Exhibit 10.26
EMPLOYMENT AGREEMENT
AGREEMENT (the "AGREEMENT"), dated as of December 3, 2002, by and
between NOVADEL PHARMA, INC., a Delaware corporation with principal executive
offices at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the "COMPANY"),
and ▇▇▇▇ ▇▇▇▇▇▇▇▇, residing at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
(the "EXECUTIVE").
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Executive as President and
Chief Executive Officer of the Company, and the Executive desires to serve the
Company in those capacities, upon the terms and subject to the conditions
contained in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto hereby agree as follows:
1. Employment.
The Company agrees to employ the Executive, and the Executive agrees to
be employed by the Company, upon the terms and subject to the conditions of this
Agreement.
2. Term.
The employment of the Executive by the Company as provided in Section 1
shall be for a period of three (3) years commencing on the date hereof, unless
sooner terminated in accordance with the provisions of Section 9 below (the
"TERM"); provided, however, that the Term shall be extended automatically for
additional one-year periods unless one party shall advise the other in writing
at least 90 days before the initial expiration of the Term or an anniversary
date thereof that this Agreement shall no longer be so extended.
3. Duties; Best Efforts; Place of Performance.
(a) The Executive shall serve as President and Chief Executive Officer
of the Company and shall perform, subject to the direction of the Board of
Directors of the Company, such duties as are customarily performed by the
President and Chief Executive Officer. The Executive shall also have such other
powers and duties as may be from time to time prescribed by the Board of
Directors of the Company, provided that the nature of the Executive's powers and
duties so prescribed shall not be inconsistent with the Executive's position and
duties hereunder.
(b) The Executive shall devote substantially all of his business time,
attention and energies to the business and affairs of the Company and shall use
his best efforts to advance the best interests of the Company and shall not
during the Term be actively 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 the Executive of his
duties hereunder or the Executive's availability to perform such duties or that
will adversely affect, or negatively reflect upon, the Company.
(c) The duties to be performed by the Executive hereunder shall be
performed primarily at the office of the Company in Flemington, New Jersey,
subject to reasonable travel requirements on behalf of the Company.
4. Directorship. The Company shall use its best efforts to cause the
Executive to be elected as a member of its Board of Directors throughout the
Term and shall include him in the management slate for election as a director at
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every stockholders' meeting during the Term at which his term as a director
would otherwise expire. The Executive agrees to accept election, and to serve
during the Term, as director of the Company, without any compensation therefor
other than as specified in this Agreement.
5. Compensation. As full compensation for the performance by the
Executive of his duties under this Agreement, the Company shall pay the
Executive as follows:
(a) Base Salary. The Company shall pay the Executive a base salary (the
"BASE SALARY") at a rate of $350,000 per annum, payable in equal semi-monthly
installments during the Term. The Board of Directors of the Company shall
annually review the Base Salary to determine whether an increase in the amount
thereof is warranted.
(b) Guaranteed Bonus. The Company shall pay the Executive a bonus (the
"GUARANTEED BONUS") of $150,000 within 30 days following each anniversary of the
date of this Agreement during the Term, provided that the Executive is employed
hereunder on such anniversary date. The Board of Directors of the Company shall
annually review the Guaranteed Bonus to determine whether an increase in the
amount thereof is warranted.
(c) Discretionary Bonus. At the sole discretion of the Board of
Directors of the Company, the Executive shall receive an additional annual bonus
(the "DISCRETIONARY BONUS") in an amount equal to up to 75% of his Base Salary,
based upon his performance on behalf of the Company during the prior year. The
Discretionary Bonus shall be payable either as a lump-sum payment or in
installments as determined by the Board of Directors of the Company in its sole
discretion.
