Exhibit 10.36
COCENSYS, INC.
EMPLOYEE AGREEMENT
FOR
XXXX X. XXXXXX
This Employment Agreement ("Agreement") is entered into as of the thirtieth
day of October, 1996, by and between Xxxx X. Xxxxxx ("Executive") and CoCensys,
Inc. (the "Company").
WHEREAS, the Company desires to continue to employ Executive to provide
personal services to the Company, and wishes to provide Executive with certain
compensation and benefits in return for his continued services; and
WHEREAS, Executive wishes to continue to be employed by the Company and
provide personal services to the Company in return for certain compensation and
benefits;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed by and between the parties hereto as
follows:
1. EMPLOYMENT BY THE COMPANY.
1.1 Subject to terms set forth herein, the Company agrees to employ
Executive in the position of President, Sales and Marketing and Executive hereby
accepts such continued employment effective November 1, 1996 (the "Employment
Date"). During the term of his employment with the Company, Executive will
devote his best efforts and substantially all of his business time and attention
(except for vacation periods as set forth herein and reasonable periods of
illness or other incapacities permitted by the Company's general employment
policies) to the business of the Company.
1.2 Executive shall serve in an executive capacity and shall perform
such duties as are customarily associated with his then current title,
consistent with the Bylaws of the Company and as required by the Company's
President, Chief Executive Officer, or Board of Directors (the "Board").
1.3 As required by law, Executive's employment is subject to
satisfactory proof of his right to work in the United States.
1.4 The employment relationship between the parties shall also be
governed by the general employment policies and practices of the Company,
including those relating to protection of confidential information and
assignment of inventions, except that when the terms of this Agreement differ
from or are in conflict with the Company's general employment policies or
practices, this Agreement shall control.
1.
2. COMPENSATION.
2.1 SALARY. Executive shall receive a twenty two percent (22%)
increase in his base salary. Pursuant to this increase, Executive shall receive
for services to be rendered hereunder an annualized base salary of one hundred
and ninety thousand ($190,000), payable on a semi-monthly basis.
2.2 BONUS. The Company agrees to increase Executive's bonus
percentage from twenty percent (20%) of his base salary to twenty five percent
(25%) of his base salary, based upon achieving MBO performance objectives or
such other mutually agreed upon performance objectives consistent with those in
place for other Company executives from time to time. The bonus shall be
payable in four (4) equal installments on the last day for each calendar quarter
during the term of this Agreement.
2.3 OPTION SHARES. The Company agrees to grant to Executive an
Incentive Stock Option to purchase fifty thousand (50,000) shares of the Common
Stock of CoCensys, Inc., approved by the Board on October 30, 1996. The
exercise price of this option will be the Fair Market Value of CoCensys, Inc.
Common Stock on October 30, 1996. The stock will vest according to the
following schedule:
The stock option will vest over four (4) years, commencing on the
Employment Date. Twenty-five percent (25%) of the option shares shall vest on
the date that is twelve (12) months from the Employment Date, with 1/48 vesting
per month for the remaining thirty-six (36) months.
2.4 COMPANY BENEFITS. Executive will be eligible for group medical
insurance and group dental insurance and will receive fifteen (15) days vacation
per year plus standard Company holidays. Executive will also be eligible to
participate in the Company's 401K plan after meeting eligibility requirements.
Annual performance reviews will be conducted each year on Executive's
anniversary and used as a basis for determining future salary levels. The
Company further agrees to continue to provide Executive with an automobile.
3. PROPRIETARY INFORMATION OBLIGATIONS.
3.1 AGREEMENT. Executive agrees to abide by the terms of his
Proprietary Information and Inventions Agreement entered into by and between
Executive and the Company
3.2 REMEDIES. Executive's duties under the Proprietary Information
and Inventions Agreement shall survive termination of his employment with the
Company. Executive acknowledges that a remedy at law for any breach or
threatened breach by him of the provisions of the Proprietary Information and
Inventions Agreement would be inadequate, and he therefore agrees that the
Company shall be entitled to injunctive relief in case of any such breach or
threatened breach.
2.
