EMPLOYMENT AGREEMENT [as amended through July 9, 2008]
Exhibit
10.1
[as
amended through July 9, 2008]
This
EMPLOYMENT AGREEMENT (the "Agreement") is dated as of June 11, 2008 by and
between ARNO
THERAPEUTICS, INC.,
a
Delaware corporation with principal executive offices at 00 Xxx Xxxxxxx Xx.,
Xxxxx 000, Xxxxxxxxx, XX 00000 (the "Company"), and XXXXX
XXXX,
an
individual residing at ,
NJ (the
"Executive").
WHEREAS,
the Company desires to employ Executive as Chief Financial Officer of the
Company; and
WHEREAS,
Executive desires to accept such employment upon the terms and conditions
contained in this Agreement.
NOW,
THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the parties hereby
agree as follows:
1. Term
of Employment.
Subject
to the provisions of Section 8 of this Agreement, Executive shall be employed
by
the Company for a period commencing on July 15, 2008 (the "Effective Date")
and
ending on the second anniversary of the Effective Date (the "Employment Term");
provided,
however,
that
the Employment Term shall be automatically extended for an additional one-year
period, on an annual basis, unless the Company or Executive provides the
other
party with at least 90 days' prior written notice before the second anniversary
of the Effective Date that the Employment Term shall not be so extended ("Notice
of Non-Renewal").
2. Position.
a. Commencing
on the date immediately following the date that the Company files with the
Securities and Exchange Commission (“SEC”) its Quarterly Report on Form 10-Q for
the quarter ended June 30, 2008, and thereafter during the remainder of the
Employment Term, Executive is appointed to serve as Chief Financial Officer
of
the Company, and Executive accepts such appointment. In such position, Executive
shall, subject to any limitations or other directions determined from time
to
time by the Board of Directors of the Company (the "Board"), which limitations
and/or directions shall be consistent with state and federal law, have such
duties and authority as are consistent with the position of Chief Financial
Officer of a company of similar size and nature, including:
(i) Financial
planning, budget, forecasting and analysis processes;
(ii) Contract
review;
(iii) Accounts
receivable/payable;
(iv) Developing/maintaining
organization’s financial management policies, ensuring compliance with
applicable law and Board policy;
(v) Reviewing
financial statements, preparing and filing SEC filings;
(vi) Present
Company’s financials to shareholders, analysts and potential
investors;
(vii) Compliance
with Xxxxxxxx-Xxxxx, accounting;
(viii) Managing/directing
outside financial auditors;
(ix) Managing
Treasury functions;
(x) Overseeing
all aspects of company financial controls;
and
may
include with the Chief Executive Officer, investor relations, directing outside
legal counsel and preparation of materials for meetings of the Board of
Directors. Executive shall report directly to the Chief Executive Officer.
At no
point, however, shall the Executive be required to undertake any actions
at the
direction of the Board of Directors, Chief Executive Officer, or any other
person which the Executive reasonably believes is in violation of state and/or
federal law.
b. During
the Employment Term, Executive shall devote his full business time and attention
to the performance of his duties hereunder, which shall be performed primarily
at the offices of the Company in Fairfield, New Jersey. Without the prior
written consent of the Board, which consent may not be unreasonably withheld,
Executive shall not engage in any other business, profession or occupation
for
compensation or otherwise that would conflict or interfere with the rendition
of
his services hereunder or adversely affect or negatively reflect upon the
Company.
c. Due
consideration will be given by the Board to appointing the Executive Chief
Operating Officer of the Company in the event of outstanding performance
by the
Executive during the Term.
3. Base
Salary.
During
the Employment Term, the Company shall pay Executive a base salary ("Base
Salary") at an annual rate of Two Hundred Thousand Dollars ($200,000.00),
payable in regular installments in accordance with the Company's usual payroll
practices. The Board (or a designated committee thereof) may, in its sole
discretion, increase such Base Salary from time to time.