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(d) Investment and Fee Bonus. The Company shall pay the Executive an
additional bonus (the "INVESTMENT AND FEE BONUS") equal to 5% of all amounts up
to an aggregate of $7,500,000 invested in, or earned by, the Company during the
Term. Such bonus shall be paid to the Executive within 30 days following the
date such amounts are invested in, or actually received by, the Company. The
Company agrees that it will pay the Executive at least $200,000 under this
Section 5(d) on or before June 30, 2003, whether or not any amounts are invested
in, or received by, the Company during the Term. The Investment and Fee Bonus
shall be reduced by the Net Proceeds (as defined below) received by the
Executive from (a) the ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ stock options in the name of the
Executive (the "Options") that are due to vest on or about December 3, 2002 and
(b) the ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Certificates of Extra Compensation in the name of the
Executive (the "Certificates") that vest on or about December 15, 2002. "Net
Proceeds" shall mean (a) with respect to the Options, the last trade price of
the common stock of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ on the date that the Options are exercised
minus the exercise price of such Option, and (b) with respect to the
Certificates the net present value of such Certificates, as determined by the
relevant compensation publication of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇. The Executive shall
furnish copies of the Options and Certificates. The Guaranteed Bonus, the
Discretionary Bonus and the Investment and Fee Bonus are collectively referred
to in this Agreement as the "BONUS").
(e) Withholding. The Company shall withhold all applicable federal,
state and local taxes and social security and such other amounts as may be
required by law from all amounts payable to the Executive under this Section 5.
(f) Stock Options. Promptly after the date hereof, and as additional
compensation for the services to be rendered by the Executive pursuant to this
Agreement, the Company shall grant the Executive stock options ("STOCK OPTIONS")
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to purchase 1,000,000 shares of Common Stock of the Company pursuant to the
Company's Stock Option Plan (the "STOCK OPTION PLAN"). The Stock Options shall
qualify as incentive stock options under Section 422 of the Internal Revenue
Code of 1986, as amended, to the extent permitted under the Stock Option Plan.
The stock options shall vest ratably over a three-year period ending on the
third anniversary of the date of this Agreement, so that 333,333 shares of the
Company's Common Stock will vest on each of December 3, 2003 and December 3,
2004, and 333,334 shares of the Company's Common Stock will vest on December 3,
2005, subject, in each case, to the provisions of Section 10 below. In
connection with such grant, the Executive shall enter into the Company's
standard stock option agreement which will incorporate the foregoing vesting
schedule and the Stock Option related provisions contained in Section 10 below.
The Board of Directors of the Company shall annually review the number of Stock
Options granted to the Executive to determine whether an increase in the number
thereof is warranted.
(g) Expenses. The Company shall reimburse the Executive for all normal,
usual and necessary expenses incurred by the Executive in furtherance of the
business and affairs of the Company, including reasonable travel and
entertainment, upon timely receipt by the Company of appropriate vouchers or
other proof of the Executive's expenditures and otherwise in accordance with any
expense reimbursement policy as may from time to time be adopted by the Company.
(h) Other Benefits. The Executive shall be entitled to all rights and
benefits for which he 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
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plans, bonus plans and other so-called "fringe" benefits) as the Company shall
make available to its senior executives from time to time.
(i) Vacation. The Executive shall, during the Term, be entitled to a
vacation of four (4) weeks per annum, in addition to holidays observed by the
Company. The Executive shall not be entitled to carry any vacation forward to
the next year of employment and shall not receive any compensation for unused
vacation days.
6. Confidential Information and Inventions.
(a) The Executive recognizes and acknowledges that in the course of his
duties he is likely to receive confidential or proprietary information owned by
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, the Executive agrees to keep confidential and not disclose or make
accessible to any other person or use for any other purpose other than in
connection with the fulfillment of his duties under this Agreement, any
Confidential and Proprietary Information (as defined below) owned by, or
received by or on behalf of, the Company or any of its affiliates. "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, plans or
the business and affairs of the Company or of any affiliate or client of the
Company. The Executive expressly acknowledges the trade secret status of the
Confidential and Proprietary Information and that the Confidential and
Proprietary Information constitutes a protectable business interest of the
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Company. The 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 his employment by the Company, except as required in the execution
of the Executive's duties to the Company. The Executive agrees to return
immediately all Company material and reproductions (including but not limited,
to writings, correspondence, notes, drafts, records, invoices, technical and
business policies, computer programs or disks) thereof in his possession to the
Company upon request and in any event immediately upon termination of
employment.
