EXHIBIT 10.40
EMPLOYMENT AGREEMENT
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This AGREEMENT made as of this 30th day of May 1996, by and between
Life Medical Sciences, Inc., a Delaware corporation (hereinafter, "the Employer"
or "Employer"), and Dr. Herbert Moskowitz (hereinafter, "the Executive" or
"Executive").
W I T N E S S E T H:
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WHEREAS, Executive presently serves as an officer of Employer and
WHEREAS, Employer wishes to provide for Executive's employment as
Chairman of the Board of Directors on the terms hereinafter set forth.
Accordingly, Employer and Executive hereby agree as follows:
1. Commencing on the Effective Date, as hereinafter defined, of this
Agreement, Employer employs Executive as Chairman of the Board of Directors to
perform the duties normally incident to such position. Executive will at all
times represent and promote the best interests of the shareholders in all
Company matters. Executive shall be responsible for keeping the Board of
Directors of Employer informed of Employer's activities and progress. Employer
shall use its best efforts to cause Executive to be elected as a director at
every stockholder's meeting at which directors are elected and to use its best
efforts to cause Executive be re-elected Chairman of the Board of Directors for
so long as this agreement remains in effect and Executive continues to be re-
elected to the Board by Shareholders.
1. Executive agrees to devote such time, efforts, skills and
attention as Executive deems necessary to fulfill Executive's duties and
responsibilities under this Agreement the Executive's good faith determination
of the amount of time necessary to fulfill Executive's duties and
responsibilities under this Agreement shall be binding on Employer.
2. The term of this Agreement shall commence as of May 30, 1996 (the
"Effective Date") and shall terminate five years thereafter (the "Initial
Term"), unless sooner terminated as hereinafter provided, and shall be
automatically renewed for successive one-year periods thereafter unless at least
ninety days prior to the end of the Initial Term or any renewal term Executive
or Employer shall give written notice to the other that this Agreement shall not
be renewed.
3. Employer will pay to Executive as compensation for all services
to be rendered by Executive hereunder a salary at the rate of One Hundred Ninety
One Thousand and 00/100 Dollars (the "Base Salary") per year during the Initial
Term and thereafter subject to such increases, if any, as may be approved by and
in the discretion of the Board of Directors of Employer provided, however, that
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in any event on each anniversary of the date of this Agreement, the Base Salary
shall be adjusted and increased as against the Base Salary prior to such
adjustment by the same percentage as the rise in the Consumer Price Index for
the New York region maintained by the Bureau of Labor Statistics for the
preceding calendar year. The
Base Salary shall be payable twice monthly.
4. Employer may pay to Executive bonuses (in cash or stock options)
as may be approved by and in the discretion of the Board of Directors of
Employer.
5. Employer will reimburse Executive for all reasonable travel and
business expenses incurred by Executive in connection with performance of
Executive's services including, but not limited to, telephone service, meals,
lodging, and secretarial support as determined by the Executive.
6. Executive will be afforded participation in all benefit plans and
programs which are currently afforded or during the term of this Agreement are
offered to other executives of Employer, including, without limitation, group
insurance, health, hospital, dental, major medical, life and disability
insurance and stock option plans or other similar fringe benefits on the same
terms as such benefits are available to executives of Employer generally.
Executive, at his option, may elect to receive from the Company, as an
alternative to health and insurance benefits as defined in this paragraph, an
amount equal to the amount that the Company would have paid to provide such
benefits for Executive. Such amount will be paid and will be adjusted quarterly
for any changes in the cost of such coverage.
7. Executive will be entitled to four weeks vacation during the
Initial Term and any renewal term of this Agreement. Executive, at his option,
shall be entitled to receive payment for any unused vacation or accrue such
vacation time.
8. During the Initial Term and any renewal term, Employer will pay
Executive a travel allowance equal to the then-current maximum allowable rate
under Internal Revenue Service guidelines multiplied by the number of miles
actually driven by Executive in performance of Executive's services under this
Agreement.
9. (a) Employer will obtain life insurance coverage, (assuming
Executive is insurable) on the life of and for the benefit of Executive in an
amount equal to twice the amount of the Base Salary of Executive then in effect.
Except that as provided in paragraph 7 herein above, Executive, at his election,
may receive an amount equal to the insurance premiums that otherwise would have
been paid, by the Company, on behalf of Executive.
(b) Executive agrees that Employer in Employer's discretion, may
apply for and procure in the name of Executive and for Employer's benefit life
insurance in any amount or amounts considered advisable but not less than One
Million 00/100 ($1,000,000) Dollars and that Executive shall have no right,
title or interest therein.
