Exhibit 10.7
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, dated as of January 1, 2000 (the
"Effective Date"), is entered into by and between Unigene Laboratories, Inc., a
Delaware corporation having offices at 000 Xxxxxx Xxxxx Xxxx, Xxxxxxxxx, X.X.
00000 (the "Company"), and Xxxxxx Xxxx, whose address is 000 Xxxxxx Xxxxx Xxxx,
Xxxxxxxxx, XX 0000 (the "Executive").
WITNESSETH:
----------
WHEREAS, the Company desires to employ the Executive and to
enter into this Agreement embodying the terms of such employment; and
WHEREAS, the Executive desires to enter into this Agreement
and to accept such employment, subject to the terms and provisions of this
Agreement;
NOW, THEREFORE, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Engagement. The Company hereby employs the Executive as its
Executive Vice President, and the Executive hereby accepts such employment, on
the terms and conditions hereinafter set forth.
2. Term. This Agreement is for an initial term of two years
commencing on the date hereof, subject to earlier termination as provided for
herein. This Agreement will be automatically renewed annually after its initial
term for an additional one-year term, and on a year-to-year basis thereafter,
unless either party notifies the other of the desire not to so renew the
Agreement no later than three months prior to scheduled termination date.
3. Duties. During the term of this Agreement, the Executive
shall serve as the Company's Executive Vice President and shall have such duties
and responsibilities as are set forth in the Company's Bylaws and such other
executive responsibilities as may be assigned to him from time to time by the
Board of Directors or the Chief Executive Officer. The Executive shall use his
best efforts to perform, and shall act in good faith in performing, all duties
required to be performed by him under this Agreement.
4. Availability. During the term of this Agreement the
Executive shall not be engaged in any other business activity that would
interfere with the performance of his duties to the Company without the express
written approval of the Board of Directors, except that, with such written
approval, the Executive may engage in a reasonable level of professional
activities such as are typical for individuals of a comparable professional
stature.
5. Business Expenses. The Company shall reimburse the
Executive, promptly upon presentation of itemized vouchers, for all ordinary and
necessary business expenses incurred by the Executive in the performance of his
duties hereunder.
6. Compensation. As compensation for the services to be
rendered hereunder, the Company agrees as follows:
(a) to pay the Executive an annual salary of $155,000 during
the initial year of this Agreement;
(b) for the second year of this Agreement, and if the
Agreement is renewed automatically for subsequent years thereafter in accordance
with Section (2) above, to provide the Executive with an annual salary approved
by the Compensation Committee, and which shall not be less than the Executive's
annual salary for the preceding year;
(c) to participate in such employee benefit plans as are made
available by the Company to its employees generally. The Executive acknowledges
that salary and all other compensation payable under this Agreement shall be
subject to withholding for income and other applicable taxes to the extent
required by law.
7. Ownership of Intellectual Property. All rights, title and
interest of every kind and nature whatsoever in and to discoveries, inventions,
improvements, patents (and applications therefor), copyrights, ideas, know-how,
notes, creations, properties and all other proprietary rights arising from, or
in any way related to, the Executive's employment hereunder shall become and
remain the exclusive property of the Company, and the Executive shall have no
interest therein.
8. Trade Secrets. The Executive covenants and agrees with the
Company that he will not, during the term of this Agreement or thereafter,
disclose to anyone (except to the extent reasonably necessary for the Executive
to perform his duties hereunder or as may be required by law) any confidential
information concerning the business or affairs of the Company (or of any
affiliate or subsidiary of the Company), including but not limited to lists of
customers, business plans, financial or cost information, and confidential
scientific and clinical information (whether of the Company or entrusted to the
Company by a third party under a confidentiality agreement or understanding),
which the Executive shall have acquired in the course of, or incident to, the
performance of his duties pursuant to the terms of this Agreement or pursuant to
his prior employment by the Company (or any affiliate or subsidiary of the
Company). In the event of a breach or threatened breach by the Executive of the
provisions of this Section 8, the Company shall be entitled to an injunction
restraining the Executive from disclosing, in whole or in part, such information
or from rendering any services to any person, firm, corporation, association or
other entity to whom such information has been disclosed or is threatened to be
disclosed. Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedies available to the Company for such breach or
threatened breach, including the recovery of damages from the Executive. Nothing
herein shall be construed as prohibiting the Executive from disclosing to anyone
any information which is, or which becomes, available to the public (other than
by reason of a violation of this Section 8) or which is a matter of general
business knowledge or experience.
