Exhibit 10.14
Employment Agreement
by and Between
Cypress Bioscience, Inc.
and
Xxxxxxx Xxxxxxxx
Table of Contents
Page
1. Employment. ....................................................................................... 1
2. Loyal And Conscientious Performance; Noncompetition. .............................................. 2
3. Compensation Of THE Executive. .................................................................... 3
4. Termination. ...................................................................................... 3
5. Confidential And Proprietary Information; Nonsolicitation. ........................................ 6
6. Assignment And Binding Effect. .................................................................... 7
7. Notices. .......................................................................................... 7
8. Choice Of Law. .................................................................................... 7
9. Integration. ...................................................................................... 7
10. Amendment. ........................................................................................ 8
11. Waiver. ........................................................................................... 8
12. Severability. ..................................................................................... 8
13. Interpretation; Construction. ..................................................................... 8
14. Representations And Warranties. ................................................................... 8
15. Counterparts. ..................................................................................... 9
16. Litigation Costs. ................................................................................. 9
17. Trade Secrets Of Others. .......................................................................... 9
18. Advertising waiver. ............................................................................... 9
i.
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into
effective as of December 1, 2001 (the "Effective Date"), by and between Cypress
Bioscience, Inc., Delaware corporation (the "Company"), and Xxxxxxx Xxxxxxxx
(the "Executive"). The Company and the Executive are hereinafter collectively
referred to as the "Parties", and individually referred to as a "Party".
Recitals
A. The Company desires assurance of the association and services of the
Executive in order to retain the Executive's experience, skills, abilities,
background and knowledge, and is willing to engage the Executive's services on
the terms and conditions set forth in this Agreement.
B. The Parties agree that this Agreement shall replace and supercede the
IMRE Employment Agreement between Executive and the Company dated January 29,
1996.
C. The Executive desires to be in the employ of the Company, and is willing
to accept such employment on the terms and conditions set forth in this
Agreement.
Agreement
In consideration of the foregoing Recitals and the mutual promises and
covenants herein contained, and for other good and valuable consideration, the
Parties, intending to be legally bound, agree as follows:
1. EMPLOYMENT.
1.1 Term. The Company hereby employs the Executive, and the Executive
hereby accepts employment by the Company, upon the terms and conditions set
forth in this Agreement, subject to extension in accordance with Section 1.2
herein. The term of this Agreement shall commence on the Effective Date and
shall continue until September 1, 2002 (the "Term"), unless terminated earlier
in accordance with Section 4 herein or extended in accordance with Section 1.2
herein.
1.2 Renewal. The Term of this Agreement may be extended by one (1) year
on September 1, 2002 (and each anniversary thereof) by written agreement between
the Parties pursuant to Section 7 herein prior to the end of the Term.
Notwithstanding anything herein to the contrary, either Party may terminate the
Executive's employment under this Agreement at any time, with or without Cause,
subject to the terms and conditions of Section 4 below.
1.3 Title. The Executive shall have the title of Vice-President
Development and Chief Medical Officer of the Company and shall serve in such
other capacity or capacities as the Chief Executive Officer (CEO) or the Board
of Directors of the Company (the "Board") may from time to time prescribe. The
Executive shall report to the CEO.
1.
1.4 Duties. The Executive shall do and perform all services, acts or
things necessary or advisable to manage and conduct the business of the Company
and which are normally associated with the positions held by Executive,
consistent with the bylaws of the Company and as required by the Board.
1.5 Policies and Practices. The employment relationship between the
Parties shall be governed by the policies and practices established by the
Company and its Board. The Executive will acknowledge in writing that he has
read the Company's Employee Handbook, which will govern the terms and conditions
of his employment with the Company, along with this Agreement. In the event that
the terms of this Agreement differ from or are in conflict with the Company's
policies or practices or the Company's Employee Handbook, this Agreement shall
control.
1.6 Location. Unless the Parties otherwise agree in writing, during the
term of this Agreement, the Executive shall perform the services Executive is
required to perform pursuant to this Agreement at the Company's offices, located
in San Diego, or at any other place at which the Company maintains an office;
provided, however, that the Company may from time to time require the Executive
to travel temporarily to other locations in connection with the Company's
business.
2. LOYAL AND CONSCIENTIOUS PERFORMANCE; NONCOMPETITION.
2.1 Loyalty. During the Executive's employment by the Company, the
Executive shall devote Executive's full business energies, interest, abilities
and productive time to the proper and efficient performance of Executive's
duties under this Agreement.
2.2 Covenant not to Compete. Except with the prior written consent of
the Company's Board of Directors, the Executive will not, during the Term of
this Agreement, and any period during which the Executive is receiving
compensation or any other consideration from the Company, including, but not
limited to, severance pay pursuant to Section 4.4.2 herein, engage in
competition with the Company or any of its affiliates, either directly or
indirectly, in any manner or capacity, as adviser, principal, agent, affiliate,
promoter, partner, officer, director, employee, stockholder, owner, co-owner,
consultant, or member of any association or otherwise, in any phase of the
business of developing, manufacturing and marketing of products or services
which are in the same field of use or which otherwise compete with the products
or services or proposed products or services of the Company or any of its
affiliates.
