Exhibit 10.34
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is
made and entered into as of January 30, 2009 (the "Effective
Date"), by and between SCOLR Pharma, Inc., a Delaware corporation
("Company"), and Bruce S. Morra ("Employee").
The parties agree as follows:
|
|
|
Title and
Duties. Company hereby employs Employee as President and Chief
Executive Officer, and Employee hereby accepts such employment, on
the terms and conditions set forth herein. Employee shall perform
such duties as are customary for the position of President and
Chief Executive Officer and any additional such duties that
Company's Board of Directors ("Board") may assign from time to
time.
|
|
|
|
Full-time and
Best Efforts. Employee will expend Employee's best efforts on
behalf of Company, and will abide by all policies and decisions
made by Company, as well as all applicable federal, state and local
laws, regulations or ordinances. Employee will act in the best
interests of Company at all times and, subject to Section 1.4
below, will devote Employee's full business time and efforts to the
performance of Employee's assigned duties to Company.
|
|
|
|
Term. The
employment relationship formed pursuant to this Agreement shall be
effective for twelve months commencing on the Effective Date (the
"Term"). The Term may be extended by mutual agreement of
Employee and Company.
|
|
|
|
Outside
Activities. Employee may serve in various capacities for
non-profit, charitable and educational organizations from time to
time. Any such non-profit work that has the potential to interfere
to any degree with Employee's services to Company must be disclosed
to, and approved by, the Board. Employee agrees that he will not
accept any position with, be employed by, provide any paid
services, or serve on any Board of Directors for a profit
organization or entity other than Company without the written
approval of the Board; provided, that Employee may serve as a
director of companies that do not compete with Company, and will
not materially detract from Employee's responsibilities hereunder
as determined in the sole judgment of the Board. Company
has agreed that Employee may continue to serve as a director of
Unigene Laboratories, Inc., and InforMedix Holdings Inc.
|
|
|
|
Base Salary. As
compensation for Employee's performance of Employee's duties
hereunder, Company shall pay Employee an initial base salary ("Base
Salary") of Three Hundred and Sixty Seven Thousand Five Hundred
Dollars ($367,500) for the 12 month term, payable in accordance
with the normal payroll practices of Company, less any amounts that
Company is required by applicable federal, state or local law to
withhold therefrom on account of employment, income or other taxes.
Employee's Base Salary shall be reviewed annually by the
Compensation Committee of the Board and may be increased (but not
decreased without the consent of Employee) and such increased
amount shall hereafter be his "Base Salary".
|
|
|
|
Stock Options
Upon execution of this Agreement, the Company shall grant Employee
options to purchase 500,000 shares of Company's Common Stock under
Company's 2004 Equity Incentive Plan (“Plan”) at an
exercise price equal to the Closing Price of the Company’s
Common Stock on the NYSE Alternext (“Closing Price”) on
January 29, 2009. Options to purchase 250,000 shares of
Company’s common Stock shall be fully vested upon execution
of this Agreement. Options to purchase 125,000 shares of
Company’s Common Stock shall vest on June 18, 2009, provided
that Employee continues to serve as Chief Executive Officer on the
vesting date. The remaining options shall vest on January 18, 2010,
provided that Employee continues to serve as the Chief Executive
Officer on the vesting date. Notwithstanding anything to the
contrary contained in the Plan, Employee shall have one year from
the date of termination of employment to exercise vested stock
options as of the date of termination. Otherwise the options will
be subject to the terms and conditions of the Plan and standard
form of stock option agreement, which Employee will be required to
sign as a condition of receiving the options.
|
|
|
|
On January 4,
2010, the Company shall issue Employee 214,285 shares of the
Company’s Common Stock (subject to availability under the
Plan); provided, that in the event there are not sufficient shares
available for issuance under the Plan to grant the full amount of
such award, Employee will be issued such lesser number of shares as
is available under the Plan and the remainder shall be issued when
sufficient shares are available for issuance under the Plan. The
Company shall use its best efforts to make the full amount of
shares to be issued to Employee under this subsection available to
Employee on the date due.
