EXHIBIT 10.9
MEDI-JECT CORPORATION
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of January 31, 2001, by and between Medi-Ject
Corporation, a Minnesota corporation (the "Company"), and Franklin Pass, an
individual resident of Hennepin County in the state of Minnesota ("Executive").
WHEREAS, the Company wishes to employ Executive to render services for the
Company on the terms and conditions set forth in this Agreement, and Executive
wishes to be retained and employed by the Company on such terms and conditions.
NOW, THEREFORE, in consideration of the premises and the respective undertakings
of the Company and Executive set forth below, the Company and Executive agree as
follows:
1. Employment. The Company hereby employs Executive, and Executive accepts
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such employment and agrees to perform services for the Company, for the
period and upon the other terms and conditions set forth in this Agreement.
2. Term. Unless terminated at an earlier date in accordance with Section 11 of
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this Agreement, the term of Executive's employment hereunder shall be for a
period commencing on the date of this Agreement (the "Commencement Date")
and terminating at the end of three years thereafter.
3. Position and Duties.
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01 Service with Company. Executive shall serve as a member of the Board of
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Directors of the Company for a term ending at the annual meeting of the
Company in 2002. In addition, Executive agrees to evaluate new
technology opportunities for the Company; to assume responsibility for
certain business development activities; to represent the Company in
industry affairs; and to perform such other reasonable employment
duties as the Board of Directors of the Company shall assign to him
from time to time.
02 Performance of Duties. Executive agrees to serve the Company faithfully
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and to the best of his ability and to devote his full time, attention
and efforts to the business and affairs of the Company during the term
of this Agreement. Executive hereby confirms that, other than as set
forth herein, he is under no contractual commitments inconsistent with
his obligations set forth in this Agreement, and that for the term of
this Agreement, he will not render or perform services for any other
corporation, firm, entity or person that are inconsistent with the
provisions of this Agreement.
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03 Outside Activities. Executive may engage in other activities ("Outside
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Activity") as long as such Outside Activity is not competitive to the
business of the Company nor interferes with Executive's obligations
under this Agreement. Executive agrees that prior to engaging in any
Outside Activity, he shall present said Outside Activity to the Chief
Executive Officer of the Company for permission to engage in such
Outside Activity upon a determination that such Outside Activity is not
competitive to the business of the Company and will not interfere with
Executive's obligations under this Agreement. The Company agrees that
such permission shall not be unreasonable withheld.
4. Compensation.
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01 Salary. The Company shall pay to Executive a base annual salary of
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$228,000, which salary shall be paid in accordance with the Company's
normal payroll procedures and policies.
02 Bonus. In addition to the salary set forth above, Executive shall be
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entitled to the following bonuses:
i) $25,000, payable at the closing (the "Closing") of the
transaction set forth in that certain Stock Purchase Agreement
entered into among the Company ("Buyer") and Permatec Holdings
AG, Permatec Pharma AG, Permatec Technologie AG and Permatec NV
(collectively, the "Sellers"); and
ii) $25,000, payable at the Closing in the event Executive is
successful in negotiating revisions in the licensing agreement
between the Company and Elan Corporation PLC.. Said revisions
shall include new definitions of the object of the License and
"Field", alteration of license fees and reduction in royalty
rates, elimination of the costs of the active ingredients in the
Device for the calculation of royalties if the Company sells
Devices with drugs. Said revisions are subject to the approval of
Xxxxxxx Xxxxxxx, which approval shall not be unreasonable
withheld.
03 Stock Options. In addition to the salary and bonus set forth above, as
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of the commencement of this Agreement, Executive will receive an option
to purchase 30,000 shares of the Company's common stock pursuant to the
Company's Stock Option Plan. The purchase price for such shares shall
be the price of the last trade on the Commencement Date (or, if no
trades were made on the Commencement Date, as of the preceding day on
which such shares were traded). The options shall vest and become
exercisable at the rate of 33 1/3% per year on the day before each
anniversary of the Commencement Date, unless the Company shall have
terminated this Agreement under Section 11(01)(111) below. Any vested,
unexercised options must be exercised within 12-months following
termination of Executive's employment.