2.3 Agreement not to Participate in Company's Competitors. During the
Term of this Agreement, the Executive agrees not to acquire, assume or
participate in, directly or indirectly, any position, investment or interest
known by Executive to be adverse or antagonistic to the Company, its business or
prospects, financial or otherwise or in any company, person or entity that is,
directly or indirectly, in competition with the business of the Company or any
of its affiliates. Ownership by the Executive, as a passive investment, of less
than two percent (2%) of the outstanding shares of capital stock of any
corporation with one or more classes of its capital
2.
stock listed on a national securities exchange or publicly traded on the
Nasdaq Stock Market or in the over-the-counter market shall not constitute a
breach of this paragraph.
3. COMPENSATION OF THE EXECUTIVE.
3.1 Base Salary. The Company shall pay the Executive a base salary of
One Hundred Ninety Thousand Dollars ($190,000) per year ("Base Salary"), less
payroll deductions and all required withholdings payable in regular periodic
payments in accordance with Company policy. Such base salary shall be prorated
for any partial year of employment on the basis of a 365-day fiscal year.
3.2 Discretionary Bonus. In addition to the Base Salary provided in
Section 3.1 above, Executive shall be eligible to receive an annual bonus (the
"Bonus") based on Executive's performance in the sole discretion of the Board.
3.3 Stock Options. Upon the Effective Date of this Agreement and
subject to approval of the Board, Executive will be granted a stock option under
the Company's [Equity Incentive Plan] to purchase 50,000 shares of the Company's
Common Stock (the "Option"). To the maximum extent possible, the Option shall be
an Incentive Stock Option as such term is defined in Section 422 of the Internal
Revenue Code of 1986, as amended. The Option will be governed by and granted
pursuant to a separate Stock Option Agreement. The exercise price per share of
the Option will be equal to the fair market value of the common stock
established on the date of grant, subject to approval by the Board. The Option
will be subject to vesting over four (4) years so long as Executive continues to
be employed with the Company, according to the following schedule: 10,000 shares
will vest on September 1, 2001 and the remaining 40,000 shares will vest daily
thereafter over a period of four (4) years.
3.4 Changes to Compensation. The Executive's compensation may be
changed from time to time as reasonably necessary in the discretion of the
Board.
3.5 Employment Taxes. All of the Executive's compensation shall be
subject to customary withholding taxes and any other employment taxes as are
commonly required to be collected or withheld by the Company.
3.6 Benefits. The Executive shall, in accordance with Company policy
and the terms of the applicable plan documents, be eligible to participate in
benefits under any executive benefit plan or arrangement which may be in effect
from time to time and made available to the Company's executive or key
management employees.
4. TERMINATION.
4.1 Termination By the Company. The Executive's employment with the
Company may be terminated under the following conditions:
4.1.1 Death or Disability. The Executive's employment with the
Company shall terminate effective upon the date of the Executive's death or
"Complete Disability" (as defined in Section 4.5.1).
3.
4.1.2 For Cause. The Company may terminate the Executive's
employment under this Agreement for "Cause" (as defined in Section 4.5.2) by
delivery of written notice to the Executive specifying the Cause or Causes
relied upon for such termination. Any notice of termination given pursuant to
this Section 4.1.2 shall effect termination as of the date specified in such
notice or, in the event no such date is specified, on the last day of the month
in which such notice is delivered or deemed delivered as provided in Section 7
below.
4.1.3 Without Cause. The Company may terminate the Executive's
employment under this Agreement at any time and for any reason by delivery of
written notice of such termination to the Executive. Any notice of termination
given pursuant to this Section 4.1.3 shall effect termination as of the date
specified in such notice or, in the event no such date is specified, on the last
day of the month in which such notice is delivered or deemed delivered as
provided in Section 7 below.
4.2 Termination By The Executive. The Executive may terminate the
Executive's employment with the Company under this Agreement at any time and for
any reason by delivery of written notice of such termination to the Company. Any
notice of termination given pursuant to this Section 4.2 shall effect
termination as of the date specified in such notice or, in the event no such
date is specified, on the last day of the month in which such notice is
delivered or deemed delivered as provided in Section 7 below.
4.3 Termination by Mutual Agreement of the Parties. The Executive's
employment pursuant to this Agreement may be terminated at any time upon a
mutual agreement in writing of the Parties. Any such termination of employment
shall have the consequences specified in such agreement.
4.4 Compensation Upon Termination.
4.4.1 Death, Complete Disability, Cause or by Executive. If the
Executive's employment shall be terminated by death, Complete Disability, Cause
(as such terms are defined below ) or by Executive, the Company shall pay the
Executive's accrued Base Salary and accrued and unused vacation benefits earned
through the date of termination, at the rate in effect at the time of
termination and subject to standard deductions and withholdings, to Executive
and/or Executive's heirs, and the Company shall thereafter have no further
obligations to the Executive and/or Executive's heirs under this Agreement.