(b) Except with prior written authorization by the Company, the
Executive agrees not to disclose or publish any of the Confidential and
Proprietary Information, or any confidential, scientific, technical or business
information of any other party to whom the Company or any of its affiliates owes
an obligation of confidence, at any time during or after his employment with the
Company.
(c) The Executive agrees that all inventions, discoveries, improvements
and patentable or copyrightable works ("INVENTIONS") initiated, conceived or
made by him, either alone or in conjunction with others, during the Term, other
than those Inventions listed on Schedule 6(c) attached hereto, 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.A., 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. The
Executive hereby assigns to the Company all right, title and interest he may
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have or acquire in all such Inventions; provided, however, that the Board of
Directors of the Company may in its sole discretion agree to waive the Company's
rights pursuant to this Section 6(c) with respect to any Invention that is not
directly or indirectly related to the Company's business. The Executive further
agrees to assist the Company in every proper way (but at the Company's expense)
to obtain and from time to time enforce patents, copyrights or other rights on
such Inventions in any and all countries, and to that end the Executive will
execute all documents necessary:
(i) to apply for, obtain and vest in the name of the Company
alone (unless the Company otherwise directs) letters patent, copyrights or other
analogous protection in any country throughout the world and when so obtained or
vested to renew and restore the same; and
(ii) to defend any opposition proceedings in respect of such
applications and any opposition proceedings or petitions or applications for
revocation of such letters patent, copyright or other analogous protection.
(d) The Executive acknowledges that while performing the services under
this Agreement the Executive may locate, identify and/or evaluate patented or
patentable inventions having commercial potential in the fields of pharmacy,
pharmaceutical, biotechnology, healthcare, technology and other fields which may
be of potential interest to the Company or one of its affiliates (the "THIRD
PARTY INVENTIONS"). The Executive understands, acknowledges and agrees that all
rights to, interests in or opportunities regarding, all Third-Party Inventions
identified by the Company, any of its affiliates or either of the foregoing
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persons' officers, directors, employees (including the Executive), agents or
consultants during the Employment Term shall be and remain the sole and
exclusive property of the Company or such affiliate and the Executive shall have
no rights whatsoever to such Third-Party Inventions and will not pursue for
himself or for others any transaction relating to the Third-Party Inventions
which is not on behalf of the Company.
(e) The provisions of this Section 6 shall survive any termination of
this Agreement.
7. Non-Competition, Non-Solicitation and Non-Disparagement.
(a) The Executive understands and recognizes that his services to the
Company are special and unique and that in the course of performing such
services the Executive will have access to and knowledge of Confidential and
Proprietary Information (as defined in Section 6) and the Executive agrees that,
during the Term and for a period of eighteen (18) months thereafter, he 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 which is engaged in any
business [directly] competitive with the business of the Company, either as an
individual for his own account, or as a partner, joint venturer, owner,
executive, employee, independent contractor, principal, agent, consultant,
salesperson, officer, director or shareholder of a Person in a business
competitive with the Company within the geographic area of the Company's
business, which is deemed by the parties hereto to be worldwide. The Executive
acknowledges that, due to the unique nature of the Company's business, the loss
of any of its clients or business flow or the improper use of its Confidential
and Proprietary Information could create significant instability and cause
substantial damage to the Company and its affiliates and therefore the Company
has a strong legitimate business interest in protecting the continuity of its
business interests and the restriction herein agreed to by the Executive
narrowly and fairly serves such an important and critical business interest of
the Company. For purposes of this Agreement, the Company shall be deemed to be
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actively engaged on the date hereof in the development of novel application drug
delivery systems for presently marketed prescription and over-the-counter drugs
and providing consulting services in connection therewith, and in the future in
any other business in which it actually devotes substantive resources to study,
develop or pursue. Notwithstanding the foregoing, nothing contained in this
Section 7(a) shall be deemed to prohibit the Executive from (i) acquiring or
holding, solely for investment, publicly traded securities of any corporation,
some or all of the activities of which are competitive with the business of the
Company so long as such securities do not, in the aggregate, constitute more
than five percent (5%) of any class or series of outstanding securities of such
corporation.
