EXECUTIVE EMPLOYEE AGREEMENT

 

                                                                   Exhibit 10.1

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                          EXECUTIVE EMPLOYEE AGREEMENT

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To:  Glenn E. Deegan                             Date:  December 17, 2004

     27 Allerton Road

     Milton, MA 02186

 

     The undersigned, MacroChem Corporation, a Delaware corporation (the

"Company"), hereby agrees with you as follows:

 

     1. POSITION AND RESPONSIBILITIES.

 

        1.1 You shall continue to serve as Vice President and General Counsel of

the Company (or in such other executive capacity as shall be designated by the

Company) and shall perform the duties customarily associated with such capacity

from time to time and at such place or places as the Company shall designate are

appropriate and necessary in connection with such employment.

 

        1.2 You will, to the best of your ability, devote your full time and

best efforts to the performance of your duties hereunder and the business and

affairs of the Company. You agree to perform such executive duties as may be

assigned to you by the Company from time to time.

 

        1.3 You will duly, punctually and faithfully perform and observe any and

all reasonable rules and regulations which the Company may now or shall

hereafter establish governing the conduct of its business.

 

     2. TERM OF EMPLOYMENT.

 

        2.1 Subject to the provisions hereof, specifically including, without

limitation, Section 2.2, the term of your employment shall be indefinite.

 

        2.2 The Company shall have the right to terminate your employment at any

time under this Agreement in any of the following ways:

 

        (a) on thirty (30) days prior written notice to you upon your disability

(disability shall be defined as your inability to perform duties under this

Agreement for an aggregate of sixty (60) days, which need not be consecutive,

out of any one hundred twenty (120) day period due to mental or physical

disability or incapacity); you shall be provided benefits under the Company's

workers compensation and disability insurance policies, to the extent and upon

the terms and conditions of such plans that are in effect at the time;

 

        (b) immediately without prior notice to you by the Company for "Cause",

as hereinafter defined, provided however, that prior to any such termination for

Cause, you have had a reasonable opportunity to be heard thereon; or

 

 

 

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        (c) at any time without Cause, provided the Company shall be obligated

to pay to you severance benefits after such termination, currently in an amount

equal to twelve (12) months' Base Salary plus benefits provided by the Company

to you at the time of such termination for such period, in accordance with the

Severance Agreement between you and the Company dated as of October 25, 2002

(the "Severance Agreement") and the Amendment to Severance Agreement dated as of

December 17, 2004 (the "Amendment to Severance Agreement") and any subsequent

amendments.

 

        2.3 You shall have the right to terminate your employment hereunder for

any reason, upon not less than four (4) weeks' prior written notice to the

Company. The Company reserves the right to waive the notice period, or any

portion thereof.

 

        2.4 "Cause" for the purpose of Section 2 of this Agreement shall

include: (a) willful malfeasance or gross negligence in the performance of your

duties, resulting in harm to the Company, (b) fraud or dishonesty by you with

respect to the Company, or (c) your conviction for a criminal offense carrying a

potential sentence of more than twelve months in jail.

 

        2.5 If your employment is terminated because of your death, all

obligations of the Company hereunder shall cease, except with respect to amounts

and obligations accrued to you, including accrued vacation pay, insurance,

vested stock options, and out-of-pocket expenses, through the last day of the

month during which your death has occurred.

 

     3. COMPENSATION. You shall receive the compensation and benefits set forth

on Exhibit A hereto ("Compensation and Benefits") for all services to be

rendered by you hereunder and for your transfer of property rights if any,

pursuant to an agreement relating to proprietary information and inventions of

even date herewith attached hereto as Exhibit B between you and the Company (the

"Confidential Information, Inventions and Noncompetition Agreement").

 

     4. CONFIDENTIAL INFORMATION, INVENTIONS AND NONCOMPETITION. You agree to

execute, deliver and be bound by the provisions of the Confidential Information,

Inventions and Noncompetition Agreement attached hereto as Exhibit B.

 

     5. REMEDIES. Your obligations under the Confidential Information,

Inventions and Noncompetition Agreement and the provisions of Sections 5 and 6

of this Agreement (as modified by Section 7, if applicable) shall survive the

expiration or termination of your employment with the Company in accordance with

the terms thereof. You acknowledge that a remedy at law for any breach or

threatened breach by you of the provisions of the Confidential Information,

Inventions and Noncompetition Agreement would be inadequate and you therefore

agree that the Company shall be entitled to injunctive relief in case of any

such breach or threatened breach.