4.4.2 Without Cause. If the Company terminates the Executive's
employment without Cause, the Executive shall be entitled to the Executive's
Base Salary and accrued and unused vacation earned through the date of
termination, subject to standard deductions and withholdings. In addition, upon
the Executive's furnishing to the Company an effective waiver and release of
claims (a form of which is attached hereto as Exhibit A), the Executive shall be
entitled to the equivalent of the Executive's annual Base Salary in effect at
the time of termination for a period of four (4) months, less standard
deductions and withholdings, to be paid in a lump sum payment within thirty (30)
days of the effective date of the Executive's termination.
4.
4.4.3 Covenant not to Compete. Notwithstanding any provisions in
this Agreement to the contrary, including any provisions contained in this
Section 4.4, the Company's obligations, and the Executive's rights, pursuant to
Section 4.4.2 shall cease and be rendered a nullity immediately should the
Executive violate any provision of Section 2 herein, or should the Executive
violate the terms and conditions of the Executive's Proprietary Information and
Inventions Agreement.
4.4.4 Termination of Obligations. In the event of the termination
of the Executive's employment hereunder and pursuant to this Section 4, the
Company shall have no obligation to pay Executive any Base Salary, Bonus or
other compensation or benefits, except as provided in this Section 4 or for
benefits due to the Executive (and/or the Executive's dependents) under the
terms of the Company's benefit plans. The Company may offset any amounts
Executive owes it or its subsidiaries against any amount it owes Executive
pursuant to this Section 4.4.
4.5 Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:
4.5.1 Complete Disability. "Complete Disability" shall mean the
inability of the Executive to perform the Executive's duties under this
Agreement because the Executive has become permanently disabled within the
meaning of any policy of disability income insurance covering employees of the
Company then in force. In the event the Company has no policy of disability
income insurance covering employees of the Company in force when the Executive
becomes disabled, the term "Complete Disability" shall mean the inability of the
Executive to perform the Executive's duties under this Agreement by reason of
any incapacity, physical or mental, which the Board, based upon medical advice
or an opinion provided by a licensed physician acceptable to the Board,
determines to have incapacitated the Executive from satisfactorily performing
all of the Executive's usual services for the Company for a period of at least
one hundred twenty (120) days during any twelve (12) month period (whether or
not consecutive). Based upon such medical advice or opinion, the determination
of the Board shall be final and binding and the date such determination is made
shall be the date of such Complete Disability for purposes of this Agreement.
4.5.2 For Cause. "Cause" for the Company to terminate Executive's
employment hereunder shall mean the occurrence of any of the following events:
(i) the Executive's repeated failure to satisfactorily perform
the Executive's job duties;
(ii) the Executive's commission of an act that materially
injures the business of the Company;
(iii) the Executive's refusal or failure to follow lawful and
reasonable directions of the Board or the appropriate individual to whom
Executive reports;
5.
(iv) the Executive's conviction of a felony involving moral
turpitude that is likely to inflict or has inflicted material injury on the
business of the Company;
(v) the Executive's engaging or in any manner participating in
any activity which is directly competitive with or intentionally injurious to
the Company or any of its affiliates or which violates any material provisions
of Section 5 hereof; or
(vi) the Executive's commission of any fraud against the Company,
its affiliates, employees, agents or customers or use or intentional
appropriation for his personal use or benefit of any funds or properties of the
Company not authorized by the Board to be so used or appropriated.
4.6 Survival of Certain Sections. Sections 2.2, 4.4.2, 4.4.3, 5, 8 and
16 of this Agreement will survive the termination of this Agreement.
5. CONFIDENTIAL AND PROPRIETARY INFORMATION; NONSOLICITATION.
5.1 As a condition of employment the Executive agrees to execute and
abide by the Proprietary Information and Inventions Agreement attached hereto as
Exhibit B.
5.2 The Executive recognizes that Executive's employment with the
Company will involve contact with information of substantial value to the
Company, which is not generally known in the trade, and which gives the Company
an advantage over its competitors who do not know or use it, including but not
limited to, techniques, designs, drawings, processes, inventions know how,
strategies, marketing, and/or advertising plans or arrangements, developments,
equipment, prototypes, sales, supplier, service provider, vendor, distributor
and customer information, and business and financial information relating to the
business, products, services, practices and techniques of the Company,
(hereinafter referred to as "Confidential and Proprietary Information"). The
Executive will at all times regard and preserve as confidential such
Confidential and Proprietary Information obtained by the Executive from whatever
source and will not, either during Executive's employment with the Company or
thereafter, publish or disclose any part of such Confidential and Proprietary
Information in any manner at any time, or use the same except on behalf of the
Company, without the prior written consent of the Company.
