Exhibit 10.2
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
This AGREEMENT (the “
Agreement ”) is made this 21st day of May, 2009, by
and between COUGAR BIOTECHNOLOGY, INC., a Delaware corporation with
principal executive offices at 10990 Wilshire Boulevard, Suite
1200, Los Angeles, CA 90024 (the “ Company ”),
and ALAN H. AUERBACH (the “ Executive
”).
W I T N E S S E T
H:
WHEREAS, the Company currently
employs Executive as its President and Chief Executive Officer;
and
WHEREAS, the terms of
Executive’s employment with the Company are governed by an
Employment Agreement dated September 28, 2006, as amended and
restated effective September 26, 2008 (the “ Original
Agreement ”); and
WHEREAS, the Company desires to
continue employing Executive, and Executive desires to continue
serving the Company, as its President and Chief Executive Officer,
upon the terms and subject to the conditions contained in this
Agreement, which will supersede the Original Agreement in all
respects.
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 be
for a period of one year commencing on September 26, 2008,
unless sooner terminated in accordance with the provisions of
Section 9 below (the “ Term ”);
provided , however , that the Term shall be extended
automatically for additional one-year periods unless one party
shall advise the other in writing at least 60 days before the
initial expiration of the Term or an anniversary date thereof that
this Agreement shall no longer be so extended.
3. Duties; Best Efforts; Place of
Performance .
(a) The Executive shall serve as
President and Chief Executive Officer of the Company and shall
perform, subject to the direction of the Board of Directors of the
Company (the “ Board ”), such duties as are
customarily performed by the President and Chief Executive Officer.
The Executive shall also have such other powers and duties as may
be from time to time directed by the Board, provided that the
nature of the Executive’s powers and duties so prescribed
shall not be inconsistent with the Executive’s position and
duties hereunder.
(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.
4. Directorship . Subject to
the provisions of applicable law and approval by the
Company’s stockholders, Executive shall serve as a member of
the Company’s Board of Directors throughout the Term and
shall be included in the management slate for election as a
director at every stockholders meeting during the Term at which his
term as a director would otherwise expire. The Executive agrees to
accept election, and to serve during the Term, as director of the
Company, without any compensation therefor other than as specified
in this Agreement.
5. 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 ”) at a rate of $470,000 per annum, payable in
equal semi-monthly installments during the Term, or otherwise in
accordance with the Company’s regular payroll practices in
effect from time to time; provided , however , that
notwithstanding the foregoing, the Base Salary shall be retroactive
to June 1, 2008. The Board shall annually review the Base
Salary to determine whether an increase in the amount thereof is
warranted.
(b) Discretionary Bonus . At
the sole discretion of the Board, the Executive shall be eligible
to receive an annual discretionary bonus (the “
Discretionary Bonus ”) in an amount up to fifty
percent (50%) of the Base Salary, based upon his performance
on behalf of the Company during the prior year. The Discretionary
Bonus shall be paid within 30 days of the date the Discretionary
Bonus is awarded by the Board. In addition, the Board shall
annually review the Discretionary Bonus to determine whether an
increase in the amount thereof is warranted.
(c) Performance Bonus . The
Company shall pay the Executive a one-time milestone-based bonus
payment in the amount of Two Million Dollars ($2,000,000) (the
“ Milestone Bonus ”) upon such time as the
Market Capitalization (as defined below) is at least $1 Billion
(the “ Milestone Target”) . The Milestone Bonus
shall be paid within 30 days of the date on which the Milestone
Target has been attained. Executive acknowledges and agrees that
the bonuses described in subparagraphs (i), (ii) and
(iii) of Section 5(c) of the Original Agreement have been
paid and satisfied in full and that the Company has no further
obligation to Executive with respect to such bonus amounts. “
Market Capitalization ” means the aggregate value of
the Company’s issued and outstanding capital stock, as
determined by multiplying the closing sale price of the
Company’s common stock as reported on the Nasdaq Global
Market or such other exchange or automated quotation system as the
common stock is then listed or quoted by the total number of issued
and outstanding shares of the Company’s capital stock on a
fully-diluted basis (i.e., assuming the issuance of all shares
issuable upon the exercise of outstanding options, warrants and
other convertible securities); provided , however ,
that in the event the Company has outstanding a class or series of
capital stock that is convertible into common stock, the number of
issued and outstanding shares of such convertible class or series
of stock shall be
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deemed to be the number of shares of common
stock issuable upon conversion thereof. Notwithstanding anything to
the contrary contained in this Section 5(c), Executive shall
be deemed to have earned the Milestone Bonus only when the Market
Capitalization of $1 Billion is either (A) maintained for a
period of at least twenty (20) consecutive business days, or
(B) averages such amount over a period of thirty
(30) consecutive business days.
