EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") dated as of February 28, 2003 and
effective as of January 1, 2003 (the "Effective Date"), is made and entered into
between Helix BioMedix, Inc., a Delaware corporation ("the Company") and ▇▇▇▇▇
▇▇▇▇▇▇ ("the Executive").
WHEREAS, the Company wishes to enter into an agreement with the Executive
governing the terms and conditions of his employment, and the Executive is
willing to be employed on the terms and conditions set forth in this Agreement;
NOW THEREFORE, in consideration of the promises and the mutual covenants
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. Employment.
--------------
The Company shall employ the Executive, and the Executive shall serve in the
full-time employ of the Company, on the terms and subject to the conditions set
forth in this Agreement. The Executive shall serve in the position of Chief
Financial Officer with duties and responsibilities customary for that position
plus any additional duties and responsibilities which may be assigned to the
Executive from time to time by the Board of Directors or the Chief Executive
Officer of the Company. Executive's duties will include, but are not limited to,
preparing regulatory reports, handling accounting functions and preparing
financial projections. The Executive shall devote his best efforts and all of
his business time and attention to the business of the Company. Executive shall
not engage in any other business activity (except the management of personal
investments and charitable and civic activities that in the aggregate do not
interfere with the performance of Executive's duties) without first obtaining
the written consent of the Board or Directors, and such consent shall not
unreasonably be withheld. Executive further agrees to abide by all by-laws,
policies, practices, procedures, or rules of the Company. The Executive shall
perform his duties and responsibilities under the direction and supervision of,
and shall report directly to, the Chief Executive Officer of the Company or such
other officer as the Chief Executive Officer determines.
2. Term.
----------
The term of this Agreement shall be continuous from and after the Effective Date
for a period of two (2) years, unless extended in writing by both the Company
and the Executive or earlier terminated in accordance with Section 4 ("the
Term").
3. Compensation.
------------------
During the Term of this Agreement, the Executive shall be compensated by the
Company as follows:
(a) Annual Base Salary.
-----------------------
The Company shall pay Executive an annual base salary for the Executive's
actual period of employment at a rate of Eighty Thousand Dollars ($80,000)
per year commencing from and after the Effective Date. Executive's annual
base salary shall increase to a rate of Ninety Thousand Dollars ($90,000)
per year commencing on June 1, 2003. The Executive's base salary shall be
paid in accordance with the Company's normal payroll policies for senior
management as are from time to time in effect. The Company agrees to
reconsider compensation upon receipt of licensing revenues.
Employment Agreement
▇▇▇▇▇ ▇▇▇▇▇▇/Helix BioMedix, Inc.
Page 2
(b) Vacation and Fringe Benefits.
---------------------------------
During the Executive's actual period of employment, the Executive shall be
eligible for three (3) weeks' paid vacation per year. In addition, the
Executive shall be entitled to participate in any and all group medical,
dental, vision, retirement, or disability benefit plans which are from time
to time maintained by the Company for its senior executive employees, in
accordance with the terms and conditions of such plans or programs as they
may be amended from time to time. Nothing herein contained shall be
construed as requiring the Company to establish or continue any particular
benefit plan in discharge of its obligations under this Agreement.
(c) Stock Options.
------------------
The Company and the Executive shall enter into a Stock Option Agreement
granting Executive options to purchase common stock subject to the terms
and conditions of the Company's Amended Stock Option Plan. The Stock Option
Agreement shall be dated February 28, 2003. The Stock Option Agreement
shall grant Executive 90,000 options to purchase common stock at $1.00 per
share. Fifteen thousand (15,000) options shall vest upon signing this
Employment Agreement. The remaining 75,000 options shall vest pursuant to
the Company's Amended Stock Option Plan.
(d) Incentive Compensation.
---------------------------
Executive shall be entitled to participate in a manner consistent with all
other senior management participation in any incentive compensation plan
that may be adopted by the Company.
(e) Business Expenses.
----------------------
The Executive shall be reimbursed, in a manner consistent with the policies
of the Company, for all reasonable business expenses incurred in the
performance of his duties pursuant to this Agreement, to the extent such
expenses are substantiated in writing, and are consistent with the general
policies of the Company relating to the reimbursement of expenses of
executive-level employees of the Company. Expenses for items that are
reasonably deemed to be personal by the Company shall not be reimbursed by
the Company and are the sole responsibility of the Executive.
