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EXHIBIT 10.25
CIMA LABS INC.
EMPLOYMENT AGREEMENT
WITH ▇▇▇▇ ▇▇▇▇▇
THIS AGREEMENT is entered into effective as of August 23, 2000, by and
between CIMA LABS INC., a Delaware corporation (the "Company"), and ▇▇▇▇ ▇▇▇▇▇,
Ph.D. (the "Employee").
WHEREAS, the parties entered into an Employment Agreement dated January 13,
1997 and desire to modify and replace that agreement; and
WHEREAS the Company desires to place the Employee in the position of Chief
Operating Officer to render services for the Company on the terms and conditions
set forth in this Agreement;
WHEREAS, the Employee desires to continue employment by the Company and
serve as its Chief Operating Officer on the terms and conditions set forth in
this Agreement; and
WHEREAS, both parties recognize the critical importance to the Company, its
employees, and its investors of preserving the confidentiality of the Company's
trade secrets and confidential information and of protecting the Company against
competition from former executives or other key employees of the Company
following their separation from the Company;
NOW, THEREFORE, in consideration of the foregoing premises and the parties'
mutual covenants and undertakings contained in this Agreement, the sufficiency
of which is hereby acknowledged, the Company and the Employee agree as follows:
1. EMPLOYMENT AND TERM. Subject to the terms and conditions herein
provided, the Company hereby continues employment of the Employee, and the
Employee hereby accepts continued employment by the Company, for a term
beginning
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EXHIBIT 10.25
September 1, 2000 and continuing thereafter for four (4) years to
September 1, 2004, unless earlier terminated in accordance with Section 11.
2. DUTIES AND REPRESENTATIONS OF THE EMPLOYEE. During the Employee's
employment hereunder, he shall serve as the Company's Chief Operating Officer.
The Employee shall devote his full time, attention, knowledge, and skill
exclusively to the loyal service of the Company. The Company shall endeavor to
evaluate the Employee's performance annually during the term of this Agreement.
The Employee represents and warrants to the Company that: (a) his acceptance of
employment under this Agreement and his performance of the duties contemplated
herein are not in conflict with any obligation, undertaking, or agreement
between the Employee and any third party; and (b) he has not and will not,
during the course of his employment with the Company, disclose or utilize
without permission of the third party, any confidential or proprietary
information, trade secrets, materials, documents, or property owned by such
third party.
3. COMPENSATION. The Company shall pay to the Employee the following
compensation:
(a) Base Salary. The Company shall pay to the Employee a base salary at the
annual rate of $220,000 beginning September 1, 2000, less legally required and
authorized deductions and withholdings, payable in periodic installments in
accordance with the standard payroll practices of the Company in effect from
time to time. On September 1, 2001, Employee's annual base salary will be
adjusted upwards by 5% or such greater amount as deemed appropriate by the
Company. Thereafter, Employee's annual base salary will be reviewed and adjusted
upward by the Company by 5% annually, but in no event will it be reduced below
$220,000.
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(b) Incentive Bonus. The Employee will be eligible for an incentive bonus
award of up to fifty percent (50%) of his base salary depending upon the
achievement of objectives defined by the Compensation Committee of the Board of
Directors. The Compensation Committee shall establish the objectives for any
calendar year at or prior to the last Board meeting of the preceding calendar
year. Whether and the extent to which objectives have been achieved and the
award to be granted to Employee will be determined by the Compensation Committee
in its discretion and paid to employee before March 1 of the next calendar year.
The establishment and implementation of any additional incentive bonus programs
shall be in the sole discretion of the Compensation Committee.
(c) Participation in Benefit Plans. The Employee shall also be entitled to
participate in all employee benefit plans or programs of the Company, including
any health, disability and life insurance group plans, to the extent that he is
eligible to participate under the terms of such plans.
(d) Paid Time Off (PTO). During the term of the Employee's employment under
this Agreement, the Employee shall be entitled to take twenty-five (25) days of
PTO per year in accordance with the Company's standard policy as in effect from
time to time. Notwithstanding any Company policy to the contrary, accrued and
unused PTO of the Employee may be carried over from any year to the next up to a
maximum accrual of 500 PTO hours. Any additional accruals will be lost unless
Employee obtains the written approval of the Chief Executive Officer of the
Company.
(e) Employment-Related Expenses. The Company shall pay or reimburse the
Employee for all reasonable and necessary out-of-pocket expenses incurred by him
in the performance of his duties under this Agreement, subject to the
presentment of
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appropriate vouchers and receipts in accordance with the Company's normal
policies for expenses verification.