(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 5.
(e) Stock Option Awards . The
Board shall review the aggregate number of stock options granted to
the Executive not less frequently than annually in order to
determine whether an increase in the number thereof is warranted.
Executive agrees and acknowledges that the Company has satisfied
its obligation to issue the stock option described in
Section 5(e) of the Original Agreement.
(f) 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) 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, 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.
(h) Vacation . Executive
shall, during the Term, be entitled to a vacation of four
(4) weeks per annum, in addition to holidays observed by the
Company; provided , however , that Executive shall
not be entitled to accrue more than six (6) weeks of accrued
vacation time at any given time. In the event that Executive has
accrued the maximum of six (6) weeks accrued and unused
vacation time, Executive shall cease accruing further vacation time
until such time as Executive’s accrued and unused vacation
time is less than such maximum amount.
6. 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 subsidiaries or third parties with whom the Company
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 subsidiaries. “
Confidential and Proprietary Information ” shall
include, but shall not be limited to, confidential or proprietary
scientific or technical information,
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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 subsidiary of the Company 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 himself or
others; and (ii) not to take 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. 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. Notwithstanding anything herein to the contrary the
following shall not constitute Confidential and Proprietary
Information: (i) information that Executive can demonstrate
was already known to him prior to the commencement of his
employment with the Company, including the period prior to the date
of this Agreement, (ii) information that is in or has entered
the public domain through no breach of this Agreement or other
wrongful act of Executive, and (iii) information that has been
rightly received from a third party who is not under any obligation
of confidentiality with respect to such information.
(b) Except with prior written
authorization by the Company or until such time as such information
becomes available in the public domain other than as a result of
Executive’s violation of the provisions of this
Section 6, 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 subsidiaries owes an
obligation of confidence, at any time during or after his
employment with the Company.
(c) The Executive agrees that all
inventions, discoveries, improvements and patentable or
copyrightable works (“ 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). 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 may in its sole
discretion agree to waive the Company’s rights pursuant to
this Section 6(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
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(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.
(d) 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 subsidiaries (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
subsidiaries or either of the foregoing persons’ officers,
directors, employees (including the Executive), agents or
consultants during the Employment Term shall be and remain the sole
and exclusive property of the Company or such subsidiary 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.
(e) The provisions of this
Section 6 shall survive any termination of this
Agreement.
7. Non-Solicitation and
Non-Disparagement .
(a) During the Term and for a period
of 18 months following the termination of Executive’s
employment with the Company, the Executive shall not, directly or
indirectly, without the prior written consent of the Company
solicit or induce any employee of the Company or any of its
subsidiaries to leave the employ of the Company or any such
subsidiary or any employee who has left the employment of the
Company or any subsidiary within one year of the termination of
such employee’s employment with the Company.
(b) Each of the Company and the
Executive agree that, both during the Term and at all times
following the termination of Executive’s employment with the
Company, (i) the Company (including its officers and
directors) shall not directly or indirectly disparage, whether or
not true, the name or reputation of the Executive, and
(ii) Executive shall not directly or indirectly disparage,
whether or not true, the name or reputation of the Company
(including its officers and directors).
(c) In the event that the Executive
breaches any provisions of Section 6 or this Section 7 or
there is a threatened breach, then, in addition to any other rights
which the Company may have, the Company shall (i) be entitled,
without the posting of a bond or other security, to injunctive
relief to enforce the restrictions contained in such Sections and
(ii) have the right to require the Executive to account for
and pay over to the Company all compensation, profits, monies,
accruals, increments and other benefits (collectively “
Benefits ”) derived or received by
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the Executive as a result of any transaction
constituting a breach of any of the provisions of Sections 6 or 7
and the Executive hereby agrees to account for and pay over such
Benefits to the Company.
(d) Each of the rights and remedies
enumerated in Section 7(c) shall be independent of the others
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 7, 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 7 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 7 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.
(e) In the event that an actual
proceeding is brought in equity to enforce the provisions of
Section 6 or this Section 7, 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.
(f) The provisions of this
Section 7 shall survive any termination of this
Agreement.
8. 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
any statute, law, determination or award, or conflict with or
constitute a default or breach of any covenant or obligation 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.
