Exhibit
10.3
EMPLOYMENT
AGREEMENT
This
EMPLOYMENT AGREEMENT (the “Agreement”)
is
made this 19th day of January, 2007, by and between NILE PHARMACEUTICALS, INC.,
a Delaware corporation with principal executive offices at 689 5th
Avenue,
12th
Floor,
New York, NY 10022 (the “Company”),
and
MR. DARON EVANS, residing at 3029
Riverside Ave., Jacksonville, FL 32205 (the“Executive”).
W I T N E S S E T H:
WHEREAS,
the Company desires to employ the Executive as Chief Operating Officer of the
Company, and the Executive desires to serve the Company in those capacities,
upon the terms and subject to the conditions contained in this
Agreement;
NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto hereby agree as follows:
1. Employment.
The
Company agrees to employ the Executive, and the Executive agrees to be employed
by the Company, upon the terms and subject to the conditions of this
Agreement.
2. Term.
The
employment of the Executive by the Company as provided in Section 1 shall
commence on February 13, 2007 (the “Effective
Date”)
and
continue for a period of three (3) years from the Effective Date (the
“Term”)
unless
terminated earlier
as set
forth in Section 8 and 9 below or by mutual written agreement of the parties
hereto. In the event that the Company does not intent to renew this Agreement,
the Company shall provide the Executive with a minimum of 120 days written
notice prior to the expiration of the Term.
3. Duties;
Best Efforts; Place of Performance.
(a) The
Executive shall serve as Chief Operating Officer of the Company and shall,
subject to the direction of the Chief Executive Officer of the Company, have
such powers and perform such duties as are customarily performed by the Chief
Operating Officer. The Executive shall also have such other powers and duties
as
may be from time to time directed by the Chief Executive Officer of the Company,
provided that the nature of the Executive’s powers and duties so prescribed
shall not be inconsistent with the Executive’s position and duties
herein.
(b) The
Executive shall devote substantially all of his business time, attention and
energies to the business and affairs of the Company and
shall
use his best efforts to advance the best interests of the Company and shall
not
during the Term be actively engaged in any other business activity, whether
or
not such business activity is pursued for gain, profit or other pecuniary
advantage, that will interfere with the performance by the Executive of his
duties hereunder or the Executive’s availability to perform such duties or that
will adversely affect, or negatively reflect upon, the Company.
(c) The
duties to be performed by the Executive hereunder shall be performed primarily
at the office of the Company, which shall be located in or within close
proximity to the San Francisco, California, or such other location as the
Company and Executive may mutually agree, provided, however, that the Executive
understands and agrees that his position may require travel outside of the
office.
4. Compensation.
As full compensation for the performance by the Executive of his duties under
this Agreement, the Company shall pay the Executive as follows:
(a) Base
Salary.
The
Company shall pay the Executive a base salary (the “Base
Salary”)
equal
to One Hundred Seventy Five Thousand Dollars ($175,000) per annum, payable
during the Term in accordance with the Company’s normal payroll
practices.
(b) Signing
Bonus.
The
Company shall pay to the Executive a one time cash payment of Twenty Five
Thousand Dollars ($25,000) upon the Effective Date of this
Agreement.
(c) Performance
Bonus.
The
Company shall annually pay the Executive a proportionate share (based on the
assigned weight of each of the Performance Milestones (as defined below) of
Fifty Thousand Dollars ($50,000) upon the successful completion of annual
corporate or individual performance milestones (the “Performance
Milestones”)
at the
“Realistic” metric. If Performance Milestones are achieved at the “Stretch”
metric, the Company shall pay you a proportionate share of Sixty Thousand
Dollars ($60,000). The
Performance Milestones and the metrics for the first year of the Term shall
be
agreed upon by the Company and the Executive and attached hereto as Schedule
4(c).
Thereafter, the Performance Milestones shall be amended each subsequent year
during the Term upon the mutual agreement of the Company and the Executive
at
least 30 days prior to the beginning of such year.
(d) Withholding.
The
Company shall withhold all applicable federal, state and local taxes and social
security and such other amounts as may be required by law from all amounts
payable to the Executive under this Section 4.
(e) Equity.
(i) Employment
Options.
The
Company shall grant to the Executive stock options pursuant to the Company’s
2005 Stock Option Plan (the “Employment
Options”)
immediately after the closing of the next round of financing to purchase that
number of shares representing one percent (1%) of the outstanding common stock
of the Company, par value $0.001 per share (the “Common
Stock”),
on a
fully diluted basis as of the grant date. The Employment Options shall vest
and
become exercisable in three (3) equal installments on the day before each
anniversary of this Agreement at an exercise price equal to Fair Market Value
(as determined the Company’s 2005 Stock Plan) (the “Exercise
Price”)
of a
share of common stock on the date of grant.