(f) Insurance.
--------------
The Company will maintain a policy of insurance for directors' and
officers' liability with such coverage as may be determined by the Board.
Executive will be included within that policy of insurance with the
premiums paid by the Company.
(g) Deduction and Withholding.
------------------------------
All compensation and other benefits to or on behalf of the Executive
pursuant to this Agreement shall be subject to such deductions and
withholding as may be agreed to by the Executive or required by applicable
law, rule or regulation.
Employment Agreement
▇▇▇▇▇ ▇▇▇▇▇▇/Helix BioMedix, Inc.
Page 3
4. Termination.
---------------
(a) Termination by Executive.
-----------------------------
The Executive may terminate his employment with the Company at any time,
for any reason, with or without cause.
(b) Termination by the Company.
-------------------------------
The Company shall have the right to terminate the Executive's employment at
any time, for any reason, without or without cause.
(c) Termination due to Death or Disability.
-------------------------------------------
The Executive's employment pursuant to this Agreement shall terminate
automatically on the date of the Executive's death or disability. For
purposes of this Agreement, the Executive shall be deemed to be disabled
(as determined in good faith by the Board), if for a period of at least
four (4) consecutive months he is unable to substantially perform the
essential functions of his position with the Company with or without
reasonable accommodation. The Executive and the Company acknowledge that
Executive's ability to perform the duties specified in Section 1 is of the
essence of this Agreement. If the Executive's employment terminates by
reason of his disability, his employment termination date shall be deemed
to be the last day of the four (4) month period described in the
immediately preceding paragraph.
5. Termination Payments.
--------------------------
In the event of termination of the employment of Executive, all compensation and
benefits set forth in this Agreement shall terminate, except as specifically
provided in this Section 5.
(a) Termination by the Company With Cause.
------------------------------------------
Upon termination by the Company With Cause (as defined below), the Company
shall pay Executive any unpaid annual base salary, earned but unused
vacation, and incentive compensation due (if any), for services already
performed to the effective date of termination of employment, subject to
normal withholding or other deductions.
(b) Termination by the Company Without Cause.
---------------------------------------------
Upon termination by the Company Without Cause (as defined below), the
Company shall pay Executive any unpaid annual base salary, earned but
unused vacation, and incentive compensation due (if any) for services
already performed to the effective date of termination of employment,
subject to normal withholding or other deductions. In addition, the Company
shall pay Executive his base salary for a period of six (6) months in
accordance with the Company's regular payroll practices then in effect,
subject to normal withholding and other deductions. The Company will issue
and file appropriate tax documents in connection with any severance
payments. Payment of the above-described severance compensation and
benefits is conditioned on Executive executing a full mutual release of all
claims relating to his employment with or termination from the Company in a
form provided by the Company. Executive will have the duty to use
reasonable effects to mitigate the costs to the Company by attempting to
obtain other employment within a reasonable time after termination.
Executive's compensation from such other employment will be credited
against the amounts due from the Company to the extent the combined
compensation from Executive's new position and Company's payments under
this Section 5(b) would otherwise exceed Executive's base salary with the
Company at the effective date of termination. Executive has a duty to
notify the Company when he obtains new employment.
Employment Agreement
▇▇▇▇▇ ▇▇▇▇▇▇/Helix BioMedix, Inc.
Page 4
(c) Termination by Executive Without Good Reason.
-------------------------------------------------
Upon termination by Executive Without Good Reason (as defined below).
Executive shall receive the compensation set forth in Section 5(a) and
shall not be entitled to any other compensation, benefits or payments.
(d) Termination by Executive With Good Reason.
----------------------------------------------
Upon termination by Executive With Good Reason (as defined below),
Executive shall receive the compensation set forth in Section 5(b) and
shall not be entitled to any other compensation, benefits or payments.
(e) Termination as a Result of Death or Disability.
---------------------------------------------------
In the event of termination of Executive's employment pursuant to Section
4(c), Executive or his estate shall be paid the compensation set forth in
Section 5(a) and shall not be entitled to any other compensation, benefits
or payments.