5.3 While employed by the Company and for one (1) year thereafter, the
Executive agrees that in order to protect the Company's Confidential and
Proprietary Information from unauthorized use, that the Executive will not,
either directly or through others, solicit or attempt to solicit any employee,
consultant or independent contractor of the Company to terminate his or her
relationship with the Company in order to become an employee, consultant or
independent contractor to or for any other person or business entity; or the
business of any customer, supplier, service provider, vendor or distributor of
the Company which, at the time of termination or one (1) year immediately prior
thereto, was doing business with the Company or listed on Company's customer,
supplier, service provider, vendor or distributor list.
6.
6. ASSIGNMENT AND BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of the
Executive and the Executive's heirs, executors, personal representatives,
assigns, administrators and legal representatives. Because of the unique and
personal nature of the Executive's duties under this Agreement, neither this
Agreement nor any rights or obligations under this Agreement shall be assignable
by the Executive. This Agreement shall be binding upon and inure to the benefit
of the Company and its successors, assigns and legal representatives.
7. NOTICES.
All notices or demands of any kind required or permitted to be given by
the Company or the Executive under this Agreement shall be given in writing and
shall be personally delivered (and receipted for) or faxed during normal
business hours or mailed by certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Company:
CEO
Cypress Bioscience, Inc.
0000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
If to the Executive:
Xxxxxxx Xxxxxxxx
[insert address]
Any such written notice shall be deemed received when personally delivered or
three (3) days after its deposit in the United States mail as specified above.
Either Party may change its address for notices by giving notice to the other
Party in the manner specified in this section.
8. CHOICE OF LAW.
This Agreement is made in San Diego, California. This Agreement shall
be construed and interpreted in accordance with the laws of the State of
California.
9. INTEGRATION.
This Agreement, including Exhibits A, B and C, as well as the Employee
Handbook contains the complete, final and exclusive agreement of the Parties
relating to the terms and conditions of the Executive's employment, and
supersedes all prior and contemporaneous oral and written employment agreements
or arrangements between the Parties, including the Employment Agreement between
Executive and the Company dated January 29, 1996. To the extent this Agreement
conflicts with the Proprietary Information and Inventions Agreement attached as
Exhibit B hereto, the Proprietary Information and Inventions Agreement controls.
To the extent this Agreement conflicts with the terms of the Employee Handbook,
this Agreement controls.
7.
10. AMENDMENT.
This Agreement cannot be amended or modified except by a written
agreement signed by the Executive and the Company.
11. WAIVER.
No term, covenant or condition of this Agreement or any breach thereof
shall be deemed waived, except with the written consent of the Party against
whom the wavier is claimed, and any waiver or any such term, covenant, condition
or breach shall not be deemed to be a waiver of any preceding or succeeding
breach of the same or any other term, covenant, condition or breach.
12. SEVERABILITY.
The finding by a court of competent jurisdiction of the
unenforceability, invalidity or illegality of any provision of this Agreement
shall not render any other provision of this Agreement unenforceable, invalid or
illegal. Such court shall have the authority to modify or replace the invalid or
unenforceable term or provision with a valid and enforceable term or provision
which most accurately represents the Parties' intention with respect to the
invalid or unenforceable term or provision.
13. INTERPRETATION; CONSTRUCTION.
The headings set forth in this Agreement are for convenience of
reference only and shall not be used in interpreting this Agreement. This
Agreement has been drafted by legal counsel representing the Company, but the
Executive has been encouraged to consult with, and has consulted with,
Executive's own independent counsel and tax advisors with respect to the terms
of this Agreement. The Parties acknowledge that each Party and its counsel has
reviewed and revised, or had an opportunity to review and revise, this
Agreement, and the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement.
14. REPRESENTATIONS AND WARRANTIES.
The Executive represents and warrants that Executive is not restricted
or prohibited, contractually or otherwise, from entering into and performing
each of the terms and covenants contained in this Agreement, and that
Executive's execution and performance of this Agreement will not violate or
breach any other agreements between the Executive and any other person or
entity.
15. COUNTERPARTS.
This Agreement may be executed in two counterparts, each of which shall
be deemed an original, all of which together shall contribute one and the same
instrument.
8.
16. LITIGATION COSTS.
Should any litigation, arbitration, or administrative action be
commenced between the Parties or their personal representatives concerning any
provision of this Agreement or the rights and duties of any person in relation
to this Agreement, the Party prevailing in such action shall be entitled, in
addition to such other relief as may be granted to a reasonable sum as and for
that Party's attorney's fees in such litigation which shall be determined by the
court, arbitrator, or administrative agency, in such action or in a separate
action brought for that purpose.
17. TRADE SECRETS OF OTHERS.
It is the understanding of both the Company and the Executive that the
Executive shall not divulge to the Company and/or its subsidiaries any
confidential information or trade secrets belonging to others, including the
Executive's former employers, nor shall the Company and/or its affiliates seek
to elicit from the Executive any such information. Consistent with the
foregoing, the Executive shall not provide to the Company and/or its affiliates,
and the Company and/or its affiliates shall not request, any documents or copies
of documents containing such information.