(ii) Performance
Options.
The
Company shall grant to the Executive stock options pursuant to the Company’s
2005 Stock Option Plan (the “Performance
Options”)
immediately after the closing of the next round of financing to purchase that
number of shares representing one percent (1%) of the outstanding common stock
on a fully diluted basis as of the grant date. Each year during the Term, a
proportionate share (based on the assigned weights of each of the Performance
Milestones) of that portion of the Performance Options representing 0.4% of
the
outstanding common stock on the date of grant shall become vested and
immediately exercisable for Performance Milestones that are achieved during
that
year at the “Stretch” metric. Similarly, a proportionate share of 0.33% of the
outstanding shares shall become vested and immediately exercisable for
Performance Milestones that are achieved during the year at the “Realistic”
metric.
(iii) Technology
Options.
In the
event that the Company acquires by license, acquisition or otherwise, an
additional biotechnology product or series of biotechnology products (a
“Technology”)
for
development that is first identified by the Executive or the Company’s
management, then the Company shall grant to the Executive options (the
“Technology
Options”)
to
purchase a number of shares of Common Stock as follows:
(1) One-half
percent (0.5%) of the then Fully Diluted Outstanding shares of Common Stock
of
the Company on a for a Technology that is in pre-clinical development;
and
(2) One
percent (1%) of the then Fully Diluted Outstanding shares of Common Stock of
the
Company for a Technology that is in human clinical trials.
For
purposes of this Agreement, “Fully Diluted Basis” shall mean shall the number of
shares of Common Stock that would be outstanding upon the conversion of all
outstanding shares of Preferred Stock outstanding from time to time, plus the
shares of Common Stock issuable upon conversion or exercise, as the case may
be,
of all securities of the Corporation convertible into, exercisable for, or
exchangeable for, directly or indirectly, shares of Common Stock of the
Corporation, including but not limited to, options and warrants to purchase
Common Stock that are currently exercisable by the holder thereof or which
will
become exercisable within 90 days of determining event.
Any
such
Technology Options issued to the Executive shall be exercisable for a period
of
five (5) years at an exercise price equal to the Fair Market Value (as
determined under the Company’s 2005 Stock Plan) of the Common Stock on the date
of the grant of such Technology Options.
(f) Expenses.
(i) Moving
Expenses.
The
Company shall reimburse you in an amount up to thirty five thousand dollars
($35,000) for qualified moving expenses incurred by you in connection with
your
relocation to California.
(ii) Company
Expenses.
The
Company shall reimburse the Executive for all normal, usual and necessary
expenses incurred by the Executive in furtherance of the business and affairs
of
the Company, including reasonable travel and entertainment, upon timely receipt
by the Company of appropriate vouchers or other proof of the Executive’s
expenditures and otherwise in accordance with any expense reimbursement policy
as may from time to time be adopted by the Company.
(g) Note.
The
Company shall loan to the Executive an amount equal to Forty Seven Thousands
Dollars ($47,000.00) in order to assist the Executive in the satisfaction of
certain obligations owed to the Executive’s prior employer, which will be
evidenced by a Note bearing interests at 4.75%. The Note will be repaid to
the
Company in three annual installments that will be subtracted from the
Executive’s Performance Bonus. In the event that the Executive’s employment is
terminated pursuant to Section 8 or 9 prior to the end of the Term, then the
Executive shall repay the Note within 10 business days of such
termination.
(h) Other
Benefits.
The
Executive shall be entitled to all rights and benefits for which he shall be
eligible under any benefit or other plans (including, without limitation,
dental, medical, vision, medical reimbursement and hospital plans, pension
plans, employee stock purchase plans, profit sharing plans, bonus plans and
other so-called “fringe benefits”) as the Company shall make available to its
senior executives from time to time. Specifically, the Company shall pay the
premiums relating to personal life insurance coverage for Executive in an amount
equal to One Million Dollars ($1,000,000). In the event that the Company does
not have appropriate medical, dental and vision plans in place on the Effective
Date, the Company shall reimburse the Executive for the cost of COBRA premiums
associated with his continued coverage under the plans of his prior
employer.
(i) Vacation.
The
Executive shall, during the Term, be entitled three (3) weeks of vacation per
annum,
in
addition to holidays observed by the Company.
