EXHIBIT 10.12
CONSULTING AGREEMENT
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THIS CONSULTING AGREEMENT is entered into as of January 1, 2002 (the
"Effective Date") by and between Connetics Corporation ("Connetics"), a Delaware
corporation, with its principal place of business at 0000 Xxxx Xxxxxxxx Xxxx,
Xxxx Xxxx, Xxxxxxxxxx 00000, and Xxxxxx X. Xxxxx, M.D. ("Xx. Xxxxx") having an
address at 00000 Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxx 00000-0000. Connetics and
Consultant are sometimes referred to individually as a "Party" and collectively
as the "Parties."
A. Xx. Xxxxx is a director of Connetics, and desires to increase his
involvement in Connetics' activities.
B. Connetics and Xx. Xxxxx are parties to a Consulting Agreement
effective as of November 17, 1993 (the "Original Agreement").
Connetics and Xx. Xxxxx agree as follows:
1. DEFINITIONS. For purposes of this Agreement:
"AFFILIATE" of Connetics means any corporation or other business
entity controlled by, controlling or under common control with, Connetics. For
this purpose "control" shall mean direct or indirect beneficial ownership of
fifty percent (50%) or more of the voting stock, or a fifty percent (50%) or
more interest in the income of, such corporation or other business entity.
"PROPRIETARY INFORMATION" means any information of value
concerning Connetics, not generally known to the public, conveyed by Connetics
to Xx. Xxxxx or otherwise learned by Xx. Xxxxx in connection with his role as a
consultant to Connetics during the term of this Agreement, including (but not
limited to):
(a) information relating to pharmaceuticals; processes for
developing pharmaceuticals; the development status of
pharmaceuticals; synthetic and manufacturing processes;
compounds; compositions of matter; formulations;
medicaments and modes of their administration; veterinary
supplements; microorganisms; cells or parts thereof, cell
lines and the progeny thereof, including modified or
recombined DNA molecules, and vectors and hosts containing
the same; natural and synthetic antibodies, antigens,
source materials, and fragments thereof; technical
information, such as clinical, biological, pharmaceutical
and characterizing data; clinical trial protocols, codes
and status; computer programs; apparatus; devices;
drawings; designs; plans; and know-how;
(b) business information, such as reports; records; customer
lists; supplier lists; marketing and sales plans;
financial information; costs; and pricing information; and
(c) any information, concepts or ideas used in, or reasonably
related to, the business of Connetics, including
information received by Connetics in confidence from
another, that Connetics discloses to Xx. Xxxxx, or that
Xx. Xxxxx conceives or
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develops for Connetics individually or in conjunction
with others under the terms of this Agreement.
2. TERM AND TERMINATION.
(a) Connetics hereby retains Xx. Xxxxx, and Xx. Xxxxx hereby
accepts this retainer as a consultant to Connetics for an initial term
commencing as of the Effective Date and ending on January 31, 2003 or such later
date as the parties may agree in writing. Connetics and Xx. Xxxxx agree to
reevaluate the financial terms of this Agreement annually, and this Agreement
shall automatically continue each calendar year on the same terms unless
Connetics and Xx. Xxxxx mutually agree to modify the Agreement. No changes to
this Agreement shall be enforceable unless in writing signed by both Parties.
(b) Either Party may terminate this Agreement by giving the other
Party one hundred twenty (120) days' prior written notice. No termination of
this Agreement shall have any effect on Xx. Xxxxx'x role as a director of
Connetics.
3. AREA OF CONSULTATION. Xx. Xxxxx shall consult with and advise
Connetics with respect to dermatology research and the dermatology market, and
in particular to formulate and execute professional relations and education
programs. Specific duties shall include, but not be limited to, interacting with
professional societies and academic institutions to develop and carry out
programs that will enhance Connetics' visibility and credibility in the
dermatology community, and that will provide support for professional education
and training to dermatologists, and working with the CEO of the company to best
allocate Connetics' professional relations budget.