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04 Expenses. The Company will pay or reimburse Executive for all
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reasonable and necessary out-of-pocket expenses incurred by him in the
performance of his duties under this Agreement, subject to the
presentment of appropriate vouchers in accordance with the Company's
normal policies for expense verification.
5. Benefits. Executive shall be entitled to participate in all employee
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benefit plans or programs (including vacation time) of the Company to the
extent that his position, title, tenure, salary, age, health and other
qualifications make him eligible to participate. The Company does not
guarantee the adoption or continuance of any particular employee benefit
plan or program during the term of this Agreement, and Executive's
participation in any such plan or program shall be subject to the
provisions, rules and regulations applicable thereto. In addition to the
normal employee benefit plans of the Company, the Company also shall pay,
or reimburse Executive for, the premiums on $2,000,000 of additional
personal life insurance on the life of Executive. Provided, however, in no
event shall the aggregate cost of the benefits provided to Executive under
this provision exceed $25,000 per year.
01 Post-Retirement Benefits. The Company agrees to continue to provide
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these benefits to Executive for a period of seven years following the
termination of Executive's employment with the Company (or to his
spouse in the event Executive shall die prior to the expiration of
said seven year period).
6. Restrictions on Sale of Stock. Executive agrees that any sales of any
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shares of the Company's stock owned by Executive shall be subject to the
following restrictions:
01 None of said shares may be sold for a period commencing on the date
hereof and continuing until the earlier of (i) three years following
the Commencement Date or (ii) termination of Executive's membership on
the Board of Directors of the Company. Provided however, in no event
shall Executive sell any of said shares for a period of one year
following the Commencement Date.
02 Executive may sell up to 50% of said shares following the expiration
of the period set forth in Section 6(01) above.
03 There shall be no further restrictions on the sale of said shares by
Executive upon the earlier of (i) one year following the expiration of
the period set forth in Section 6(01) above or (ii) such time as
Executive is no longer either a member of the Board of Directors or an
employee of the Company. Provided, however, in no event may Executive
sell any of said shares prior to one-year following the Commencement
Date.
7. Confidential Information. Except as permitted or directed by the Company's
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Board of Directors, during the term of this Agreement and for a period of
five years thereafter, Executive shall not divulge, furnish or make
accessible to anyone or use in any way (other than in the ordinary course
of the business of the Company) any confidential or secret knowledge or
information of the Company which Executive has acquired or become
acquainted with or will acquire or become acquainted with prior to the
termination of the
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period of his employment by the Company (including employment by the
Company or any affiliated companies prior to the date of this Agreement),
whether developed by himself or by others, concerning any trade secrets,
confidential or secret designs, processes, formulae, plans, devices or
material (whether or not patented or patentable) directly or indirectly
useful in any aspect of the business of the Company, any customer or
supplier lists of the Company, or any other confidential or secret aspects
of the business of the Company. Executive acknowledges that the above-
described knowledge or information constitutes an unique and valuable asset
of the Company and represents a substantial investment of time and expense
by the Company and its predecessors, and that any disclosure or other use
of such knowledge or information other than for the sole benefit of the
Company would be wrongful and would cause irreparable harm to the Company.
Both during and after the term of this Agreement, Executive will refrain
from any acts or omissions that would reduce the value of such knowledge or
information to the Company. The foregoing obligations of confidentiality,
however, shall not apply to any knowledge or information which is now
published or which subsequently becomes publicly known in the form of which
it was obtained from the Company, other than as a direct or indirect result
of the breach of this Agreement by Executive.
8. Ventures. During the term of this Agreement, it is anticipated that
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Executive will be engaged in or associated with the planning and
implementing of projects, programs and ventures involving the Company and
third parties, and Executive hereby expressly acknowledges and agrees that
all rights in such projects, programs and ventures shall belong to the
Company. Except as formally approved by the Company's Board of Directors,
Executive shall not be entitled to any interest in such projects, programs
and ventures or to any commission, finder's fee or other compensation in
connection therewith, other than the compensation to be paid to Executive
as provided in this Agreement, described in Section 4. of this Agreement.