(c) Executive represents and warrants that to the best of
Executive's knowledge Executive is in good health and that to the best of
Executive's knowledge Executive will qualify and be acceptable for life
insurance in the minimum amount of One Million 00/100 ($1,000,000) Dollars.
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(d) Executive agrees to submit to any medical or other
examination and to execute and deliver any application or other instrument
necessary to effectuate such life insurance.
10. In the event of Executive's death during the term of this
Agreement, this Agreement shall terminate immediately, provided, however, that
Executive's legal representatives shall be entitled to receive within 60 days
after the termination of this Agreement, in addition to any other amounts
payable to Executive hereunder, the Base Salary which would otherwise have been
due Executive had Executive worked through the end of the month in which
Executive died plus six additional months of the Base Salary in effect on the
date of Executive's death.
11. If during the term of this Agreement, Executive is unable to
perform Executive's duties hereunder on account of illness or other incapacity,
and such illness or other incapacity shall continue for a period of more than
three consecutive months or more than 120 days (whether or not consecutive)
during any twelve-month period, Employer shall have the right, on thirty days'
notice to Executive, given after such three month or 120-day period, to
terminate this Agreement. In the event of any such termination Employer shall be
obligated to pay to Executive within 30 days after the termination of this
Agreement, in addition to any other amounts payable to Executive hereunder, the
Base Salary which would otherwise be due Executive until the expiration of the
month of employment during which the termination occurred plus six additional
months of the Base Salary in effect on the date of such termination. If, prior
to the date specified on such notice, Executive's illness or incapacity shall
have terminated and Executive shall have taken up the performance of Executive's
duties hereunder, Executive shall be entitled to resume Executive's employment
hereunder as though such notice had not been given. Employer's Board of
Directors shall determine in good faith, upon consideration of medical evidence
satisfactory to it, whether Executive by reason of physical or mental disability
shall be unable to perform the services required of Executive hereunder.
12. If Employer shall terminate Executive's employment hereunder for
Cause, as hereinafter defined, Employer will pay to Executive within ten days
after the termination of this Agreement an amount equal to the amount which
Executive would have earned as the Base Salary hereunder through the end of the
then current month in which such termination or departure occurred plus three
additional months of the Base Salary in effect on the date of such termination.
Cause shall mean a conviction of a felony directly and materially affecting
Employer.
13. If Executive's employment shall terminate for any reason other
than for death, illness or incapacity, or Cause, as stated in paragraphs 11, 12
and 13 respectively of this agreement, then, in such event Employer shall pay to
Executive within 30 days of the termination date, in addition to any other
amounts payable to Executive hereunder, the base salary due Executive through
the termination date plus an amount equal to six months of the
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Executives base salary then in effect. This provision of the agreement shall be
operative regardless of who terminates the agreement or how long the agreement
has been in effect.
14. Executive covenants and agrees with Employer that Executive has
not and will not, during Executive's employment with Employer and thereafter,
directly or indirectly, use, communicate, disclose or disseminate to anyone
(except to the extent reasonably necessary for Executive to perform his duties
hereunder, except as required by law or except if generally available to the
public otherwise than through use, communication, disclosure or dissemination by
the Executive) any materials, documents or records containing confidential
information concerning the businesses or affairs of Employer or of any of its
affiliates or subsidiaries which Executive may have acquired in the course of or
as incident to Executive's employment or prior dealings with Employer or with
any of its affiliates or subsidiaries, including, without limitation, customer
lists, business or trade secrets of, or methods or techniques used by Employer
of any of its affiliates or subsidiaries in or about their respective
businesses, or any information whatsoever concerning the customers or suppliers
of any of them.
15. Executive covenants and agrees with Employer that Executive has
not, and will not during Executive's employment with Employer and for a period
of six months after the termination of Executive's employment with Employer, in
any manner, directly or indirectly, (i) induce or attempt to influence any
present or future officer, employee, lessor, lessee, licensor, licensee or agent
of Employers or its subsidiaries or its affiliates to leave its respective
employ or solicit or divert or service any customers or clients of Employer or
its subsidiaries or its affiliates or (ii) alone or as a partner, officer,
director, employee, consultant or stockholder (except for ownership of no more
than 1% of the capital stock) of any corporation, partnership or other entity be
competitive with the business of Employer or its subsidiaries or affiliates. For
purposes of subdivision (ii) above of this paragraph 16, a business shall be
presumed to be competitive if it conducts in whole or in part anywhere in the
United States any business in which Employer, its subsidiaries or affiliates has
engaged in or engages in during the term of Executive's employment with Employer
or which Employer, its subsidiaries or affiliates contemplated engaging in
during the term of this Agreement and began engaging in within six months
subsequent to the termination of this Agreement.