4. OTHER EMPLOYMENT.
(a) Xx. Xxxxx shall promptly disclose in writing to Connetics
should any conflict or possible conflict of duties and obligations arise during
the term of this Agreement. In addition, Connetics shall have the right to
notify Xx. Xxxxx if Connetics believes that a conflict of interest may have
arisen based on information known to Connetics. The Parties agree that, if Xx.
Xxxxx agrees to perform services for another company which Connetics, in its
discretion, believes to be in direct competition with Connetics, then Connetics
shall have the right to terminate this Agreement.
(b) Xx. Xxxxx confirms that this Agreement does not conflict with
Xx. Xxxxx'x duties and obligations under any other agreement to which Xx. Xxxxx
is a party, and that Xx. Xxxxx is free to disclose any information that Xx.
Xxxxx will furnish to Connetics in connection with providing Xx. Xxxxx'x
services.
5. COMPENSATION.
(a) Annual Retainer. Connetics shall pay Xx. Xxxxx, and Xx. Xxxxx
shall accept for Xx. Xxxxx'x services under this Agreement, compensation in the
form of an annual retainer in the amount of Sixty Thousand Dollars ($60,000)
payable in equal quarterly installments.
(b) Per Diem Fees. Connetics shall pay Xx. Xxxxx a fee equal to
One Thousand Dollars ($1,000) per day spent on Connetics' activities. It is
anticipated that Xx. Xxxxx shall spend approximately five (5) days per month on
such activities.
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(c) Expenses. Upon presentation of copies of receipts or other
appropriate evidence of expenditures by Xx. Xxxxx, Connetics shall reimburse Xx.
Xxxxx for reasonable travel expenses that Xx. Xxxxx incurs for travel at the
request and with the prior written approval of Connetics, in rendering services
pursuant to this Agreement. Connetics shall not reimburse Xx. Xxxxx for time
spent traveling unless specifically authorized in advance.
(d) Xx. Xxxxx'x Social Security Number is provided below solely
for the purpose of permitting Connetics to report payments made to Xx. Xxxxx
under this Agreement, as required by applicable federal, state or local tax laws
or regulations. Xx. Xxxxx acknowledges and agrees that it is his sole obligation
to report as self-employment income all compensation for services received from
Connetics in his capacity as a consultant.
(e) The compensation outlined in this SECTION 5 is intended to be
in addition to any compensation that may be paid to Xx. Xxxxx in his capacity as
a director of Connetics.
6. PROPRIETARY INFORMATION.
(a) In order to facilitate Xx. Xxxxx'x services under this
Agreement, it may be necessary for Connetics to disclose Proprietary Information
to Xx. Xxxxx. Xx. Xxxxx agrees to retain the Proprietary Information in strict
confidence and not to disclose or transfer the Proprietary Information to any
party other than as authorized by Connetics or as contemplated by this
Agreement. Upon completion of Xx. Xxxxx'x services under this Agreement, Xx.
Xxxxx will return all Technology copies and any remaining samples to Connetics,
unless directed otherwise by Connetics. These obligations of confidentiality and
non-use shall survive the expiration or termination of this Agreement.
(b) Xx. Xxxxx shall not use any Proprietary Information except
for providing consulting services under this Agreement, nor disclose Proprietary
Information to others without Connetics' express written permission.
(c) Xx. Xxxxx understands that Proprietary Information can
constitute "inside information" for securities purposes and agrees to refrain
from any unauthorized disclosure, trading or other such use.