18. ADVERTISING WAIVER.
The Executive agrees to permit the Company and/or its affiliates, and
persons or other organizations authorized by the Company and/or its affiliates,
to use, publish and distribute advertising or sales promotional literature
concerning the products and/or services of the Company and/or its affiliates, or
the machinery and equipment used in the provision thereof, in which the
Executive's name and/or pictures of the Executive taken in the course of the
Executive's provision of services to the Company and/or its affiliates, appear.
The Executive hereby waives and releases any claim or right the Executive may
otherwise have arising out of such use, publication or distribution.
9.
In Witness Whereof, the Parties have executed this Agreement as of the date
first above written.
Cypress Bioscience, Inc.
By: /s/ Xxxx Xxxxxxxxx
---------------------------------------
Its: Chief Operating Officer and Executive Vice President
----------------------------------------------------
Dated: 12/10/01
------------------------------------
Executive:
/s/ R. Xxxxxxx Xxxxxxxx
--------------------------------------------
Xxxxxxx Xxxxxxxx
Dated: 12/12/01
------------------------------------
10.
EXHIBIT A
RELEASE AND WAIVER OF CLAIMS
In consideration of the payments and other benefits set forth in
Section 4.4.2 of the Employment Agreement dated ___________, to which this form
is attached, I, Xxxxxxx Xxxxxxxx, hereby furnish Cypress Bioscience, Inc. (the
"Company"), with the following release and waiver ("Release and Waiver").
I hereby release, and forever discharge the Company, its officers,
directors, agents, employees, stockholders, successors, assigns, affiliates,
parent, subsidiaries, and benefit plans, of and from any and all claims,
liabilities, demands, causes of action, costs, expenses, attorneys' fees,
damages, indemnities and obligations of every kind and nature, in law, equity,
or otherwise, known and unknown, suspected and unsuspected, disclosed and
undisclosed, arising out of or in any way related to agreements, events, acts or
conduct at any time prior to and including the date that this Release and Waiver
is signed, including but not limited to: all such claims and demands directly or
indirectly arising out of or in any way connected with my employment with the
Company or the termination of that employment; claims pursuant to any federal,
state or local law relating to employment, including, but not limited to,
discrimination claims, claims under the California Fair Employment and Housing
Act, and the Federal Age Discrimination in Employment Act of 1967, as amended
("ADEA"), or claims for wrongful termination, breach of the covenant of good
faith, contract claims, tort claims, and wage or benefit claims, including but
not limited to, claims for salary, bonuses, commissions, stock, stock options,
vacation pay, fringe benefits, severance pay or any form of compensation.
I also acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A general release does not extend
to claims which the creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him must have materially
affected his settlement with the debtor." I hereby expressly waive and
relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to any claims I may have against the
Company.
I acknowledge that, among other rights, I am waiving and releasing any
rights I may have under ADEA, that this Release and Waiver is knowing and
voluntary, and that the consideration given for this Release and Waiver is in
addition to anything of value to which I was already entitled as an executive of
the Company. I further acknowledge that I have been advised, as required by the
Older Workers Benefit Protection Act, that: (a) the release and waiver granted
herein does not relate to claims under the ADEA which may arise after this
Release and Waiver is executed; (b) I have the right to consult with an attorney
prior to executing this Release and Waiver (although I may choose voluntarily
not to do so); and if I am 40 years of age or older upon execution of this
Release and Waiver: (c) I have twenty-one (21) days from the date of termination
of my employment with the Company in which to consider this Release and Waiver
(although I may choose voluntarily to execute this Release and Waiver earlier);
(d) I have seven (7) days following the execution of this Release and Waiver to
revoke my consent to this Release and Waiver; and (e) this Release and Waiver
shall not be effective until the seven (7) day revocation period has expired.
Date: __________________ By: ________________________________
Xxxxxxx Xxxxxxxx
EXHIBIT B
Cypress Bioscience, Inc.
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
In consideration of my employment or continued employment by
Cypress Bioscience, Inc.
(the "Company"), and the compensation now and hereafter paid to me, I,
Xxxxxxx Xxxxxxxx, hereby agree as follows:
1. Nondisclosure
1.1 Recognition of Company's Rights; Nondisclosure. At all times
during my employment and thereafter, I will hold in strictest confidence and
will not disclose, use, lecture upon or publish any of the Company's [and/or its
Affiliates'] Proprietary Information (defined below), except as such disclosure,
use or publication may be required in connection with my work for the Company,
or unless an officer of the Company expressly authorizes such in writing. I will
obtain Company's written approval before publishing or submitting for
publication any material (written, verbal, or otherwise) that relates to my work
at Company and/or incorporates any Proprietary Information. I hereby assign to
the Company any rights I may have or acquire in such Proprietary Information and
recognize that all Proprietary Information shall be the sole property of the
Company and its assigns. [For purposes of this Agreement, "Affiliate" means,
with respect to any specific entity, any other entity that, directly or
indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with such specified entity.]