4. OUTSIDE ACTIVITIES.
4.1 Except with the prior written consent of the Company's Board of
Directors, Executive will not during the term of this Agreement undertake or
engage in any other employment, occupation or business enterprise, other than
ones in which Executive is a passive investor. Executive may engage in civic
and not-for-profit activities so long as such activities do not materially
interfere with the performance of his duties hereunder.
4.2 Except as permitted by Section 4.3, during the term of his
employment by the Company, Executive agrees not to acquire, assume or
participate in, directly or indirectly, any position, investment or interest
known by him to be adverse or antagonistic to the Company, its business or
prospects, financial or otherwise.
4.3 During the term of his employment by the Company, except on
behalf of the Company, Executive will not directly or indirectly, whether as an
officer, director, stockholder, partner, proprietor, associate, representative,
consultant, or in any capacity whatsoever engage in, become financially
interested in, be employed by or have any business connection with any other
person, corporation, firm, partnership or other entity whatsoever which were
known by him to compete directly with the Company, throughout the world, in any
line of business engaged in (or planned to be engaged in) by the Company;
provided, however, that anything above to the contrary notwithstanding, he may
own, as a passive investor, securities of any competitor corporation, so long as
his direct holdings in any one such corporation shall not in the aggregate
constitute more than 1% of the voting stock of such corporation.
5. TERMINATION OF EMPLOYMENT.
5.1 TERMINATION WITHOUT CAUSE.
(A) The Company shall have the right to terminate Executive's
employment with the Company at any time without cause.
(B) In the event Executive's employment is terminated without
cause, the Company shall pay Executive severance ("Severance Payments") in the
form of continuation of his base salary in effect on the date Executive's
employment with the Company is terminated ("Separation Date") for a period of
twelve (12) consecutive months ("Severance Period"), except as provided herein.
If during the Severance Period, Executive accepts an offer of employment from
another employer for which his base salary is an amount greater than or equal to
his base salary in effect on the Separation Date, the Company's obligation to
make Severance Payments shall cease immediately. If during the Severance
Period, Executive accepts an offer of employment from another employer for which
his base salary is an amount less than his base salary in effect on the
Separation Date, the Company shall continue to make Severance Payments
throughout the Severance Period in an amount equal to the difference between
Executive's base salary in effect on the Separation Date and his base salary in
effect at his new employer. Notwithstanding
3.
the foregoing, in no event shall Executive Severance Payments cease or be
reduced during the first six (6) months of the Severance Period.
(C) In the event that Executive's employment is terminated
without cause, and to the extent Executive elects COBRA benefits, the Company
will reimburse Executive for his COBRA payments during the Severance Period;
provided, however, that the Company's obligation to make such reimbursements
shall cease immediately if Executive becomes eligible for other health insurance
benefits at the expense of a new employer. Executive agrees to notify a duly
authorized officer of the Company, in writing, immediately upon his acceptance
of any such employment. At the appropriate time, Executive will be provided
with a separate notice of his COBRA rights.
(D) In the event that Executive's employment is terminated
without cause and to the extent permitted under the applicable stock option plan
or plans, all Executive's stock options outstanding on the date hereof and
granted hereafter shall either (i) continue to vest for twenty-four (24)
continuous months commencing on the Separation Date in accordance with the
original terms of such options or (ii) be accelerated so that all Executive's
unvested option shares shall be deemed vested as of the Separation Date. Under
either (i) or (ii) above, all of Executive's vested options may be exercised
until the earlier of (x) the date that is three (3) years after the Separation
Date or (y) the expiration dates of the options. Executive acknowledges that,
any extension of the period during which Executive may exercise his stock
options, shall cause any Incentive Stock Options (within the meaning of Section
422 of the Internal Revenue Code), to be nonstatutory stock options.
(E) In the event that Executive's employment is terminated
without cause, the Company agrees to forgive the two relocation loans, each in
the principal amount of seventy-five thousand dollars ($75,000), made to
Executive pursuant to his offer letter dated May 12, 1994.
5.2 TERMINATION FOR CAUSE.
(A) The Company shall have the right to terminate Executive's
employment with the Company at any time for cause.