(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.
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9. Termination .
Executive’s employment hereunder shall be terminated upon the
Executive’s death and may be terminated as
follows:
(a) The Executive’s employment
hereunder may be terminated by the Board for Cause. Any of the
following actions by the Executive shall constitute “
Cause ”:
(i) The willful failure, disregard
or refusal by the Executive to perform his duties hereunder except
where the performance of such duties is deemed unlawful;
(ii) Any willful, intentional or
grossly negligent act by the Executive having the effect of
injuring, in a material way (whether financial or otherwise and as
determined in good-faith by a majority of the Board), the business
or reputation of the Company or any of its subsidiaries, taken as a
whole;
(iii) Willful misconduct by the
Executive in respect of the duties or obligations of the Executive
under this Agreement, including, without limitation,
insubordination with respect to lawful directions received by the
Executive from the Board;
(iv) The Executive’s
conviction of any felony or a misdemeanor involving moral turpitude
(including entry of a nolo contendere plea);
(v) The determination by the
Company, after a reasonable and good-faith investigation by the
Company (which shall include interviewing Executive) following a
written allegation by another employee of the Company, that the
Executive engaged in some form of harassment prohibited by law
(including, without limitation, age, sex or race discrimination),
unless the Executive’s actions were specifically directed by
the Board;
(vi) Any misappropriation or
embezzlement of the property of the Company or its subsidiaries
(whether or not a misdemeanor or felony);
(vii) Breach by the Executive of any
of the provisions of Sections 6, 7 or 8 of this Agreement;
and
(viii) Breach by the Executive of
any provision of this Agreement other than those contained in
Sections 6, 7 or 8 which is not cured by the Executive within
thirty (30) days after notice thereof is given to the
Executive by the Company.
(b) The Executive’s employment
hereunder may be terminated by the Board due to the
Executive’s Disability. For purposes of this Agreement, a
termination for “ Disability ” shall occur
(i) when the Board 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, 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
Board after the Executive has been unable to substantially perform
his duties hereunder for 90 or more consecutive days, or more than
120 days in any consecutive twelve month period, by reason of any
physical or mental illness or injury. For purposes of this
Section 9(b), the Executive agrees to make himself available
and to cooperate in any reasonable examination by a reputable
independent physician retained by the Company.
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(c) The Executive’s employment
hereunder may be terminated by the Company (or its successor) upon
the occurrence of a Change of Control. For purposes of this
Agreement, “ Change of Control ” means
(i) the acquisition, directly or indirectly, following the
date hereof by any person (as such term is defined in
Section 13(d) and 14(d)(2) of the Securities Exchange Act of
1934, as amended), in one transaction or a series of related
transactions, of securities of the Company representing in excess
of fifty percent (50%) or more of the combined voting power of
the Company’s then outstanding securities if such person or
his or its affiliate(s) do not own in excess of 50% of such voting
power on the date of this Agreement, or (ii) the future
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).
(d) The Executive’s employment
may be terminated by the Executive for Good Reason. “ Good
Reason ” means the occurrence of any one or more of the
following events without the Executive’s prior written
consent, unless the Company fully corrects the circumstances
constituting Good Reason (provided such circumstances are capable
of correction) prior to the date of termination:
(i) a material diminution in the
Executive’s Base Salary;
(ii) a material diminution in the
Executive’s authority, duties or responsibilities, including,
without limitation, any circumstance in which the Executive ceases
to serve as the Chief Executive Officer of a corporation whose
stock is publicly traded (other than a circumstance where the
corporation’s stock ceases to be publicly traded in
connection with, or as a result of, a Management Buyout (as defined
below));
(iii) a change in the geographic
location at which the Executive must perform services to a location
that is greater than 25 miles from 10990 Wilshire Boulevard, Los
Angeles, CA 90024; or
(iv) any other action or inaction
that constitutes a breach by the Company (including its officers
and directors) of its obligations under this Agreement;
provided , however , that no termination shall be
deemed a termination by the Executive for Good Reason unless and
until (x) the Executive provides the Board with written notice
of the circumstances constituting Good Reason within 90 days after
the date that Executive first becomes aware of the existence of
such circumstances; (y) the Company fails to correct the
circumstance so identified within 30 days after the receipt of such
notice (if capable of correction), provided , however
, that the Executive shall not be required to provide notice of,
nor shall the Company be entitled to cure, a breach by the Company
(including its officers and directors) of the provisions of
Section&