1.2 Proprietary Information. The term "Proprietary Information"
shall mean any and all confidential and/or proprietary knowledge, data or
information of the Company and/or its Affiliates. By way of illustration but not
limitation, "Proprietary Information" includes (a) trade secrets, inventions,
mask works, ideas, processes, formulas, source and object codes, data, programs,
other works of authorship, know-how, improvements, discoveries, developments,
designs and techniques (hereinafter collectively referred to as "Inventions");
and (b) information regarding plans for research, development, new products,
marketing and selling, business plans, budgets and unpublished financial
statements, licenses, prices and costs, suppliers and customers; and (c)
information regarding the skills and compensation of other employees of the
Company [and/or its Affiliates]. Notwithstanding the foregoing, it is understood
that, at all such times, I am free to use information which is generally known
in the trade or industry, which is not gained as result of a breach of this
Agreement, and my own, skill, knowledge, know-how and experience to whatever
extent and in whichever way I wish.
1.3 Third Party Information. I understand, in addition, that the
Company has received and in the future will receive from third parties
confidential or proprietary information ("Third Party Information") subject to a
duty on the Company's part to maintain the confidentiality of such information
and to use it only for certain limited purposes. During the term of my
employment and thereafter, I will hold Third Party Information in the strictest
confidence and will not disclose to anyone (other than Company personnel who
need to know such information in connection with their work for the Company) or
use, except in connection with my work for the Company, Third Party Information
unless expressly authorized by an officer of the Company in writing.
1.4 No Improper Use of Information of Prior Employers and Others.
During my employment by the Company I will not improperly use or disclose any
confidential information or trade secrets, if any, of any former employer or any
other person to whom I have an obligation of confidentiality, and I will not
bring onto the premises of the Company any unpublished documents or any property
belonging to any former employer or any other person to whom I have an
obligation of confidentiality unless consented to in writing by that former
employer or person. I will use in the performance of my duties only information
which is generally known and used by persons with training and experience
comparable to my own, which is common knowledge in the industry or otherwise
legally in the public domain, or which is otherwise provided or developed by the
Company.
2. Assignment of Inventions.
2.1 Proprietary Rights. The term "Proprietary Rights" shall mean
all trade secret, patent,
1.
copyright, mask work and other intellectual property rights throughout the
world.
2.2 Prior Inventions. Inventions, if any, patented or unpatented,
which I made prior to the commencement of my employment with the Company are
excluded from the scope of this Agreement. To preclude any possible uncertainty,
I have set forth on Exhibit B-2 (Previous Inventions) attached hereto a complete
list of all Inventions that I have, alone or jointly with others, conceived,
developed or reduced to practice or caused to be conceived, developed or reduced
to practice prior to the commencement of my employment with the Company, that I
consider to be my property or the property of third parties and that I wish to
have excluded from the scope of this Agreement (collectively referred to as
"Prior Inventions"). If disclosure of any such Prior Invention would cause me to
violate any prior confidentiality agreement, I understand that I am not to list
such Prior Inventions in Exhibit B-2 but am only to disclose a cursory name for
each such invention, a listing of the party(ies) to whom it belongs and the fact
that full disclosure as to such inventions has not been made for that reason. A
space is provided on Exhibit B-2 for such purpose. If no such disclosure is
attached, I represent that there are no Prior Inventions. If, in the course of
my employment with the Company, I incorporate a Prior Invention into a Company
product, process or machine, the Company is hereby granted and shall have a
nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with
rights to sublicense through multiple tiers of sublicensees) to make, have made,
modify, use and sell such Prior Invention. Notwithstanding the foregoing, I
agree that I will not incorporate, or permit to be incorporated, Prior
Inventions in any Company Inventions without the Company's prior written
consent.
2.3 Assignment of Inventions. Subject to Sections 2.4 and 2.6, I
hereby assign and agree to assign in the future (when any such Inventions or
Proprietary Rights are first reduced to practice or first fixed in a tangible
medium, as applicable) to the Company all my right, title and interest in and to
any and all Inventions (and all Proprietary Rights with respect thereto) whether
or not patentable or registrable under copyright or similar statutes, made or
conceived or reduced to practice or learned by me, either alone or jointly with
others, during the period of my employment with the Company. Inventions assigned
to the Company, or to a third party as directed by the Company pursuant to this
Section 2, are hereinafter referred to as "Company Inventions".
2.4 Nonassignable Inventions. This Agreement does not apply to an
Invention which qualifies fully as a nonassignable Invention under Section 2870
of the California Labor Code (hereinafter "Section 2870"). I have reviewed the
notification on Exhibit B-1 (Limited Exclusion Notification) and agree that my
signature acknowledges receipt of the notification.