9. Termination For Cause. The Company may terminate the
employment of the Executive for cause in the event that the Board of Directors
determines that the Executive has engaged in (a) any willful or unlawful act
that causes material injury to the Company; or (b) any criminal act that
adversely affects the ability of the executive to perform effectively his duties
under this Agreement. If the employment of the Executive under this Agreement is
terminated under this Section 9, the Company shall be relieved of all further
obligations under this Agreement, except for the payment of accrued salary and
reimbursement under Section 5 for reimbursable expenses incurred prior to
termination. Notwithstanding such termination of employment, the Executive shall
continue to be bound by the provisions in Sections 7, 8, and 13. If the
Executive's employment is terminated pursuant to this Section 9, the Company
shall provide to the Executive a statement in reasonable detail of the Company's
reasons for such termination.
10. Termination Without Cause. The Company may terminate the
employment of the Executive without cause, subject to compliance with this
Section 10.
(a) In the event the Executive's employment is terminated
without cause, the Executive shall be entitled to:
(1) a severance payment consisting of:
(a) a lump-sum payment equal to the salary that the executive
would have earned for the remaining term of this Agreement, if the remaining
term (either the initial term or as extended) is more than one year; or (b) a
lump-sum payment equal to the executive's then-current annual salary, if the
remaining term of the employment agreement (either the initial term or as
extended) is one year or less.
(2) a payment in cash equal to the cash value of all accrued
vacation days.
(b) Termination of employment under this Section 10 shall not
terminate the Executive's obligations under Sections 7, 8 or 13.
11. Resignation by the Executive for Good Reason.
(a) The Executive may resign for good reason if one or both of
the following occur:
(1) a Change of Control at Unigene (as defined in
paragraph (d) below); or
(2) a material diminution in the Executive's
responsibilities without the Executive's consent.
(b) In the event that the Executive resigns for good reason,
the Executive shall be entitled to:
(1) a severance payment consisting of:
(a) a lump-sum payment equal to the salary that the
executive would have earned for the remaining term of this Agreement, if the
remaining term (either the initial term or as extended) is more than one year;
or (b) a lump-sum payment equal to the executive's then-current annual salary,
if the remaining term of this Agreement (either the initial term or as extended)
is one year or less.
(2) a payment in cash equal to the cash value of all
accrued vacation days.
(c) Termination of employment under this Section 10 shall not
terminate the Executive's obligations under
Sections 7, 8 or 13.
(d) For the purpose of this Agreement, a "Change of Control"
shall have occurred if:
(i) any individual, entity or group (within the meaning
of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) acquires beneficial ownership (within the
meaning of Rule l3d-3 promulgated under the Exchange Act) of more than 50% of
either (A) the then outstanding shares of Common Stock or (B) the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors (the "Voting Securities");
provided, however, that any acquisition by the Company, by any employee benefit
plan (or related trust) of the Company, or by any corporation with respect to
which, following such acquisition, more than 50% of, respectively, the then
outstanding shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Common Stock and Voting
Securities immediately prior to such acquisition in substantially the same
proportion as their ownership, immediately prior to such acquisition, of the
Common Stock and Voting Securities, as the case may be, shall not constitute a
Change of Control;
(ii) individuals who, as of the Effective Date,
constitute the Board of Directors (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board of Directors, provided that any
individual becoming a director subsequent to the Effective Date whose election
was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be deemed a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office is in settlement of an actual or threatened election contest relating to
the election of the directors of the Company; or
(iii) the stockholders of the Company approve (A) a
reorganization, merger or consolidation, in each case, with respect to which all
or substantially all of the persons who were the respective beneficial owners of
the Common Stock and the Voting Securities immediately prior to such
reorganization, merger or consolidation do not, following such reorganization,
merger or consolidation, beneficially own, directly or indirectly, more than 50%
of, respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such reorganization, merger or consolidation or (B) a complete
liquidation or dissolution of the Company or of the sale or other disposition of
all or substantially all of the assets of the Company.
