Employment Agreement Cornerstone Pharmaceuticals, Inc Robert Shorr, Ph.D. D.I.C.
Cornerstone
Pharmaceuticals, Inc
&
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▇▇▇▇▇, Ph.D. D.I.C.
THIS
EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of January
22, 2007 (the “Effective Date”) by and between Cornerstone
Pharmaceuticals, Inc., a
New
York corporation, with an office located at ▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
(the “Company”) and ▇▇▇▇▇▇ ▇▇▇▇▇, an
individual with an address of ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
(“EMPLOYEE”).
WHEREAS,
the Company is in the business of researching,
developing and commercializing unique, value-added, cancer chemotherapies
for
the most difficult to treat cancers
(the
“Company's Business”); and
WHEREAS,
EMPLOYEE has had significant experience in the development and management
of
pharmaceutical and biotech companies; and
WHEREAS,
the Company desires to retain the services of EMPLOYEE; and
WHEREAS,
EMPLOYEE is willing to be employed by the Company.
NOW,
THEREFORE, in consideration of the mutual covenants contained herein, the
parties agree as follows:
EMPLOYEE
is hereby employed and engaged to serve the Company as the Chief Executive
Officer and Chief Science Officer or such additional titles as the Company
shall
specify from time to time though no change is to be made to title and any
related duties without the explicit written approval of the EMPLOYEE, and
EMPLOYEE does hereby accept, and EMPLOYEE hereby agrees to such engagement
and
employment.
1. Duties.
EMPLOYEE shall be responsible for interactions with domestic and world wide
financial managers and investors in both the private and public markets to
meet
the company’s financing, growth and profit directed activities. To achieve these
and all other defined objectives Employee shall assemble an experienced and
effective success oriented senior management team that shall (i) participate
in
obtaining financing and managing budgets; (ii) support the Company’s mission
directed strategic and tactical plan, including manufacturing, business
development, marketing, sales, distribution and project management and; (iii)
the establishment of corporate policy and culture; (iv) investor and public
relations (IR/PR); and (v) compliance with US and appropriate Non-US regulatory
agencies (financial and product related). Employee shall work closely with
the
Company’s President in defining and achieving all objectives. In addition,
EMPLOYEE’s duties shall be such duties and responsibilities as the Company’s
Board of Directors shall specify from time to time, and shall entail those
duties customarily performed by Chief Executive Officer and Chief Science
Officer of a similarly situated company. EMPLOYEE shall
diligently and faithfully execute and perform such duties and responsibilities,
subject to the general supervision and control of the Company’s Board of
Directors. EMPLOYEE shall be responsible and report only to the Company’s Board
of Directors. In its sole and absolute discretion, the Company’s Board of
Directors shall determine EMPLOYEE’s duties and responsibilities and may assign
or reassign EMPLOYEE to such duties and responsibilities as it deems in the
Company's best interest, to the extent such assignment or reassignment is
commensurate with the duties customarily performed by the Chief Executive
Officer of a similarly situated company. EMPLOYEE shall devote his
full-time attention, energy, and skill during normal business hours to the
business and affairs of the Company and shall not, during the Employment
Term,
as that term is defined below, be actively engaged in any other business
activity, except with the prior written consent of the Company’s Board of
Directors. Notwithstanding
anything to the contrary in this Agreement EMPLOYEE is not precluded from
devoting reasonable periods of time required for:
(a) serving
as a director or member of a committee of any organization or corporation,
charity or governmental position involving no conflict of interest with the
interests of the Company;
(b) serving
as a consultant in his area of expertise (in areas other than in connection
with
the FIELD as hereinafter defined)), to government, industrial, and academic
panels where it does not conflict with the interests of the Company. The
Company
has interests in the following areas: (i) lipid containing microbubbles (“LCM”)
technology as a drug delivery vehicle for use in the treatment of cancer
as
defined in the confidential License Agreement between Cornerstone Ventures,
LLC
and Cavitation-Control Technologies, Inc. dated December 12, 2000; (ii)
Emulsiphan nanoparticles and Emulsiphan nanoparticle based products; (iii)
lipoic acid derivatives; (iv) polyethylene conjugated triazine derivatives;
(v)
products isolated from latex derived from the botanical Ficus carica; (vi)
technologies used to treat and diagnose cancer licensed, acquired or otherwise
developed by the Company’s employees and duly assigned to the Company (the
“FIELD”); and
(c) managing
his personal investments or engaging in any other non-competing business;
provided that such activities do not materially interfere with the regular
performance of his duties and responsibilities under this Agreement as
determined by the Company.