(f) Stock Option. Subject to the terms of the Company's Equity Incentive
Plan and a stock option agreement to be entered into between the Company and
Employee, the Company shall issue to the Employee an incentive stock option to
purchase one hundred thousand (100,000) shares of common stock in the Company
effective at the date of signing this Agreement. This award will vest as
follows: (i) twenty-five percent (25%) of the shares subject to the option will
vest on September 1, 2001; (ii) twenty-five percent (25%) of the shares subject
to the option will vest on September 1, 2002; (iii) twenty-five percent (25%) of
the shares subject to the option will vest on September 1, 2003; (iv)
twenty-five percent (25%) of the shares subject to the option will vest on
September 1, 2004. The above vesting schedule may be accelerated in accordance
with the terms of the Equity Incentive Plan.
(g) Car Allowance. The Employee will be paid a car allowance in the amount
of six hundred fifty dollars ($650.00) per month, consistent with the Company's
payroll and accounting practices.
4. CONFIDENTIAL INFORMATION. Except as permitted or directed by the
Company's CEO or Board of Directors, during the term of this Agreement or at any
time thereafter, the Employee shall not divulge, furnish, or make accessible to
anyone or use in any way (other than in the ordinary course of business of the
Company) any confidential or secret knowledge of the Company which the Employee
has acquired or become acquainted with or will acquire or become acquainted with
prior to the termination of his employment by the Company, whether developed by
himself or by others, concerning any trade secrets, confidential or secret
designs, processes,
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formulae, plans, devices, or materials (whether or not patented or patentable),
directly or indirectly useful in any aspect of the business of the Company, any
customer or supplier list of the Company, pricing structure, marketing plans,
strategic plans, any confidential or secret development or research work of the
Company, or any other confidential information or secret aspects of the business
of the Company. The Employee acknowledges that the above-described knowledge or
information constitutes a unique and valuable asset of the Company and
represents a substantial investment of time and expense by the Company and its
predecessors, and that any disclosure or other use of such knowledge or
information other than for the sole benefit of the Company would be wrong and
would cause irreparable harm to the Company. Both during and after the term of
this Agreement, the Employee will refrain from any acts or omissions that would
reduce the value of such knowledge or information to the Company. The foregoing
obligations of confidentiality, however, shall not apply to any knowledge or
information which is now published or which subsequently becomes generally
publicly known in the form in which it was obtained from the Company, other than
as a direct or indirect result of a breach of this Agreement by the Employee.
5. RETURN OF PROPERTY. The Employee agrees that all property in the
Employee's possession belonging to the Company, including without limitation,
all documents, reports, manuals, memoranda, computer print-outs, customer lists,
credit cards, keys, identification, products, access cards, any electronic data
storage device containing confidential or proprietary information of the
Company, passwords used to access Company property, and all other property
relating in any way to the business of the Company are the exclusive property of
the Company, even if the Employee authored, created, or assisted in authoring or
creating such property. The Employee
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shall return to the Company all such documents and property, and delete any and
all copies of such documents and property from any computer or computer storage
device in his possession, immediately upon termination of Employee's employment
or at such earlier time as the Company may reasonably request,
6. IMPROVEMENTS AND INVENTIONS.
(a) Notification and Disclosure. Employee shall promptly and fully disclose
to the Company any and all ideas, improvements, discoveries, and inventions,
whether or not they are believed to be patentable (all of which are hereinafter
sometimes referred to as "Inventions"), which Employee conceives or first
actually reduces to practice, either solely or jointly with others, whether
outside Company facilities or during non-business hours, during the period of
Employee's employment with the Company or within six months after termination of
employment, and which relate to the business now or hereafter carried on or
contemplated by the Company or which result from any work performed by Employee
for the Company.
(b) Ownership and Patenting of Inventions. All such Inventions shall be the
sole and exclusive property of the Company, except as limited by Section 6(c)
below. During the term of Employee's employment and thereafter, whenever
requested to do so by the Company, Employee shall execute and assign any and all
applications, assignments, and other instruments which the Company shall deem
necessary or convenient in order to apply for and obtain Letters Patent of the
United States and/or of any foreign country for such Inventions and in order to
assign and convey to the Company or its nominee the sole and exclusive right,
title, and interest in and to such Inventions, and Employee will render aid and
assistance in any interference or litigation
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pertaining thereto. All expenses reasonably incurred by Employee at the request
of the Company shall be borne by the Company.
(c) Notice of Exclusion. This Section 6 shall not apply to inventions for
which no equipment, supplies, facility or trade secret information of Employer
was used and which was developed entirely on the Employee's own time, and (1)
which does not relate directly to the business of the Company or to the
company's actual or demonstrably anticipated research or development, or (2)
which does not result from any work performed by the Employee for the Company.