4. Bonus
Compensation.
a. The
Company shall pay to the Executive a one time cash payment of Twenty Five
Thousand Dollars ($25,000.00) upon the Effective Date of this
Agreement.
b. During
the Employment Term, Executive may earn an annual performance bonus
("Performance Bonus") of up to thirty percent (30%) of his Base Salary in
respect of each twelve-month period that he is employed by the Company (or
pro
rata portion thereof) based upon the successful achievement of certain corporate
and individual goals, which shall be established within thirty (30) days
of the
Effective Date by the Executive and the Board (or a designated committee
thereof), and renewed annually on a calendar year basis, with the first calendar
year being pro-rated as discussed otherwise herein, by the Executive and
the
Board (or a designated committee thereof). Any Performance Bonus will be
paid to
the Executive within thirty (30) days of the end of each calendar year during
the Employment Term.
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5. Equity.
a. Employment
Options. Promptly
following the Effective Date, the Company shall grant to Executive stock
options
(the "Employment Options"), pursuant to the Company's 2005 Stock Option Plan,
to
purchase Four Hundred Forty Thousand shares of common stock of the Company,
par
value $0.0001 per share (the "Common Stock"), representing two percent (2%)
of
the outstanding Common Stock on a fully diluted basis as of the date hereof,
at
an exercise price equal to the price per share of Common Stock on the
Commencement Date as quoted on the Over the Counter Bulletin Board. Subject
to
the Executive’s continued employment the Employment Options shall vest and
become exercisable, if at all, as follows:
(i)
One
quarter of such Employment Options shall vest on the first anniversary of
this
Agreement; and
(ii)
thereafter the Employment Options shall vest in equal monthly installments
on
the last day of each month over a period of 24 months on the last business
day
of each month (each date on which Employment Options vest is hereinafter
referred to as a “Vesting Date”).
b. Subject
to earlier expiration as described in Section 8 below, the Employment Options
shall have a ten (10) year term and shall be exercisable at an exercise price
equal to the price per share paid by investors in the Financing. In the event of
a Change of Control (as defined in Section 8(d)(ii) below), one-half of all
unvested Employment Options shall vest and remain exercisable during the
Executive’s continued employment with the Company and for a period of twelve
(12) months thereafter, provided said continued employment is materially
the
same or similar to the Executive’s prior position with the Company.
c. The
parties specifically acknowledge and agree that the equity provisions of
this
Employment Agreement supersede any and all prior or subsequent agreements,
including but not limited to the Stock Option Agreement, relating to grant
of
equity options to the Executive. To the extent there is a disagreement of
the terms of this Employment Agreement and a prior or subsequent Stock Option
Agreement, including but not limited to those dealing with change of control
and
vesting, then the terms of this Agreement shall control
6. Employee
Benefits.
During
the Employment Term, Executive shall be entitled to: (a) participation in
the
Company's health, dental and other welfare benefit as in effect from time
to
time; (b) up to four (4) non-consecutive weeks of vacation per year; and
(c)
sick leave and holidays in accordance with the Company's policies as in effect
from time to time (collectively, "Employee Benefits"), on a basis no less
favorable than those benefits generally made available to other senior
executives of the Company or, as applicable, to the Company's employees
generally. The Company shall reimburse the Executive for the premiums
attributable to a life insurance policy for the Executive in an amount equal
to
twice Executive’s then Base Salary. Executive shall be designated as a named
insured on directors and officers’ liability insurance of the Company providing
policy limits of not less than One Million Dollars ($1,000,000), and Executive
shall be provided evidence of such insurance within thirty (30) days of the
Execution Date.
7. Business
Expenses.
During
the Employment Term, reasonable business expenses incurred by Executive in
the
performance of his duties hereunder shall be reimbursed by the Company in
accordance with the Company's policies in effect from time to time.
8. Termination.
The
Employment Term and Executive's employment hereunder may be terminated by
either
party at any time and for any reason; provided
that
Executive shall be required to give the Company at least sixty (60) days'
prior
written notice of any termination of his employment. Notwithstanding any
other
provision of this Agreement, the provisions of this Section 8 shall exclusively
govern Executive's rights upon termination of employment with the
Company.
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a. By
the
Company For Cause or By Executive Resignation Without Good
Reason.
(i)
The
Employment Term and Executive's employment hereunder may be terminated by
the
Company for Cause (as defined below) and shall terminate automatically upon
Executive's resignation without Good Reason (as defined in Section 8(c)(ii));
provided
that
Executive shall be required to give the Company at least sixty (60) days'
prior
written notice of his resignation without Good Reason.