2. Best
Efforts of EMPLOYEE.
During his employment hereunder, EMPLOYEE shall, subject to the direction
and
supervision of the Company’s Board of Directors, devote his full business time,
best efforts, business judgment, skill, and knowledge to the advancement
of the
Company's interests and to the discharge of his duties and responsibilities
hereunder.
(a)
3. Employment
Term.
Unless
terminated pursuant to Section 12 of this Agreement, the term of this Agreement
shall commence as of the Effective Date of this Agreement and shall continue
for
a term of thirty six (36) months (the “Initial Term”), and shall be
automatically renewed for successive two (2) year terms (the “Renewal Term”)
unless a party hereto notifies the other that it does not wish to renew the
Agreement at least 30 days prior to the expiration of the then current term
(the
terms “Initial Term” and “Renewal Term” are collectively hereinafter referred to
as the “Employment Term”).
4. Compensation
of EMPLOYEE.
(a) Base
Compensation.
As
compensation for the services provided by EMPLOYEE under this Agreement,
the
Company shall pay EMPLOYEE an annual salary of $230,000 (the “Base
Compensation”). The Base Compensation shall be reviewed each year and may
be increased in the sole discretion of the Company’s Board of Directors (or its
Compensation Committee). However, the Company shall review the Base
Compensation six months from the effective date of this Agreement. The
compensation of EMPLOYEE under this Section shall be paid in accordance with
the
Company's usual payroll procedures. EMPLOYEE is also eligible to receive
a bonus
per the discretion of the Company’s Board of Directors.
(b) Incentive
Stock and Stock Options.
EMPLOYEE shall be eligible to receive shares of the Company’s authorized common
stock and options to purchase shares of the Company’s authorized common stock in
accordance with the terms of the 2005 Cornerstone Pharmaceuticals, Inc.,
Incentive Stock Plan.
5. Benefits.
EMPLOYEE shall be entitled to participate in any and all Company benefit
plans,
from time to time, in effect for employees of the Company. Such
participation shall be subject to the terms of the applicable plan documents
and
generally applicable Company policies.
6. Vacation,
Sick Leave and Holidays.
EMPLOYEE shall be entitled to four (4) weeks of paid vacation, with such
vacation to be scheduled and taken in accordance with the Company's standard
vacation policies. In addition, EMPLOYEE shall be entitled to such sick leave
and holidays at full pay in accordance with the Company's policies established
and in effect from time to time.
7. Business
Expenses.
The Company shall reimburse EMPLOYEE for all reasonable out-of-pocket business
expenses incurred in performing EMPLOYEE’s duties and responsibilities hereunder
in accordance with the Company's policies, provided EMPLOYEE promptly furnishes
to the Company adequate records of each such business expense.
8. Location
of EMPLOYEE's Activities.
EMPLOYEE’s principal place of business in the performance of his duties and
obligations under this Agreement shall be at a place to be determined by
the
Board of Directors within the Central New Jersey area. Notwithstanding the
preceding sentence, EMPLOYEE will engage in such travel and spend such time
in
other places as may be necessary or appropriate in furtherance of his duties
hereunder.