The
Executive shall not be entitled to carry any vacation forward to the next year
of employment and shall not receive any compensation for unused vacation
days.
5. Confidential
Information and Inventions.
(a) The
Executive recognizes and acknowledges that in the course of his duties he is
likely to receive confidential or proprietary information owned by the Company,
its affiliates or third parties with whom the Company or any such affiliates
has
an obligation of confidentiality. Accordingly, during and after the Term, the
Executive agrees to keep confidential and not disclose or make accessible to
any
other person or use for any other purpose other than in connection with the
fulfillment of his duties under this Agreement, any Confidential and Proprietary
Information (as defined below) owned by, or received by or on behalf of, the
Company or any of its affiliates. “Confidential
and Proprietary Information”
shall
include, but shall not be limited to, confidential or proprietary scientific
or
technical information, data, formulas and related concepts, business plans
(both
current and under development), client lists, promotion and marketing programs,
trade secrets, or any other confidential or proprietary business information
relating to development programs, costs, revenues, marketing, investments,
sales
activities, promotions, credit and financial data, manufacturing processes,
financing methods, plans or the business and affairs of the Company or of any
affiliate or client of the Company. The Executive expressly acknowledges the
trade secret status of the Confidential and Proprietary Information and that
the
Confidential and Proprietary Information constitutes a protectable business
interest of the Company. The Executive agrees: (i) not to use any such
Confidential and Proprietary Information for strictly personal use or for
others; and (ii) not to permanently remove any Company material or
reproductions (including but not limited to writings, correspondence, notes,
drafts, records, invoices, technical and business policies, computer programs
or
disks) thereof from the Company’s offices at any time during his employment by
the Company, except as required in the execution of the Executive’s duties to
the Company, provided; however, that the Executive shall not be prevented from
using or disclosing any Confidential and Proprietary Information:
(i) that
Executive can demonstrate was known to him prior to the effective date of that
certain Confidential Disclosure Agreement entered into between the Parties
dated
November 16, 2006;
(ii) that
is
now, or becomes in the future, available to persons who are not legally required
to treat such information as confidential unless such persons acquired the
Confidential and Proprietary Information through acts or omissions of Executive;
(iii) that
is
within the Executive’s general business or industry knowledge, know-how or
expertise; or
(iv)
that he
is compelled to disclose pursuant to the order of a court or other governmental
or legal body having jurisdiction over such matter.
(b) The
Executive agrees to return immediately all Company material and reproductions
(including but not limited, to writings, correspondence, notes, drafts, records,
invoices, technical and business policies, computer programs or disks) thereof
in his possession to the Company upon request and in any event immediately
upon
termination of employment.
(c) Except
with prior written authorization by the Company, the Executive agrees not to
disclose or publish any of the Confidential and Proprietary Information, or
any
confidential, scientific, technical or business information of any other party
to whom the Company or any of its affiliates owes a legal duty of confidence,
at
any time during or after his employment with the Company.
(d) The
Executive agrees that all inventions, discoveries, improvements and patentable
or copyrightable works, relating to the Company’s Business (as defined below).
(“Inventions”)
initiated, conceived or made by him, either alone or in conjunction with others,
during the Term shall be the sole property of the Company to the maximum extent
permitted by applicable law and, to the extent permitted by law, shall be “works
made for hire” as that term is defined in the United States Copyright Act (17
U.S.C.A., Section 101). For purposes of this Agreement, “Company’s
Business”
shall
be the development of novel therapeutics for the treatment of human disease,
and
which are listed on the attached Schedule
5(d)
which
may be amended from time to time to include additional therapeutics, and in
the
future, any other business in which it actually devotes substantive resources
to
study, develop or pursue. The Company shall be the sole owner of all patents,
copyrights, trade secret rights, and other intellectual property or other rights
in connection therewith. The Executive hereby assigns to the Company all right,
title and interest he may have or acquire in all such Inventions; provided;
however, that the Board of Directors of the Company may in its sole discretion
agree to waive the Company’s rights pursuant to this Section 5(c) with respect
to any Invention that is not directly or indirectly related to the Company’s
business. The Executive further agrees to assist the Company in every proper
way
(but at the Company’s expense) to obtain and from time to time enforce patents,
copyrights or other rights on such Inventions in any and all countries, and
to
that end the Executive will execute all documents necessary:
(i) to
apply
for, obtain and vest in the name of the Company alone (unless the Company
otherwise directs) letters patent, copyrights or other analogous protection
in
any country throughout the world and when so obtained or vested to renew and
restore the same; and
(ii) to
defend
any opposition proceedings in respect of such applications and any opposition
proceedings or petitions or applications for revocation of such letters patent,
copyright or other analogous protection.