(b) During the Term and for 18 months thereafter, the Executive shall
not, directly or indirectly, without the prior written consent of the Company:
(i) solicit or induce any employee of the Company or any of
its affiliates to leave the employ of the Company or any such affiliate; or hire
for any purpose any employee of the Company or any affiliate or any employee who
has left the employment of the Company or any affiliate within one year of the
termination of such employee's employment with the Company or any such affiliate
or at any time in violation of such employee's non-competition agreement with
the Company or any such affiliate; or
(ii) solicit or accept employment or be retained by any Person
who, at any time during the term of this Agreement, was an agent, client or
customer of the Company or any of its affiliates where his position will be
related to the business of the Company or any such affiliate; or
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(iii) solicit or accept the business of any agent, client or
customer of the Company or any of its affiliates with respect to products,
services or investments similar to those provided or supplied by the Company or
any of its affiliates.
(c) The Executive agrees that both during the Term and at all times
thereafter, he shall not directly or indirectly disparage, whether or not true,
the name or reputation of the Company or any of its affiliates, including but
not limited to, any officer, director, employee or shareholder of the Company or
any of its affiliates.
(d) In the event that the Executive breaches any provisions of Section
6 or this Section 7 or there is a threatened breach, then, in addition to any
other rights which the Company may have, the Company shall (i) be entitled,
without the posting of a bond or other security, to injunctive relief to enforce
the restrictions contained in such Sections and (ii) have the right to require
the Executive to account for and pay over to the Company all compensation,
profits, monies, accruals, increments and other benefits (collectively
"BENEFITS") derived or received by the Executive as a result of any transaction
constituting a breach of any of the provisions of Sections 6 or 7 and the
Executive hereby agrees to account for and pay over such Benefits to the
Company.
(e) Each of the rights and remedies enumerated in Section 7(d) 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 7, 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 7 is held to be
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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. No such holding of
invalidity or unenforceability in one jurisdiction shall bar or in any way
affect the Company's right to the relief provided in this Section 7 or otherwise
in the courts of any other state or jurisdiction within the geographical scope
of such covenants as to breaches of such covenants in such other respective
states or jurisdictions, such covenants being, for this purpose, severable into
diverse and independent covenants.
(f) In the event that an actual proceeding is brought in equity to
enforce the provisions of Section 6 or this Section 7, the 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 which may be available. The
Executive agrees that he shall not raise in any proceeding brought to enforce
the provisions of Section 6 or this Section 7 that the covenants contained in
such Sections limit his ability to earn a living.
(g) The provisions of this Section 7 shall survive any termination of
this Agreement.
8. Representations and Warranties by the Executive.
The Executive hereby represents and warrants to the Company as follows:
(i) Neither the execution or delivery of this Agreement nor
the performance by the Executive of his duties and other obligations hereunder
violate or will violate any statute, law, determination or award, or 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
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prior employment agreement, contract, or other instrument to which the Executive
is a party or by which he is bound.
(ii) The Executive has the full right, power and legal
capacity to enter and deliver this Agreement and to perform his duties and other
obligations hereunder. This Agreement constitutes the legal, valid and binding
obligation of the Executive enforceable against him in accordance with its
terms. No approvals or consents of any persons or entities are required for the
Executive to execute and deliver this Agreement or perform his duties and other
obligations hereunder.
