Exhibit 10.13
EMPLOYMENT
AGREEMENT
AGREEMENT (the “
Agreement ”), dated as of May 1, 2009, by and
between Chelsea Therapeutics International, Ltd., a Delaware
corporation with principal executive offices at 3530 Toringdon Way,
Unit 200, Charlotte, North Carolina 28277 (the “
Company ”), and DR. SIMON PEDDER, residing at 1347
Shinnecock Lane, Fort Mill, South Carolina 29707 (the “
Executive ”).
W I T N E S S E T
H:
WHEREAS, the Company desires to
continue to employ the Executive as President and Chief Executive
Officer of the Company, and the Executive desires to continue to
serve the Company in those capacities, upon the terms and subject
to the conditions contained in this Agreement;
NOW, THEREFORE, in consideration of
the mutual covenants and agreements herein contained, the parties
hereto hereby agree as follows:
1. Employment .
(a) Services . The Executive
will be employed by the Company as its President and Chief
Executive Officer. The Executive will report to the Board of
Directors of the Company (the “ Board ”) and
shall perform such duties as are consistent with his position as
President and Chief Executive Officer (the “ Services
”). The Executive agrees to perform such duties faithfully,
to devote substantially all of his working time, attention and
energies to the business of the Company, and while he remains
employed, not to engage in any other business activity that is in
conflict with his duties and obligations to the Company.
(b) Acceptance . Executive
hereby accepts such employment and agrees to render the
Services.
2. Term .
Subject to earlier termination in
accordance with Section 9 of this Agreement, the
Executive’s employment under this Agreement shall commence as
of May 1, 2009 or such other date as may be agreed to by the
Parties (the “ Effective Date ”) and shall
continue for a term of three (3) years (the “
Term ”). The Term may be extended for additional one
(1) year periods upon the mutual written agreement of the
Executive and the Board. In the event that either party determines
not to extend the Term, such party will provide the other party
with at least 90 days prior written notice.
3. Best Efforts; Place of
Performance .
(a) 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.
(b) The duties to be performed by
the Executive hereunder shall be performed in North Carolina or at
such place as may be agreed upon by the Executive and the
Board.
4. Directorship . The Company
shall use its best efforts to cause the Executive to be elected as
a member of its Board throughout the Term and shall include him 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 Executive a salary (the “ Base Salary
”) equal to Four Hundred Fourty-Seven Thousand, One Hundred
and Sixty Dollars ($447,160) per year. Payment shall be made in
accordance with the Company’s normal payroll practices. The
amount of increase reflected in this Base Salary as compared to the
salary rate being paid immediately prior to the Term shall be paid
retroactively to January 1, 2009.
(b) Incentive Bonus . The
Executive shall participate in the Company’s annual incentive
bonus program for executive officers. Under the incentive bonus
program, the Executive shall be entitled to an additional annual
bonus (the “ Incentive Bonus ”) in an amount
targeted at 45% of his Base Salary if the fiscal year corporate
goals set by the Board or Compensation Committee and communicated
to the Executive are achieved at 100%. The Board or Compensation
Committee has the authority to increase the Incentive Bonus to up
to 67.5% of the Executive’s Base Salary if the fiscal year
corporate goals are exceeded or based on exemplary performance
during the fiscal year by Executive. The Incentive Bonus shall be
payable either as a lump-sum payment or in installments as
determined by the Board or Compensation Committee in its sole
discretion. In either case, the entire amount must be paid no later
than the March 15 of the calendar year immediately following
the calendar year in which the fiscal year ends. The Board or
Compensation Committee shall annually review the Incentive Bonus to
determine whether an increase in the amount thereof is warranted.
No guaranteed bonus or other bonus related compensation shall be
paid for calendar year 2009 or subsequent years under this
Agreement or any prior agreement.
(c) Option Grants and Equity
Awards .