(e) The
Executive acknowledges that while performing the services under this Agreement
the Executive may locate, identify and/or evaluate patented or patentable
inventions having commercial potential in the fields of pharmacy,
pharmaceutical, biotechnology, healthcare, technology and other fields which
may
be of potential interest to the Company or one of its affiliates (the
“Third
Party Inventions”).
The
Executive understands, acknowledges and agrees that all rights to, interests
in
or opportunities regarding, all Third-Party Inventions identified by the
Company, any of its affiliates or either of the foregoing persons’ officers,
directors, employees (including the Executive), agents or consultants during
the
Term shall be and remain the sole and exclusive property of the Company or
such
affiliate and the Executive shall have no rights whatsoever to such Third-Party
Inventions and will not pursue for himself or for others any transaction
relating to the Third-Party Inventions which is not on behalf of the
Company.
(f) The
provisions of this Section 5 shall survive any termination of this
Agreement.
6. Non-Competition
and Non-Solicitation.
(a) The
Executive understands and recognizes that his services to the Company are
special and unique and that in the course of performing such services the
Executive will have access to and knowledge of Confidential and Proprietary
Information (as defined in Section 5) and the Executive agrees
that:
(i)
during
the Term;
(ii) for
a
period of six (6) months
following the expiration of the Term;
(iii) for
a
period of six (6) months from the date of termination if during the Term the
Company terminates this Agreement pursuant to Section 8(a);
(iv) for
a
period of twelve (12) months if the Executive’s employment is terminated by the
Company during the Term pursuant to Section 8(b); and
(v)
for a
period of twelve (12) months if this Agreement is terminated by Executive other
than pursuant to Section 9
Executive
shall not in any manner, directly or indirectly, on behalf of himself or any
person, firm, partnership, joint venture, corporation or other business entity
(“Person”),
enter
into or engage in any business which is directly or indirectly competitive
with
the Company Business, either as an individual for his own account, or as a
partner, joint venturer, owner, executive, employee, independent contractor,
principal, agent, consultant, salesperson, officer, director or shareholder
of a
Person in a business competitive with the Company within the geographic area
of
the Company’s Business, which is deemed by the parties hereto to be worldwide;
provided; however, if a Person’s business has multiple lines or segments, some
of which are not competitive with the Company’s Business, nothing herein shall
prevent the Executive from being employed by, working for or assisting that
line
or segment of a Person’s business that is not competitive with the Company’s
Business. The Executive acknowledges that, due to the unique nature of the
Company’s Business, the loss of any of its clients or business flow or the
improper use of its Confidential and Proprietary Information could create
significant instability and cause substantial damage to the Company and its
affiliates and therefore the Company has a strong legitimate business interest
in protecting the continuity of its business interests and the restriction
herein agreed to by the Executive narrowly and fairly serves such an important
and critical business interest of the Company. Notwithstanding the foregoing,
nothing contained in this Section 6(a) shall be deemed to prohibit the Executive
from acquiring or holding, solely for investment, publicly traded securities
of
any corporation or other entity, some or all of the activities of which are
competitive with the business of the Company so long as such securities do
not,
in the aggregate, constitute more than three percent (3%) of any class or series
of outstanding securities of such corporation or other entity. The provisions
of
this Section 6(a) shall not, however, apply if the Executive’s employment is
terminated upon a Change of Control (as defined in 8(b) below).
(b) During
the Term and for a period of twelve (12) months (or six (6) months in the case
of clause (b)(iii) below) thereafter, the Executive shall not, directly or
indirectly, without the prior written consent of the Company:
(i) solicit
or induce any employee of the Company or any of its subsidiaries or Two River
Group Holdings, LLC (“Two River”) to leave the employ of the Company or such
subsidiaries or Two River; or hire for any purpose any employee of the Company
or its subsidiaries or Two River who has left the employment of the Company
or
any subsidiary or Two River if such employment would be in violation of such
employee’s non-competition agreement with the Company or any such subsidiary or
Two River; or
(ii) solicit
or accept employment or be retained by any Person who, at any time during the
term of this Agreement, was an agent, client or customer of the Company or
any
of its subsidiaries or Two River where his position will be related to and
competitive with the business of the Company or any such subsidiaries or Two
River; or
(iii)
solicit
or accept the business of any agent, client or customer of the Company or any
of
its subsidiaries or Two River with respect to products or services similar
to
and competitive with those provided or supplied by the Company or any of its
subsidiaries.