7. OWNERSHIP AND REGISTRATION OF COPYRIGHTABLE MATERIAL. All copyrightable
material relating to the Company's business which Employee produces, composes,
or writes, individually or in collaboration with others, whether made on the
Company's time or Employee's time, shall be treated as and constitute a "work
made for hire" or as having similar status in the United States or elsewhere and
shall be the sole and exclusive property of the Company. At the request of the
Company, Employee shall expressly assign to the Company all interest in such
copyrightable material and shall sign all papers and do all other acts which the
Company shall deem necessary or convenient, at the expense of the Company, to
assist the Company to obtain copyright registration of such material in any and
all countries.
8. RESTRICTIVE COVENANT. The Employee acknowledges that the Company needs
to be protected against the potential for unfair competition and impairment of
the Company's goodwill by the Employee's use of the Company's training,
assistance, confidential information, and trade secrets in direct competition
with the Company. The Employee therefore agrees that during his employment with
the
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Company and for a period of one (1) year following the date of termination of
his employment with the Company for any reason, the Employee shall not, directly
or indirectly, operate, join, control, be employed by, provide services to, or
participate in ownership, management, operation, or control of, or be connected
in any manner as an independent contractor, consultant, or otherwise, with any
person or organization engaged in any pharmaceutical or other business activity
involved in the development of fast-dissolve drug delivery technology.
9. COVENANT NOT TO RECRUIT. The Employee recognizes that the Company's work
force constitutes an important and vital aspect of its business. The Employee
agrees that during his employment with the Company and for a period of two (2)
years following the termination of his employment with the Company for any
reason whatsoever, he shall not recruit or solicit, or assist or encourage
anyone else in the recruitment or solicitation of, any of the Company's then
current employees to terminate their employment with the Company or to become
employed by or perform services for any business enterprise.
10. CONFLICTS OF INTEREST. Employee, during the term of his employment by
the Company, shall avoid actual or perceived conflicts of interest and shall at
all times keep the Company informed of any intended business activity or outside
employment. Employee shall not engage in any business activity or outside
employment without the express written authorization of the Company.
11. TERMINATION.
(a) Method of Termination. Employee's employment by the Company hereunder
shall end immediately upon:
(i) receipt by the Employee of notice from the Company of termination
of Employee's employment (whether in written or oral form), with
or without Cause,
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(ii) receipt by the Company of Employee's resignation from the
Company whether in written or oral form), with or without Good
Reason,
(iii) the Employee's death,
(iv) the Employee's Disability, as defined herein, or
(v) expiration of the term of this Agreement as established in
Section 1 hereof;
and the date on which termination is effective shall be the "Termination Date."
(b) Cause. For purposes of this Agreement, "Cause" means:
(i) any felony conviction of Employee;
(ii) use by Employee of intoxicating beverages or chemical abuse that
negatively affects Employee's job performance (following at
least one written warning);
(iii) an act or acts of dishonesty taken by the Employee and intended
to result in the enrichment of the Employee or others at the
expense of the Company;
(iv) any material breach of the Employee's obligations under this
Agreement;
(v) the willful misconduct or gross negligence of the Employee in
connection with the performance of his duties, responsibilities,
agreements, and covenants hereunder, or his failure to comply
with the reasonable rules, regulations, policies, directions,
expectations and restrictions established by the Company, as
determined in the sole discretion of the Company, and which
misconduct, negligence, or failure the Company determines in its
sole discretion has continued for a period of thirty (30) days
after written notice to the Employee; or
(vi) willful conduct of the Employee which brings discredit to the
Company, its products, or its services.
(c) Disability. For purposes of this Agreement, "Disability" means the
inability of the Employee to perform the Employee's duties hereunder by reason
of illness or other physical or mental impairment or condition, if such
inability continues for an uninterrupted period of 90 calendar days or more. A
period of inability shall be
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"uninterrupted" unless and until the Employee
returns to full-time work for a continuous period of at least 30 calendar days.
(d) Good Reason. For purposes of this Agreement, resignation by Employee
for "Good Reason" means that, within one (1) year following a Change in Control,
Employee resigns because:
(i) the Company eliminates his position,
(ii) the Company requires Employee to transfer to a work site outside
a 100-mile radius of his work location immediately prior to the
Change in Control and Employee is unwilling to relocate,
(iii) there is a material diminution in the responsibilities and
duties of the Employee after the Change in Control as compared to
Employee's responsibilities and duties immediately prior to the
Change in Control removed from the position held by him prior to
the change in control.