16. Employer acknowledges that Executive has substantial interest and
activities in the medical field. Nothing herein shall restrict or otherwise
limit Executive from managing Executive's private investments or conducting
activities which are not competitive with the businesses of Employer. Executive
shall be permitted to serve as a director of companies which are not competitive
with the businesses of Employer, so long as such services do not interfere with
the performance of Executive's duties under this Agreement.
17. Executive acknowledges that the remedy at law for any breach or
threatened breach by the Executive of the covenants contained in paragraphs 15
and 16, would be wholly inadequate, and therefore the Employer or its
subsidiaries or its affiliates shall be entitled to preliminary and permanent
injunctive relief and specific performance thereof. Paragraphs 15 and 16,
constitute independent and separable covenants that shall be enforceable
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notwithstanding rights or remedies that the Employer or its subsidiaries or its
affiliates may have under any other provision of this Agreement, or otherwise.
If any or all of the provisions of paragraph 15 and 16 are held to be
unenforceable for any reason whatsoever, it shall not in any way invalidate or
affect the remainder or this Agreement which shall remain in full force and
effect. If the period of time or geographical areas specified in paragraphs 15
and 16 are determined to be unreasonable in any judicial proceeding, the period
of time or areas of restriction shall be reduced so that this Agreement may be
enforced in such areas and during such period of time as shall be determined to
be reasonable.
18. The waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed as a waiver of any subsequent
breach thereof.
19. Any and all notices referred to herein shall be sufficient if
furnished in writing and sent by certified mail, return receipt requested, to
the respective parties at the addresses set forth below, or such other address
as either party may from time to time designate in writing.
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To Executive: To Employer:
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Dr. Herbert Moskowitz Life Medical Sciences, Inc.
616 Washington Court 214 Carnegie Center
Guilderland, New York 12084 Princeton, New Jersey 08549
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With copies in each case to: Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
New York, New York 10012
Attention: Irwin M. Rosenthal
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20. This Agreement shall be binding upon, and shall inure to the
benefit of, Employer and its successors and assigns, and Executive and
Executive's legal representatives, heirs, legatees and distributees, but neither
this Agreement nor any rights hereunder shall be assignable, encumbered or
pledged by Executive.
21. This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes any and
all prior written or oral agreements between Employer and Executive with respect
to the subject matter hereof. No modification, amendment or waiver of any of the
provisions of this Agreement shall be effective unless in writing and signed by
both parties hereto.
22. (a) If any controversy or dispute arises under, out of or in
relation to any of the provisions hereof which cannot be settled by the parties
within twenty (20) days after the same shall arise, such controversy or dispute
shall be submitted for arbitration in New York, New York before a panel of three
arbitrators, one of which shall be selected by the party initiating such
arbitration, one of which shall be selected by the other party and the third of
which (hereinafter referred to as the "Third Arbitrator") shall be selected by
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the two arbitrators so selected; provided, however, that in the event that such
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other arbitrators shall not agree on
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the selection of the Third Arbitrator, the Third Arbitrator shall be selected by
the American Arbitration Association located in New York, New York. Any dispute
or controversy submitted to arbitration in accordance with the provisions of
this Section 26 shall be determined by such arbitrators in accordance with the
Commercial Arbitration Rules of the American Arbitration Association then
existing.
(b) The arbitrators may award any relief which they shall deem proper
in the circumstances, without regard to the relief which would otherwise be
available to any party in a court of law or equity including, without
limitation, an award of money damages, specific performance, injunctive relief
and/or declaratory relief. The award and findings of the arbitrators shall be
conclusive and binding upon all of the parties hereto, whether or not all
parties hereto participate in the arbitration proceeding, and judgment upon the
award may be entered in any court of competent jurisdiction upon the application
of any party.
(c) Employer agrees to pay all costs and expenses including but not
limited to all reasonable legal fees incurred by Executive in pursuing and/or
enforcing his rights under this agreement. Expenses and costs will be paid
within 10 days of submission to the Company by Executive and will not be
recoverable in the event of an adverse legal decision against the Executive.
(d) Notwithstanding the foregoing, the parties reserve the right to
seek and obtain injunctive relief, whether in the form of a temporary
restraining order, preliminary injunction, injunction to enforce an arbitration
award, or other order of similar import, from any court of competent
jurisdiction prior to, during or after commencement or prosecution of
arbitration proceedings or the final decision and award of the arbitrators.
23. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same Agreement.
24. If any provision or part of any provision of this Agreement is
held for any reason to be unenforceable, the remainder of this Agreement shall
nevertheless remain in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of this 30th day of May 1996.
LIFE MEDICAL SCIENCES, INC.
By:
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Name:
Title:
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Dr. Herbert Moskowitz
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