EXHIBIT 10.21
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated September 4, 2001,
between FLEMINGTON PHARMACEUTICAL CORPORATION, a New Jersey corporation (the
"Corporation"), 00 Xxxxx Xxxxx 00 Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 and XXXXXX
X. XXXXXX, 00000 Xxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000 (the "Executive").
W I T N E S S E T H
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WHEREAS, the Corporation desires to employ Executive as the Corporation's
Vice President - Corporate Development to engage in such activities and to
render such services under the terms and conditions hereof and has authorized
and approved the execution of this Agreement; and
WHEREAS, Executive desires to be employed by the Corporation under the
terms and conditions hereinafter provided;
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
herein contained, the parties agree as follows:
1. EMPLOYMENT, DUTIES AND ACCEPTANCE.
1.1 SERVICES. During employment hereunder, Executive shall be
Vice President - Corporate Development of the Corporation, shall have the powers
and duties normally held by a corporate officer holding such a position and
shall report directly to the President of the Corporation. Executive shall
devote Executive's business time, attention, knowledge and skills faithfully,
diligently and to the best of Executive's ability in furtherance of the business
and activities of the Corporation (the "Services"). The principal place of
performance by Executive of services hereunder shall be agreed upon between
Executive and the Corporation's President.
1.2 ACCEPTANCE. Executive hereby accepts such employment and
agrees to render the Services.
2. TERM OF EMPLOYMENT.
2.1 TERM. The Executive's employment under this Agreement (the
"Term") shall begin as of the Effective Date (as hereinafter defined) and shall
continue for a term of one (1) year, unless sooner terminated pursuant to
Sections 5 or 9 of this Agreement. Notwithstanding anything to the contrary
contained herein, the provisions of this Agreement governing Protection of
Confidential Information shall continue in effect as specified in Section 10
hereof and survive the expiration or termination hereof.
2.2 EFFECTIVE DATE. The effective date of this Agreement (the
"Effective Date") shall be September 4, 2001.
2.3 EXTENSION OF TERM. If, as a result of Executive's efforts, the
Corporation successfully raises additional capital, through either a public or
private placement of the Corporation's common stock, in the amount of $2,500,000
within one year of the Effective Date, the Term of this Agreement shall be
extended by one year beyond the time it originally would have ended; if the
amount of such capital raised in such manner is $5,000,000 within two years of
the Effective Date, the Term of this Agreement shall be extended by two years
beyond the time it originally would have ended.
3. BASE SALARY AND EXPENSE REIMBURSEMENT.
3.1 BASE SALARY. The Corporation shall pay Executive a salary
(the "Base Salary") at the rate of $120,000 per year. Payment shall be made
monthly, on the last day of each calendar month.
3.1.1 INCREASE OF BASE SALARY. If, while this Agreement is in effect,
as a result of Executive's efforts, the Corporation successfully raises
additional capital, through either a public or private placement of the
Corporation's common stock, in the amount of $5,000,000, Executive's Base Salary
shall be increased to $180,000 per year, effective the first day of the first
month following the closing of such capital raise.
3.2 EXPENSE REIMBURSEMENT. All travel and other expenses
reasonably incurred by Executive incidental to the rendering of Services to the
Corporation hereunder shall be paid by the Corporation or reimbursed to
Executive upon receipt and approval of expense reports on Corporation forms
supported by appropriate documentation. From time to time, Executive shall
submit, and obtain approval for, proposed expense budgets. All unbudgeted
expenses in excess of $500.00 (individually, or collectively if in connection
with a single, related subject or project within a given month) shall require
advance approval.
3.3 BONUSES. In addition, Executive shall be entitled to such
other cash bonuses and other compensation in the form of stock, stock options or
other property or rights as may from time to time be awarded by the Board in
connection with Executive's employment.