(e) Change in Control. A "Change in Control" of the Company shall be deemed
to have occurred when any "person" (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended) is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 51% or more of the combined voting power of the Company's then
outstanding securities and that person has used such voting power to elect a
majority of the Company's Board of Directors.
12. PAYMENTS ON TERMINATION.
(a) Disability. Upon termination for Disability, the Employee shall be
entitled to receive continuation of his Base Salary and to continue to
participate in any group health insurance plan in which he is then enrolled, to
the extent allowed by that plan, for a period of one hundred eighty (180) days
after the Termination Date. If the Company maintains a disability insurance
policy covering the Employee, then the amount of
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payment to be made by the Company to the Employee pursuant to this Section 12(a)
shall be reduced by any amount so paid to the Employee under any such insurance
policy.
(b) Death. Upon termination in the event of the Employee's death, the
Company shall continue to pay the Employee's Base Salary to his estate and to
allow Employee's dependent(s) to continue to participate in any group health
insurance plan in which such dependent(s) are then enrolled, to the extent
allowed by that plan, for a period of one hundred eighty (180) days after the
Termination Date.
(c) Termination By the Company Without Cause. Upon termination by the
Company for reasons other than Cause, the Company will continue to pay Employee
at the rate of his then current annual Base Salary for a period of twelve (12)
months after the Termination Date or the remainder of the term set forth in
Section 1, whichever is longer.
(d) Other Terminations. Upon termination of Employee's employment by the
Company for Cause, by the Employee for other than Good Reason, or by expiration
of this Agreement, the Company will pay Employee his Base Salary earned through
the Termination Date.
(e) Termination after Change in Control. In the event of termination of
Employee's employment by the Company as a result of a Change in Control of the
Company, or by Employee for Good Reason, the Company will continue to pay
Employee at the rate of his then current annual Base Salary for a period of
twelve (12) months after the Termination Date or the remainder of the term set
forth in Section 1, whichever is longer. The amount of payment to be made by the
Company to the Employee pursuant to this Section 12(e) shall be reduced by 50%
of any gross
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compensation earned by the Employee in connection with any employment or
self-employment of the Employee during the compensation period pursuant to this
Section 12(e). Employee shall promptly notify the Company of any such employment
or self-employment and disclose to the Company his gross earnings therefrom.
Except as otherwise provided in the last sentence of this paragraph, if the
payments owed to the Employee pursuant to this Section 12 (e) and any other
benefits to which the Employee shall become entitled, either alone or together
with other payments or benefits in the nature of compensation to the Employee
which would constitute a "parachute payment" as defined in Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), such payments or other
benefits shall be reduced (but not below zero) to the largest aggregate amount
as will result in no portion thereof being subject to the excise tax imposed
under Section 4999 of the Code. The Employee in good faith shall determine the
amount of any reduction to be made pursuant to this paragraph. Notwithstanding
the foregoing, this Section 12 (e) shall not apply (and no reduction shall be
made to the payments or other benefits otherwise available to the Employee) if
the Company determines that (i) the Employee's net after-tax position without
the imposition of such reduction would be greater than (ii) the Employee's net
after-tax position with the imposition of such reduction.
(f) Release. The payment of any amounts to Employee under this Section 12
or otherwise after termination of Employee's employment with the Company shall
be conditioned upon the Company receiving a full and complete release from
Employee of any current or future claims Employee may have against the Company,
its officers and directors and other Company affiliates other than (i) with
respect to the payment of amounts specifically provided for herein, (ii)
pursuant to rights of indemnification under
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the Company's Certificate of Incorporation or by-laws, or (iii) pursuant to the
terms of any employee benefit plan of the Company in which Executive is a
participant.
(g) No Additional Obligations. Except as set forth in this Section 12, the
Company shall have no further obligation to Employee upon termination of
Employee's employment.
13. ASSIGNMENT. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of the Company. The Employee may not assign this Agreement or any
rights hereunder. Any purported or attempted assignment or transfer by the
Employee of this Agreement or any of the Employee's duties, responsibilities, or
obligations hereunder shall be void.
14. NOTICES. For purposes of this Agreement, notices provided in this
Agreement shall be in writing and shall be deemed to have been given when
personally served, sent by courier or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, to the last known
residence address of the Employee or, in the case of the Company, to its
principal office to the attention of the Chief Executive Officer, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.