|
|
|
|
Employee shall
be eligible to receive a performance-based cash bonus at the end of
2009 in a targeted amount of up to 50% of Base Salary (as adjusted
from time to time) based on the achievement of certain objectives
approved by the Board of Directors in its sole discretion with the
opportunity to receive a bonus of 100% of Base Salary if target
goals are exceeded and Employee
|
|
|
remains
employed on the last day of the performance period. If Employee is
terminated earlier by Company without Cause (as defined below),
Employee shall be entitled to a pro-rated bonus to the date of
termination (as calculated in 6.2). The bonus shall be based on the
criteria established by the Board of Directors as described below
applied on a basis consistent with the determination of bonus
payments for other executive employees. The terms and amount of
such bonus shall be determined by the Compensation Committee of the
Board in its sole discretion, based on performance factors and
objectives that are established no later than ninety (90) days
after the first day of the fiscal year. Any such bonus
that becomes payable shall be made within 75 days after the end of
the calendar year, with the actual payment timing during such
period within Company's sole discretion.
|
|
|
|
Health, Other
Welfare and Fringe Benefits. Employee will be eligible for all
customary and usual health, other welfare and fringe benefits
generally available to employees of Company, subject to the terms
and conditions of Company's plan documents. Company reserves the
right to change or eliminate its health, other welfare and fringe
benefit programs on a prospective basis, at any time, effective
upon notice to Employee. In addition, Employee will also receive
$500 per month for automobile allowance. Company’s
health, other welfare and fringe benefits, along with the
automobile allowance, shall be collectively referred to as the
“Other Benefits”.
|
|
|
|
Vacation and
Personal Days. Employee will be entitled to accrue vacation of four
(4) weeks per year in accordance with Company's vacation policy and
one (1) week per year for personal days, for Employees other
business . Vacation and personal days may be carried over from year
to year and any accrued but unused vacation will be paid to
Employee as additional compensation at the time of Employee's
termination of employment. Employee will be responsible
for written reporting of vacation time on a timely
basis.
|
|
|
|
Relocation and
Temporary Living Expenses. Company will reimburse Employee up to a
maximum amount of thirty thousand dollars ($30,000) for actual
living expenses in the Bothell area, reasonable expenses related to
moving his family and possessions to the Bothell area from both
Utah and New Jersey, trips for Employee and his spouse to assist
with relocation, and replacement of furniture and other household
items that Employee decides not to move to the Bothell area.
Payment shall be made upon receipt of documentation for actual
expenses.
|
|
|
|
Fees. Company
shall pay reasonable professional fees incurred by Employee, and an
appropriate gross up for applicable federal income taxes, to
negotiate and prepare this Agreement in an amount not to exceed Ten
Thousand Dollars ($10,000).
|
|
|
|
Business
Expenses. Company will reimburse Employee for all reasonable
out-of-pocket expenses incurred in the performance of Employee's
duties on behalf of Company in accordance with Company's
policies.
|
|
|
|
Director. As
long as Employee is serving as the Chief Executive Officer and
President of Company, the Board of Directors agrees to nominate
Employee for election by the stockholders to serve as a director of
Company.
|
|
|
|
Termination of
Employee's Employment.