(c) The
Executive and Company mutually agree that both during the Term and at all times
thereafter, neither party shall directly or indirectly disparage, whether or
not
true, the name or reputation of the other party, and in the case of the Company
including any officer, director or material shareholder of the Company.
Notwithstanding the foregoing, nothing in this Agreement shall preclude the
parties hereto or their successors from making truthful statements in the proper
performance of their jobs or that are required by applicable law, regulation
or
legal process, and the parties shall not violate this provision in making
truthful statements in response to disparaging statements made by the other
party.
(d) In
the
event that the Executive materially breaches any provisions of Section 5 or
this
Section 6, then, in addition to any other rights which the Company may have,
the
Company shall be entitled to seek injunctive relief to enforce the restrictions
contained in such Sections which injunctive relief shall be in addition to
any
other rights or remedies available to the Company under the law or in
equity.
(e) The
right
and remedy enumerated in Section 6(d) shall be independent of and shall be
in
addition to and not in lieu of any other rights and remedies available to the
Company at law or in equity. If any of the covenants contained in this Section
6, or any part of any of them, is hereafter construed or adjudicated to be
invalid or unenforceable, the same shall not affect the remainder of the
covenant or covenants or rights or remedies which shall be given full effect
without regard to the invalid portions. If any of the covenants contained in
this Section 6 is held to be invalid or unenforceable because of the duration
of
such provision or the area covered thereby, the parties agree that the court
making such determination shall have the power to reduce the duration and/or
area of such provision and in its reduced form such provision shall then be
enforceable. No such holding of invalidity or unenforceability in one
jurisdiction shall bar or in any way affect the Company’s right to the relief
provided in this Section 6 or otherwise in the courts of any other state or
jurisdiction within the geographical scope of such covenants as to breaches
of
such covenants in such other respective states or jurisdictions, such covenants
being, for this purpose, severable into diverse and independent
covenants.
(f) In
the
event that an actual proceeding is brought in equity to enforce the provisions
of Section 5 or this Section 6, the Executive shall not urge as a defense that
there is an adequate remedy at law nor shall the Company be prevented from
seeking any other remedies which may be available. The Executive agrees that
he
shall not raise in any proceeding brought to enforce the provisions of Section
5
or this Section 6 that the covenants contained in such Sections limit his
ability to earn a living.
(g) The
provisions of this Section 6 shall survive any termination of this Agreement,
provided that the Company has not breached its obligations under this
Agreement.
7. Representations
and Warranties by the Executive. The Executive hereby represents and
warrants to the Company as follows:
(a) Neither
the execution or delivery of this Agreement nor the performance by the Executive
of his duties and other obligations hereunder violate or will violate statute
or
law or conflict with or constitute a default or breach of any covenant or
obligation, including without limitation any non-competition restrictions,
under
(whether immediately, upon the giving of notice or lapse of time or both) any
prior employment agreement, contract, or other instrument to which the Executive
is a party or by which he is bound. Notwithstanding the foregoing, the Executive
makes no representation as to the enforceability of the provision in Section
6.
(b) The
Executive has the full right, power and legal capacity to enter and deliver
this
Agreement and to perform his duties and other obligations hereunder. This
Agreement constitutes the legal, valid and binding obligation of the Executive
enforceable against him in accordance with its terms. No approvals or consents
of any persons or entities are required for the Executive to execute and deliver
this Agreement or perform his duties and other obligations hereunder.
Notwithstanding the foregoing, the Executive makes no representation as to
the
enforceability of the provision in Section 6.
8. Termination
by the Company. The Executive’s employment hereunder shall be terminated as
follows:
(a) The
Executive’s employment hereunder shall be terminated automatically upon the
Executive’s death.
(b) The
Company may terminate the Executive for “Cause.” Any of the following actions by
the Executive shall constitute “Cause”:
(i) Willful
failure to perform the duties or obligations hereunder or willful misconduct
by
the Executive in respect of such duties or obligations,
including, without limitation, willful
failure, disregard or refusal by the Executive to abide
by
lawful specific directions received by the Executive from the Board of
Directors;
(ii) Any
willful, intentional or grossly negligent act by the Executive having the effect
of injuring, in a material way, whether financial or otherwise, the business
or
reputation of the Company or any of its subsidiaries or Two River;
(iii) Any
material violation of the material provisions of the Company’s Personnel
Policies and Procedures Manual, a copy of which has been provided to
you;
(iv) The
Executive’s indictment of any felony or a misdemeanor involving moral
turpitude;
(v) Any
misappropriation or embezzlement of the property of the Company or its
subsidiary (whether or not a misdemeanor or felony); and
(vi) Material
breach by the Executive of any of the provisions of Sections
5, 6 or 7
of this
Agreement.
