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Exhibit
10.3
EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT (the “
Agreement ”)
is made this 19th day of January, 2007, by and between NILE
PHARMACEUTICALS, INC., a Delaware corporation with principal
executive offices at 689 5
th Avenue,
12
th Floor,
New York, NY 10022 (the “
Company ”),
and MR. DARON EVANS, residing at 3029
Riverside Ave., Jacksonville, FL 32205 (the “
Executive ”).
W I T N E S S E T H:
WHEREAS,
the Company desires to employ the Executive as Chief Operating
Officer of the Company, and the Executive desires 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 .
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 commence on February 13, 2007 (the
“
Effective Date ”)
and continue for a period of three (3) years from the Effective
Date (the “
Term ”)
unless
terminated earlier as
set forth in Section 8 and 9 below or by mutual written agreement
of the parties hereto. In the event that the Company does not
intent to renew this Agreement, the Company shall provide the
Executive with a minimum of 120 days written notice prior to the
expiration of the Term.
3.
Duties; Best Efforts; Place of Performance .
(a)
The
Executive shall serve as Chief Operating Officer of the
Company and shall, subject to the direction of the Chief
Executive Officer of the Company, have such powers and perform
such duties as are customarily performed by the Chief
Operating Officer. The Executive shall also have such other
powers and duties as may be from time to time directed by the
Chief Executive Officer of the Company, provided that the
nature of the Executive’s powers and duties so
prescribed shall not be inconsistent with the
Executive’s position and duties herein.
(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.
(c)
The
duties to be performed by the Executive hereunder shall be
performed primarily at the office of the Company, which shall
be located in or within close proximity to the San Francisco,
California, or such other location as the Company and
Executive may mutually agree, provided, however, that the
Executive understands and agrees that his position may require
travel outside of the office.
4.
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 ”)
equal to One Hundred Seventy Five Thousand Dollars ($175,000) per
annum, payable during the Term in accordance with the
Company’s normal payroll practices.
(b)
Signing Bonus .
The Company shall pay to the Executive a one time cash payment of
Twenty Five Thousand Dollars ($25,000) upon the Effective Date of
this Agreement.
(c)
Performance Bonus .
The Company shall annually pay the Executive a proportionate share
(based on the assigned weight of each of the Performance Milestones
(as defined below) of Fifty Thousand Dollars ($50,000) upon the
successful completion of annual corporate or individual performance
milestones (the “
Performance Milestones ”)
at the “Realistic” metric. If Performance Milestones
are achieved at the “Stretch” metric, the Company shall
pay you a proportionate share of Sixty Thousand Dollars
($60,000).
The
Performance Milestones and the metrics for the first year of the
Term shall be agreed upon by the Company and the Executive and
attached hereto as
Schedule 4(c) .
Thereafter, the Performance Milestones shall be amended each
subsequent year during the Term upon the mutual agreement of the
Company and the Executive at least 30 days prior to the beginning
of such year.
(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 4.
(e)
Equity .
(i)
Employment Options .
The Company shall grant to the Executive stock options pursuant to
the Company’s 2005 Stock Option Plan (the “
Employment Options ”)
immediately after the closing of the next round of financing to
purchase that number of shares representing one percent (1%) of the
outstanding common stock of the Company, par value $0.001 per share
(the “
Common Stock ”),
on a fully diluted basis as of the grant date. The Employment
Options shall vest and become exercisable in three (3) equal
installments on the day before each anniversary of this Agreement
at an exercise price equal to Fair Market Value (as determined the
Company’s 2005 Stock Plan) (the “
Exercise Price ”)
of a share of common stock on the date of grant.
(ii)
Performance Options .
The Company shall grant to the Executive stock options pursuant to
the Company’s 2005 Stock Option Plan (the “
Performance Options ”)
immediately after the closing of the next round of financing to
purchase that number of shares representing one percent (1%) of the
outstanding common stock on a fully diluted basis as of the grant
date. Each year during the Term, a proportionate share (based on
the assigned weights of each of the Performance Milestones) of that
portion of the Performance Options representing 0.4% of the
outstanding common stock on the date of grant shall become vested
and immediately exercisable for Performance Milestones that are
achieved during that year at the “Stretch” metric.