 

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     6. ASSIGNMENT. This Agreement and the rights and obligations of the parties

hereto shall bind and inure to the benefit of any successor or successors of the

Company by reorganization, merger or consolidation and any assignee of all or

substantially all of its business and properties, but, except as to any such

successor or assignee of the Company, neither this Agreement nor any rights or

benefits hereunder may be assigned by the Company or by you, except by operation

of law or by a further written agreement by the parties hereto.

 

     7. INTERPRETATION. IT IS THE INTENT OF THE PARTIES THAT in case any one or

more of the provisions contained in this Agreement shall, for any reason, be

held to be invalid, illegal or unenforceable in any respect, such invalidity,

illegality or unenforceability shall not affect the other provisions of this

Agreement, and this Agreement shall be construed as if such invalid, illegal or

unenforceable provision had never been contained herein. MOREOVER, IT IS THE

INTENT OF THE PARTIES THAT if any one or more of the provisions contained in

this Agreement is or becomes or is deemed invalid, illegal or unenforceable or

in case any provision shall for any reason be held to be excessively broad as to

duration, geographical scope, activity or subject, such provision shall be

construed by amending, limiting and/or reducing it to conform to applicable laws

so as to be valid and enforceable or, if it cannot be so amended without

materially altering the intention of the parties, it shall be stricken and the

remainder of this Agreement shall remain in full force and effect.

 

     8. NOTICES. Any notice which the Company is required to or may desire to

give you shall be given by personal delivery or registered or certified mail,

return receipt requested, addressed to you at your address of record with the

Company, or at such other place as you may from time to time designate in

writing. Any notice which you are required or may desire to give to the Company

hereunder shall be given by personal delivery or by registered or certified

mail, return receipt requested, addressed to the Company at its principal

office, or at such other office as the Company may from time to time designate

in writing. The date of personal delivery or five (5) days after the date of

mailing any notice under this Section 8 shall be deemed to be the date of

delivery thereof.

 

     9. WAIVERS. No waiver of any right under this Agreement shall be deemed

effective unless contained in writing signed by the party charged with such

waiver, and no waiver of any right arising from any breach or failure to perform

shall be deemed to be a waiver of any future such right or of any other right

arising under this Agreement. If either party should waive any breach of any

provision of this Agreement, he or it shall not thereby be deemed to have waived

any preceding or succeeding breach of the same or any other provision of this

Agreement.

 

     10. COUNSEL. You acknowledge that you have had the opportunity to read this

Agreement in its entirety and to obtain the advice of counsel regarding its

terms and conditions.

 

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     11. COMPLETE AGREEMENT; AMENDMENTS. The foregoing, including Exhibits A and

B attached hereto, together with the Severance Agreement and the Amendment to

Severance Agreement, represents the entire agreement of the parties with respect

to the subject matter hereof, superseding any other previous oral or written

communications, representations, understandings, or agreements with the Company

or any officer or representative thereof. Notwithstanding anything herein to the

contrary, this Agreement shall have no affect on the terms of the Severance

Agreement and the Amendment to Severance Agreement which shall remain in full

force and effect. Any amendment to this Agreement or waiver by the Company of

any right hereunder shall be effective only if evidenced by a written instrument

executed by the parties hereto.

 

     12. HEADINGS. The headings of the Sections contained in this Agreement are

inserted for convenience and reference only and in no way define, limit, extend

or describe the scope of this Agreement or the intent of any provisions hereof,

and shall not be deemed to constitute a part hereof or to affect the meaning of

this Agreement in any way.

 

     13. COUNTERPARTS. This Agreement may be signed in two counterparts, each of

which shall be deemed an original and both of which shall together constitute

one agreement.

 

     14. GOVERNING LAW. This Agreement shall be governed by and construed in

accordance with the internal laws of the Commonwealth of Massachusetts, without

regard to its conflict of law principles.

 

 

 

 

 

 

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     If you are in agreement with the foregoing, please sign your name below and

also at the bottom of the Confidential Information, Inventions and

Noncompetition Agreement, whereupon both Agreements shall become binding in

accordance with their terms. Please then return this Agreement to the Company.

(You may retain for your records the accompanying counterpart of this Agreement

enclosed herewith).

 

                                                  Very truly yours,

 

                                                  MACROCHEM CORPORATION,

                                                  a Delaware corporation

 

                                                  By:/s/Robert J. DeLuccia

                                                    ---------------------------

                                                     Robert J. DeLuccia

                                                     President & C.E.O.