In
any case where the
Executive’s action or inaction that may constitute Cause is capable of being
cured, such action or inaction shall not constitute Cause if such action or
inaction is cured by the Executive within 30 days receipt of written notice
from
the Company
of the action or inaction.
(c) The
Executive’s employment hereunder may be terminated by the Board of Directors of
the Company due to the Executive’s Disability. For purposes of this Agreement, a
termination for “Disability”
shall
occur (i) when the Chief Executive Officer of the Company has provided a
written termination notice to the Executive supported by a written statement
from a reputable independent physician to the effect that the Executive shall
have become so physically or mentally incapacitated as to be unable to resume,
even with any reasonable accommodations, within the ensuing twelve (12) months,
his employment hereunder by reason of physical or mental illness or injury,
or
(ii) upon rendering of a written termination notice by the Chief Executive
Officer of the Company after the Executive has been unable, even with any
reasonable accommodations, to substantially perform his duties hereunder for
one
hundred twenty (120) or more consecutive days, or more than one hundred eighty
(180) days in any consecutive twelve month period, by reason of any physical
or
mental illness or injury. For purposes of this Section 8(c), the Executive
agrees to make himself available and to cooperate in any reasonable examination
by a reputable independent physician retained by the Company.
(d) The
Executive’s employment hereunder may be terminated by the Board of Directors of
the Company (or its successor) upon the occurrence of a Change of Control.
For
purposes of this Agreement, “Change
of Control”
means
a
merger, acquisition or other business combination resulting in (i) the
acquisition of all or substantially all of the Company’s then outstanding
securities (not including in the securities beneficially owned by such person),
or (ii) the disposition by the Company (whether direct or indirect, by sale
of
assets or stock, merger, consolidation or otherwise) of all or substantially
all
of its business and/or assets in one transaction or series of related
transactions (other than a merger effected exclusively for the purpose of
changing the domicile of the Company).
9. Termination
by Executive.
Executive may terminate his employment as follows:
(a) at
any
time, for any reason or no reason at all, upon not less than sixty (60) days
prior written notice to the Company, which may be waived by the
Company;
(b) at
any
time for “Good
Reason”
which
shall constitute:
(i) an
actual
diminution by the Company of the Executive’s title or duties;
(ii) a
material breach by the Company of any of the provisions contained herein, which
is not cured by the Company within 30 days of written notice by the Executive
to
the Company; and
(iii)
the
Company requiring that the Executive relocate outside of the San Francisco
metropolitan area.
10. Compensation
upon Termination.
(a) If
the
Executive’s employment is terminated pursuant to Section 8(a) or 8(c), (i) the
Company shall pay to the Executive or to the Executive’s estate, as applicable,
(i) his Base Salary for a period of six (6) months thereafter; (ii) expense
reimbursement amounts through the date of his Death or Disability, (iii) any
accrued but unpaid performance bonus for a year prior to the year in which
the
Executive’s employment is terminated; (iv) a pro rata performance bonus for the
year in which the Executive’s employment is terminated; and (v) all Employment
Options shall vest immediately and become exercisable.
(b) If
the
Executive’s employment is terminated pursuant to Section 8(b) or 9(a), then the
Company shall pay to the Executive his Base Salary, accrued but unpaid
Performance Bonus and expense reimbursement through the date of his termination.
The Executive shall have no further entitlement to any other compensation or
benefits from the Company except as provided in the Company’s compensation and
benefit plans. All Employment Options and Performance Options that have not
previously vested shall expire immediately.
(c) If
the
Executive’s employment is terminated (i) by the Company pursuant to Section
8(d), (ii) by the Company other than pursuant to Section 8(a), (b), or (c),
or
(iii) if the Executive terminates his employment pursuant to Section 9(b),
then
(1) the Company shall continue to pay to the Executive his Base Salary,
Performance Bonus (based on the assumption that the Realistic metric is met)
and
benefits for a period of six (6) months following such termination; (2) pay
the
Executive any accrued but unpaid Performance Bonus for a year prior to the
year
in which the Executive’s employment is terminated and a pro rata Performance
Bonus for the year in which the Executive’s employment is terminated (based on
the assumption that the Realistic metric is met); (3) pay the Executive any
expense reimbursement amounts owed through the date of termination; and (4)
all
unvested Employment Options and Performance Options shall vest and become
exercisable immediately and all Employment Options and Performance Options
shall
remain exercisable for a period of not less than five (5) years.