2.5 Obligation to Keep Company Informed. During the period of my
employment and for six (6) months after termination of my employment with the
Company, I will promptly disclose to the Company fully and in writing all
Inventions authored, conceived or reduced to practice by me, either alone or
jointly with others. In addition, I will promptly disclose to the Company all
patent applications filed by me or on my behalf within a year after termination
of employment. At the time of each such disclosure, I will advise the Company in
writing of any Inventions that I believe fully qualify for protection under
Section 2870; and I will at that time provide to the Company in writing all
evidence necessary to substantiate that belief. The Company will keep in
confidence and will not use for any purpose or disclose to third parties without
my consent any confidential information disclosed in writing to the Company
pursuant to this Agreement relating to Inventions that qualify fully for
protection under the provisions of Section 2870. I will preserve the
confidentiality of any Invention that does not fully qualify for protection
under Section 2870.
2.6 Government or Third Party. I also agree to assign all my
right, title and interest in and to any particular Company Invention to a third
party, including without limitation the United States, as directed by the
Company.
2.7 Works for Hire. I acknowledge that all original works of
authorship which are made by me (solely or jointly with others) within the scope
of my employment and which are protectable by copyright are "works made for
hire", pursuant to United States Copyright Act (17 U.S.C., Section 101).
2.8 Enforcement of Proprietary Rights. I will assist the Company
in every proper way to obtain, and from time to time enforce, United States and
foreign Proprietary Rights relating to Company Inventions in any and all
countries. To that end I will execute, verify and deliver such documents and
perform such other acts (including appearances as a witness) as the Company may
reasonably request for use in applying for, obtaining, perfecting, evidencing,
2.
sustaining and enforcing such Proprietary Rights and the assignment thereof. In
addition, I will execute, verify and deliver assignments of such Proprietary
Rights to the Company or its designee. My obligation to assist the Company with
respect to Proprietary Rights relating to such Company Inventions in any and all
countries shall continue beyond the termination of my employment, but the
Company shall compensate me at a reasonable rate after my termination for the
time actually spent by me at the Company's request on such assistance.
In the event the Company is unable for any reason, after reasonable effort, to
secure my signature on any document needed in connection with the actions
specified in the preceding paragraph, I hereby irrevocably designate and appoint
the Company and its duly authorized officers and agents as my agent and attorney
in fact, which appointment is coupled with an interest, to act for and in my
behalf to execute, verify and file any such documents and to do all other
lawfully permitted acts to further the purposes of the preceding paragraph with
the same legal force and effect as if executed by me. I hereby waive and
quitclaim to the Company any and all claims, of any nature whatsoever, which I
now or may hereafter have for infringement of any Proprietary Rights assigned
hereunder to the Company.
3. Records. I agree to keep and maintain adequate and current records
(in the form of notes, sketches, drawings and in any other form that may be
required by the Company) of all Proprietary Information developed by me and all
Inventions made by me during the period of my employment at the Company, which
records shall be available to and remain the sole property of the Company at all
times.
4. Additional Activities. I agree that during the period of my
employment by the Company I will not, without the Company's express written
consent, engage in any employment or business activity which is competitive
with, or would otherwise conflict with, my employment by the Company. I agree
further that for the period of my employment by the Company and for one (l) year
after the date of termination of my employment by the Company I will not induce
any employee of the Company to leave the employ of the Company.
5. No Conflicting Obligation. I represent that my performance of all
the terms of this Agreement and as an executive of the Company does not and will
not breach any agreement to keep in confidence information acquired by me in
confidence or in trust prior to my employment by the Company. I have not entered
into, and I agree I will not enter into, any agreement either written or oral in
conflict herewith.
6. Return of Company Documents. When I leave the employ of the
Company, I will deliver to the Company any and all drawings, notes, memoranda,
specifications, devices, formulas, and documents, together with all copies
thereof, and any other material containing or disclosing any Company Inventions,
Third Party Information or Proprietary Information of the Company. I further
agree that any property situated on the Company's premises and owned by the
Company, including disks and other storage media, filing cabinets or other work
areas, is subject to inspection by Company personnel at any time with or without
notice. Prior to leaving, I will cooperate with the Company in completing and
signing the Company's termination statement.
7. Legal and Equitable Remedies. Because my services are personal and
unique and because I may have access to and become acquainted with the
Proprietary Information of the Company, the Company shall have the right to
enforce this Agreement and any of its provisions by injunction, specific
performance or other equitable relief, without bond and without prejudice to any
other rights and remedies that the Company may have for a breach of this
Agreement.
8. Notices. Any notices required or permitted hereunder shall be
given to the appropriate party at the address specified below or at such other
address as the Party shall specify in writing. Such notice shall be deemed given
upon personal delivery to the appropriate address or if sent by certified or
registered mail, three (3) days after the date of mailing.
9. Notification of New Employer. In the event that I leave the
employ of the Company, I hereby consent to the notification of my new employer
of my rights and obligations under this Agreement.