9. Confidentiality.
EMPLOYEE recognizes that the Company has and will have business affairs,
products, future plans, trade secrets, customer lists, and other vital,
non-publicly disclosed information (collectively "Confidential Information")
that are valuable assets of the Company. EMPLOYEE agrees that he shall not
at any time or in any manner, either directly or indirectly, divulge, disclose,
communicate, or use in any manner (except in performance of his services
to the
Company pursuant to the terms of this Agreement) any Confidential Information
to
any third party without the prior written consent of the Company’s Board of
Directors. EMPLOYEE will protect the Confidential Information
and treat it as strictly confidential.
10. Non-Competition.
EMPLOYEE acknowledges that he has gained, and will gain extensive knowledge
in
the business conducted by the Company and has had, and will have, extensive
contacts with customers of the Company. Accordingly, EMPLOYEE agrees that
he shall not compete directly or indirectly with the Company in the FIELD,
either during the Employment Term or during the twelve (12) month period
immediately after the Employment Term. For the purposes of this Section 10,
competing directly or indirectly with the Company shall mean engaging, directly
or indirectly, as principal owner, officer, partner, consultant, advisor,
or
otherwise, either alone or in association with others, in the operation of
any
entity engaged in the FIELD.Other than in connection with a legal proceeding
or
a proceeding of a regulatory body EMPLOYEE and Company shall not, for a five
(5)
year period after the Employment Term, make public statements in derogation
of
the other.
11. Termination.
Notwithstanding any other provisions hereof to the contrary, EMPLOYEE’s
employment hereunder shall terminate under the following
circumstances:
(a) Voluntary
Termination by EMPLOYEE.
EMPLOYEE shall have the right to voluntarily terminate this Agreement and
his
employment hereunder at any time during the Employment Term.
(b) Termination
by EMPLOYEE for GOOD REASON.
EMPLOYEE
shall have the right to terminate this Agreement upon 30 days notice to Company
for Good Reason, which shall not be affected by the EMPLOYEE's incapacity
due to
physical or mental illness. The EMPLOYEE's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any circumstance
constituting Good Reason hereunder though EMPLOYEE shall provide notice to
the
Company within 60 days of such material adverse change constituting GOOD
REASON.
GOOD REASON shall mean the occurrence, without the EMPLOYEE's express written
consent, of any of the following circumstances unless, in the case of paragraphs
(i) through (iv), such circumstances are fully corrected prior to the Date
of
Termination specified in the Notice of Termination given in respect thereof
which shall be no less than twenty (20) days:
(i) the
assignment to the EMPLOYEE of any significant duties materially inconsistent
with the EMPLOYEE's status as a senior executive officer of the Company or
a
materially adverse alteration in the nature or status of the EMPLOYEE's
responsibilities;
(ii) the
relocation of the Company's principal executive offices to a location outside
the Metropolitan New York or New Jersey area or the Company's requiring the
EMPLOYEE to be based anywhere other than the Company's principal executive
offices, excluding required travel on the Company's business to an extent
materially consistent with the EMPLOYEE's present business travel obligations;
(iii) the
act
by the Company, without the EMPLOYEE's consent, to reduce by more than 10%
any
portion of the EMPLOYEE's current compensation except pursuant to an
across-the-board compensation deferral similarly affecting all senior executives
of the Company and all senior executives of any person in control of the
Company, or failure to pay to the EMPLOYEE any portion of an installment
of
deferred compensation under any deferred compensation program of the Company,
within seven (7) days of the date such compensation is due;
(iv) the
material breach by the Company of any term of this Agreement.
(c) Voluntary
Termination by the Company. The
Company shall have the right to voluntarily terminate this Agreement and
EMPLOYEE’s employment hereunder at any time during the Employment
Term.
(d) Termination
for Cause.