4. STOCK OPTIONS.
4.1 In connection with this Agreement, the Corporation hereby
grants the Executive stock options (outside of the Corporation's stock option
plans) to purchase 350,000 shares of the Corporation's common stock, at an
exercise price of $0.75 per share, (the "Nonplan Options"). The Nonplan Options
shall vest in, and become exercisable by, the Executive as follows: (a) 87,500
Options on execution hereof; (b) 87,500 Options on December 5, 2001; (c) 87,500
Options on March 5, 2002; and, (d) 87,500 Options on June 5, 2001. The Nonplan
Options may be exercised by the Executive at any time, following vesting, during
the ten (10) years following the date of grant, provided the Executive is an
employee of the Corporation at the time of exercise. Notwithstanding anything
contained herein to the contrary, the terms and conditions set forth in the
Nonplan Options document shall control the terms and conditions on which the
Nonplan Options shall vest, continue in force and may be exercised.
4.2 If, as a result of Executive's efforts, the Corporation
successfully raises additional capital, through either a public or private
placement of the Corporation's common stock, in the amount of $2,500,000 within
one year of the Effective Date, or $5,000,000 within two years of the Effective
Date, the Corporation shall grant Executive an additional 350,000 fully vested
Nonplan Options having an exercise price of $0.75 per share. Notwithstanding
anything contained herein to the contrary, the terms and conditions set forth in
the Nonplan Options document shall control the terms and conditions on which the
Nonplan Options shall vest, continue in force and may be exercised.
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5. SEVERANCE.
5.1 TERMINATION FOR GOOD REASON. If Executive's employment
hereunder shall be terminated for Good Reason (as defined in Section 9.4 hereof)
at any time prior to the end of the Term, Executive shall be entitled to receive
from the Corporation any unpaid accrued Base Salary earned through the date of
termination.
5.2 EXECUTIVE'S TERMINATION WITHOUT GOOD REASON. If the Executive
terminates employment without Good Reason (as defined in Section 9.4 hereof) at
any time prior to the end of the Term, Executive shall be entitled to receive
from the Corporation payment of any unpaid accrued Base Salary earned through
the date of termination. All other obligations of the Corporation hereunder
shall terminate on the date of termination and the Executive's termination
without Good Reason shall act as a waiver of all claims to compensation which
might otherwise have accrued after the date of termination.
5.3 CORPORATION'S RIGHT TO TERMINATE EARLY. Notwithstanding
anything contained in this Agreement to the contrary, the Corporation shall have
the right to terminate Executive's employment at any time after December 4, 2001
for any reason or for no reason. In such case, Executive shall be entitled to
receive from the Corporation any unpaid accrued Base Salary earned through the
date of termination.
6. ADDITIONAL BENEFITS.
During Executive's employment, the Corporation shall cause Executive to be
covered by all the Corporation's employee benefit plans, in effect from time to
time, for which Executive is eligible, including without limitation, any
retirement plan or group insurance. The Corporation does not presently have any
group life insurance or group long-term disability insurance program; however,
the Corporation is in the process of exploring the implementation of such
programs. Upon implementation, it is the Corporation's present expectation that
the Executive will be covered by group life insurance in an amount equal to at
least one year's Base Salary and group long-term disability insurance.
7. VACATION.
Executive shall be entitled to such holidays as are in effect for all of
the Corporation's employees, and to sick leave in accordance with Corporation
policy as in effect from time to time. In addition, Executive shall be entitled
to four weeks vacation days (twenty business days) per year. It is not
anticipated that the Executive will use any vacation days during the remainder
of the 2001 calendar year. The timing of the taking of vacation is left to the
discretion of Executive, provided the same is not inconsistent with the
reasonable business requirements of the Corporation. Vacation days not used by
Executive during a given year may be accumulated and carried forward to future
years.
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8. INDEMNIFICATION.
