the attention of such other individuals as either
Party shall have designated to the other by notice given in the
foregoing manner.
16
(i) Entire
Agreement. This Agreement sets forth the entire agreement
and understanding of the Parties relating to the subject matter
hereof, and supersedes all prior agreements, arrangements and
understandings, written or oral between the Parties, relating to
the subject matter hereof.
(j) Affiliate
and Control Defined. As used in this Agreement, the term
“affiliate” of
a specified Person shall mean and include any Person controlling,
controlled by or under common control with the specified Person. A
Person shall be deemed to “control”
another Person if such first Person possesses directly or
indirectly the power to direct, or cause the direction of, the
management and policies of the second Person, whether through the
ownership of voting securities, by contract or
otherwise.
(k) Captions,
Headings and Cross-References. The section headings
contained herein are for reference purposes and convenience only
and shall not in any way affect the meaning or interpretation of
this Agreement. Except as expressly set forth otherwise, all
cross-references to sections refer to sections of this
Agreement.
(l) Severability.
In addition to, and not in conflict with, the provisions of
Sections 6(b) and
6(f), the Parties agree that each and every provision of
this Agreement shall be deemed valid, legal and enforceable in all
jurisdictions to the fullest extent possible. Any provision of this
Agreement that is determined to be invalid, illegal or
unenforceable in any jurisdiction shall, as to that jurisdiction,
be adjusted and reformed rather than voided, if possible, in order
to achieve the intent of the Parties. Any provision of this
Agreement that is determined to be invalid, illegal or
unenforceable in any jurisdiction which cannot be adjusted and
reformed shall for the purposes of that jurisdiction, be voided.
Any adjustment, reformation or voidance of any provisions of this
Agreement shall only be effective in the jurisdiction requiring
such adjustment or voidance, without affecting in any way the
remaining provisions of this Agreement in such jurisdiction or
adjusting, reforming, voiding or rendering that provision or any
other provision of this Agreement invalid, illegal or unenforceable
in any other jurisdiction.
(m)
Counterpart
Execution. This Agreement may be executed in one or more
counterparts each of which shall be an original document and all of
which together shall constitute one and the same instrument. The
Parties acknowledge that this Agreement may be executed and
delivered by means of electronic signatures and that use and
acceptance of electronic signatures to bind the Parties represents
the voluntary agreement and intention of the Parties to conduct
this transaction by electronic means. The Parties agree that
execution and delivery by electronic means will have the same legal
effect as if signatures had been manually written on this
Agreement. This Agreement will be deemed lawfully executed by the
Parties by such action for purposes of any statute or rule of law
that requires this Agreement to be executed by the Parties to make
the mutual promises, agreements and obligations of the Parties set
forth herein legally enforceable. Facsimile and .pdf exchanges of
signatures will have the same legal force and effect as the
exchange of original signatures. THE PARTIES HEREBY WAIVE ANY RIGHT
TO RAISE ANY DEFENSE OR WAIVER BASED UPON EXECUTION OF THIS
AGREEMENT BY MEANS OF ELECTRONIC SIGNATURES IN ANY PROCEEDING
ARISING UNDER OR RELATING TO THIS AGREEMENT. The Parties agree that
the legal effect, validity and enforceability of this Agreement
will not be impaired solely because of its execution in electronic
form or that an electronic record was used in its formation. The
Parties acknowledge that they are capable of retaining electronic
records of this transaction.
IN WITNESS WHEREOF, the Parties hereto
have executed this Executive Employment Agreement as of the date
set forth above.
Signature page follows.
17
|
By:
___________________________
Name: Khoso
Baluch
Title:
Chief Executive Officer
Date:
___________________________
|
EXECUTIVE:
___________________________
Xxxxxxxxx
Xxxxxx
Date:
______________________
|
|
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18
APPENDIX A
PRIOR INVENTIONS