(d) Notwithstanding the foregoing, Xx. Xxxxx shall not be
prevented from using or disclosing information:
(i) that Xx. Xxxxx can demonstrate by written records was
known to him before the date of disclosure by Connetics
and not obtained or derived directly or indirectly from
Connetics;
(ii) that is now, or becomes in the future, public knowledge
other than by breach of this Agreement by Xx. Xxxxx;
(iii) that is lawfully disclosed to Xx. Xxxxx on a
non-confidential basis by a third party who is not
obligated to Connetics or any other party to retain such
information in confidence;
(iv) that is properly required by law, regulation, rule, act or
order of any governmental authority or agency to be
disclosed by Xx. Xxxxx, provided that Xx. Xxxxx shall
provide Connetics with reasonable advance notice of any
such required disclosure and
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cooperate with Connetics in minimizing the extent of any
such disclosure and in seeking such protective order(s) or
the like as may be available to protect the
confidentiality of the Information; and provided further
that Xx. Xxxxx will make such disclosure only to the
extent the disclosure is legally required; or
(v) that Xx. Xxxxx obtains in the course of his service on the
Board of Directors for other companies. As of the date of
this Agreement, EXHIBIT A represents a list of all
for-profit companies on which Xx. Xxxxx serves as a
director. Xx. Xxxxx agrees to disclose to Connetics the
names of any other companies that he becomes affiliated
with as a director during the term of this Agreement.
7. WRITINGS. Any writings prepared by Xx. Xxxxx as a direct result of
Xx. Xxxxx'x activities with Connetics are prepared as works for hire for the
benefit of Connetics. Xx. Xxxxx hereby assigns to Connetics any copyright to
which Xx. Xxxxx is entitled for any writings prepared by Xx. Xxxxx in the course
of consulting for Connetics.
8. NOTICE. Any notice required or permitted by the terms of this
Agreement shall be given by registered mail or overnight courier, prepaid and
properly addressed, or delivered by hand to:
Connetics Corporation
ATTN: Xxxxxx X. Xxxxxxx
0000 Xxxx Xxxxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
or to
Xx. Xxxxx
00000 Xxxxxxxxx Xxxx
P.O. Box 2726
Gearhart, Oregon 97138-2726
or to such other address as either Party may designate by notice
pursuant to this Section. If mailed, any such notice shall be deemed to have
been given when received; and if delivered by hand, when received.
9. ASSIGNMENT.
(a) This Agreement is personal to Xx. Xxxxx, and Xx. Xxxxx shall
have no right or authority to assign the Agreement or any portion of this
Agreement, to sublet or subcontract in whole or in part, or otherwise delegate
his performance under this Agreement, without Connetics' prior written consent.
Connetics may not assign its obligations under this Agreement or any portion of
this Agreement without Xx. Xxxxx'x prior written consent.
(b) Subject to the foregoing, this Agreement shall be binding
upon and inure to, the benefit of the Parties, their successors and assigns. Any
attempted assignment contrary to the provisions of this SECTION 9 shall be
deemed ineffective.
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10. BREACH; REMEDIES. If either Party breaches any of the terms or
conditions of this Agreement, the other Party shall have the option to terminate
this Agreement immediately upon written notice, pursuant to SECTION 8, to the
breaching party, upon which event all rights of the breaching party shall
terminate upon the effective date of termination specified in such notice. The
obligations provided under SECTIONS 6 and 7 of this Agreement are acknowledged
as necessary and reasonable in order to protect Connetics and its business, and
Xx. Xxxxx expressly agrees that monetary damages would be inadequate to
compensate Connetics for the breach of those obligations. Accordingly, Xx. Xxxxx
agrees and acknowledges that any such violation or threatened violation will
cause irreparable injury to Connetics and that, in addition to any other
remedies that may be available, in law, in equity or otherwise, Connetics shall
be entitled to obtain injunctive relief against the breach or threatened breach
by Xx. Xxxxx of SECTIONS 6 and/or 7, without the necessity of proving actual
damages.
11. INDEPENDENT CONTRACTOR. Notwithstanding anything in this Agreement
to the contrary, Xx. Xxxxx'x status with Connetics shall be, at all times during
the term of this Agreement, that of an independent contractor. Nothing in this
Agreement shall be construed to give Xx. Xxxxx the power or authority to act or
make representations for, or on behalf of, or to bind or commit Connetics.