Executive shall be entitled to
participate in any stock option or equity compensation plan or
program maintained by the Company and shall receive grants and
awards under such plans or programs commensurate with his position
as President and Chief Executive Officer. The Company represents
and warrants to the Executive that, as of April 1, 2009, there
are 37,926,968 shares of Common Stock (as hereinafter defined)
outstanding on a fully-diluted basis. (For purposes hereof, the
“ Common Stock ” means the Company’s
common stock, par value $0.0001
per share). Without limiting the generality of
the first sentence of this Section 5(d), as additional
consideration for the services to be rendered by the Executive
pursuant to this Agreement, effective as of the Effective Date, the
Company shall grant the Executive an option to purchase that number
of shares of Common Stock necessary to ensure that, immediately
after such grant, the Executive’s total ownership of the
Company, including outstanding Common Stock and options to acquire
Common Stock, equals 4.75% of the number of shares of Common Stock
outstanding on a fully-diluted basis as of April 1, 2009. Such
stock options will be granted under and pursuant to the terms of
the Company’s 2004 Stock Plan and will be granted to the
extent possible as incentive stock options under the Internal
Revenue Code of 1986, as amended (the “ Code ”).
The options will vest in four equal annual installments commencing
on the first anniversary of the Effective Date and on each of the
next three anniversaries thereafter provided that Executive remains
in the employ of the Company on such anniversary. Vesting may occur
sooner in accordance with Section 10 of this
Agreement.
(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 or
authorized by Executive from all amounts payable to the Executive
under this Section 5.
(e) Expenses . The Company
shall reimburse the Executive for all normal, usual and necessary
business 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.
(f) 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. In addition, the
Company shall reimburse the Executive for any calendar year for his
reasonable medical licensing fees and other professional dues
incurred during the Term provided that the Executive remains in the
employ of the Company. The Company shall reimburse Executive for
such fees and dues promptly upon receipt of appropriate proof of
the Executive’s expenditures. To receive reimbursement,
Executive must provide proof of the expenditures to the Company
within 45 days of the date on which the expense was incurred. The
Company’s reimbursement must be paid not later than 30 days
after receipt of proof of the expenditures. The amount of such fees
and dues eligible for reimbursement during a calendar year shall
not affect the amount of such fees and dues eligible for
reimbursement during any other calendar year. The Executive’s
right to reimbursement of medical licensing fees and other
professional dues shall not be subject to liquidation or exchange
for another benefit.
(g) Vacation . The Executive
shall, during the Term, be entitled to a vacation of four
(4) weeks per annum, in addition to holidays observed by the
Company. The Executive shall not be entitled to carry any vacation
forward to the next year of employment and shall not receive any
compensation for unused vacation days upon termination of
employment or otherwise.
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 affiliates or third parties with whom the Company or
any such affiliates 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
affiliates. “ Confidential and Proprietary Information
” shall include, but shall not be limited to, confidential or
proprietary scientific or technical information, 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,
non-public personnel information, plans or the business and affairs
of the Company or of any affiliate 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.
(b) Except with prior written
authorization by the Company, 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 affiliates 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
(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 affiliates (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 affiliates 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 affiliate 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-Competition,
Non-Solicitation and Non-Disparagegment .
(a) While Executive is employed by
the Company and for a period of twelve (12) months after the
termination or cessation of such employment by either party for any
reason whatsoever, Executive will not, directly on his own behalf
or indirectly for or in conjunction with others:
(i) Within the Restricted Territory
(as defined in subsection (b) below), engage in any business
or enterprise (whether as owner, partner, officer, director,
employee, consultant, investor, lender or otherwise) in competition
with the Company, where such business or enterprise develops,
manufactures, markets, licenses or sells any products designed to
treat immunological diseases, including but not limited to
rheumatoid arthritis (“RA”), cancer, psoriasis, and
other anti-inflammatory conditions or any other conditions
including but not limited to neurogenic orthostatic hypotension,
intradialytic hypotension and fibromyalgia that compete with the
products being sold or developed by the Company at the time of
Executive’s termination (collectively, the “Competitive
Products”) in any management or executive role or in any
position (whether as an employee, contractor or consultant) in
which Executive or a third party would benefit from
Executive’s use or disclosure of the Company’s
Confidential Information;
(ii) Within the Restricted
Territory, solicit or accept employment or be retained by an
individual or entity who, at any time during the term of this
Agreement, was an agent, client, licensee, or customer of the
Company, where the Executive would have any management or executive
role or be in any position (whether as an employee, contractor or
consultant) in which the Executive or a third party would benefit
from Executive’s use or disclosure of the Company’s
Confidential Information;
(iii) Within the Restricted
Territory, become financially interested in an enterprise that is
engaged, as a substantial part of its operations, in selling the
Competitive Products; provided, however , that nothing in
this Agreement shall be construed to preven