The Company shall have the right to terminate this Agreement and EMPLOYEE’s
employment hereunder at any time for cause. As used in this Agreement, "cause"
shall mean refusal by EMPLOYEE to implement or adhere to lawful policies
or
directives of the Company’s Board of Directors in accordance with the terms and
conditions of this Agreement, breach of this Agreement, EMPLOYEE’s conviction of
a felony, other conduct of a criminal nature as determined by governmental
authorities that may have a material adverse impact on the Company's reputation,
breach of fiduciary duty or the criminal misappropriation by EMPLOYEE of
funds
from or resources of the Company. Cause shall not be deemed to exist unless
the
Company shall have first given EMPLOYEE a written notice thereof specifying
in
reasonable detail the facts and circumstances alleged to constitute "cause"
and
thirty (30) days after such notice such conduct has, or such circumstances
have,
as the case may be, not entirely ceased and not been entirely remedied to
the
reasonable satisfaction of the Company.
(e) Termination
Upon Death or for Disability.
This Agreement and EMPLOYEE’s employment hereunder, shall automatically
terminate upon EMPLOYEE’s death or upon written notice to EMPLOYEE and
certification of EMPLOYEE’s disability by a qualified physician or a panel of
qualified physicians if EMPLOYEE will be disabled continuously beyond a period
of twelve (12) months and will be unable to perform the duties contained
in this
Agreement.
(f) Effect
of Termination.
In the
event that this Agreement and EMPLOYEE’s employment is voluntarily terminated by
EMPLOYEE pursuant to Section 11(a), or in the event the Company terminates
this
Agreement for cause pursuant to Section 11 (d), all obligations of the Company
shall cease except for the obligations of both parties under Section 17.
In the
event that this Agreement and EMPLOYEE’s employment is terminated under Sections
11(a) through 11(e) all duties, responsibilities and obligations of EMPLOYEE
under this Agreement shall cease except for the restrictions and/or obligations
of Sections 9, 10, 11 and 17.
(i) Upon
termination pursuant to sections 11(b), Termination by EMPLOYEE for GOOD
REASON
or 11(c), Voluntary Termination by the Company, the EMPLOYEE
shall
receive all accrued Base Compensation through the date of termination plus
all
accrued vacation pay and bonuses, if any, plus twelve (12) months of the
annualized salary based on the EMPLOYEE’s
Base
Compensation including benefits such as health and other insurance benefits
made
available to Company employees or made available to the company by its
professional employer organization for terminated employees as the case may
be
(provided
that the
EMPLOYEE shall not be entitled to any benefits under this Section 11 (f)(i)
while the EMPLOYEE is a full-time employee of any other company providing
reasonably similar benefits) as severance compensation. In the event the
termination under Section 11 (b) or (c), occurs within in twelve (12) months
of
a Change of Control (which shall mean any merger, consolidation, sale of
assets
or other similar transaction or series of transactions involving the Company,
which excludes any transaction or transactions following which the Company
or
its stockholders continue to own a majority of the combined voting power
of the
outstanding securities of the corporation or other entity surviving or
succeeding to the business of the Company, then the severance compensation
shall
be increased to eighteen (18) months of Employee’s Base Compensation.
(ii) In
the event this Agreement is terminated upon the death or disability of EMPLOYEE
pursuant to Section 11(e), EMPLOYEE shall be entitled to all compensation
and
benefits pursuant to this Agreement for the period between the effective
termination date to the end of the Employment Term (up to a maximum of twelve
(12) months pay) pursuant to Section 4. Payment will be made to EMPLOYEE
or
EMPLOYEE’s appointed trustee.
Notwithstanding
anything to the contrary in this Agreement, under no circumstance shall the
manner of termination of EMPLOYEE’s employment under this Agreement of the
termination of this Agreement or any other term of this Agreement affect
the
obligations of the Company under any royalty obligations as they may accrue.
12. Resignation.
In the event that EMPLOYEE’s employment with the Company is terminated for any
reason whatsoever, EMPLOYEE agrees to immediately resign as an officer of
the
Company and any related entities. For the purposes of this Section 13, the
term
the "Company" shall be deemed to include subsidiaries, parents, and affiliates
of the Company.