Accordingly, Xx. Xxxxx agrees not to use or refer to the name of Connetics
without Connetics' written permission, which written permission shall not be
unreasonably withheld, in any public statements, whether oral or written,
including, but not limited to shareholder reports, prospectuses, communications
with stock market analysts, press releases or other communications with the
media. This SECTION 11 is not intended to affect any rights or obligations Xx.
Xxxxx may have in his capacity as a director of Connetics.
12. APPLICABLE LAW; DISPUTE RESOLUTION. This Agreement will be
interpreted and enforced in accordance with the laws of California,
notwithstanding the choice of law principles of California or those of any other
jurisdiction. Xx. Xxxxx hereby submits to the jurisdiction of the U.S. District
Court for the Northern District of California and the California State Courts
within Santa Xxxxx County. Any dispute, controversy or claim arising out of or
relating to this Agreement, or the breach or termination of this Agreement,
shall be settled by arbitration in accordance with the rules of the American
Arbitration Association then in effect.
13. INDEMNITY. Connetics agrees to indemnify and hold harmless Xx. Xxxxx
for all claims from third parties arising from the use of product(s) developed
by Connetics for which Xx. Xxxxx has provided consulting services, except that
no indemnification is provided for claims resulting from any negligence on the
part of Xx. Xxxxx.
14. SURVIVAL. The covenants and agreements set forth in SECTIONS 6, 7,
11, 12 and 13 shall survive any termination or expiration of this Agreement and
remain in full force and effect regardless of the reason for or cause of
termination.
15. NO WAIVER. No waiver of any term or condition of this Agreement
shall be valid or binding on either Party unless agreed in writing by the Party
to be charged. The failure of either Party to enforce at any time any of the
provisions of this Agreement, or the failure to require at any time performance
by the other Party of any of the provisions of this Agreement, shall in no way
be construed to be a present or future waiver of such provisions, nor in any way
affect the validity of either Party to enforce each and every such provision
thereafter.
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16. HEADINGS. Article and section headings contained in this Agreement
are included for convenience only and form no part of the agreement between the
Parties.
17. PARTIAL INVALIDITY. If any provision of this Agreement is held to be
invalid, illegal, or unenforceable by a court of competent jurisdiction: (a)
such provision will be deemed amended to conform to applicable laws of such
jurisdiction so as to be valid and enforceable, or, if it cannot be so amended
without materially altering the intention of the parties, it will be stricken;
(b) the remaining provisions shall remain in full force and effect; (c) the
validity, legality and enforceability of such provision will not in any way be
affected or impaired thereby in any other jurisdiction; and (d) the remainder of
this Agreement will remain in full force and effect. The Parties agree to
renegotiate in good faith any term held invalid and to be bound by the mutually
agreed substitute provision in order to give the most approximate effect
intended by the Parties.
18. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of
the Parties with respect to Xx. Xxxxx'x consulting services to Connetics. This
Agreement may not be modified except by a writing signed by the Parties. This
Agreement has no effect on the existing Change in Control and Indemnification
Agreements between Connetics and Xx. Xxxxx.
IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the
Effective Date.
CONNETICS CORPORATION XX. XXXXX
By: /s/ XXXXXX X. XXXXXXX /s/ XXXXXX X. XXXXX, M.D.
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Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxx, M.D.
President and Chief Executive Officer
SOCIAL SECURITY NO. ON FILE
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EXHIBIT A
Companies where Xx. Xxxxx Serves on the Board of Directors
Arbor Vita Corporation
Reconstructive Technologies, Inc.
Medgenics, Inc.
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AMENDMENT TO CONSULTING AGREEMENT
THIS AMENDMENT TO CONSULTING AGREEMENT ("AMENDMENT") is entered into as of
December 11, 2002 by and between Connetics Corporation, a Delaware corporation
having an address at 0000 Xxxx Xxxxxxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000
("CONNETICS") Xxxxxx X. Xxxxx, M.D. having an address at 00000 Xxxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxx 00000-0000 ("XX. XXXXX"). Connetics and Xx. Xxxxx are sometimes
referred to individually as "Party" and collectively as "Parties".
