EXHIBIT 10.47
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as
of June 16, 1998 by and between Discovery Laboratories, Inc., a Delaware
corporation (the "Company"), and Xxxxxx X. Xxxxxxx, M.D. (the "Executive").
WHEREAS, the Company and Executive desire that Executive be
employed by the Company and that the terms and conditions of such employment be
defined;
NOW, THEREFORE, in consideration of the employment of
Executive by the Company, the Company and Executive agree as follows:
1. Term of the Agreement. The Company shall employ Executive
and Executive shall accept employment for a period of three (3) years commencing
on June 16, 1998 (the "Commencement Date") and continuing until June 15, 2001,
subject, however, to prior termination as hereinafter provided in Section 5 (the
"Employment Period").
2. Executive's Duties and Obligations.
a. Duties. Executive shall serve as Vice President of
Clinical Research. Executive shall be responsible for the overall conduct of
protocol development for existing and future drug candidates within the
Company's pipeline and for overall conduct of clinical trials according to
current Good Clinical Practices.
b. Location of Employment. Executive's principal place of
business shall be at the Company's office to be located within thirty (30) miles
of Doylestown, Pennsylvania.
c. Proprietary Information and Inventions Agreement. Upon
commencement of employment with the Company, Executive shall execute the
Company's standard form of Intellectual Property and Confidential Information
Agreement (the "Confidentiality Agreement") a copy of which is attached to this
Agreement as Exhibit A.
3. Devotion of Time to Company's Business
a. Full-time Efforts. During his employment with the
Company, Executive shall, subject to the provisions set forth in Section 3.b,
devote substantially all of his business time, attention and efforts to the high
quality performance of his duties to the Company.
b. No Other Employment. During his employment with the
Company, Executive shall not, whether directly or indirectly, render any
services of a commercial or professional nature to any other person or
organization, whether for compensation or otherwise, without the prior written
consent of the Company's Executive Committee or Board of Directors.
Notwithstanding this Section 3.b., as specifically agreed by the Company and
Executive, Executive may engage in activities related to the filed of
neonatology at the hospital of his choice, private patient and research and
attendance at professional meetings, provided that Executive's time spent at
such activities shall not interfere with the performance of his contractual
obligations under this Agreement.
c. Non-Competition During Employment. During the Employment
Period and for eighteen (18) months after its termination, Executive shall not,
directly or indirectly, either as an employee, employer, consultant, agent,
principal, partner, stockholder, corporate officer, director, or in any other
individual or representative capacity (i) compete with the Company in the
business of developing or commercializing pulmonary surfactants, Vitamin D
analogs or any other category of compounds which forms the basis of the
Company's products or products under development (a "Competing Business"), or
(ii) directly or indirectly solicit employees of the Company, provided however,
that the provisions set forth in Exhibit A and in this Section 3 shall not be
applicable in the event Executive's employment is terminated by the Company
without Good Cause or by the Executive for Good Cause, as defined in Section 5.
4. Compensation and Benefits.
a. Base Compensation. During the term of this Agreement,
the Company shall pay to Executive base annual compensation of Two Hundred
Thousand Dollars ($200,000), less all required tax withholdings, as required by
law.
b. Bonuses.
(1) Incentive Bonus. Executive shall be eligible for
incentive bonuses in amounts to be determined by the Company's Compensation
Committee after consultation with the Company's Chief Executive Officer, to be
paid in either cash or equity, upon the achievement of each of the following
milestones (which bonuses shall be paid only once for each of the milestones):
(a) the successful completion of Phase II studies for any compound under
development in the Company's portfolio (each a "Portfolio Compound"); (b) the
successful completion of Phase III studies for any Portfolio Compound; and (c)
receipt of marketing approval in the United States for any Portfolio Compound.
(2) Additional Bonus. Executive shall be eligible for
such year-end bonus, which may be paid in either cash or equity, or both, as is
awarded at the discretion of the Compensation Committee of the Board of
Directors of the Company after consultation with the Company's Chief Executive
Officer.
c. Insurance Benefits. During his employment with the
Company, the Company shall provide reasonable medical and disability benefits to
Executive and to Executive's family. In addition, the Company will provide
Executive with term life insurance upon his life on behalf of Executive's
beneficiaries in the amount of Executive's annual salary for the term of this
Agreement.
d. Stock Options. The Board of Directors of the Company has
granted to Executive, on the date hereof, incentive stock options to purchase:
(i) 39,638 shares of Common Stock, $0.001 par value of the Company (the "Common
Stock"), pursuant to the terms of the Notice of Grant attached hereto as Exhibit
B, (ii) 20,493 shares of Common Stock, subject to acceleration at such time as
the market capitalization of the Company exceeds $75 million, pursuant to the
terms of the Notice of Grant attached hereto as Exhibit C, and (iii) 18,400
shares of Common Stock, subject to acceleration upon consummation of a corporate
partnering deal having a total Value (as hereinafter defined) of at least $20
million, pursuant to the terms of the Notice of Grant attached hereto as Exhibit
D. For purposes of this Agreement, "Value" shall mean the total payments,
including without limitation, contingent payments prior to or at receipt of
marketing approval for the Portfolio Compound involved in the relevant
agreement, to be paid to Discovery from corporate partnering transactions of
from any other transactions for the development, clinical testing, regulatory
approval, manufacturing and/or marketing of a Portfolio Compound, including
without limitation upfront fees, milestone payments, research and development
and other contractual commitments.
e. Participation in Benefits. Executive shall be entitled
to participate in and receive the benefits in any plan of the Company, in
addition to those specifically referred to in this Agreement, relating to
pension, profit sharing, stock options, or other retirement benefits, disability
and medical coverage or reimbursement plans that the Company may adopt for the
benefit of its executives and employees which are now in existence or may come
into existence hereafter. Nothing paid to Executive under any plan or
arrangement presently in effect or made available in the future shall be deemed
to be in lieu of the compensation payable pursuant to Section 4.a.
