Exhibit 10.19
EXECUTIVE EMPLOYMENT
AGREEMENT
This Executive Employment Agreement
(“Agreement”), dated March 8th, 2006
(“Effective Date”), is between Innercool Therapies,
Inc., a Delaware corporation (the “Company”) and Mike
Magers (“Executive”).
1. POSITION, RESPONSIBILITIES,
AND TERM
a. Position.
Executive is employed by the Company
to render services to the Company in the positions of President and
Chief Operating Officer. As President of the Company, which is a
wholly-owned subsidiary of Cardium Therapeutics, Inc.
(“Parent Company”), Executive shall report
operationally to the President of Parent Company. Executive shall
perform such duties and responsibilities as are normally related to
such positions in accordance with the standards of the industry and
any additional duties now or hereafter assigned to Executive by the
Company. Executive shall abide by the rules, regulations, and
practices as adopted or modified from time to time in the
Company’s sole discretion.
b. Other Activities.
Except upon the prior written
consent of the Company, Executive will not, during the Term (as
defined below) of this Agreement, engage, directly or indirectly,
in any other business activity (whether or not pursued for
pecuniary advantage) that interferes with Executive’s duties
and responsibilities hereunder or create a conflict of interest
with the Company. Executive has identified on Attachment A certain
defined Other Activities that are represented to not interfere with
Executive’s duties and responsibilities hereunder or to
create a conflict of interest with the Company, and the Company
hereby consents to such activities provided they do not so
interfere or create a conflict of interest.
c. No Conflict.
Executive represents and warrants
that Executive’s execution of this Agreement,
Executive’s employment with the Company, and the performance
of Executive’s proposed duties under this Agreement shall not
violate any obligations Executive may have to any other employer,
person or entity, including any obligations with respect to
proprietary or confidential information of any other person or
entity.
d. Term of Employment
. Executive shall be retained by the
Company to perform the services set forth in this Agreement
commencing on the Effective Date and ending upon the earlier of:
(i) three (3) years after the Effective Date of this
Agreement (“Initial Term”); or (ii) the date upon
which Executive’s employment is terminated in accordance with
Section 3. This Agreement shall be automatically renewed for
additional one (1) year terms (each an “Extension
Term”) upon the expiration of the Initial Term and each
Extension Term, unless either party gives the other party a written
notice of termination not less than thirty (30) days prior to
the date of expiration of the Initial Term or any Extension Term
(together, the Initial Term and all Extension Terms are referred to
herein as the “Term”).
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2. COMPENSATION AND BENEFITS
a. Base Salary.
In consideration of the services to
be rendered under this Agreement, the Company shall pay Executive a
salary at the rate of Two Hundred and Sixty-Six Thousand Dollars
($266,000) per year (“Base Salary”). The Base Salary
shall be paid in accordance with the Company’s normal payroll
practices. Executive’s Base Salary will be reviewed from time
to time in accordance with the established procedures of the
Company for adjusting salaries for similarly situated employees and
may be adjusted in the sole discretion of the Company.
b. Warrants
. In further consideration of the
services to be rendered under this Agreement, the Company shall
grant to Executive a stock purchase warrant (the
“Warrant”) exercisable into up to Two Hundred Fifty
Thousand (250,000) shares of Common Stock of Cardium
Therapeutics, Inc., a Delaware corporation and the parent entity of
the Company, pursuant to the terms of the Warrant Agreement
attached hereto as Exhibit A and incorporated herein by this
reference. Executive’s entitlement to receive the shares of
Common Stock underlying the Warrant is conditioned on
Executive’s execution of the Warrant Agreement.
c. Bonus. Executive will be eligible to participate in an
executive incentive compensation program to be administered by the
Company’s Board of Directors. The amounts payable thereunder
will be based on the Company’s overall performance as well as
Executive’s specific performance. Based on such performance,
Executive incentive bonus may be up to a maximum 40% of
Executive’s Base Salary (“Bonus”) and will be
paid within two-and-one-half months of the end of the year in which
it is earned.
d. Benefits.
In further consideration of the
services to be rendered under this Agreement, Executive shall be
eligible to participate in health benefits and paid time off
benefits generally made available by the Company to its employees
in accordance with the applicable benefit plans, and as may be
amended from time to time in the Company’s sole discretion;
provided that with respect to the calculation of Executive’s
paid time off benefits, Executive will be credited with five
(5) years of prior service and will also be entitled take an
additional four days per year as “floating
holidays”.