(d) If
the
Executive’s employment is terminated as a result of a Change of Control, then
(i) the Company shall continue to pay to the Executive his Base Salary,
Performance Bonus (based on the assumption that the Realistic metric is met)
and
benefits for a period of twelve (12) months following such termination; (ii)
pay
the Executive any accrued but unpaid Performance Bonus for a year prior to
the
year in which the Executive’s employment is terminated and a pro rata
Performance Bonus for the year in which the Executive’s employment is terminated
(based on the assumption that the Realistic metric is met); (iii) pay the
Executive any expense reimbursement amounts owed through the date of
termination; and (iv) all unvested Employment Options and Performance Options
shall vest and become exercisable immediately and all Employment Options and
Performance Options shall remain exercisable for a period of not less than
five
(5) years
(e) Notwithstanding
anything to the contrary herein or in Section 10 or otherwise in the Company’s
2005 Stock Option Plan, following termination of the Executive’s employment
other than by the Corporation for Cause or by the Executive during the Term
without Good Reason, the Executive shall have a period of no less than six
(6)
months to exercise any and all vested Employment Options and Performance
Options; provided, however, if the Company sends to the Executive a non-renewal
notice provided for under Section 2 hereof, the Executive shall have a period
of
no less than twelve (12) months after the termination of his employment to
exercise any and all vested Employment Options and Performance Options
.
(f) This
Section 10 sets forth the only obligations of the Company with respect to the
termination of the Executive’s employment with the Company, and the Executive
acknowledges that, upon the termination of his employment, he shall not be
entitled to any payments or benefits which are not explicitly provided in
Section 10.
(g)
The
provisions of this Section 10 shall survive any termination of this
Agreement.
11. Miscellaneous.
(a) This
Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York, without giving effect to its principles
of conflicts of laws.
(b) Any
dispute arising out of, or relating to, this Agreement or the breach thereof
(other than Sections 5 or 6 hereof), or regarding the interpretation thereof,
shall be exclusively decided by binding arbitration conducted in New York in
accordance with the rules of the American Arbitration Association (the
“AAA”)
then
in effect before a single arbitrator appointed in accordance with such rules.
Judgment upon any award rendered therein may be entered and enforcement obtained
thereon in any court having jurisdiction. The arbitrator shall have authority
to
grant any form of appropriate relief, whether legal or equitable in nature,
including specific performance. Each of the parties agrees that service of
process in such arbitration proceedings shall be satisfactorily made upon it
if
sent by registered mail addressed to it at the address referred to in paragraph
(g) below. The
costs
of such arbitration shall be borne proportionate to the finding of fault as
determined by the arbitrator. Judgment
on the arbitration award may be entered by any court of competent
jurisdiction.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto,
and their respective heirs, legal representatives, successors and
assigns.
(c) This
Agreement, and the Executive’s rights and obligations hereunder, may not be
assigned by the Executive. The Company may assign its rights, together with
its
obligations, hereunder in connection with any sale, transfer or other
disposition of all or substantially all of its business or assets provided
the
assignee entity which succeeds to the Company expressly assumes the Company’s
obligations hereunder and complies with the terms of this
Agreement.
(d) This
Agreement cannot be amended orally, or by any course of conduct or dealing,
but
only by a written agreement signed by the parties hereto.
(e) The
failure of either party to insist upon the strict performance of any of the
terms, conditions and provisions of this Agreement shall not be construed as
a
waiver or relinquishment of future compliance therewith, and such terms,
conditions and provisions shall remain in full force and effect. No waiver
of
any term or condition of this Agreement on the part of either party shall be
effective for any purpose whatsoever unless such waiver is in writing and signed
by such party.
(f) All
notices, requests, consents and other communications, required or permitted
to
be given hereunder, shall be in writing and shall be delivered personally or
by
an overnight courier service or sent by registered or certified mail, postage
prepaid, return receipt requested, to the parties at the addresses set forth
on
the first page of this Agreement, and shall be deemed given when so delivered
personally or by overnight courier, or, if mailed, five (5) days after the
date
of deposit in the United States mails. Either party may designate another
address, for receipt of notices hereunder by giving notice to the other party
in
accordance with this paragraph (g).