 

 

Read, Accepted and Agreed:

 

/s/Glenn E. Deegan

----------------------                                     

Glenn E. Deegan

 

 

 

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                                                                      EXHIBIT A

 

                            COMPENSATION AND BENEFITS

                               OF GLENN E. DEEGAN

 

 

COMPENSATION. Your current Base Salary shall be $180,000 per year, less

applicable deductions, payable in accordance with the Company's payroll

policies. Your Base Salary shall be reviewed and adjusted from time to

time by the Company. You will be eligible to participate in the

executive compensation plan maintained by the Company from time to time

subject to plan terms and generally applicable Company policies.

 

VACATION. You will be entitled to all state statutory holidays, and

four (4) weeks paid vacation for the first year of employment which

will accrue at a rate of 13.33 hours per month. Thereafter, any

additional vacation time, over and above the vacation time already

referred to herein shall be determined by the Company.

 

INSURANCE AND BENEFITS. During your employment, you will be eligible to

participate in the benefits plans made available by the Company from

time to time, subject to plan terms and generally applicable Company

policies. Currently, Company benefits include medical insurance, dental

insurance, life insurance, and short and long-term disability

insurance. The Company currently pays 75% of the premiums for medical

and dental insurance and 100% of the premiums for life, short and

long-term disability insurance. You will also be able to participate in

the Company's 401(k) and deferred compensation plans.

 

SICK DAYS AND EXCUSED ABSENCE DAYS. You will be entitled to

compensation for sick days and excused absence days in accordance with

Company policy.

 

STOCK OPTIONS. You have been granted stock options to purchase shares

of the Common Stock of the Company, $.01 par value per share. Future

stock options may be granted by the Company based in part on your

performance.

 

 

 

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                                                                       EXHIBIT B

 

        CONFIDENTIAL INFORMATION, INVENTIONS AND NONCOMPETITION AGREEMENT

 

    To:  MacroChem Corporation                      Date:  December 17, 2004

         110 Hartwell Avenue

         Lexington, Massachusetts 02421-3134

 

 

     I, the undersigned, acknowledge the importance to MacroChem Corporation

(the "Company") of protecting its confidential information and other legitimate

interests, including without limitation the valuable confidential information

and goodwill that it has developed or acquired. I also acknowledge the Company's

practice of obtaining agreements such as this from its employees. Therefore, in

consideration of my initial or ongoing employment with the Company and in

consideration of my being granted access to trade secrets and other confidential

information of the Company and for other good and valuable consideration, the

receipt and sufficiency of which I hereby acknowledge:

 

     1.   I agree that all Confidential Information, as defined below, which I

          create or to which I have access as a result of my employment and

          other associations with the Company is and shall remain the sole and

          exclusive property of the Company. I agree that, except as required

          for the proper performance of my regular duties for the Company I will

          never, directly or indirectly, use or disclose any Confidential

          Information. I understand and agree that this restriction shall

          continue to apply after the termination of my employment or this

          Agreement, howsoever caused. Further, I agree to provide prompt notice

          to the Company of any required disclosure of Confidential Information

          sought pursuant to subpoena, court order or any other legal

          requirement and to provide the Company a reasonable opportunity to

          seek protection of the Confidential Information prior to any such

          disclosure.

 

     2.   I agree that all documents, records and files, in any media of

          whatever kind and description, relating to the business, present or

          otherwise, of the Company and any copies (including without limitation

          electronic), in whole or in part, thereof (the "Documents" and each

          individually, a "Document"), whether or not prepared by me, shall be

          the sole and exclusive property of the Company. Except as required for

          the proper performance of my regular duties for the Company or as

          expressly authorized in writing in advance by the Board or its

          designee, I will not copy any Documents or remove any Documents, or

          copies, from the premises of the Company. I will safeguard, and return

          to the Company immediately upon termination of my employment, and at

          such other times as may be specified by the Company, all Documents and

          all other property of the Company, and all documents, records and

          files of their customers, subcontractors and suppliers ("Third-Party

          Documents" and each individually a "Third-Party Document") and all

          other property of such customers, subcontractors and suppliers, then

          in my possession or control; provided, however, that, if a Document or

          Third-Party Document is on electronic media, I may, in lieu of

          surrender of the Document or Third-Party Document, provide a copy on

          electronic media (e.g., a properly formatted diskette) to the Company

          and delete and overwrite all other electronic media copies thereof. I

          also agree that, upon request of any duly authorized officer of the

          Company, I will disclose all passwords necessary or desirable to

          enable the Company to obtain access to the Documents and Third-Party

          Documents.