(f) Definition of "Cause".
--------------------------
"Cause" as used in this Agreement shall mean a determination by the Board
of Directors that one or more of the following has occurred: (i) willful
misconduct, or dishonesty in the performance of Executive's duties that
results in a material adverse effect on the Company; (ii) conviction of
Executive of a felony involving an act of dishonesty, moral turpitude,
deceit or fraud; or (iii) current use by the Executive of illegal
substances.
(g) Definition of "Good Reason".
--------------------------------
"Good Reason" as used in this Agreement shall mean the occurrence of any of
the following events, without the consent of the Executive: (i) a demotion
or other material reduction in the nature and status of Executive's
responsibilities; or (ii) a material reduction in Executive's annual base
salary or any failure by the Company to satisfy its duty to compensate the
Executive as required under this Agreement.
6. Intellectual Property.
-------------------------
The Company shall own all right, title and interest (including patent
rights, copyrights, trade secret rights, mask work rights, sui generis
database rights and all other intellectual rights of any sort throughout
the world) relating to any and all inventions (whether or not patented or
patentable), discoveries, works of authorship, mask works, designs,
know-how, ideas and information made or conceived or reduced to practice,
in whole or in part, by Executive during the Term (collectively
"Inventions") to and only to the fullest extent allowed by RCW 49.44.140,
which provides that this Agreement does not apply to any such inventions,
discoveries and any patent, patent application, copyright or other
intellectual property right for which no equipment, supplies, facility or
trade secret information of the Company was
Employment Agreement
▇▇▇▇▇ ▇▇▇▇▇▇/Helix BioMedix, Inc.
Page 5
used and that was developed entirely on the Executive's own time, unless
(a) the inventions, discoveries and any patent, patent application,
copyright or other intellectual property right relates (i) directly to the
business of the Company; or (ii) to the Company's actual or demonstrably
anticipated research or development; or (b) such inventions, discoveries
and any patent, patent application, copyright or other intellectual
property right results from any work performed by the Executive for the
Company. Executive will disclose all Inventions to the Company so the
Company can make an independent assessment about the application of RCW
49.44.140. Executive shall assist the Company, at the Company's expense, to
executive such documents and perform such other acts as the Company deems
necessary or appropriate for the Company to obtain patents or copyrights on
such Inventions and to assign to the Company or its designee such
Inventions and any patent and copyright applications and patents and
copyrights relating thereto. Executive agrees to disclose any Inventions
created by the Executive prior to Executive's employment with the Company.
If Executive uses or discloses Executive's own (except where excluded
pursuant to this Section) or any third party's Inventions when acting
within the scope of Executive's employment, the Company will have, and
Executive grants the Company, a perpetual, irrevocable, worldwide,
royalty-free, non-exclusive, sublicensable right and license to exploit and
exercise all such Inventions rights. To the extent allowed by law, this
Section includes all "moral rights" "artist's rights" or the like. To the
extent that Executive retains any such moral or artist's rights Executive
hereby ratifies and consents to any action that may be taken with respect
to such rights by or authorized by the Company and agrees not to asserts
any such rights with respect thereto. Executive will confirm any such
ratifications and consents from time to time as requested by the Company.
7. Privacy.
-------------
Executive recognizes and agrees that Executive has no expectation of privacy
with respect to the Company's telecommunications, networking or information
processing systems (including, but not limited to, stored computer files, email
messages and voice mail) and that Executive's activity and any files or messages
on or using any of these Company-owned systems may be monitored and/or copied at
any time without notice.
8. Confidentiality of Information.
----------------------------------
(a) Scope.
-----------
During the term of his employment with the Company and thereafter the
Executive shall not at any time, whether during or after his employment by
the Company, take or use, or otherwise disclose to anyone, any Confidential
Information, except as necessary to perform his duties hereunder, as
permitted by the Chief Executive Officer of the Company, or as required by
any court or governmental agency.
Employment Agreement
▇▇▇▇▇ ▇▇▇▇▇▇/Helix BioMedix, Inc.
Page 6
(b) Definition.