(ii)
For
purposes of this Agreement, "Cause" shall mean: (A) Executive's willful failure
to adequately perform material duties or obligations hereunder, or willful
misconduct by Executive in respect of such duties or obligations,
including, without limitation, willful
failure, disregard or refusal by Executive to abide
by
specific objective and lawful directions received by him in writing constituting
an action of the Board;
(B)
any
willful, intentional or grossly negligent act by Executive having the reasonably
foreseeable effect of actually and substantially injuring, whether financial
or
otherwise, the business reputation of the Company; (C)
Executive's indictment of any felony; (D) Executive being convicted of a
misdemeanor involving moral turpitude
that
causes,
or
could reasonably be expected to cause, substantial
harm to
the Company or its reputation; (E) 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 Executive engaged in some form of harassment prohibited
by law
(including, without limitation, age, sex or race discrimination);
provided, however, that Cause shall not exist under clause (E) unless the
Company gives written notice to Executive where such notice describes
with particularity the alleged act(s) at issue and has given Executive an
opportunity to be heard at a meeting of the Board with or without counsel,
and
the
Board
provides Executive with a summary of its findings; (F) any
misappropriation or embezzlement of the property of the Company or its
affiliates (whether or not a misdemeanor or felony) by Executive; and (G)
a
material breach by Executive of this Agreement, which if capable of being
cured,
is not cured by the Executive within thirty (30) days of written notice from
the
Company of the alleged breach.
(iii)
If
Executive's employment is terminated by the Company for Cause, or if Executive
resigns without Good Reason, Executive shall be entitled to receive: (A)
his
Base Salary through the date of such termination; (B) any Performance Bonus
earned but unpaid as of the date of termination for any previously completed
year of employment; (C) reimbursement for any unreimbursed business expenses
properly incurred by Executive prior to the date of such termination in
accordance with Company policy; and (D) such Employee Benefits, if any, as
to
which Executive may be entitled under the employee benefit plans of the Company
for Executive (the amounts described in clauses (A) through (D) hereof being
referred to as the "Accrued Rights"). Additionally, if Executive's employment
is
terminated by the Company for Cause, or if Executive resigns without Good
Reason, then (1) all unvested Employment Options shall expire immediately,
and
(2) the Executive shall have a period of ninety (90) days to exercise any
and
all currently vested Employment Options, after which time all Employment
Options
shall expire.
(iv)
Following a termination of Executive's employment by the Company for Cause
or
resignation by Executive without Good Reason, except as set forth in Section
8(a)(iii), Executive shall have no further rights to any compensation or
any
other benefits under this Agreement.
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b. Disability
or Death.
(i)
The
Employment Term and Executive's employment hereunder shall terminate
automatically upon Executive's death and may be terminated by the Company
if
Executive becomes physically or mentally incapacitated and is, therefore,
unable
for a period of six (6) consecutive months or for an aggregate of nine (9)
months in any twelve (12) consecutive month period to perform Executive's
duties
(such incapacity is hereinafter referred to as "Disability"). Any question
as to
the existence of the Disability of Executive as to which Executive and the
Company cannot agree shall be determined in writing by a qualified independent
physician, with such independent doctor being designated after agreement
by the
Company and the Executive, and the cost of such independent Physician shall
be
borne equally by the Executive and the Company. Executive hereby agrees to
make
himself available and to cooperate in any reasonable examination by an
Independent Physician.
(ii)
Upon
termination of Executive's employment hereunder for either Disability or
death,
Executive or Executive's estate (as the case may be) shall be entitled to
receive: (A) the Accrued Rights; (B) a pro
rata portion
(based upon the ratio of (x) the number of days from the Effective Date or,
if
applicable, the immediately preceding Extension Date, to (y) 365) of the
Performance Bonus, if any, that Executive would have been entitled to receive
in
respect of the fiscal year in which such termination occurs, payable when
such
Performance Bonus would have otherwise been payable had Executive's employment
not terminated (a “Pro-Rata Bonus”); and (C)
his
Base Salary and Employee Benefits for a period of twelve (12) months following
any such termination.
(iii)
Following Executive's termination of employment due to death or Disability,
all
unvested Employment Options scheduled to vest following the end of such
employment year shall immediately vest and remain exercisable for a period
of
three hundred and sixty five (365) calendar days, after which date all
Employment Options shall expire.
c. By
the
Company Without Cause or Resignation by Executive for Good
Reason.