As provided in the Corporation's By-Laws, Certificate of Incorporation and
Directors and Officers insurance policy, and only to the extent provided
therein, the Corporation shall indemnify Executive and hold Executive harmless
against any and all expenses reasonably incurred by him in connection with or
arising out of (a) the defense of any action, suit or proceeding to which
Executive is a named party, or (b) any claim asserted or threatened against
Executive, provided, in either case, the matter has arisen because of or in
connection with Executive's being or having been an employee or officer of the
Corporation, whether or not he continues to be such at the time the expenses
indemnified against are incurred, except insofar as (a) such indemnification may
be prohibited by law, (b) the expenses were incurred in connection with a
matter where the Corporation is or was in an adversarial position to Executive
and the Corporation prevailed against Executive in such matter (this exclusion
is not intended by the parties to encompass a situation where the "adversarial"
position of the Corporation results from the litigation being characterized as a
shareholder's derivative action), or (c) the expenses were incurred in
connection with a matter arising out a material breach by Executive of this
Agreement or of Executive's obligations to the Corporation (mere poor
performance by the Executive of the responsibilities of his position would not
be considered a "material breach" for the purposes of this exclusion).
9. TERMINATION.
9.1 DEATH. If Executive dies during the Term of this Agreement,
Executive's employment hereunder shall terminate upon his death and all
obligations of the Corporation hereunder shall terminate on such date, except
that Executive's estate or his designated beneficiary shall be entitled to
payment of any unpaid accrued Base Salary through the date of his death.
9.2 DISABILITY. If Executive shall be unable to perform a
significant part of his duties and responsibilities in connection with the
conduct of the business and affairs of the Corporation and such inability lasts
for a period of at least 90 consecutive days by reason of Executive's physical
or mental disability, whether by reason of injury, illness or similar cause,
Executive shall be deemed disabled, and the Corporation any time thereafter may
terminate Executive's employment hereunder by reason of the disability. During
such 90 day period, the Base Salary and other benefits payable to Executive
hereunder shall not be suspended or diminished, except to the extent equivalent
to the extent of any Corporation-provided disability insurance in effect. Upon
delivery to Executive of notice to terminate, all obligations of the Corporation
hereunder shall terminate, except that Executive shall be entitled to payment of
any unpaid accrued Base Salary through the date of termination. The obligations
of Executive under Section 10 hereof shall continue notwithstanding termination
of Executive's employment pursuant to this Section 9.2.
9.3 TERMINATION FOR CAUSE. The Corporation may at any time during
the Term, with 10 days prior written notice, terminate this Agreement and
discharge Executive for Cause, whereupon the Corporation's obligation to pay
compensation or other amounts payable hereunder to or for the benefit of
Executive shall terminate on the date of such discharge. As used herein the
term "Cause" shall be deemed to mean and include: (i) a material breach by
Executive of this Agreement including without limitation a breach by Executive
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of the obligations set forth in Section 10 hereof; (ii) excessive absenteeism,
alcoholism or drug abuse; (iii) substantial neglect or inattention by Executive
of or to his duties hereunder; (iv) willful violation of specific and lawful
written or oral direction from the President or Board of Directors of the
Corporation provided such direction is not inconsistent with the Executive's
duties and responsibilities; or (v) fraud, criminal conduct or embezzlement.
The following shall be deemed a material breach for the purposes of Subsection
(i) hereof: (a) the Executive's conviction for, or a plea of nolo contendere
to, a felony or a crime involving moral turpitude (which, through lapse of time
or otherwise, is not subject to appeal); (b) willful misconduct as an employee
of the Corporation; or (c) willful or reckless disregard of his responsibilities
under this Agreement. The obligations of the Executive under Section 10 shall
continue notwithstanding termination of the Executive's employment pursuant to
this Section 9.3.
9.4 TERMINATION BY EXECUTIVE. The Executive shall have the right
to terminate this Agreement for Good Reason, as hereinafter defined. Good
Reason shall mean any of the following: (i) the assignment to the Executive of
duties inconsistent with the Executive's position, duties, responsibilities,
titles or offices as described herein; (ii) any material reduction by the
Corporation of the Executive's duties and responsibilities; or (iii) any
reduction by the Corporation of the Executive's compensation or benefits payable
hereunder (it being understood that a reduction of benefits applicable to all
employees of the Corporation, including the Executive, shall not be deemed a
reduction of the Executive's compensation package for purposes of this
definition).