---------------
"Confidential Information" shall mean any and all trade secrets, ideas,
suggestions, innovations, conceptions, discoveries, strategies,
improvements, technological developments, methods, processes,
specifications, formulae, compositions, techniques, systems, computer
software and programs, notes, memoranda, work sheets, lists of actual or
potential customers and suppliers, pricing information and policies, works
of authorship, products, data, and information in any form, which concern
or relate to any aspect of the actual or contemplated business of the
Company and which are stamped "confidential" or are otherwise treated as
confidential by the Company, except for such items as the Executive can
prove through clear and convincing evidence were in the public domain,
being publicly and openly known, prior to the date of commencement of the
Executive's employment by the Company or, subsequent to such date, became
part of the public domain, being publicly and openly known, through lawful
and proper means.
(c) Restrictions.
-----------------
The Executive agrees that the restrictions set forth in this paragraph are
reasonable and necessary to protect the Company.
9. Noncompetition and Nonsolicitation.
--------------------------------------
(a) Scope.
----------
During the Term and for a period of two (2) years from the effective date
of termination of employment, the Executive shall not, directly or
indirectly, as principal, agent, employee, officer, shareholder, consultant
or otherwise, engage in any business that competes directly with the
Company, and will not solicit or aid in soliciting, endeavor to obtain as a
customer or client, accept sales, marketing, financial, or consulting
business from, or perform sales, marketing, consulting or related business
for any person, firm, corporation, association or other entity: (i) that is
or was a Company customer for whom Executive performed any services for
with whom Executive had maintained substantial business contacts at any
time during the Term; or (ii) whose business Executive solicited, either
alone or in conjunction with others, on behalf of the Company or any of its
subsidiaries during the Term.
(b) Consideration.
------------------
Executive acknowledges that his employment with the Company, his receipt of
Confidential Information and information about Inventions from the Company
and his training with the Company all constitute consideration for the
agreements in this Section.
(c) Reform.
-----------
If a court of competent jurisdiction should declare any or all of this
Agreement unenforceable because of any unreasonable restriction of duration
and/or geographical area in subparagraph 9(a), then such court shall have
the express authority to reform subparagraph 9(a) to provide for reasonable
restrictions and/or to grant the Company such other relief, at law or in
equity, as are reasonably necessary to protect the interests of the
Company.
10. Nonsolicitation of Employees.
---------------------------------
During the Term and for a period of two (2) years from the effective date of
termination of employment, the Executive shall not, directly or indirectly,
employ, solicit or induce or attempt to influence any employee of the Company or
any affiliate of the Company to terminate his or her employment with the Company
or any affiliate of the Company or to work for the Executive or any other person
or entity.
Employment Agreement
▇▇▇▇▇ ▇▇▇▇▇▇/Helix BioMedix, Inc.
Page 7
11. Responsibilities Upon Termination.
--------------------------------------
Upon the termination of his employment by the Company for whatever reason and
irrespective of whether or not such termination is voluntary on his part:, the
Executive shall promptly deliver to the Company all of its data, designs,
drawings, plans, manuals, notes, memoranda, work sheets, specifications,
customer lists, supplier lists, pricing information, computer programs, and all
other materials which are or have become the property of the Company and all
copies or reproductions of any such.
12. Separate Agreements.
------------------------
The covenants of the Executive contained in paragraphs 6, 8, 9, 10 and 11 of
this Agreement shall be construed as separate agreements independent of any
other agreement, claim or cause of action of the Executive against the Company,
whether predicated on this Agreement or otherwise, and no other agreement, claim
or cause of action asserted by the Executive shall constitute a defense to the
enforcement by the Company of these covenants. The covenants contained in this
Agreement are necessary to protect the legitimate business interests of the
Company. Damages for the violation of any such covenants will not give full and
sufficient relief to the Company. In the event of any violation of any such
covenants, the Company shall be entitled (i) to injunctive relief against the
continued violation thereof, and (ii) to its actual damages. In any dispute
concerning whether or not the Executive has violated any of such covenants, the
prevailing party shall be entitled to payment from the other party for any and
all expenses, including attorneys' fees and expenses, incurred by the prevailing
party in connection with such dispute.
13. General.
------------
(a) Survival.