(i)
The
Employment Term and Executive's employment hereunder may be terminated by
the
Company without Cause or by Executive's resignation for Good Reason;
provided
that
Executive shall be required to give the Company at least thirty (30) days'
prior
written notice of any resignation of his employment for Good Reason.
(ii)
For
purposes of this Agreement, "Good Reason" shall mean: (A) following the
effective date of his appointment as Chief Financial Officer, as described
in
Section 2.a., any
material
diminution
by the Company of Executive’s title of Chief Financial Officer;
(B) a
material breach by the Company of any of the provisions contained herein,
which,
if capable of being cured, is not cured by the Company within ten (10) days
after written notice thereof by Executive to the Company; and (C) the
relocation of the company’s headquarters and/or the Executive’s place of
employment outside of a twenty five (25) mile radius from its current location.
(iii)
If,
during the first twelve (12) months of the Employment Term, the Executive's
employment is terminated by the Company without Cause, other than by reason
of
death or Disability, or if Executive resigns for Good Reason, Executive shall
be
entitled to receive: (A) the Accrued Rights; (B) subject to Executive's
continued compliance with the provisions of Sections 9 and 10, continued
payment
of his Base Salary at the rate in effect immediately prior to the date of
such
termination for a period of nine (9) months following such termination; (C)
subject to Executive's continued compliance with the provisions of Sections
9
and 10, an amount equal to one-half of the Performance Bonus, if any, that
the
Executive would have earned for the year in which such termination occurs;
(D)
subject to Executive's continued compliance with the provisions of Sections
9
and 10, his Employee Benefits until the earlier to occur of (1) the date
on
which Executive obtains new employment, and (2) six (6) months following
such
termination; and (E) unvested Employment Options scheduled to vest
following the end of such employment year shall immediately vest and remain
exercisable for a period of twelve (12) months following such termination,
after
which date all Employment Options shall expire.
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(iv)
Thereafter, if the Executive's employment is terminated by the Company without
Cause, other than by reason of death or Disability, or if Executive resigns
for
Good Reason, Executive shall be entitled to receive: (A) the Accrued Rights;
(B)
subject to Executive's continued compliance with the provisions of Sections
9
and 10, continued payment of his Base Salary at the rate in effect immediately
prior to the date of such termination for a period of twelve (12) months
following such termination; (C) subject to Executive's continued compliance
with
the provisions of Sections 9 and 10, an amount equal to the Performance Bonus,
if any, that the Executive would have earned for the year in which such
termination occurs; (D) subject to Executive's continued compliance with
the
provisions of Sections 9 and 10, his Employee Benefits until the earlier
to
occur of (1) the date on which Executive obtains new employment, and (2)
twelve
(12) months following such termination; and (E) unvested Employment Options
scheduled to vest following the end of such employment year shall immediately
vest and remain exercisable for a period of twelve (12) months following
such
termination, after which date all Employment Options shall expire.
(v)
Following Executive's termination of employment by the Company without Cause
(other than by reason of Executive's death or Disability) or by Executive's
resignation for Good Reason, all Employment Options which were not then vested
(or did not become vested pursuant to Section 8(c)(iii) or (iv) hereof) shall
immediately expire and, except as set forth in this Section 8(c)(iii) or
(iv),
Executive shall have no further rights to any compensation or any other benefits
under this Agreement.
d. By
the
Company upon a Change of Control.
(i)
The
Employment Term and Executive's employment hereunder may be terminated by
the
Company upon a Change of Control.
(ii)
For
purposes of this Agreement, a “Change of Control” shall have the meaning set
forth in the Company’s 2005 Stock Option Plan (the “Plan”), except that,
notwithstanding the terms of the Plan, no transaction shall be considered
a
Change in Control under this Agreement or any related stock option agreement,
and no Options shall vest (A) as a result of a Change of Control arising
out of
a private placement of equity securities of the Company for the purpose of
financing the Company’s on-going operations; or (B) as a result of a Change of
Control arising out of any transaction ascribing a valuation to the Company
of
less than One Hundred Million Dollars ($100,000,000).
