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[GRAPHIC OMITTED]
EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (the “Agreement”), effective as of
this 5th day of June, 2007, is entered into by Palatin
Technologies, Inc., a Delaware corporation with its principal place
of business at 4C Cedar Brook Drive, Cranbury, NJ, 08512 (the
“Company”), and Stephen T. Wills
(“Employee”).
The Company
desires to continue employing the Employee, and the Employee
desires to continue to be employed by the Company. In consideration
of the mutual covenants and promises contained herein, and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the parties hereto, the parties
agree that the following terms of this Employment Agreement shall
supersede in all respects any prior agreements governing employment
between the parties:
| 1.0 |
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Term of Employment . The Company hereby agrees to
continue employing the Employee, and the Employee hereby accepts
the continuation of employment with the Company, upon the terms set
forth in this Agreement, for the period commencing on June 5, 2007
(the “Commencement Date”) and ending on June 30, 2010
unless sooner terminated in accordance with the provisions of
Section 4 (the “Employment Period”). |
| 2.0 |
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Position Title &Capacity. |
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2.1 |
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The Employee shall serve as Chief Financial Officer, with
responsibilities consistent with this position and as the
Company’s Board of Directors (the “Board”) may
determine from time to time, with powers and duties as may be
determined, from time to time, by the Board, consistent with the
Employee’s position. The Employee shall report to the
Company’s Board of Directors. The Employee shall be based at
the Company’s corporate headquarters, which is based in
Cranbury, New Jersey. The Employee shall also be available for
travel at such times and to such places as may be reasonably
necessary in connection with the performance of his duties
hereunder. |
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2.2 |
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The Employee may serve as an employee director on the Board as
determined and approved by the Board during the Employment Period
and for no additional compensation; however, upon termination of
employment for any reason, the Employee will no longer serve as a
member of the Company’s Board of Directors and will take any
and all actions necessary to effectuate such resignation as may be
reasonably requested by the Company. |
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2.3 |
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The Employee hereby accepts such employment and agrees to
undertake the duties and responsibilities inherent in such position
and such other duties and responsibilities as the Board shall from
time to time reasonably assign to him. The Employee agrees to
devote substantially all of his business time, attention and
energies to the business and interests of the Company during the
Employment Period. The Employee agrees to abide by the rules,
regulations, instructions, personnel practices and policies of the
Company and any changes therein which may be adopted from time to
time by the Company. The Employee acknowledges receipt of copies of
all such rules and policies committed to writing as of the date of
this Agreement. |
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2.4 |
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The Employee specifically covenants, warrants and represents to
the Company that he has the full, complete and entire right and
authority to enter into this Agreement, that he has no agreement,
duty, commitment or responsibility of any kind or nature whatsoever
with any corporation, partnership, firm, company, joint venture or
other entity or other person which would conflict in any manner
whatsoever with any of his duties, obligations or responsibilities
to the Company pursuant to this Agreement, that he is not in
possession of any document or other tangible property of any
corporation, partnership, firm, company, joint venture or other
entity or other person of a confidential or proprietary nature
which would conflict in any manner whatsoever with any of his
duties, obligations or responsibilities to the Company pursuant to
his Agreement, and that he is fully ready, willing and able to
perform each and all of his duties, obligations and
responsibilities to the Company pursuant to this
Agreement. |
| 3.0 |
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Compensation and Benefits . During the Employment
Period, unless sooner terminated in accordance with the provisions
of Section 4, the Employee shall receive the following compensation
and benefits: |
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3.1 |
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Salary . The Company shall pay the Employee, in
equal semi-monthly installments or otherwise in accordance with the
Company’s standard payroll policies as such policies may
exist from time to time, an annual base salary of $321,000,
effective July 1, 2007. Such salary shall be subject to review, as
determined by the Company’s Compensation Committee and
approved by the Board, on an annual basis, but the Board shall not
decrease the Employee’s annual base salary at any such annual
review. |
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3.2 |
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Cash Performance Bonus . The Employee will be
included in the Company’s annual discretionary bonus
compensation program based on a June 30 th year end in
an amount to be decided by the Company’s Compensation
Committee and approved by the Board, payable no later than
September 30 th of each year during the Employment
Period. |
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3.3 |
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Stock Options . As additional compensation for
services rendered, the Company has granted to the Employee the
right and option to purchase shares of the Company’s Common
Stock and in the future may grant additional options to purchase
shares of the Company’s Common Stock to the Employee in
accordance with the terms of the Company’s stock plan then in
effect. |
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Notwithstanding any option certificate or agreement to the
contrary, the following provisions apply to all options granted to
the Employee either prior to or after the Commencement
Date: |
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(a) |
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All such options that are not vested as of the Date of
Termination (as defined in Section 6) shall immediately vest and
become fully exercisable as of the Date of Termination, except in
the case of termination: (i) for Cause (as defined in Section 6) or
(ii) at the election of the Employee pursuant to Section 4.6.