Similarly, a proportionate share of 0.33% of the outstanding shares
shall become vested and immediately exercisable for Performance
Milestones that are achieved during the year at the
“Realistic” metric.
(iii)
Technology Options .
In the event that the Company acquires by license, acquisition or
otherwise, an additional biotechnology product or series of
biotechnology products (a “
Technology ”)
for development that is first identified by the Executive or the
Company’s management, then the Company shall grant to the
Executive options (the “
Technology Options ”)
to purchase a number of shares of Common Stock as
follows:
(1)
One-half
percent (0.5%) of the then Fully Diluted Outstanding shares of
Common Stock of the Company on a for a Technology that is in
pre-clinical development; and
(2)
One
percent (1%) of the then Fully Diluted Outstanding shares of
Common Stock of the Company for a Technology that is in human
clinical trials.
For
purposes of this Agreement, “Fully Diluted Basis”
shall mean shall the number of shares of Common Stock that
would be outstanding upon the conversion of all outstanding
shares of Preferred Stock outstanding from time to time, plus
the shares of Common Stock issuable upon conversion or
exercise, as the case may be, of all securities of the
Corporation convertible into, exercisable for, or exchangeable
for, directly or indirectly, shares of Common Stock of the
Corporation, including but not limited to, options and
warrants to purchase Common Stock that are currently
exercisable by the holder thereof or which will become
exercisable within 90 days of determining event.
Any
such Technology Options issued to the Executive shall be
exercisable for a period of five (5) years at an exercise
price equal to the Fair Market Value (as determined under the
Company’s 2005 Stock Plan) of the Common Stock on the
date of the grant of such Technology Options.
(f)
Expenses .
(i)
Moving Expenses .
The
Company shall reimburse you in an amount up to thirty five thousand
dollars ($35,000) for qualified moving expenses incurred by you in
connection with your relocation to California.
(ii)
Company 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)
Note .
The
Company shall loan to the Executive an amount equal to Forty Seven
Thousands Dollars ($47,000.00) in order to assist the Executive in
the satisfaction of certain obligations owed to the
Executive’s prior employer, which will be evidenced by a Note
bearing interests at 4.75%. The Note will be repaid to the Company
in three annual installments that will be subtracted from the
Executive’s Performance Bonus. In the event that the
Executive’s employment is terminated pursuant to Section 8 or
9 prior to the end of the Term, then the Executive shall repay the
Note within 10 business days of such termination.
(h)
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, vision, 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. Specifically,
the Company shall pay the premiums relating to personal life
insurance coverage for Executive in an amount equal to One Million
Dollars ($1,000,000). In the event that the Company does not have
appropriate medical, dental and vision plans in place on the
Effective Date, the Company shall reimburse the Executive for the
cost of COBRA premiums associated with his continued coverage under
the plans of his prior employer.
(i)
Vacation .
The Executive shall, during the Term, be entitled three (3) weeks
of vacation 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.
5.
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, 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 strictly personal use or for others; and
(ii) not to permanently remove 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, provided; however, that
the Executive shall not be prevented from using or disclosing any
Confidential and Proprietary Information:
(i)
that
Executive can demonstrate was known to him prior to the
effective date of that certain Confidential Disclosure
Agreement entered into between the Parties dated November 16,
2006;
(ii)
that
is now, or becomes in the future, available to persons who are
not legally required to treat such information as confidential
unless such persons acquired the Confidential and Proprietary
Information through acts or omissions of
Executive;
(iii)
that
is within the Executive’s general business or industry
knowledge, know-how or expertise; or
(iv)
that
he is compelled to disclose pursuant to the order of a court
or other governmental or legal body having jurisdiction over
such matter.
(b)
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.
(c)
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 a legal duty of
confidence, at any time during or after his employment with
the Company.
(d)
The
Executive agrees that all inventions, discoveries,
improvements and patentable or copyrightable works, relating
to the Company’s Business (as defined below).
(“
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). For purposes of this Agreement,
“
Company’s Business ”
shall be the development of novel therapeutics for the treatment of
human disease, and which are listed on the attached
Schedule 5(d) which
may be amended from time to time to include additional
therapeutics, and in the future, any other business in which it
actually devotes substantive resources to study, develop or pursue.
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 of Directors of
the Company may in its sole discretion agree to waive the
Company’s rights pursuant to this Section 5(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.
(e)
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 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.
(f)
The
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