(iii)
Following Executive’s termination as a result of Change of Control, Executive
shall be entitled to receive: (A) the Accrued Rights; and, subject to
Executive's continued compliance with the provisions of Sections 9 and 10,
(B)
continued payment of his Base Salary at the rate in effect immediately prior
to
the date of such termination for a period of 12 months following such
termination; (C) an amount equal to the Performance Bonus, if any, that the
Executive would have earned for the year in which such termination occurs;
(D)
Employee Benefits for a period of twelve (12) months following such termination;
(E) all unvested Employment Options shall immediately vest and remain
exercisable for a period of twelve (12) months, after which date all Employment
Options shall expire immediately.
e. Expiration
of Employment Term.
In the
event either party delivers a Notice of Non-Renewal, unless Executive's
employment is terminated prior to the expiration of the Employment Term pursuant
to paragraphs (a), (b), (c) or (d) of this Section 8, Executive shall be
entitled to receive the Accrued Rights. Upon non-renewal of Executive's
employment hereunder following either party's election not to extend the
Employment Term, (i) any unvested Employment Options shall expire, and (ii)
any
vested Employment Options shall remain exercisable for a period of twelve
(12)
from the date of termination. Further, except as set forth in this Section
8(e),
Executive shall have no further rights to any compensation or any other benefits
under this Agreement.
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f. Notice
of Termination.
Any
purported termination of employment by the Company or by Executive (other
than
due to Executive's death) shall be communicated by written notice to the
other
party hereto in accordance with the provisions of this Agreement ("Notice
of
Termination"), which notice shall indicate the specific termination provision
in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of employment
under
the provision so indicated.
g. Payments
to Executive.
Except
as otherwise provided herein, all payments required to be made by the Company
to
Executive under this Section 8 in connection with the termination of Executive's
employment shall be payable in regular installments in accordance with the
Company's usual payroll practices. Additionally, the obligations of the Company
to make any payments described in Sections 8(b)(ii)(B) and (C), 8(c)(iii)(B)
and
(C), 8(c)(iv)(B) and (C), and 8(d)(iii)(B) and (C) and its obligations under
Sections 8(b)(iii), 8(c)(iii)(E), 8(c)(iv)(E) and (F), and 8(d)(iii)(E) shall
be
subject to the execution and non-revocation by Executive of a general release
of
claims in a form provided by the Company and Executive's continued compliance
with his obligations under Sections 9 and 10 hereof.
9. Non-Competition
and Non-Solicitation.
a. Executive
understands and recognizes that his services to the Company are special and
unique and that in the course of performing such services Executive will
have
access to and knowledge of Confidential and Proprietary Information (as defined
in Section 10 below) and Executive agrees that, during the Employment Term
and
for a period of six (6) months
(or
twelve (12) months if Executive's employment is terminated by the Company
for
Cause or by Executive without Good Reason) thereafter, he shall not in any
manner, directly or indirectly, on behalf of himself or any natural person,
firm, partnership, joint venture, corporation,
limited
liability company
or other
business entity ("Person"), enter into or engage in any business that is
directly or indirectly competitive with the Company’s Business (as defined
below), 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, member 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;
provided,
however,
that if
a Person's business has multiple lines or segments, some of which are not
competitive with the Company's Business, nothing herein shall prevent Executive
from being employed by, working for or assisting that line or segment of
such
Person's business that is not competitive with the Company's Business. 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 Executive narrowly
and fairly serves such an important and critical business interest of the
Company. Notwithstanding the foregoing, nothing contained in this Section
9(a)
shall be deemed to prohibit Executive from acquiring or holding, solely for
investment purposes, publicly traded securities of any corporation or other
entity, 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 three percent (3%) of any class or series of outstanding securities
of
such corporation or other entity.
For
purposes of this Agreement, "Company's Business" shall be the development
of
novel therapeutics for the treatment of cancer, which shall be specifically
limited to the investigation, development, and/or testing of compounds developed
by the Company during the tenure of the Executive’s.