13. No
Mitigation.
The
Company agrees that, if the EMPLOYEE's employment is terminated during the
term
of this Agreement, the EMPLOYEE is not required to seek other employment
or to
attempt in any way to reduce any amounts payable and benefits due to the
EMPLOYEE by the Company under this Agreement. However benefits payable by
the
Company on behalf of the EMPLOYEE shall be replaced by the benefit plan earned
by the EMPLOYEE if EMPLOYEE has accepted a full time employment with another
company.
14. Governing
Law, Jurisdiction and Venue.
This Agreement shall be governed by and construed in accordance with the
laws of
the State of Incorporation of the Company without giving effect to any
applicable conflicts of law provisions.
15. Business
Opportunities.
During
the Employment Term EMPLOYEE agrees to bring to the attention of the Company’s
Board of Directors all written business proposals that come to EMPLOYEE’s
attention and all business or investment opportunities of whatever nature
that
are created or devised by EMPLOYEE and that relate to areas in which the
Company
conducts business and might reasonably be expected to be of interest to the
Company or any of its subsidiaries.
16. Employee’s
Representations and Warranties.
EMPLOYEE hereby represents and warrants that he is not under any contractual
obligation to any other company, entity or individual that would prohibit
or
impede EMPLOYEE from performing his duties and responsibilities under this
Agreement and that he is free to enter into and perform the duties and
responsibilities required by this Agreement. EMPLOYEE hereby agrees to indemnify
and hold the Company and its officers, directors, employees, shareholders
and
agents harmless in connection with the representations and warranties made
by
EMPLOYEE in this Section 16.
17. Indemnification.
(a) The
Company agrees that if EMPLOYEE is made a party, or at any time is threatened
to
be made a party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding"), by reason of the fact
that he is or was a director, officer or employee of the Company or is or
was
serving at the request of the Company as a director, officer, member, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
or
not the basis of such Proceeding is EMPLOYEE’s alleged action in an official
capacity while serving as a director, officer, member, employee or agent,
EMPLOYEE shall be indemnified and held harmless by the Company to the fullest
extent permitted or authorized by the Company's certificate of incorporation
or
bylaws or, if greater, by the laws of the State of New York or the Company’s
State of Incorporation (whichever is broader), against all cost, expense,
liability and loss (including, without limitation, attorney's fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by EMPLOYEE in connection therewith,
and such indemnification shall continue as to EMPLOYEE even if he has ceased
to
be a director, member, employee or agent of the Company or other entity and
shall inure to the benefit of EMPLOYEE’s heirs, executors and
administrators. The Company shall advance to EMPLOYEE or to his heirs,
executors and administrators to the extent permitted by law all reasonable
costs
and expenses which may be reasonably incurred by him in connection with a
Proceeding within 20 days after receipt by the Company of a written request,
with appropriate documentation, for such advance. Such request shall
include an undertaking by EMPLOYEE or EMPLOYEE’s heirs, executors and
administrators to repay the amount of such advance if it shall ultimately
be
determined that EMPLOYEE or his heirs, executors and administrators is not
entitled to be indemnified against such costs and expenses.
(b) Neither
the failure of the Company (including its Board of Directors, independent
legal
counsel or stockholders) to have made a determination prior to the commencement
of any proceeding concerning payment of amounts claimed by EMPLOYEE that
indemnification of EMPLOYEE is proper because he has met the applicable standard
of conduct, nor a determination by the Company (including its board of
directors, independent legal counsel or stockholders) that EMPLOYEE has not
met
such applicable standard of conduct, shall create a presumption that EMPLOYEE
has not met the applicable standard of conduct.
(c) The
Company agrees to continue and maintain appropriate directors' and officers'
liability insurance policy covering EMPLOYEE to the extent the Company provides
such coverage for its other executive officers.