3. AT-WILL
EMPLOYMENT
The employment of Executive shall be
“at-will” at all times. The Company or Executive may
terminate Executive’s employment with the Company at any
time, without any advance notice, for any reason or no reason at
all, notwithstanding anything to the contrary contained in or
arising from any statements, policies or practices of the Company
relating to the employment, discipline or termination of its
employees. Following the termination of Executive’s
employment, the Company shall pay to Executive all compensation to
which Executive is entitled up through the date of termination,
subject to any other rights or remedies of the Company under law.
Thereafter, all obligations of the Company under this Agreement
shall cease other than those set forth in
Section 4.
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4. COMPANY TERMINATION
OBLIGATIONS
a. Termination by Company Without
Cause or by Executive for Good Reason. If the Company terminates Executive’s
employment without Cause (as defined below) or Executive terminates
his employment for Good Reason (as defined below), Executive will
receive severance benefits as follows: (i) continued payment
of Base Salary (at the rate then in effect for Base Salary) for
twelve (12) months, payable according to the Company’s
normal payroll practices (“Severance Period”);
(ii) payment of a pro rata share of the Bonus which Executive
would have been eligible to receive during the Severance Period,
payable according to the Company’s normal payroll practices;
(iii) acceleration of the Warrant (such that any unvested
shares shall become fully vested and immediately exercisable in the
same manner and timing as provided for accelerated vesting in a
Change of Control, as described under Section 7(d) of the
Warrant Agreement); and (iv) the Company will pay for
continuation health benefits for twelve (12) months pursuant
to COBRA provided Executive completes all necessary documentation
in a timely manner to receive such benefits (collectively
“Severance Benefits”). Executive’s eligibility to
receive the Severance Benefits is conditioned on Executive having
first signed a general release of all known and unknown claims
against the Company. All other obligations of the Company under
this Agreement shall cease upon the termination of
Executive’s employment for any reason.
i. Cause. For purposes of this Agreement,
“Cause” shall mean: (i) Executive commits a crime
involving dishonesty, breach of trust, or physical harm to any
person; (ii) Executive engages in conduct that is in bad faith
and injurious to the Company, including but not limited to,
misappropriation of trade secrets, fraud or embezzlement;
(iii) Executive materially breaches this Agreement (and, if
such breach is curable, has failed to cure such breach following a
14-day notice period); (iv) Executive refuses to implement or
follow a lawful policy of the Company or a directive of the Company
that is reasonably consistent with Executive’s duties and
responsibilities; or (v) Executive engages in misfeasance or
malfeasance demonstrated by Executive’s failure to perform
Executive’s job duties diligently and
professionally.
ii. Good Reason.
For purposes of this Agreement,
“Good Reason” means (i) the diminution of
Executive’s duties in any material respect which continues
for more than thirty (30) days following written notice by
Executive of his objection to such diminution, (ii) assignment
to Executive of duties inconsistent in any material respect with
Executive’s position (including status, offices, titles and
reporting requirements (such as a termination of Executive’s
direct reporting relationship to the President or CEO of Cardium
Therapeutics), (iii) the Company moves Executive’s
principal place of employment outside of San Diego County,
California; or (iv) a “Change in
Control”.
iii. Change of
Control. For purposes of
this Agreement, “Change of Control” shall mean a change
in ownership or control of the Company effected through a merger,
consolidation or acquisition by any person or related group of
persons (other than an acquisition by the Company or by a
Company-sponsored employee benefit plan or by a person or
persons
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that directly or indirectly controls, is
controlled by, or is under common control with, the Company) of
beneficial ownership (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934) of securities possessing more than
fifty percent of the total combined voting power of the outstanding
securities of the Company.
b. Termination Due to Death or
Disability. Executive’s employment shall terminate
automatically upon Executive’s death or if Executive becomes
Disabled. Executive shall be deemed Disabled if Executive is unable
for medical reasons to perform his essential job duties for ninety
(90) days in a twelve (12) month period. If
Executive’s employment is terminated by the Company due to
Executive’s death or Disability, Executive will receive the
benefits already due to him under Section 2. All other
obligations of the Company under this Agreement shall cease upon
termination of this Agreement for any reason.
c. Termination by Company Without
Cause Following Change In Control During Term.