7
b. During
the Employment Term and for a period of twelve (12) months thereafter (or
six
(6) months in the case of clause (b)(ii)), Executive shall not, directly
or
indirectly, without the prior written consent of the Company: (i)
solicit or induce any person
who, at any time during the preceding twelve (12) months, was an employee
of the Company or any of its subsidiaries or of
Two
River
Group Holdings, LLC ("Two River") to leave the employ of the Company or such
subsidiaries or Two River
or hire,
or assist any other Person in hiring, any such employee;
or
(ii)
solicit the business of any agent, client or customer of the Company or any
of
its subsidiaries with respect to products or services similar to and competitive
with those provided or supplied by the Company or any of its
subsidiaries.
c. The
Company and Executive mutually agree that both during the Employment Term
and at
all times thereafter, neither party shall directly or indirectly disparage,
whether or not true, the name or reputation of the other party, and in the
case
of the Company, including any officer, director or material shareholder of
the
Company. Notwithstanding the foregoing, nothing in this Agreement shall preclude
the parties hereto or their successors from making truthful statements in
the
proper performance of their jobs or that are required by applicable law,
regulation or legal process, and the parties shall not violate this provision
in
making truthful statements in response to disparaging statements made by
the
other party.
d. In
the
event that Executive breaches any provisions of this Section 9 or Section
10,
then, in addition to any other rights that the Company may have, the Company
shall be entitled,
upon entry of an appropriate order by a Court of competent jurisdiction,
to
cease making any payments to Executive under Section 8 hereof, cancel any
options that vested under Section 8 hereof, recover any amounts paid under
Section 8 hereof (including amounts received by Executive in respect of any
options that became vested under Section 8) other than payments in respect
of
the Accrued Rights and
seek
injunctive relief to enforce the restrictions contained in such Sections,
which
injunctive relief shall be in addition to any rights or remedies available
to
the Company under the law or in equity. The
Executive’s agreement to the terms and conditions contained in this section
shall in no way be considered his consent to the entry of such relief, and
the
Executive and the Company agree that no such relief will be sought until
notice
is given to the Executive and a fourteen (14) day period in which the Executive
has to cure the alleged violation lapses.
e. The
rights and remedies enumerated in Section 9(d) shall be independent of, 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 9, 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 9 is held to be invalid or unenforceable
because of the duration of such provision or the area covered thereby, the
parties agree that the court making such determination shall have the power
to
reduce the duration and/or area of such provision and in its reduced form
such
provision shall then be enforceable. 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 9 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. The
provisions of this Section 9 shall survive the termination of Executive's
employment for any reason.
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10. Confidential
Information and Inventions.
a. 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 Employment
Term, 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 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. 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 Company. Executive agrees not to: (i)
use
any such Confidential and Proprietary Information for strictly personal use
or
for others; and (ii)
permanently remove 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 his duties to the Company; provided,
however,
that
Executive shall not be prevented from using or disclosing any Confidential
and
Proprietary Information: (A)
that
Executive can demonstrate was known to him prior to the effective date of
this
agreement; (B)
that
is now, or becomes in the future, available to persons who are not legally
required to treat such information as confidential unless such persons acquired
the Confidential and Proprietary Information through acts or omissions of
Executive; or (C)
that
he is compelled to disclose pursuant to the order of a court or other
governmental or legal body having jurisdiction over such matter; provided
that
Executive shall give prompt written notice to the Company of such requirement,
disclose no more information than is so required, and cooperate with any
attempts by the Company to obtain a protective order or similar
treatment.
b. Except
with prior written authorization by the Company, 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 a legal duty of confidence,
at
any time during or after his employment with the Company.
c. If
Executive creates, invents, designs, develops, contributes to or improves
any
works of authorship, inventions, intellectual property, materials documents
or
other work product relating to the Company's Business ("Inventions") either
alone or with third parties, at any time during Executive's employment by
the
Company and within the scope of such employment and/or with the use of any
Company resources, Executive shall promptly and fully disclose same to the
Company and hereby irrevocably assigns, transfers and conveys, to the maximum
extent permitted by applicable law, all rights and intellectual property
rights
therein (including rights under patent, industrial property, copyright,
trademark, trade secret, unfair competition and related laws) to the Company
to
the extent ownership of any such rights does not vest originally in the Company.
The Company shall be the sole owner of all patents, copyrights, trade secret
rights, and other intellectual property or other rights in connection therewith.