(d) Promptly
after receipt by EMPLOYEE of notice of any claim or the commencement of any
action or proceeding with respect to which EMPLOYEE is entitled to indemnity
hereunder, EMPLOYEE shall notify the Company in writing of such claim or
the
commencement of such action or proceeding, and the Company shall (i) assume
the
defense of such action or proceeding, (ii) employ counsel reasonably
satisfactory to EMPLOYEE, and (iii) pay the reasonable fees and expenses
of such
counsel. Notwithstanding the preceding sentence, EMPLOYEE shall be
entitled to employ counsel separate from counsel for the Company and from
any
other party in such action if EMPLOYEE reasonably determines that a conflict
of
interest exists which makes representation by counsel chosen by the Company
not
advisable. In such event, the reasonable fees and disbursements of such
separate counsel for EMPLOYEE shall be paid by the Company to the extent
permitted by law.
(e) After
the
termination of this Agreement and upon the request of EMPLOYEE, the Company
agrees to reimburse EMPLOYEE for all reasonable travel, legal and other
out-of-pocket expenses related to assisting the Company to prepare for or
defend
against any action, suit, proceeding or claim brought or threatened to be
brought against the Company or to prepare for or institute any action, suit,
proceeding or claim to be brought or threatened to be brought against a third
party arising out of or based upon the transactions contemplated herein and
in
providing evidence, producing documents or otherwise participating in any
such
action, suit, proceeding or claim. In the event EMPLOYEE is required to
appear after termination of this Agreement at a judicial or regulatory hearing
in connection with EMPLOYEE's employment hereunder, or EMPLOYEE's role in
connection therewith, the Company agrees to pay EMPLOYEE a reasonable sum,
to be
mutually agreed upon by EMPLOYEE and the Company, per diem for each day of
his
appearance and each day of preparation therefor.
18. Notices.
All demands, notices, and other communications to be given hereunder, if
any,
shall be in writing and shall be sufficient for all purposes if personally
delivered, sent by facsimile or sent by United States mail to the address
below
or such other address or addresses as such party may hereafter designate
in
writing to the other party as herein provided.
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Company:
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EMPLOYEE
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Cornerstone
Pharmaceuticals, Inc.
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Attn:
General Counsel
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19. Entire
Agreement.
This Agreement contains the entire agreement of the parties with respect
to the
specific terms of this employment of the EMPLOYEE by the Company and there
are
no other promises or conditions in any other agreement, whether oral or
written. This Agreement supersedes any prior written or oral agreements
between the parties. This Agreement may be modified or amended, if the amendment
is made in writing and is signed by both parties. This Agreement is for the
unique personal services of EMPLOYEE and is not assignable or delegable,
in
whole or in part, by EMPLOYEE. This Agreement may be assigned or delegated,
in
whole or in part, by the Company and, in such case, shall be assumed by and
become binding upon the person, firm, company, corporation or business
organization or entity to which this Agreement is assigned. The headings
contained in this Agreement are for reference only and shall not in any way
affect the meaning or interpretation of this Agreement. If any provision
of this
Agreement shall be held to be invalid or unenforceable for any reason, the
remaining provisions shall continue to be valid and enforceable and any such
provision that is held to be invalid or unenforceable shall be substituted
by a
valid or enforceable provision that is as similar in its intent as to the
invalid or unenforceable provision. The failure of either party to enforce
any
provision of this Agreement shall not be construed as a waiver or limitation
of
that party's right to subsequently enforce and compel strict compliance with
every provision of this Agreement. This Agreement may be executed in two
or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument and, in pleading or
proving any provision of this Agreement, it shall not be necessary to produce
more than one of such counterparts.
[Intentionally
left blank - signatures on following page]
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year
first above written.
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CORNERSTONE
PHARMACEUTICALS, INC.:
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EMPLOYEE:
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By:
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/s/
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Name:
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Title:
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