(g) This
Agreement sets forth the entire agreement and understanding of the parties
relating to the subject matter hereof, and supersedes all prior agreements,
arrangements and understandings, written or oral, relating to the subject matter
hereof. No representation, promise or inducement has been made by either party
that is not embodied in this Agreement, and neither party shall be bound by
or
liable for any alleged representation, promise or inducement not so set
forth.
(h) As
used
in this Agreement, “affiliate” of a specified Person shall mean and include any
Person controlling, controlled by or under common control with the specified
Person.
(i) The
section headings contained herein are for reference purposes only and shall
not
in any way affect the meaning or interpretation of this Agreement.
(j) This
Agreement may be executed in any number of counterparts, each of which shall
constitute an original, but all of which together shall constitute one and
the
same instrument.
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12.
|
Certain
Tax Provisions.
|
(a) Section
409A.
Any
payment otherwise required under this Agreement or any other plan or arrangement
of the Company to be made to the Executive after a termination of Executive’s
employment that the Company reasonably determines is subject to Section
409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended (the “Code”)
shall not be paid or payment commenced until the later of (a) six months after
the date of the Executive’s “separation from service” (within the meaning of
Section 409A of the Code) and (b) the payment date or commencement date
specified in this Agreement for such payment(s). On the earliest date on which
such payment(s) can be made or commenced without violating the requirements
of
Section 409A(a)(2)(B)(i) of the Code, the Company shall pay the Executive,
in a
single lump sum, an amount equal to the aggregate amount of all payments delayed
pursuant to the preceding sentence. Such delay will not affect the timing of
any
installments or other payments otherwise payable after the delay period imposed
under Section 409. In addition, other provisions of this Agreement or any other
such plan or arrangement notwithstanding, the Company shall have no right to
accelerate or delay any such payment or to make any such payment as the result
of any specific event except to the extent permitted under Section
409A.
(b) Section
280G.
Notwithstanding anything to the contrary contained in this Agreement, to the
extent that any of the payments and benefits provided for under this Agreement
or any other agreement or arrangement between the Executive and the Company
(collectively, the "Payments") constitute a "parachute payment" within the
meaning of Section 280G of the Code and (ii) but for this Section 13(b), would
be subject to the excise tax imposed by Section 4999 of the Code, then the
Payments shall be payable either (i) in full or (ii) as to such lesser amount
which would result in no portion of such Payments being subject to excise tax
under Section 4999 of the Code; whichever of the foregoing amounts, taking
into
account the applicable federal, state and local income taxes and the excise
tax
imposed by Section 4999, results in the Executive’s receipt on an after-tax
basis, of the greatest amount of economic benefits under this Agreement,
notwithstanding that all or some portion of such benefits may be taxable under
Section 4999 of the Code. Unless the Executive and the Company otherwise agree
in writing, any determination required under this Section 12(b) shall be made
in
writing by the Company’s independent public
accountants (the "Accountants"), whose reasonable determination shall be
conclusive and binding upon the Executive and the Company for all purposes.
For
purposes of making the calculations required by this Section 12(b), the
Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of the Sections 280G and 4999 of the Code. The
Executive and the Company shall furnish to the Accountants such information
and
documents as the Accountants may reasonably request in order to make a
determination under this Section 12(b). If this Section 12(b) is applied to
reduce an amount payable to the Executive, and the Internal Revenue Service
successfully asserts that, despite the reduction, the Executive has nonetheless
received payments which are in excess of the maximum amount that could have
been
paid to him without being subjected to any excise tax, then, unless it would
be
unlawful for the Company make such a loan or similar extension of credit to
the
Executive, the Executive may repay such excess amount to the Company though
such
amount constitutes a loan to you made at the date of payment of such excess
amount, bearing interest at 120% of the applicable federal rate (as determined
under section 1274(d) of the Code in respect of such loan).
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
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|
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|
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By:
|
/s/
Allan Gordon
|
| |
|
Name:
|
Allan
Gordon, M.D.
|
| |
|
Title:
|
President
& Chief Executive Officer
|
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|
Date:
|
January
19, 2007
|
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|
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EXECUTIVE
|
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|
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By:
|
/s/
Daron Evans
|
| |
|
Name:
|
Daron
Evans
|
| |
|
Date:
|
January
19, 2007
|
SCHEDULE
4(c)
SCHEDULE
5(d)
1. The
development of novel naturetic peptides for the treatment of cardiovascular
and
inflammatory disease in humans.