Executive agrees that all Inventions, 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). Executive further agrees to assist the Company
(at
the Company's expense but without further remuneration) to obtain and from
time
to time enforce, protect, record or register patents, copyrights or other
rights
on such Inventions in any and all countries, and to that end Executive shall
execute all documents necessary to: (i)
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)
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. If the Company is
unable for any other reason to secure Executive's signature on any document
for
this purpose, then Executive hereby irrevocably designates and appoints the
Company and its duly authorized officers and agents as Executive's agent
and
attorney-in-fact, to act for and in Executive's behalf and stead to execute
any
documents and to do all other lawfully permitted acts in connection with
the
foregoing
9
d. Executive
acknowledges that while performing the services under this Agreement 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 ("Third Party Inventions"). 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 persons' officers, directors,
employees (including Executive), agents or consultants during the Employment
Term shall be and remain the sole and exclusive property of the Company or
such
affiliate and Executive shall have no rights whatsoever to such Third-Party
Inventions and will not pursue for himself or for others any transaction
relating to Third-Party Inventions that is not on behalf of the
Company.
e. Upon
termination of Executive's employment with the Company for any reason, Executive
shall: (i) cease and not thereafter commence use of any Confidential and
Proprietary Information, Inventions, Third Party Inventions or other
intellectual property owned or used by the Company, its subsidiaries or
affiliates (including, without limitation, any trade secret, trademark, trade
name, logo, domain name or other source indicator); (ii) immediately destroy,
delete, or return to the Company, at the Company's option, all originals
and
copies in any form or medium (including memoranda, books, papers, plans,
computer files, letters and other data) in Executive's possession or control
(including any of the foregoing stored or located in Executive's office,
home,
laptop or other computer, whether or not Company property) that contain
Confidential and Proprietary Information or otherwise relate to the Company's
Business and the business of its affiliates and subsidiaries, except that
Executive may retain only those portions of any personal notes, notebooks
and
diaries that do not contain any Confidential and Proprietary Information;
and
(iii) notify and fully cooperate with the Company regarding the delivery
or
destruction of any other Confidential and Proprietary Information of which
Executive is or becomes aware.
f. Executive
shall not improperly use for the benefit of, bring to any premises of, divulge,
disclose, communicate, reveal, transfer or provide access to, or share with
the
Company any confidential, proprietary or non-public information or intellectual
property relating to, a former employer or other third party without the
prior
written permission of such third party. Executive hereby indemnifies, holds
harmless and agrees to defend the Company and its officers, directors, partners,
employees, agents and representatives from any breach of the foregoing covenant.
Executive shall comply with all relevant policies and guidelines of the Company,
including regarding the protection of confidential information and intellectual
property and potential conflicts of interest. Executive acknowledges that
the
Company may amend any such policies and guidelines from time to time, and
that
Executive remains at all times bound by their most current version.
g. The
provisions of this Section 10 shall survive the termination of Executive's
employment for any reason.
10
11. Specific
Performance.
Executive acknowledges and agrees that the Company's remedies at law for
a
breach of any of the provisions of Section 9 or Section 10 may be
inadequate and the Company may suffer irreparable damages as a result of
such
breach. In recognition of this fact, Executive agrees that, in the event
of such a breach, in addition to any remedies at law or under this Agreement,
the Company, without posting any bond, shall be entitled to cease making
any
payments or providing any benefit otherwise required by this Agreement and
seek
equitable relief in the form of specific performance, temporary restraining
order, temporary or permanent injunction or any other equitable remedy which
may
then be available. The
Executive’s agreement to the terms and conditions contained in this section
shall in no way be considered his consent to the entry of such relief, and
the
Executive and the Company agree that no such relief will be sought until
notice
is given to the Executive and a fourteen (14) day period in which the Executive
has to cure the alleged violation lapses.
12. Representations.
Executive
hereby represents and warrants to the Company as follows:
a. Neither
the execution nor delivery of this Agreement nor the performance by Executive
of
his duties and other obligations hereunder violate or will violate any
statute
or law or conflict with or constitute a default or breach of any covenant
or
obligation, including without limitation any non-competition restrictions,
to
any
prior employer under
(whether immediately, upon the giving of notice or lapse of time or both)
any
prior employment agreement, contract, or other instrument to which Executive
is
a party or by which he is bound,
or
under applicable law.
b. 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 Executive enforceable
against him in accordance with its terms. No approvals or consents of any
persons or entities are required for Executive to execute and deliver this
Agreement or perform his duties and other obligations hereunder.
c. Executive
has not taken or retained (and will not take or retain) any documents or
files,
whether in hard copy or electronic form, which were created, collected or
received by Executive in connection with any prior employment, except for
documents and files relating solely to Executive’s compensation.
13. Miscellaneous.
a. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of New Jersey, without regard to the conflicts of laws principles
thereof.
b. Arbitration.