|
|
|
|
Termination for
Cause by Company, Disability or Death. Company may terminate
Employee's employment immediately at any time for Cause. For
purposes of this Agreement, "Cause" is defined as (a) Employee's
indictment for, or conviction (or plea of nolo contendere) of
fraud, embezzlement, misappropriation, or any felony or any
misdemeanor involving an act of moral turpitude; (b) acts or
omissions constituting gross negligence, recklessness or willful
misconduct on the part of Employee with respect to Employee's
obligations to Company or otherwise relating to the business of
Company; (c) Employee's material breach of this Agreement,
Company's Code of Conduct or Company's Confidentiality and
Non-Compete Agreement, following written notice and a 30-day
opportunity to cure, or (d) any similar or related act or failure
to act which is materially injurious to Company., following written
notice and a 30 day opportunity to cure. In the event that
Employee's employment is terminated in for Cause, or if Employee's
employment is terminated because of Employee's death or Employee's
inability to perform the essential functions of the position, with
or without reasonable accommodation, due to a mental or physical
disability, where such inability continues for a period or periods
aggregating ninety (90) calendar days in any 12-month period,
Employee shall be entitled to receive only the Base Salary then in
effect, prorated to the date of termination and any of the Other
Benefits (including without limitation any applicable disability
insurance) and expense reimbursements to which Employee is entitled
under Sections 3 and 4 above and otherwise by virtue of his prior
employment by Company or as required by law (collectively, the
"Standard Entitlements"). All other Company obligations to Employee
pursuant to this Agreement will become automatically terminated and
completely extinguished. Employee will not be entitled to receive
the Severance Package described in Section 6.2 or 6.4 below or any
part thereof.
|
|
|
|
Termination
Without Cause by Company/Severance. Company may terminate
Employee's employment under this Agreement without Cause at any
time upon written notice to Employee. In the event of such
termination, whether during or at the end of the Term, Employee
will receive the Standard Entitlements plus a prorated portion
(based on the percentage of the year actually employed by the
Company) of the bonus for the year of termination; provided that
such bonus will be a minimum of 25% and maximum of 75% of the Base
Salary. The remainder of the bonus, if any, will be paid based on
the average percentage of bonus awards (as a ratio to target) for
the Company’s other executive officers. The
|
|
|
minimum 25%
bonus will be paid to Employee at the same time as the Standard
Entitlements and any additional bonus shall be paid to Employee at
the time bonus payments are made to Company’s other executive
employees. Employee will also receive a "Severance Package"
consisting of (a) a lump sum cash payment equal to twelve (12)
months of Employee's Base Salary in effect and bonus (as calculated
above) on the date of termination, and (b) for a period of twelve
(12) months following the date of termination, continued medical
coverage at Company's expense pursuant to COBRA at existing levels
as of the date of termination, and Other Benefits to the extent the
applicable plans provide continuation coverage to non-employees.
Notwithstanding the foregoing sentence, in the
event this Agreement is extended beyond the initial
Term, the Severance Package payable to Employee will be increased
to sixteen (16) months of Base Salary and bonus (as calculated
above), and continuation of medical and Other Benefits at
Company’s expense for sixteen (16) months. Company shall
provide Employee with at least thirty days notice if it determines
not to extend this Agreement. The payment of the Severance Package
is payable in a lump sum on the 45tth day following Employee's
termination date and is contingent upon Employee's satisfaction of
the Severance Conditions described below. All other Company
obligations to Employee pursuant to this Agreement will be
automatically terminated and completely extinguished.
|
|
|
|
Voluntary
Resignation by Employee With Good Reason. Employee will be deemed
to have resigned for “Good Reason” if Employee resigns
within ninety (90) days after any of the following have occurred,
without Employee’s written consent, and after the expiration
of the notice and cure periods described in this paragraph above:
(a) Company reduces the level of Employee’s responsibilities
or changes Employee’s duties so that Employee’s duties
are no longer consistent with the position of a Chief Executive
Officer; (b) Company reduces Employee’s Base Salary; (c)
Company relocates Employee’s principal place of work to a
location more than fifty (50) miles from its current location in
Bothell, WA; or (d) Company fails to assign the terms of this
Agreement to any successors contemplated in Section
13.1. Notwithstanding the foregoing, Employee’s
resignation as a result of any of the foregoing conditions shall be
considered a Voluntary Resignation by Employee Without Good Reason
(as described in Section 6.4) unless Employee shall have provided
written notification to Company of the condition(s) allegedly
constituting Good Reason and Company shall have failed to correct
such condition(s) within ten (10) days after Company’s
receipt of such notice.
In the event
that Employee voluntarily resigns with Good Reason, Employee will
receive the Standard Entitlements plus a prorated portion of the
bonus for the year of termination, (as calculated in 6.2,
Termination Without Cause by Company/Sev
|
|