-------------
The covenants of the Executive contained in paragraphs 6, 8, 9, 10 and 11
of the Agreement, shall survive the term of the Executive's employment
under this Agreement.
(b) Counterparts.
-----------------
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which, taken together, shall
constitute one instrument.
(c) Headings.
-------------
All headings used in this Agreement are for convenience only and shall not
in any way affect the construction of or be taken into consideration
interpreting this Agreement.
(d) Notices.
------------
All notices, demands and other communications provided for by this
Agreement shall be in writing and shall be deemed to have been given at the
time the same is delivered in person or is mailed by registered or
certified mail addressed as follows:
Employment Agreement
▇▇▇▇▇ ▇▇▇▇▇▇/Helix BioMedix, Inc.
Page 8
To the Company: ▇▇▇▇▇ ▇▇▇▇▇▇, President and CEO
-------------------------------
Helix BioMedix, Inc., ▇▇▇▇▇ ▇▇▇▇ ▇▇▇. ▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-----------------------------------------------------------
To the Executive: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Either party wishing to change the address to which notices, requests,
demands and other communications under this Agreement shall be sent shall
give written notice of such change to the other party.
(e) Dispute Resolution.
-----------------------
Any controversies or claims arising out of or relating to this Agreement
shall be fully and finally settled by arbitration in the city of Seattle,
Washington in accordance with the Employment Arbitration Rules of the
American Arbitration Association then in effect ("the AAA Rules"),
conducted by one arbitrator either mutually agreed upon by the Company and
Executive or chosen in accordance with the AAA Rules, except that the
parties shall have any right to discovery as would be permitted by the
Federal Rules of Civil Procedure for a period of 90 days following the
commencement of such arbitration, and the arbitrator shall resolve any
dispute that arises in connection with such discovery. Judgment upon the
award rendered by the arbitrator may be entered in any court having
jurisdiction. In any such dispute, the prevailing party shall be entitled
to its or his attorneys' fees and costs, in addition to any other relief
that may be awarded.
(f) Governing Law.
------------------
This Agreement shall be governed by the laws of the State of Washington
without regard to any rules governing conflicts of laws.
(g) Waiver.
-----------
The waiver or failure of either party to insist in any one or more
instances upon performance of any term, covenant or condition of this
Agreement shall not be construed as a waiver of future performance of any
such term, covenant or condition, but the obligations of either party with
respect to such term, covenant or condition shall continue in full force
and effect. No course of dealing shall be implied or arise from any waiver
or series of waivers of any right or remedy hereunder.
(h) Severability.
-----------------
Each provision of this Agreement shall be interpreted where possible in a
manner necessary to sustain its legality and enforceability. If any
provision of this Agreement shall be unenforceable or invalid under
applicable law, such provision shall be limited to the minimum extent
necessary to render the same enforceable or valid. The unenforceability of
any provision of this Agreement in a specific situation, or the
unenforceability of any portion of any provision of this Agreement in a
specific situation, shall not
Employment Agreement
▇▇▇▇▇ ▇▇▇▇▇▇/Helix BioMedix, Inc.
Page 9
affect the enforceability of (i) that provision or portion of provision in
another situation or (ii) the other provisions or portions of provisions of
this Agreement if such other provisions or the remaining portions could
then continue to conform with the purposes of this Agreement and the terms
and requirements of applicable law.
(i) Assignment.
---------------
Except as may be provided under Section 3 above, this Agreement is personal
to Executive and shall not be assignable by Executive. If the Company
changes its name or changes to another corporate form, this Agreement will
remain in effect between the Executive and the Company's successor. All the
terms and provisions of this Agreement shall be binding on and shall insure
to the benefit of and be enforceable by the parties and their respective
successors and permitted assigns.
(j) Amendments.
---------------
This Agreement shall not be amended orally, but only by a written
instrument executed by each party to this Agreement.
(k) Entire Agreement.
---------------------
This Agreement, including documents referenced herein, and any amendments
or extensions to those agreements embodies the entire agreement and
understanding between the parties with respect to the subject matter hereof
and supersedes all prior oral and written agreements and understandings
between the Company and the Executive with respect to the subject matter
hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
Helix BioMedix, Inc.
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ President and CEO
Executive
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