Any
dispute arising out of, or relating to, this Agreement or the breach thereof
(other than Sections 9 or 10 hereof), or regarding the interpretation thereof,
shall be exclusively decided by binding arbitration conducted in New
Jersey
in
accordance with the rules of the American Arbitration Association (the "AAA")
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. Each of the parties agrees that service
of process in such arbitration proceedings shall be satisfactorily made upon
it
if sent by registered mail addressed to it at the address referred to in
clause
(h) below. The
costs
of such arbitration shall be borne by the Company. In the event Executive
prevails at arbitration, he shall be entitled to payment of reasonable
attorney’s fees in addition to all other relief awarded by the arbitrator.
Judgment on the arbitration award may be entered by any court of competent
jurisdiction.
11
c. Entire
Agreement/Amendments.
This
Agreement contains the entire understanding of the parties with respect to
the
employment of Executive by the Company. There are no restrictions, agreements,
promises, warranties, covenants or undertakings between the parties with
respect
to the subject matter herein other than those expressly set forth herein.
This
Agreement may not be altered, modified or amended except by written instrument
signed by the parties hereto.
d. No
Waiver.
The
failure of a party to insist upon strict adherence to any term of this Agreement
on any occasion shall not be considered a waiver of such party's rights or
deprive such party of the right thereafter to insist upon strict adherence
to
that term or any other term of this Agreement.
e. Severability.
In the
event that any one or more of the provisions of this Agreement shall be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining pro-visions of this Agreement shall not
be
affected thereby.
f. Assignment.
This
Agreement, and all of Executive's rights and duties hereunder, shall not
be
assignable or delegable by Executive or the Company, except as set forth
below.
Any purported assignment or delegation by Executive in violation of the
foregoing shall be null and void ab
initio
and of
no force and effect. This Agreement may be assigned by the Company only to
a
Person which is a successor in interest to substantially all of the business
operations of the Company. Upon such assignment, the rights and obligations
of
the Company hereunder shall become the rights and obligations of such successor
Person.
g. Successors;
Binding Agreement.
This
Agreement shall inure to the benefit of and be binding upon personal or legal
representatives, executors, administra-tors, successors, heirs, distributees,
devisees and legatees.
h. Notice.
For the
purpose of this Agreement, notices and all other communications provided
for in
the Agreement shall be in writing and shall be deemed to have been duly given
when delivered by hand or overnight courier or three days after it has been
mailed by United States registered mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth below in this
Agreement, or to such other address as either party may have furnished to
the
other in writing in accordance herewith, except that notice of change of
address
shall be effective only upon receipt.
If
to the
Company:
00
Xxx
Xxxxxxx Xx., Xxxxx 000
Xxxxxxxxx,
XX 00000
If
to
Executive:
To
the
most recent address of Executive set forth in the personnel records of the
Company, with a copy to Xxxxxxx X. Xxxxxxx, Esq., Midlige Xxxxxxx, L.L.C.,
000
Xxxxxxxxxxxx Xxxx, Xxxxxxx Xxxxx, XX 00000
i. Cooperation.
After
the termination of the Employment Term, Executive shall cooperate with the
Company in connection with any action or proceeding (or any appeal from any
action or proceeding) that relates to events occurring during Executive's
employment hereunder, but shall be done to the extent reasonably possible
in a
manner as to reduce interference in Executive's new position after his
employment hereunder ends. The Company shall reimburse Executive for any
reasonable out of pocket expenses he incurs in connection with such cooperation.
This provision shall survive any termination of this Agreement.
12
j. Withholding
Taxes.
The
Company may withhold from any amounts payable under this Agreement such federal,
state and local taxes as may be required to be withheld pursuant to any
applicable law or regulation.
k. Counterparts.
This
Agreement may be signed in any number of counterparts, each of which shall
constitute an original, but all of which together shall constitute one and
the
same instrument.
IN
WITNESS WHEREOF, the parties hereto have duly executed this Employment Agreement
as of the day and year first above written.
|
By: /s/
Xxxxx X. Xxxxxx
Name:
Xxxxx X. Xxxxxx, M.D.
Title: President
& Chief Medical Officer
|
|
EXECUTIVE:
|
|
/s/
Xxxxx Xxxx
Xx.
Xxxxx Xxxx
|
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