f. Vacation. Executive shall be entitled to a paid vacation
benefit during each year of the term of this Agreement. The vacation benefit
shall consist of not less than three (3) weeks during each year at times
mutually acceptable between the Company and Executive.
g. Relocation Allowance. The Company shall pay the amount
of Fifteen Thousand Dollars ($15,000.00) to Executive towards reimbursement of
relocation expenses for which no accounting shall be required from Executive by
Company if, and only if, Executive relocates to a location in or in proximity to
Doylestown, Pennsylvania, within one (1) year of the Commencement Date.
h. Other Expenses. The Company shall reimburse Executive or
otherwise provide for or pay for all expenses (including but not limited to
meals, entertainment, travel, automobile and lodging expenses) incurred by
Executive in the course of performing his duties under this Agreement.
5. Termination of Employment.
a. Termination for Good Cause. The Company may terminate
Executive's employment at any time for "Good Cause," as herein defined. For the
purposes of this Agreement, "Good Cause" shall mean (i) gross misconduct, (ii)
gross neglect of duties, (iii) acts involving moral turpitude, (iv) material
breach by Executive of this Agreement or the Confidentiality Agreement or (v)
any act or omission involving fraud, embezzlement, or misappropriation of any
property or proprietary information of the Company by Executive which is not
cured or cannot be cured by Executive within fifteen (15) days after receipt of
written notice from the Company. If the Company terminates Executive's
employment for Good Cause, Executive shall have a right to unpaid compensation
and other benefits accrued and unpaid through the last day of Executive's
employment.
b. Termination by Executive for Good Cause. Executive may
terminate his employment at any time for "Good Cause" as herein defined. "Good
Cause" shall mean (i) a failure by Company to comply with any material
provisions of the Agreement which failure has not been cured in fifteen (15)
days after notice given by Executive to Company, (ii) without Executive's
express written consent, the assignment to Executive of any duties inconsistent
with Executive's position, duties, responsibilities and status with the Company,
(iii) the failure of Company to continue in effect any bonus, benefit or
compensation plan, life insurance plan, health and accident plan, or any other
benefit plan in which Executive is participating, (iv) the taking of any action
by Company which would adversely affect Executive's benefits under such plans,
or (v) any purported termination of Executive's employment which is not
effective pursuant to Section 5.a. of this Agreement.
If Executive terminates his employment for Good Cause pursuant
to this Section 5.b., the Company shall immediately pay all compensation and
benefits accrued and unpaid through the last day of Executive's employment. In
addition, Executive shall receive a severance payment equal to Executive's base
compensation, payable at normal Company payroll dates, for a period of six (6)
months. Executive shall not be required to set off or mitigate the amount of any
payment provided for under this 5.b. for payments received or to be received by
Executive from other employment or consulting income.
c. Death or Disability. This Agreement shall
terminate if Executive dies or is mentally or physically "Disabled" as herein
defined. For the purposes of this Agreement, "Disabled" shall mean a mental or
physical condition that renders Executive incapable of performing his duties and
obligations under this Agreement for three (3) or more consecutive months or for
a total of six (6) months during any twelve (12) consecutive months; provided,
that during such period the Company shall give Executive at least thirty (30)
days' written notice that it considers the time period for disability to be
running. If this Agreement is terminated under this Section 5.c., Executive or
his estate shall be entitled to any unpaid compensation accrued through the last
day of Executive's employment but shall not be entitled to any severance
benefits.
6. Miscellaneous.
a. Governing Law. This Agreement shall be interpreted,
construed, governed and enforced according to the laws of the Commonwealth of
Pennsylvania as applied to agreements among Pennsylvania residents entered into
and to be performed entirely within Pennsylvania without regards to the
application of choice of law rules.
b. Amendments. No amendment or modification of the terms or
conditions of this Agreement shall be valid unless in writing and signed by the
parties hereto.
c. Severabilitv. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be construed, if possible, so as to be enforceable under applicable law,
else, such provision shall be excluded from this Agreement and the balance of
the Agreement shall be interpreted as if such provision were so excluded and
shall be enforceable in accordance with its terms.
d. Successors and Assigns. The rights and obligations of
the Company under this Agreement shall inure to the benefit of and shall be
binding upon the successors and assigns of the Company, including, without
limitation, any person, partnership or corporation which may acquire all or
substantially all of the Company's assets and business, or with or into which
the Company may be consolidated or merged. Executive shall not be entitled to
assign any of his rights or obligations under this Agreement.
e. Notices. All notices required or permitted under this
Agreement shall be in writing and shall be deemed effective upon personal
delivery, on the date of scheduled delivery by a nationally recognized overnight
service or two (2) days after deposit in the United States Post Office, by
registered or certified mail, postage prepaid, addressed to the other party at
the address shown below such party's signature, or at such other address or
addresses as either party shall designate to the other in accordance with this
Section 6.e.
f. Entire Agreement. This Agreement, including the exhibits
attached hereto, constitutes the entire agreement between the parties with
respect to the employment of Executive. Executive hereby agrees that the
Employment Agreement by and between Executive and Acute Therapeutics, Inc.,
dated June 1, 1997, shall be of no further force or effect and that he shall
have no further rights under said agreement.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date set forth above.
DISCOVERY LABORATORIES, INC.
/s/ Xxxxxx X. Xxxxxxxx
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By: Xxxxxx X. Xxxxxxxx, Ph.D.
Its: President
Address: 0000 Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
EXECUTIVE:
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, M.D.
Address: 000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