10. General Provisions.
10.1 Governing Law; Consent to Personal Jurisdiction. This Agreement
will be governed by and construed according to the laws of the State of
California, as such laws are applied to agreements entered into and to be
performed entirely
3.
within California between California residents. I hereby expressly consent to
the personal jurisdiction of the state and federal courts located in San Diego
County, California for any lawsuit filed there against me by Company arising
from or related to this Agreement.
10.2 Severability. In case any one or more of the provisions contained
in this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect the other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein. If moreover, any one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad
as to duration, geographical scope, activity or subject, it shall be construed
by limiting and reducing it, so as to be enforceable to the extent compatible
with the applicable law as it shall then appear.
10.3 Successors and Assigns. This Agreement will be binding upon my
heirs, executors, administrators and other legal representatives and will be for
the benefit of the Company, its successors, and its assigns.
10.4 Survival. The provisions of this Agreement shall survive the
termination of my employment and the assignment of this Agreement by the Company
to any successor in interest or other assignee.
10.5 Employment. I agree and understand that nothing in this Agreement
shall confer any right with respect to continuation of employment by the
Company, nor shall it interfere in any way with my right or the Company's right
to terminate my employment at any time, with or without Cause.
10.6 Waiver. No waiver by the Company of any breach of this Agreement
shall be a waiver of any preceding or succeeding breach. No waiver by the
Company of any right under this Agreement shall be construed as a waiver of any
other right. The Company shall not be required to give notice to enforce strict
adherence to all terms of this Agreement.
10.7 Entire Agreement. The obligations pursuant to Sections 1 and 2 of
this Agreement shall apply to any time during which I was previously employed,
or am in the future employed, by the Company as a consultant if no other
agreement governs nondisclosure and assignment of inventions during such period.
This Agreement is the final, complete and exclusive agreement of the Parties
with respect to the subject matter hereof and supersedes and merges all prior
discussions between us. No modification of or amendment to this Agreement, nor
any waiver of any rights under this Agreement, will be effective unless in
writing and signed by the Party to be charged. Any subsequent change or changes
in my duties, salary or compensation will not affect the validity or scope of
this Agreement.
This Agreement shall be effective as of the first day of my employment
with the Company, namely: _______________, 2001.
I have read this Agreement carefully and understand its terms. I have
completely filled out Exhibit B-1 to this agreement.
Dated: 12/10/01
---------------------------------------------------
/s/ R. Xxxxxxx Xxxxxxxx
-----------------------------------------------------------
(Signature)
______________________________________________________
(Executive's Printed Name)
Accepted and Agreed To:
Cypress Bioscience, Inc.
________________________________________
________________________________________
By: /s/ Xxxx Xxxxxxxxx
--------------------------------------------------------
Title: Chief Operating Officer and Executive Vice President
-----------------------------------------------------
Dated: 12/10/01
---------------------------------------------------
4.
Exhibit B-1
LIMITED EXCLUSION NOTIFICATION
This is to Notify The Executive in accordance with Section 2872 of the
California Labor Code that the foregoing Agreement between the Executive and the
Company does not require the Executive to assign or offer to assign to the
Company any invention that the Executive developed entirely on your own time
without using the Company's equipment, supplies, facilities or trade secret
information except for those inventions that either:
1. Relate at the time of conception or reduction to practice of the
invention to the Company's business, or actual or demonstrably
anticipated research or development of the Company;
2. Result from any work performed by The Executive for the Company.
To the extent a provision in the foregoing Agreement purports to
require the Executive to assign an invention otherwise excluded from the
preceding paragraph, the provision is against the public policy of this state
and is unenforceable.
This limited exclusion does not apply to any patent or invention
covered by a contract between the Company and the United States or any of its
agencies requiring full title to such patent or invention to be in the United
States.
I acknowledge receipt of a copy of this notification.
/s/ Xxxxxxx Xxxxxxxx
-----------------------------------------
Xxxxxxx Xxxxxxxx
Date: 12/10/01
------------------------------------
Witnessed by:
/s/ Xxxx Xxxxxxxxx
-------------------------------------
(Printed Name of Representative)
Exhibit B-2
TO: Cypress Bioscience, Inc.
FROM: Xxxxxxx Xxxxxxxx
DATE: December 10, 2001
SUBJECT: Previous Inventions
1. Except as listed in Section 2 below, the following is a complete list of all
inventions or improvements relevant to the subject matter of my employment by
Cypress Bioscience, Inc. (the "Company") that have been made or conceived or
first reduced to practice by me alone or jointly with others prior to my
engagement by the Company:
[X] No inventions or improvements.
[_] See below:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
[_] Additional sheets attached.
2. Due to a prior confidentiality agreement, I cannot complete the disclosure
under Section 1 above with respect to inventions or improvements generally
listed below, the proprietary rights and duty of confidentiality with respect to
which I owe to the following party(ies):
Invention or Improvement Party(ies) Relationship
1. __________________________ _____________________ ________________________
2. __________________________ _____________________ ________________________
3. __________________________ _____________________ ________________________
[_] Additional sheets attached.
2.