9. Termination. The Executive's employment hereunder shall be
terminated upon the Executive's death and may be terminated as follows:
(a) The Executive's employment hereunder may be terminated by the Board
of Directors of the Company for Cause. Any of the following actions by the
Executive shall constitute "CAUSE":
(i) The willful failure, disregard or refusal by the Executive
to perform his duties hereunder;
(ii) Any willful, intentional or grossly negligent act by the
Executive having the effect of injuring, in a material way (whether financial or
otherwise and as determined in good-faith by a majority of the Board of
Directors of the Company), the business or reputation of the Company or any of
its affiliates, including but not limited to, any officer, director, executive
or shareholder of the Company or any of its affiliates;
(iii) Willful misconduct by the Executive in respect of the
duties or obligations of the Executive under this Agreement, including, without
limitation, insubordination with respect to reasonable and legal directions
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received by the Executive from the Board of Directors of the Company;
(iv) The Executive's indictment of any felony or a misdemeanor
involving moral turpitude (including entry of a nolo contendere plea);
(v) The determination by the Company, after a reasonable and
good-faith investigation by the Company following a written allegation by
another employee of the Company, that the Executive engaged in some form of
harassment prohibited by law (including, without limitation, age, sex or race
discrimination), unless the Executive's actions were specifically directed by
the Board of Directors of the Company;
(vi) Any misappropriation or embezzlement of the property of
the Company or its affiliates (whether or not a misdemeanor or felony);
(vii) Breach by the Executive of any of the provisions of
Sections 6, 7 or 8 of this Agreement; and
(viii) Breach by the Executive of any provision of this
Agreement other than those contained in Sections 6, 7 or 8 which is not cured by
the Executive within thirty (30) days after notice thereof is given to the
Executive by the Company.
(b) The Executive's employment hereunder may be terminated by the Board
of Directors of the Company due to the Executive's Disability. For purposes of
this Agreement, a termination for "DISABILITY" shall occur (i) when the Board of
Directors of the Company has provided a written termination notice to the
Executive supported by a written statement from a reputable independent
physician to the effect that the Executive shall have become so physically or
mentally incapacitated as to be unable to resume, within the ensuing twelve (12)
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months, his employment hereunder by reason of physical or mental illness or
injury, or (ii) upon rendering of a written termination notice by the Board of
Directors of the Company after the Executive has been unable to substantially
perform his duties hereunder for 90 or more consecutive days, or more than 120
days in any consecutive twelve month period, by reason of any physical or mental
illness or injury. For purposes of this Section 9(b), the Executive agrees to
make himself available and to cooperate in any reasonable examination by a
reputable independent physician retained by the Company.
(c) The Executive's employment hereunder may be terminated by the
Executive for Good Reason. For purposes of this Agreement, "GOOD REASON" means
(i) a breach by the Company of its material obligations under Section 5 of this
Agreement (a "MATERIAL BREACH"), (ii) a material reduction by the Board of
Directors of the Company of the Executive's duties or authority provided for in
this Agreement (a "MATERIAL CHANGE"), or (iii) the relocation of the principal
executive office of the Company in excess of fifty (50) miles from its present
location not consented to by the Executive; provided, however, that a Material
Breach or a Material Change shall constitute Good Reason only if the Executive
has notified the Board of Directors of the Company in writing of the existence
and particulars of such Material Breach or Material Change and the Board of
Directors has failed to remedy such Material Change or Material Breach within
thirty (30) days of such notice.
(d) The Executive's employment hereunder may be terminated by the Board
of Directors of the Company (or its successor) upon the occurrence of a Change
of Control. For purposes of this Agreement, "CHANGE OF CONTROL" means (i) the
acquisition, directly or indirectly, following the date hereof by any person (as
such term is defined in Section 13(d) and 14(d)(2) of the Securities Exchange
Act of 1934, as amended), in one transaction or a series of related
transactions, of securities of the Company representing in excess of fifty
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percent (50%) or more of the combined voting power of the Company's then
outstanding securities if such person or his or its affiliate(s) do not own in
excess of 50% of such voting power on the date of this Agreement, or (ii) the
future disposition by the Company (whether direct or indirect, by sale of assets
or stock, merger, consolidation or otherwise) of all or substantially all of its
business and/or assets in one transaction or series of related transactions
(other than a merger effected exclusively for the purpose of changing the
domicile of the Company).