In addition to the benefits set
forth in Section 4(a) above, if the Company terminates
Executive’s employment without Cause following a Change in
Control during the Term of this Agreement, Executive will be
eligible to become immediately vested in all Warrants granted to
Executive pursuant to Section2 (b) above (“Accelerated
Vesting”). Executive’s eligibility to receive the
Accelerated Vesting is conditioned on Executive having first signed
a general release of all known and unknown claims against the
Company. All other obligations of the Company under this Agreement
shall cease upon the termination of Executive’s employment
for any reason.
d. 409A Tax Issues
. Notwithstanding any other
provision of this Agreement whatsoever, the Company, in its sole
discretion and without Executive’s consent, may amend or
modify this Agreement in any manner to provide for the application
and effects of Section 409A of the Code (relating to deferred
compensation arrangements) and any related regulatory or
administrative guidance issued by the Internal Revenue Service. The
Company shall have the authority to delay the payment of any
benefits payable under this Agreement to the extent it deems
necessary or appropriate to comply with
Section 409A(a)(2)(B)(i) of the Code (relating to payments
made to certain “key employees” of certain
publicly-traded companies) and in such event, any such amount to
which Executive would otherwise be entitled during the six
(6) month period immediately following Executive’s
separation from service will be paid on the first business day
following the expiration of such six (6) month
period.
5. EXECUTIVE TERMINATION
OBLIGATIONS
a. Return of Property.
Executive agrees that all property
(including without limitation all equipment, tangible proprietary
information, documents, records, notes, contracts and
computer-generated materials) furnished to or created or prepared
by Executive incident to Executive’s employment belongs to
the Company and shall be promptly returned to the Company upon
termination of Executive’s employment.
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b. Resignation and
Cooperation. Upon
termination of Executive’s employment, Executive shall be
deemed to have resigned from all offices and directorships then
held with the Company. Following any termination of employment,
Executive shall reasonably cooperate with the Company in the
winding up of pending work on behalf of the Company and the orderly
transfer of work to other employees. Executive shall also
reasonably cooperate with the Company in the defense of any action
brought by any third party against the Company that relates to
Executive’s employment by the Company.
c. Continuing
Obligations. Executive
understands and agrees that Executive’s obligations under
Sections 6 and 7 herein (including Exhibits B and C) shall survive
the termination of Executive’s employment for any reason and
the termination of this Agreement.
6. INVENTIONS AND PROPRIETARY
INFORMATION
Executive agrees to sign and be
bound by the terms of the Employee Proprietary Information and
Inventions Agreement, which is attached as Exhibit B
(“Proprietary Information Agreement”).
7. ARBITRATION
Executive agrees to sign and be
bound by the terms of the Arbitration Agreement, which is attached
as Exhibit C.
8. AMENDMENTS; WAIVERS;
REMEDIES
This Agreement may not be amended or
waived except by a writing signed by Executive and by a duly
authorized representative of the Company other than Executive.
Failure to exercise any right under this Agreement shall not
constitute a waiver of such right. Any waiver of any breach of this
Agreement shall not operate as a waiver of any subsequent breaches.
All rights or remedies specified for a party herein shall be
cumulative and in addition to all other rights and remedies of the
party hereunder or under applicable law.
9. ASSIGNMENT; BINDING
EFFECT
a. Assignment.
The performance of Executive is
personal hereunder, and Executive agrees that Executive shall have
no right to assign and shall not assign or purport to assign any
rights or obligations under this Agreement. This Agreement may be
assigned or transferred by the Company; and nothing in this
Agreement shall prevent the consolidation, merger or sale of the
Company or a sale of any or all or substantially all of its
assets.
b. Binding Effect.
Subject to the foregoing restriction
on assignment by Executive, this Agreement shall inure to the
benefit of and be binding upon each of the parties; the affiliates,
officers, directors, agents, successors and assigns of the Company;
and the heirs, devisees, spouses, legal representatives and
successors of Executive.
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10. NOTICES
All notices or other communications
required or permitted hereunder shall be made in writing and shall
be deemed to have been duly given if delivered: (a) by hand;
(b) by a nationally recognized overnight courier service; or
(c) by United States first class registered or certified mail,
return receipt requested, to the principal address of the other
party. The date of notice shall be deemed to be the earlier of
(i) actual receipt of notice by any permitted means, or
(ii) five business days follo