9. Noncompetition and Nonsolicitation Covenants.
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01 Agreement Not to Compete. Executive agrees that, during the term of
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his employment by the Company and for a period of one (1) year
thereafter, he shall not, directly or indirectly, engage in
competition with the Company in any manner or capacity (e.g., as an
advisor, principal, agent, partner, officer, director, stockholder,
employee, member of any association, or otherwise) in any phase of the
business that the Company is conducting during the term of this
Agreement, including the design, development, manufacture,
distribution, marketing, leasing or selling of accessories, devices,
or systems related to the products or services being sold by the
Company.
02 Geographic Extent of Covenant. The obligations of Executive under
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Section 8.01 shall apply to any geographic area in which the Company:
i) has engaged in business during the term of this Agreement through
production, promotional sales or marketing activity, or
otherwise; or
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ii) has otherwise established its goodwill, business reputation, or
any customer or supplier relations.
03 Limitation on Covenant. Ownership by Executive, as a passive
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investment, of less than one percent (1 %) of the outstanding shares
of capital stock of any corporation listed on a national securities
exchange or publicly traded in the over-the-counter market shall not
constitute a breach of this Section 8
04 Nonsolicitation and Noninterference. During the term of this Agreement
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and for a period of two years thereafter, Executive shall not:
i) induce or attempt to induce any employee of the Company to leave
the employ of the Company, or in any way interfere adversely with
the relationship between any such employee and the Company;
ii) Induce or attempt to induce any employee of the Company to work
for, render services to, provide advice to or supply confidential
business information or trade secrets of the Company to any third
person, firm or corporation; or
iii) Induce or attempt to induce any customer, supplier, licensee,
licensor or other business relation of the Company to cease doing
business with the Company, or in any way interfere with the
relationship between any such customer, supplier, licensee,
licensor or other business relation and the Company.
05 Indirect Competition and Interference. Executive further agrees that,
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during the term of this Agreement and, solely with respect to Section
9.04, the period' covered by Section 9.04, he will not, directly or
indirectly, assist or encourage any other person in carrying out,
directly or indirectly, any activity that would be prohibited by the
above provisions of this Section 9 if such activity were carried out
by Executive, either directly or indirectly; and, in particular,
Executive agrees that he will not, directly or indirectly, induce any
employee of the Company to carry out, directly or indirectly, any such
activity.
10. Patent and Related Matters.
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01 Disclosure and Assignment. Executive will promptly disclose in writing
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to the Company complete information concerning each and every
invention, discovery, improvement, device, design, apparatus,
practice, process, method or product, whether patentable or not, made,
developed, perfected, devised, conceived or first reduced to practice
by Executive, either solely or in collaboration with others, during
the term of this Agreement, or within six months thereafter, whether
or not during regular working hours, relating either directly or
indirectly to the business, products, practices, or techniques of the
Company (hereinafter referred to as "Developments"). Executive, to the
extent that he has the legal right to do so, hereby
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acknowledges that any and all of said Developments are the property of
the Company and hereby assigns and agrees to assign to the Company any
and all of Executive's right, title and interest in and to any and all
of such Developments. Without limiting the foregoing, any and all
original works of authorship which are created by Executive (solely or
jointly with others) within the scope of Executive's employment and
which are protectable by copyright law shall be deemed "works made for
hire," as that term is defined in the U.S. Copyright Act (17 U. S. C.
Section 101).
02 Future Developments. As to any future Developments made by Executive
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that relate to the business, products or practices of the Company and
that are first conceived or reduced to practice during the term of
this Agreement, or within six months thereafter, but that are claimed
for any reason to belong to an entity or person other than the
Company, Executive will promptly disclose the same in writing to the
Company and shall not disclose the same to others if the Company,
within twenty (20) days thereafter, shall claim ownership of such
Developments under the terms of this Agreement. If the Company makes
such claim, Executive agrees that, insofar as the rights (if any) of
Executive are involved, it will be settled by arbitration in
accordance with the rules of the American Arbitration Association. The
locale of the arbitration shall be Minneapolis, Minnesota (or other
locale convenient to the Company's principal executive offices). If
the Company makes no such claim, Executive hereby acknowledges that
the Company has made no promise to receive and hold in confidence any
such information disclosed by Executive.