10. Compensation upon Termination.
(a) If the Executive's employment is terminated as a result of his
death or Disability, the Company shall (i) pay to the Executive or to the
Executive's estate, as applicable, (x) his Base Salary and any accrued and
unpaid Bonus and expense reimbursement amounts through the date of his death or
Disability and (y) the pro rata portion of the Guaranteed Bonus and Stock
Options earned by the Executive during the year of his death or Disability
(which, for this purpose, shall be prorated in accordance with the number of
full months in such year during which the Executive was employed hereunder), and
(ii) for the shorter of twelve (12) months following his death or Disability or
the balance of the Term (as if such termination had not occurred) provide
continuation coverage to the members of the Executive's family and, in the case
of termination for Disability, the Executive under all major medical and other
health, accident, life or other disability plans and programs in which such
family members and, in the case of termination for Disability, the Executive
participated immediately prior to his death or Disability. All Stock Options
that are scheduled to vest by the end of the calendar year in which such
termination occurs shall be accelerated and deemed to have vested as of the
termination date. All Stock Options that have not vested (or been deemed
pursuant to the immediately preceding sentence to have vested) as of the date of
termination shall be deemed to have expired as of such date. Any Stock Options
that have vested as of the date of the Executive's death or Disability
(including the Options described in the immediately preceding sentence) shall
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remain exercisable for a period of 90 days after the date of his death or
Disability.
(b) If the Executive's employment is terminated by the Board of
Directors of the Company for Cause or by the Executive other than for Good
Reason, the Company shall pay to the Executive his Base Salary through the date
of his termination and the Executive shall have no further entitlement to any
other compensation or benefits from the Company. All Stock Options that have not
vested as of the date of any such termination shall be deemed to have expired as
of such date and, in addition, the Executive's right to exercise any vested
Stock Options shall terminate as of such date.
(c) If the Executive's employment is terminated by the Company (or its
successor) upon the occurrence of a Change of Control, the Company (or its
successor, as applicable) shall (i) continue to pay to the Executive his Base
Salary for a period of one year following such termination, and (ii) pay the
Executive any Bonus that would have otherwise been due to the Executive by the
end of the calendar end of the year in which such termination occurs as well as
any expense reimbursement amounts owed through the date of termination. The
Company's obligation under clause (i) in the preceding sentence shall be
reduced, however, by any amounts otherwise actually earned by the Executive
during the one year period following the termination of his employment. All
Stock Options that have not vested as of the date of such termination shall be
accelerated and deemed to have vested as of such date.
(d) If (i) the Executive's employment is terminated by the Company
other than as a result of the Executive's death or Disability and other than for
17
reasons specified in Sections 10(b) or (c), or (ii) the Executive's employment
is terminated by the Executive for Good Reason, the Company shall (i) continue
to pay to the Executive his Base Salary for a period of one year following such
termination, (ii) pay the Executive the Bonus that would have otherwise been due
to the Executive in the calendar year in which such termination occurs and (iii)
pay the Executive any expense reimbursement amounts owed through the date of
termination. The Company's obligation under clauses (i) and (ii) in the
preceding sentence shall be reduced, however, by any amounts otherwise actually
earned by the Executive during the one year period following the termination of
his employment. All Stock Options that are scheduled to vest by the end of the
calendar year in which such termination occurs shall be accelerated and deemed
to have vested as of the termination date. All Stock Options that have not
vested (or been deemed pursuant to the immediately preceding sentence to have
vested) as of the date of termination shall be deemed to have expired as of such
date.