Notwithstanding the foregoing if upon a Change in Control as
defined in Section 6.5 (c) or (d), any of the options are
terminated in connection with the Change in Control, then all such
options that are not vested as of the date of the Change in Control
shall immediately vest and become fully exercisable immediately
prior to the Change in Control; and |
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(b) |
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All of such options that are vested as of the Date of
Termination shall expire on the first to occur of: (i) 24 months
following |
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the Employee’s retirement; (ii) 24 months following the
Employee’s Date of Termination other than (A) for Cause (as
defined in Section 6), or (B) termination at the election of the
Employee pursuant to Section 4.6; (iii) the expiration date of the
option as set forth in the applicable option certificate or
agreement; or (iv) as otherwise provided in the applicable option
plan in the event of the dissolution or liquidation of the Company,
or a merger, reorganization or consolidation in which the Company
is not the surviving corporation. For purposes of this subsection,
“retirement” requires that the Employee not render
services of any nature for any entity as a regular employee, and
not render services of any nature for any entity for more than an
average of twenty (20) hours per week as a consultant or term
employee. |
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Nothing in this Section 3.3 shall apply to or affect any equity
award that is not either an incentive stock option under Section
422 of the Internal Revenue Code of 1986, as amended (the
“Code”) or a non-qualified stock option. |
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3.4 |
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Fringe-Benefits . The Employee shall be entitled
to participate in all benefit programs that the Company establishes
and makes available to its employees, if any, to the extent that
the Employee’s position, tenure, salary, age, health and
other qualifications make him eligible to participate. The Employee
shall also be entitled to holidays and annual vacation leave in
accordance with the Company’s policy as it exists from time
to time. |
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3.5 |
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Reimbursement of Expenses . The Company shall
reimburse the Employee for all reasonable travel, entertainment and
other expenses incurred or paid by the Employee in connection with,
or related to, the performance of his duties, responsibilities or
services under this Agreement, upon presentation by the Employee of
documentation, expense statements, vouchers and/or such other
supporting information as the Company may request, provided
however, that the amount available for such travel, entertainment
and other expenses may be fixed in advance by the
Board. |
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3.6 |
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Insurance . The Employee will be covered under
the Company’s Directors’ and Officers’ liability
insurance to the same extent the Company’s directors and
other officers are covered. |
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| 4.0 |
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Employment Termination . The employment of the
Employee by the Company pursuant to this Agreement shall terminate
upon the occurrence of any of the following: |
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4.1 |
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Expiration of the Employment Period in accordance with Section
1, unless the Company and Employee agree to extend the Agreement
term or otherwise continue Employee’s employment on mutually
agreeable terms. |
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4.2 |
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At the election of the Company, for Cause (as defined in
Section 6), immediately upon written notice by the Company to the
Employee, which notice of termination shall have been approved by a
majority of the Board. |
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4.3 |
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Immediately upon the death or determination of Disability (as
defined in Section 6) of the Employee. |
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4.4 |
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At the election of the Employee, for Good Reason (as defined in
Section 6), immediately upon written notice of not less than sixty
(60) days prior to termination by the Employee to the
Company. |
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4.5 |
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At the election of the Company upon or within twelve (12)
months following a Change in Control (as defined in Section 6), or
at the election of the Employee for Good Reason (as defined in
Section 6) upon or within twelve (12) months following a Change in
Control (as defined in Section 6), immediately upon written notice
of termination. |
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4.6 |
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At the election of either party, upon written notice of
termination. |
| 5.0 |
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Effect of Termination . |
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5.1 |
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Compensation & Benefits . |
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(a) |
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As referenced in this section, compensation following the
Employee’s termination shall be in the form of severance.
Severance will be based on the employee’s base salary in
effect as of the employee’s last day of employment, and will
be paid in installments in accordance with the Company’s
regular payroll schedule in effect on the Date of Termination
(provided that such installments shall be made at least monthly)
except as set forth in subparagraph (e) below. |
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(b) |
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Severance is not considered compensation for purposes of
employee and employer matching contributions under the 401(k)
plan. |
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(c) |
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As referenced in this section, upon termination of the
Employee’s employment with the Company, medical and dental
benefits will be available to the Employee, at his election, solely
pursuant to the provisions of COBRA with the Company paying the
full cost of COBRA coverage for a period up to 18 months if
employment is terminated for any reason except an Employee
resignation without Good Reason (as defined in Section 6) and a
Company discharge for Cause (as defined in Section 6). If the
Employee is discharged for Cause or the Employee resigns without
Good Reason, the Employee will be required to remit the COBRA cost
(102% of total benefit cost) of coverage. |
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(d) |
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Upon termination of the Employee’s employment with the
Company, apart from the Employee’s election under COBRA to
continue medical and dental benefits (as described in Section
5.1(c)), the Employee will cease to be eligible for participation
in the Company’s health and welfare insurance and any other
fringe benefit programs that pursuant to their contracts or Company
policy require an active employee status. |
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(e) |
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Notwithstanding any other provision with respect to the timing
of severance payments under this Agreement, if, on the Date of
Termination, the Employee is deemed to be a “specified
employee” (within the meaning of Section 409A(a)(2)(B)(i) of
the Code, and any successor statute, regulation and guidance
thereto, hereafter, “Section 409A”) limited only to the
extent necessary to comply with the requirements of Section 409A,
any severance payments to which the Employee may become entitled
under this Agreement which are subject to Section 409A (and not
otherwise exempt from its application) will be withheld until the
first business day of the seventh month following the Date of
Termination, at which time the Employee shall be paid an aggregate
amount equal to the accumulated, but unpaid, six months of payments
otherwise due to the Employee. After the first business day of the
seventh month following the Date of Termination and |
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continuing each month thereafter, the Employee sh |
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