03 Limitation on Sections 10.01 and 10.02. The provisions of Sections
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10.01 and 10.02 shall not apply to any Development meeting the
following conditions:
i) such Development was developed entirely on Executive's own time;
ii) such Development was made without the use of any Company
equipment, supplies, facility or trade secret information;
iii) such development does not relate:
(1) directly to the business of the Company; or
(2) to the Company's actual or demonstrable anticipated
research;
iv) such Development does not result from any work performed by
Executive for the Company.
04 Assistance of Executive. Upon request and without further compensation
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therefor, but at no expense to Executive, and whether during the term
of this Agreement or thereafter, Executive will do all lawful acts,
including, but not limited to, the execution of papers and lawful
oaths and, the giving of testimony, that in the opinion of the
Company, its successors and assigns may be necessary or desirable in
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obtaining, sustaining, reissuing, extending and enforcing United
States and foreign Letters Patent, including, but not limited to,
design patents, on any and all of such Developments, and for
perfecting, affirming and recording the Company's complete ownership
and title thereto, and to cooperate otherwise in all proceedings and
matters relating thereto.
05 Records. Executive will keep complete, accurate and authentic
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accounts, notes, data and records of all Developments in the manner
and form requested by the Company. Such accounts, notes, data and
records shall be the property of the Company, and, upon its request,
Executive will promptly surrender the same to it or, if not previously
surrendered upon its request or otherwise, Executive will surrender
the same, and all copies thereof, to the Company upon the conclusion
of his employment.
06 Obligations, Restrictions and Limitations. Executive understands that
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the Company may enter into agreements or arrangements with agencies of
the United States Government, and that the Company may be subject to
laws and regulations which impose obligations, restrictions and
limitations on it with respect to inventions and patents that may be
acquired by it or that may be conceived or developed by employees,
consultants or other agents rendering services to it. Executive agrees
that he shall be bound by all such obligations, restrictions and
limitations applicable to any such invention conceived or developed by
him during the term of this Agreement and shall take any and all
further action that may be required to discharge such obligations and
to comply with such restrictions and limitations.
11. Termination.
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01 Grounds for Termination. This Agreement shall terminate prior to the
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expiration of the term set forth in Section 2 or any extension thereof
in the event that at any time during the initial term or any extension
thereof
i) Executive shall die;
ii) The Board of Directors shall determine that the Executive has
become disabled; provided, however, in the event of termination
of Employment of the Executive as a result of disability, the
Company shall continue to pay Executive the salary and benefits
provided for in Sections 4 and 5 above, offset by any payments
received by the Executive pursuant to the Company's group
disability program;
iii) The Board of Directors may terminate this Agreement for Cause, if
it shall determine that:
(1) Executive has breached this Agreement in any material
respect, which breach is not cured by Executive or is not
capable of being
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cured by Executive within thirty (30) days after written
notice of such breach is delivered to Executive; or
(2) Executive has engaged in willful and material misconduct,
including willful and material failure to perform his duties
as an officer or employee of the Company; or
iv) Executive may terminate this Agreement for Cause if the Company
has breached this Agreement in any material respect, which breach
is not cured by the Company or is not capable of being cured by
the company within thirty (30) days after written notice of such
breach is delivered to the Board of Directors.
Notwithstanding any termination of this Agreement, Executive, in consideration
of his employment hereunder to the date of such termination, shall remain bound
by the provisions of this Agreement that specifically relate to periods,
activities or obligations upon or subsequent to the termination of Executive's
employment
02 Effects of Termination. In the event that the Company terminates this
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Agreement pursuant to Sections 11(01)(1) or (iii) or if the Executive
terminates this Agreement other than pursuant to Section 11(OI)(iv),
then the Company's obligations to make any payments to Executive
pursuant to Sections 4 and 5 hereunder shall cease on the date of
termination. In the event that Executive shall terminate this
Agreement pursuant to Section 11(Ol)(iv) or if the Company terminates
this Agreement other than pursuant to Sections 11(Ol)(i) or (iii)
hereof, then the Company shall be obligated to continue making the
payments to Executive pursuant to Sections 4 and 5 of this Agreement.