(e) The continuation coverage under any major medical and other health,
accident, life or other disability plans and programs for the periods provided
in Section 10(a) shall be provided (i) at the expense of the Company and (ii) in
satisfaction of the Company's obligation under Section 4980B of the Internal
Revenue Code of 1986 (and any similar state law) with respect to the period of
time such benefits are continued hereunder. Notwithstanding anything to the
contrary contained herein, the Company's obligation to provide such continuation
coverage under such Sections shall cease immediately upon the date any covered
individual becomes eligible for similar benefits under the plans or policies of
another employer.
(f) This Section 10 sets forth the only obligations of the Company with
respect to the termination of the Executive's employment with the Company, and
the Executive acknowledges that, upon the termination of his employment, he
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shall not be entitled to any payments or benefits which are not explicitly
provided in Section 10.
(g) Upon termination of the Executive's employment hereunder for any
reason, the Executive shall be deemed to have resigned as director of the
Company, effective as of the date of such termination.
(h) The provisions of this Section 10 shall survive any termination of
this Agreement.
11. Miscellaneous.
(a) This Agreement shall be governed by, and construed and interpreted
in accordance with, the laws of the State of New York, without giving effect to
its principles of conflicts of laws.
(b) Any dispute arising out of, or relating to, this Agreement or the
breach thereof (other than Sections 6 or 7 hereof), or regarding the
interpretation thereof, shall be finally settled by arbitration conducted in New
York City in accordance with the rules of the American Arbitration Association
then in effect before a single arbitrator appointed in accordance with such
rules. Judgment upon any award rendered therein may be entered and enforcement
obtained thereon in any court having jurisdiction. The arbitrator shall have
authority to grant any form of appropriate relief, whether legal or equitable in
nature, including specific performance. For the purpose of any judicial
proceeding to enforce such award or incidental to such arbitration or to compel
arbitration and for purposes of Sections 6 and 7 hereof, the parties hereby
submit to the non-exclusive jurisdiction of the Supreme Court of the State of
New York, New York County, or the United States District Court for the Southern
District of New York, and agree that service of process in such arbitration or
19
court proceedings shall be satisfactorily made upon it if sent by registered
mail addressed to it at the address referred to in paragraph (g) below. The
costs of such arbitration shall be borne proportionate to the finding of fault
as determined by the arbitrator. Judgment on the arbitration award may be
entered by any court of competent jurisdiction.
(c) This Agreement shall be binding upon and inure to the benefit of
the parties hereto, and their respective heirs, legal representatives,
successors and assigns.
(d) This Agreement, and the Executive's rights and obligations
hereunder, may not be assigned by the Executive. The Company may assign its
rights, together with its obligations, hereunder in connection with any sale,
transfer or other disposition of all or substantially all of its business or
assets.
(e) This Agreement cannot be amended orally, or by any course of
conduct or dealing, but only by a written agreement signed by the parties
hereto.
(f) 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.
(g) All notices, requests, consents and other communications, required
or permitted to be given hereunder, shall be in writing and shall be delivered
personally or by an overnight courier service or sent by registered or certified
mail, postage prepaid, return receipt requested, to the parties at the addresses
20
set forth on the first page of this Agreement, and shall be deemed given when so
delivered personally or by overnight courier, or, if mailed, five days after the
date of deposit in the United States mails. Either party may designate another
address, for receipt of notices hereunder by giving notice to the other party in
accordance with this paragraph (g).
(h) 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.
(i) As used in this Agreement, "affiliate" of a specified Person shall
mean and include any Person controlling, controlled by or under common control
with the specified Person.
(j) The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
(k) This Agreement may be executed in any number of counterparts, each
of which shall constitute an original, but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
NOVADEL PHARMA, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman
EXECUTIVE
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
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SCHEDULE 6(C)
Future revenues which may be earned from distribution, or assignment (licensure)
of rights, of currently patented `device for housing and dispensing
pre-moistened bathroom tissues', or from any improvements made thereto.
23