12. Disability of the Executive. In the event that the
Executive during the period while employed under this Agreement shall at any
time become unable, due to ill-health, accident, injury or other disability, to
carry out his duties under this Agreement with reasonable accommodation provided
by the Company, the Company, upon a lump-sum payment to the Executive equal to
the Executive's then-current annual salary, may terminate this Agreement and be
relieved of all further obligations hereunder. Termination of employment under
this Section 12 shall not terminate the Executive's obligations under Sections
7, 8 or 13.
13. Non-Competition. The Executive hereby agrees that for a
period of one year following the termination for any reason of his employment
under this Agreement, he will not, directly or indirectly, engage in any
business involving (a) the development, production or sale of Calcitonin
products or (b) the development, production or sale of amidated peptides
anywhere in the world. The Executive agrees that the provisions of this Section
13 are necessary and reasonable to protect the Company in the conduct of its
business. If any restriction contained in this Section 13 shall be deemed to be
invalid or unenforceable by reason of the extent, duration of geographic scope
thereof, then the Company shall have the right to reduce such extent, duration,
geographic scope or other provisions thereof, and in their reduced form such
restrictions shall then be enforceable in the manner contemplated hereby.
14. Capacity. The Executive represents and warrants to the
Company that he is not now under any obligation, of a contractual nature or
otherwise, to any person, firm, corporation, association or other entity that is
inconsistent or in conflict with this Agreement or which would prevent, limit or
impair in any way the performance by him of his obligations hereunder.
15. Waiver. No act, delay, omission or course of dealing on
the part of any party hereto in exercising any right, power or remedy hereunder
shall operate as, or be construed as, a waiver thereof or otherwise prejudice
such party's rights, powers and remedies under this Agreement.
16. Arbitration. The Executive agrees to submit to binding
arbitration all claims arising out of his employment with the Company and/or
this Agreement, including all claims under federal law (including but not
limited to Title VII of the Civil Rights Act of 1967) as well as all claims
under state law (including but not limited to claims under the New Jersey Law
Against Discrimination). This arbitration shall take place in New Jersey, under
the then prevailing rules of the American Arbitration Association.
17. Assignability. The rights and obligations contained herein
shall be binding on and inure to the benefit of the successors and assigns of
the Company. The Executive may not assign his rights or obligations hereunder
without the express written consent of the Company.
18. Completeness. This Agreement sets forth all, and is
intended by each party to be an integration of all, of the promises, agreements
and understandings between the parties hereto with respect to the subject matter
hereof.
19. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one agreement binding on the parties hereto.
20. Severability. Each provision of this Agreement shall be
considered severable and if for any reason any provision that is not essential
to the effectuation of the basic purpose of the Agreement is determined to be
invalid or contrary to any existing or future law, such provision shall be
deemed to be omitted from this Agreement and such invalidity shall not impair
the operation of or affect those provisions of this Agreement that are valid.
21. Headings. Headings contained in this Agreement are
inserted for reference and convenience only and in no way define, limit, extend
or describe the scope of this Agreement or the meaning or construction of any of
the provisions hereof.
22. Survival of Terms. If this Agreement is terminated for any
reason, the provisions of Sections 7, 8 and 13 shall survive, and the Executive
and the Company, as the case may be, shall continue to be bound by the terms
thereof to the extent provided therein.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement to day and year first above written.
UNIGENE LABORATORIES, INC.
/s/Xxxxxx Xxxx By: /s/Xxxxxx X. Xxxx
--------------- ------------------
Xxxxxx Xxxx Xxxxxx X. Xxxx
President and Chief
Executive Officer