03 "Disability" Defined. The Board of Directors may determine that
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Executive has become disabled, for the purpose of this Agreement, in
the event that Executive shall fail, because of illness or incapacity,
to render services of the character contemplated by this Agreement
over a period of ninety (90) days during any one hundred eighty (180)
day period. The Board of Directors shall make the existence or
nonexistence of grounds for termination because of disability in good
faith after notice in writing given to Executive at least thirty (30)
days prior to such determination. During such thirty (30) day period,
Executive shall be permitted to make a presentation to the Board of
Directors for its consideration.
04 Surrender of Records and Property. Upon termination of his employment
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with the Company, Executive shall deliver promptly to the Company all
records, manuals, books, blank forms, documents, letters, memoranda,
notes, notebooks, reports, data, tables, calculations or copies
thereof, which are the property of the Company or which relate in any
way to the business, products, practices or techniques of the Company,
and all other property, trade secrets and confidential information of
the Company, including, but not limited to, all documents which in
whole or in part
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contain any trade secrets or confidential information of the Company,
which in any of these cases are in his possession or under his
control.
12. Miscellaneous.
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01 Governing Law. This Agreement is made under and shall be governed by
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and construed in accordance with the laws of the State of Minnesota.
02 Prior Agreements. This Agreement contains the entire Agreement of the
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parties relating to the subject matter hereof and supersedes all prior
Agreements and understandings with respect to such subject matter, and
the parties hereto have made no Agreements, representations or
warranties relating to the subject matter of this Agreement which are
not set forth herein.
03 Withholding Taxes. The Company may withhold from any benefits payable
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under this Agreement all federal, state, city or other taxes as shall
be required pursuant to any law or governmental regulation or ruling.
04 Amendments. No amendment or modification of this Agreement shall be
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deemed effective unless made in writing and signed by the parties
hereto.
05 No Waiver. No term or condition of this Agreement shall be deemed to
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have been waived, nor shall there be any estoppel to enforce any
provisions of this Agreement, except by a statement in writing signed
by the party against whom enforcement of the waiver or estoppel is
sought. Any written waiver shall not be deemed a continuing waiver
unless specifically stated, shall operate only as to the specific term
or condition waived and shall not constitute a waiver of such term or
condition for the future or as to any act other than that specifically
waived.
06 Severability. To the extent any provision of this Agreement shall be
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invalid or unenforceable, it shall be considered deleted herefrom and
the remainder of such provision and of this Agreement shall be
unaffected and shall continue in full force and effect. In furtherance
and not in limitation of the foregoing, should the duration or
geographical extent of, or business activities covered by, any
provision of this Agreement be in excess of that which is valid and
enforceable under applicable law, then such provision shall be
construed to cover only that duration, extent or activities which may
validly and enforceably be covered. Executive acknowledges the
uncertainty of the law in this respect and expressly stipulates that
this Agreement be given the construction which renders its provisions
valid and enforceable to the maximum extent (not exceeding its express
terms) possible under applicable law.
07 Assignment. This Agreement shall not be assignable, in whole or in
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part, by either party without the written consent of the other party,
except that the Company may, without the consent of Executive, assign
its rights and obligations under this Agreement to any corporation,
firm or other business entity with or into which the Company may merge
or consolidate, or to which the Company may sell or transfer
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all or substantially all of its assets, or of which 50% or more of the
equity investment and of the voting control is owned, directly or
indirectly, by, or is under common ownership with, the Company. After
any such assignment by the Company, the Company shall be discharged
from all further liability hereunder and such assignee shall
thereafter be deemed to be the Company for the purposes of all
provisions of this Agreement including this Section 11.
08 Injunctive Relief. Executive agrees that it would be difficult to
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compensate the Company fully for damages for any violation of the
provisions of this Agreement, including without limitation the
provisions of Sections 6, 8, 9 and 10. Accordingly, Executive
specifically agrees that the Company shall be entitled to temporary
and permanent injunctive relief to enforce the provisions of this
Agreement and that such relief may be granted without the necessity of
proving actual damages. This provision with respect to injunctive
relief shall not, however, diminish the right of the Company to claim
and recover damages in addition to injunctive relief.
IN WITNESS WHEREOF, Executive and the Company have executed this Agreement as of
the date set forth in the first paragraph.
MEDI-JECT CORPORATION EXECUTIVE
By /s/ Xxxxxxxx X. Xxxxxxxxx /s/ Franklin Pass
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Its Chief Financial Officer
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