10. CONFIDENTIALITY; NON-COMPETITION.
10.1 CONFIDENTIALITY. The Corporation and Executive acknowledge
that the services to be performed by Executive under this Agreement are unique
and extraordinary, and, as a result of Executive's employment hereunder,
Executive will be in possession of confidential information and trade secrets
relating to the business and affairs of both the Corporation and its clients.
Executive agrees that Executive will not, other than in the ordinary course of
business and subject to receipt of an appropriate Confidentiality Agreement,
during or after any term of employment, directly or indirectly use or disclose
to any person, firm or corporation any confidential information regarding the
clients, customers, business practices, products, research programs of the
Corporation or its clients acquired by Executive during Executive's employment,
unless Executive has obtained the Corporation's advance written consent
specifically authorizing Executive's disclosure or use thereof.
10.2 NON-COMPETITION. Executive agrees that, for a period
beginning with the Effective Date of this Agreement and ending twelve months
after the date of termination of employment by the Company, Executive will not,
either individually or in conjunction with any person, firm, association,
syndicate, company or corporation, directly or indirectly (as principal, agent,
employee, director, officer, shareholder, partner, independent contractor,
individual proprietor, or as an investor who has made advances, loans or
contributions to capital, or in any other manner whatsoever) compete with
company in the business then conducted by the Corporation. Executive also agrees
that, during such period, Executive will not solicit or encourage any persons
who, during such period, were employees of Company to (i) terminate such
persons' employment with Company; or (ii) become affiliated with any person,
firm, association, syndicate, company or corporation which is in a business
similar to that of the Company and in which Executive, either directly or
indirectly, has an interest.
10.3 ANTI-RAIDING. Executive agrees that during the term of his
employment hereunder, and, thereafter for a period of one (1) year, Executive
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will not, as principal, agent, employee, employer, consultant, director or
partner of any person, firm, corporation or business entity other that the
Corporation, or in any individual or representative capacity whatsoever,
directly or indirectly, without the prior express written consent of the
Corporation approach, counsel or attempt to induce any person who is then in the
employ of the Corporation to leave the employ of the Corporation or employ or
attempt to employ any such person or persons who at any time during the
preceding six months was in the employ of the Corporation.
10.4 INJUNCTION. Executive acknowledges and agrees that, because
of the special nature of his services, any breach or threatened breach of any of
the above provisions of this Section 10 hereof will cause the Corporation
irreparable injury and incalculable harm and, therefore, the Corporation will
have "no adequate remedies at law". Executive, therefore, agrees in advance that
Corporation shall be entitled to injunctive and other equitable relief for such
breach or threatened breach and that resort by the Corporation to such
injunctive or other equitable relief shall not be deemed to waive or to limit in
any respect any right or remedy which the Corporation may have with respect to
such breach or threatened breach. The Executive agrees that in such action, if
the Corporation makes a prima facie showing that Executive has violated or
apparently intends to violate any of the provisions of this Section 10, the
Corporation need not prove either damage or irreparable injury in order to
obtain injunctive relief. The Corporation and Executive agree that any such
action for injunctive or equitable relief shall be heard in a state or federal
court situated in New Jersey and each of the parties hereto agrees to accept
service of process by registered mail and to otherwise consent to the
jurisdiction of such courts.
10.5 NO INDEMNIFICATION. The provisions of Section 8, above, do
not apply to any expenses incurred by Executive in defending against any claim
made pursuant to this Section 10.
10.6 SEVERABILITY. If any provision contained within this Section
10 is found to be unenforceable by reason of the extent, duration or scope
thereof, or otherwise, then such restriction shall be enforced to the maximum
extent permitted by law, and Executive agrees that such extent, duration or
scope may be modified in any proceeding brought to enforce such restriction.