15. CONSTRUCTION AND SEVERABILITY. The validity, interpretation,
performance, and enforcement of this Agreement shall be governed by the laws of
the State of Minnesota. In the event any provision of this Agreement shall be
held illegal or invalid for any reason, said illegality or invalidity will not
in any way affect the legality or validity of any other provision hereof. It is
the intention of the parties hereto that the Company
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be given the broadest possible protection respecting its confidential
information and trade secrets and respecting competition by the Employee
following the termination of his employment.
16. ARBITRATION. Except as provided in this paragraph, any claims or
disputes of any nature between the parties arising from or related to the
performance, breach, termination, expiration, application, or meaning of this
Agreement or any matter relating to the Employee's employment and the
termination of that employment, shall be resolved exclusively by arbitration
before the American Arbitration Association in Minneapolis, Minnesota, in
accordance with the American Arbitration Association's employment dispute
resolution rules in place at the time of the arbitration.
The decision of the arbitrator(s) shall be final and binding upon both
parties. Judgment on the award rendered by the arbitrator(s) may be entered in
any court having proper jurisdiction.
This paragraph shall have no application to claims by the Company asserting
a violation of or seeking to enforce, by injunction or otherwise, the terms of
Sections 4, 5, 6, 7, 8 or 9 of this Agreement. Such claims may be maintained by
either party in a lawsuit subject to the terms of Section 17 below. The Employee
agrees that the Company will not have an adequate remedy at law and, in addition
to, but not to the exclusion of, any other available remedy, the Company shall
have the right to enforce the provisions of Sections 4, 5, 6, 7, 8 and 9 of this
Agreement by applying for and obtaining temporary and permanent restraining
orders or injunctions from a court of competent jurisdiction without the
necessity of filing a bond therefore, and the Company shall be entitled to
recover from the Employee its reasonable attorneys' fees and costs in enforcing
the provisions of Sections 4, 5, 6, 7, 8 and 9 of this Agreement.
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17. VENUE. Any action at law, suit in equity, or judicial proceeding
authorized by Section 16 above, arising directly, indirectly, or otherwise in
connection with, out of, related to or from this Agreement or any provision
hereof, shall be litigated only in the state or federal courts of the State of
Minnesota. The Employee waives any right the Employee may have to initiate,
transfer, or change the venue of any litigation brought against the Employee by
the Company.
18. ENTIRE AGREEMENT. This Agreement sets forth the entire Agreement
between the Company and the Employee with respect to his employment by the
Company and there are no undertakings, covenants, or commitments, except as set
forth herein, in the August 23, 2000 between Employee and Company ("Stock Option
Agreements"), and in any employee benefit plan of the Company in which Employee
is a participant. The parties hereto have made no agreements, representations or
warranties relating to the subject matter of this Agreement that are not set
forth herein. This Agreement may not be altered or amended, except by a writing
executed by the party against whom such alteration or amendment is to be
enforced. This Agreement supersedes any and all prior understandings or
agreements between the parties including, but not limited to, the Employment
Agreement between Employee and Employer dated January 13, 1997, but not
including the Stock Option Agreements.
19. COUNTERPARTS. This Agreement may be simultaneously executed in any
number of counterparts, and such counterparts executed and delivered, each as an
original, shall constitute but one and the same instrument.
20. CAPTIONS AND HEADINGS. The captions and section headings used in this
Agreement are for convenience of reference only, and shall not affect the
construction or interpretation of this Agreement or any of the provisions
hereof.
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21. SURVIVAL. The parties expressly acknowledge and agree that the
provisions of this Agreement which by their express or implied terms extend
beyond the expiration of this Agreement or the termination of the Employee's
employment hereunder, including without limitation Sections 4, 5, 6, 7, 8, and
9, shall continue in full force and effect, notwithstanding the Employee's
termination of employment with the Company or the expiration or termination of
this Agreement.
22. WAIVERS. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof, or the exercise of any
other right or remedy granted hereby or by any related document or by law. No
single or partial waiver of rights or remedies hereunder, nor any course of
conduct of the parties, shall be construed as a waiver of rights or remedies by
either party (other than as expressly and specifically waived).
23. RELIANCE BY THIRD PARTIES. This Agreement is intended for the exclusive
benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors, and permitted assigns, and
no other person or entity shall have any right to rely on this Agreement or to
claim or derive any benefit therefrom, absent the express written consent of the
party to be charged with such reliance or benefit.
IN WITNESS WHEREOF, the parties have signed this Agreement.
CIMA LABS INC.
Dated: August 23, 2000
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Ph.D.
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Type Name
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Signature
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Its: President and CEO
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Dated: August 23, 2000
--------------------- By: ▇▇▇▇ ▇▇▇▇▇, Ph.D.
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Type Name
/s/ ▇▇▇▇ ▇▇▇▇▇
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Signature
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