BACKGROUND
Connetics and Xx. Xxxxx are Parties to a Consulting Agreement dated January
1, 2002 ("CONSULTING AGREEMENT"). Connetics and Xx. Xxxxx desire to amend
the terms of the Consulting Agreement.
AGREEMENT
1. Section 5(a) Annual Retainer of the Consulting Agreement is hereby
replaced, in its entirety, to read as follows:
(a) Annual Retainer. Beginning January 1, 2003 and continuing
throughout the term of the Consulting Agreement, Connetics
shall pay Xx. Xxxxx, and Xx. Xxxxx shall accept for Xx.
Xxxxx'x services under this Consulting Agreement, compensation
in the form of an annual retainer in the amount of Fifty-Four
Thousand Dollars ($54,000.00) payable in equal quarterly
installments.
2. This Amendment may be executed in a number of identical counterparts, each
of which will be deemed an original, but all of which together will
constitute one and the same instrument.
3. All of the remaining provisions of the Consulting Agreement shall continue
in full force and effect as though fully set forth in this Amendment.
IN WITNESS WHEREOF, the Parties have entered into this Amendment as of the date
first written above.
CONNETICS CORPORATION XXXXXX X. XXXXX
"CONNETICS" "XX. XXXXX"
Signature: /s/ Xxxxxx X. Xxxxxxx Signature: /s/ Xxxxxx X. Xxxxx
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Print: Xxxxxx X. Xxxxxxx Print: Xxxxxx X. Xxxxx, M.D.
Title: President and Chief Executive Social Security No:
Officer
SECOND AMENDMENT TO CONSULTING AGREEMENT
THIS SECOND AMENDMENT TO CONSULTING AGREEMENT ("SECOND AMENDMENT") is
entered into as of January 1, 2003 ("EFFECTIVE DATE") by and between Connetics
Corporation, a Delaware corporation having an address at 0000 Xxxx Xxxxxxxx
Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000 ("CONNETICS") Xxxxxx X. Xxxxx, M.D. having an
address at 00000 Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxx 00000-0000 ("XX. XXXXX").
Connetics and Xx. Xxxxx are sometimes referred to individually as "Party" and
collectively as "Parties".
BACKGROUND
Connetics and Xx. Xxxxx are Parties to a Consulting Agreement dated January 1,
2002 ("INITIAL AGREEMENT") and to an Amendment to Consulting Agreement dated
December 11, 2002 ("AMENDMENT"). Collectively, the Initial Agreement and the
Amendment are to be know as the "CONSULTING AGREEMENT". Connetics and Xx. Xxxxx
desire to amend the terms of the Consulting Agreement.
AGREEMENT
1. Section 2(a) of the Consulting Agreement is hereby replaced, in its
entirety, to read as follows:
(a) Connetics hereby retains Xx. Xxxxx, and Xx. Xxxxx hereby
accepts this retainer as a consultant to Connetics for the
term commencing on the Effective Date of this Second Amendment
and ending on December 31, 2003.
2. This Second Amendment may be executed in a number of identical
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
3. All of the remaining provisions of the Consulting Agreement shall continue
in full force and effect as though fully set forth in this Second
Amendment.
IN WITNESS WHEREOF, the Parties have entered into this Second Amendment as of
the Effective Date of this Second Amendment.
CONNETICS CORPORATION XXXXXX X. XXXXX
"CONNETICS" "XX. XXXXX"
Signature: /s/ Xxxxxx X. Xxxxxxx Signature: /s/ Xxxxxx X. Xxxxx
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Print: Xxxxxx X. Xxxxxxx Print: Xxxxxx X. Xxxxx, M.D.
Title: President and Chief Executive Social Security No:
Officer