11. ARBITRATION. Except with respect to any proceeding brought
under Section 10 hereof, any controversy, claim, or dispute between the parties,
directly or indirectly, concerning this Employment Agreement or the breach
hereof, or the subject matter hereof, including questions concerning the scope
and applicability of this arbitration clause, shall be finally settled by
arbitration in the State of New Jersey pursuant to the rules then applying of
the American Arbitration Association. The arbitrators shall consist of one
representative selected by the Corporation, one representative selected by the
Executive and one representative selected by the first two arbitrators. The
parties agree to expedite the arbitration proceeding in every way, so that the
arbitration proceeding shall be begun within thirty (30) days after request
therefore is made, and shall continue thereafter, without interruption, and that
the decision of the arbitrators shall be handed down within thirty (30) days
after the hearings in the arbitration proceedings are closed. The arbitrators
shall have the right and authority to assess the cost of the arbitration
proceedings and to determine how their decision or determination as to each
issue or matter in dispute may be implemented or enforced. The decision in
writing of any two of the arbitrators shall be binding and conclusive on all of
the parties to this Agreement. Should either the Corporation or the Executive
fail to appoint an arbitrator as required by this Section 11 within thirty (30)
days after receiving written notice from the other party to do so, the
arbitrator appointed by the other party shall act for all of the parties and his
decision in writing shall be binding and conclusive on all of the parties to
this Employment Agreement. Any decision or award of the arbitrators shall be
final and conclusive on the parties to this Agreement; judgment upon such
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decision or award may be entered in any competent Federal or state court located
in the United States of America; and the application may be made to such court
for confirmation of such decision or award for any order of enforcement and for
any other legal remedies that may be necessary to effectuate such decision or
award.
12. NOTICES.
All notices, requests, consents and other communications required or
permitted to be given hereunder, shall be in writing and shall be deemed to have
been duly given if delivered personally or sent by prepaid telegram, telecopy or
mailed first-class, postage prepaid, by registered or certified mail (notices
sent by telegram or mailed shall be deemed to have been given on the date sent),
to the parties at their respective addresses hereinabove set forth or to such
other address as either party shall designate by notice in writing to the other
in accordance herewith. Copies of all notices shall be sent to Xxxxxx X.
Xxxxxx, Esq., 00 Xxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx 00000.
13. GENERAL.
13.1 GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the local laws of the State of New
Jersey applicable to agreements made and to be performed entirely in New Jersey.
13.2 CAPTIONS. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
13.3 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, relating to the subject matter hereof. No representation,
promise or inducement has been made by either party that is not embodied in this
Agreement, and neither party shall be bound by or liable for any alleged
representation, promise or inducement not so set forth.
13.4 SEVERABILITY. If any of the provisions of this Agreement
shall be unlawful, void, or for any reason, unenforceable, such provision shall
be deemed severable from, and shall in no way affect the validity or
enforceability of, the remaining portions of this Agreement.
13.5 WAIVER. The waiver by any party hereto of a breach of any
provision of this Agreement by any other party shall not operate or be construed
as a waiver of any subsequent breach of the same provision or any other
provision hereof.
13.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same Agreement.
13.7 ASSIGNABILITY. This Agreement, and Executive's rights and
obligations hereunder, may not be assigned by Executive. The Corporation,
however, may assign its rights, together with its obligations, hereunder to any
of its successors or assigns, whether by merger, consolidation or acquisition of
all or substantially all of its business or assets.
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13.8 AMENDMENT. This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or covenants hereof may
be waived, only by a written instrument executed by both of the parties hereto,
or in the case of a waiver, by the party waiving compliance. No superseding
instrument, amendment, modification, cancellation, renewal or extension hereof
shall require the consent or approval of any person other than the parties
hereto. The failure of either party at any time or times to require performance
of any provision hereof shall in no matter affect the right at a later time to
enforce the same. No waiver by either party of the breach of any term or
covenant contained in this Agreement, whether by conduct or otherwise, in any
one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
ATTEST: FLEMINGTON PHARMACEUTICAL
CORPORATION.
By:/s/ Xxxxxx X. Xxxxxx By:/s/ Xxxxx X. Xxxxxx III
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Xxxxxx X. Xxxxxx, Secretary Xxxxx X. Xxxxxx III, Ph.D.
President
WITNESS:
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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