EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (this “Agreement”), effective as of August 6, 2008 (“Effective Date”), between Urigen Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and William J. Garner (the “Employee”).

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it is in the best interests of the Company and its shareholders to employ the Employee in the position set forth below, and the Employee desires to serve in that capacity.

1. Employment Period. The Company shall employ the Employee, and the Employee shall serve the Company, on the terms and conditions set forth in this Agreement, for a term of two years commencing on the date hereof, unless earlier terminated in accordance with Section 4 hereof (the “Initial Term” and, together with any subsequent term of Employment, the “Employment Period”); provided that the term of employment hereunder will automatically be renewed for successive one-year terms (each such term a “Renewal Term”) unless either party shall, at least 30 days before such date, provide written notice to the other party that the Employment Period will not be extended.

(a) The Employee shall serve as President and Chief Executive Officer of the Company, reporting to the Board, with such duties and responsibilities as are customarily assigned to such position, and such other duties and responsibilities not inconsistent therewith as may be assigned to him from time to time by the Board.

(b) During the Employment Period, and excluding any periods of vacation and sick leave to which the Employee is entitled, the Employee shall devote his full-time efforts to the business and affairs of the Company and use his best efforts to carry out such responsibilities faithfully and efficiently. It shall not be considered a violation of the foregoing for the Employee to (i) serve on corporate, civic or charitable boards or committees, (ii) deliver lectures or fulfill speaking engagements, (iii) manage personal investments, (iv) engage in other business activities, so long as such activities do not materially interfere with the performance of his responsibilities as an employee of the Company in accordance with this Agreement or violate the provisions of Section 8 of this Agreement.

(c) Employee shall not be required to change his domicile to perform his duties.  Employee agrees to perform a reasonable amount of travel in order to perform his duties hereunder.

(a) Base Salary. During the first contract year of the Initial Term, the Employee shall receive an annual base salary (the “Annual Base Salary”) of $250,000.  Employee will receive an annual salary review by the Board, or an authorized committee thereof, on each anniversary of the Effective Date. The Annual Base Salary shall be payable in accordance with the Company’s payroll practices as in effect from time to time. The Board or an authorized committee thereof may increase the Annual Base Salary above the foregoing amounts at its discretion.

(c) Benefits. During the Employment Period, the Employee and the Employee’s direct family shall be entitled to participate in all benefit programs of the Company provided to executives of similar rank, including, but not limited to, health insurance coverage, as well as all welfare benefit plans, practices, policies and programs provided by the Company or Parent, including, but not limited to any comprehensive dental plan, retirement plans and profit sharing programs the Company or Parent may provide to other employees from time to time.

(d) Expenses. During the Employment Period, the Employee shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Employee in carrying out the Employee’s duties under this Agreement, provided that the Employee complies with the policies, practices and procedures of the Company for submission of expense reports, receipts and similar documentation of such expenses.

(a) Death or Disability. The Employee’s employment shall terminate automatically upon the Employee’s death during the Employment Period. The Company shall be entitled to terminate the Employee’s employment because of the Employee’s Disability during the Employment Period. “Disability” means that (i) the Employee is unable to perform the job with or without a reasonable accommodation pursuant to the state and federal disability discrimination laws or (ii) a physician selected by the Company or its insurers, and acceptable to the Employee or the Employee’s guardian or legal representative, has made a finding of permanent physical or mental disability and such disability is expected to result in death or to be of a continuous duration of no less than twelve (12) months. A termination of the Employee’s employment by the Company for Disability shall be communicated to the Employee by written notice, and shall be effective on the 30th day after receipt of such notice by the Employee (the “Disability Effective Date”), unless the Employee is able to, and does, return to full-time performance of the Employee’s duties before the Disability Effective Date or the employee establishes that he is not disabled under this definition of Disability.