(B) "Cause" for termination shall mean: (a) unsatisfactory
performance of Executive's duties which continues for thirty (30) days after
written notice; or (2) misconduct, including but not limited to: (i) conviction
of any felony or any crime involving moral turpitude or dishonesty, (ii)
participation in a fraud against the Company, (iii) willful breach of
Executive's duties to the Company, (iv) intentional damage to any Company
property, or (v) breach of Executive's Proprietary Information and Inventions
Agreement. Physical or mental disability shall not constitute cause.
(C) In the event Executive's employment is terminated at any
time with cause, he will not be entitled to severance pay, pay in lieu of notice
or any other such compensation.
4.
5.3 VOLUNTARY OR MUTUAL TERMINATION.
(A) Executive may voluntarily terminate his employment with the
Company at any time, after which no further compensation will be paid to
Executive.
(B) In the event Executive voluntarily terminates his
employment, he will not be entitled to severance pay, pay in lieu of notice or
any other such compensation.
6. NONSOLICITATION. During Executive's employment by the Company and for
a period of one (1) year after the date of termination of his employment,
Executive agrees that the will not, without the written consent of a duly
authorized officer of the Company, directly or indirectly solicit, entice,
induce or encourage any employee of the Company to terminate his/her employment
with the Company in order to become an employee, consultant or independent
contractor for any other party.
7. GENERAL PROVISIONS.
7.1 NOTICES. Any notices provided hereunder must be in writing and
shall be deemed effective upon the earlier of personal delivery (including
personal delivery by telex) or the third day after mailing by first class mail,
to the Company at its primary office location and to Executive at his address as
listed on the Company payroll.
7.2 SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provisions had never been contained herein.
7.3 WAIVER. If either party should waive any breach of any
provisions of this Agreement, he or it shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision of
this Agreement.
7.4 COMPLETE AGREEMENT. This Agreement, including Executive's
Proprietary Information and Inventions Agreement and Stock Option Agreements,
contains the entire agreement between Executive and the Company and constitutes
the complete, final, and exclusive embodiment of Executive's agreement with
respect to the subject matter hereof. This Agreement is executed without
reliance upon any promise, warranty or representation, written or oral, by any
party or any representative of any party other than those expressly contained
herein and it supersedes any other such promises, warranties, or
representations, including without limitation Executive's offer letter of
May 12, 1994. This Agreement may not be amended or modified in any way, except
in a writing signed by both Executive and a duly authorized officer of the
Company.
5.
Notwithstanding the foregoing, Executive's Proprietary Information and
Inventions Agreement shall remain in full force and effect according to its
original terms.
7.5 COUNTERPARTS. This Agreement may be executed in separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
Agreement.
7.6 HEADINGS. The headings of the sections hereof are inserted for
convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.
7.7 SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive and the Company, and
their respective successors, assigns, heirs, executors and administrators,
except that Executive may not assign any of his duties hereunder and he may not
assign any of his rights hereunder without the written consent of the Company,
which shall not be withheld unreasonably.
7.8 DISPUTE RESOLUTION. All disputes arising from the
interpretation, breach, or enforcement of this Agreement (excluding disputes
arising from Executive's Proprietary Information and Inventions Agreement) which
cannot first be resolved by negotiations between the parties shall be submitted
to final and binding arbitration in accordance with the rules of the American
Arbitration Association then in effect. Both Executive and the Company
acknowledge that there may not be an adequate remedy at law if one party
breaches the provisions of this Agreement. Therefore, the arbitrators shall be
empowered to award any appropriate equitable relief including, without
limitation, specific performance and injunctive relief; and, if necessary to
avoid irreparable harm pending arbitration, such equitable relief may also be
sought in a court of law. The prevailing party shall be entitled to reasonable
attorneys' fees, costs, and necessary disbursements in addition to any other
relief to which it may be entitled.
7.9 CHOICE OF LAW. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the law of the
State of California.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.
CoCensys, Inc.
By: /s/ Xxxxxx X. Xxxxx
___________________________________
Xxxxxx X. Xxxxx
Chairman of the Board
Date: October 13, 1996
_________________________________
6.
Accepted and agreed this
13th day of October, 1996.
/s/ Xxxx X. Xxxxxx
____________________________
Xxxx X. Xxxxxx
7.
