EXHIBIT 10.1
 

 
EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”), dated February 6, 2010 by and
between Adeona Pharmaceuticals, Inc., a corporation organized under the laws of
the State of Nevada (the “Corporation”), and James S. Kuo, M.D., M.B.A., an
individual (the “Employee” or the “CEO”).

1.           EMPLOYMENT; DUTIES

(a)           The Corporation hereby engages and employs the Employee as
Chairman, Chief Executive Officer and President of the Corporation, and Employee
hereby accepts such engagement and employment as Chairman, Chief Executive
Officer and President of the Corporation, for the term of this Agreement as long
as CEO desires to serve. It is expected that the employment duties of CEO will
include reporting directly to the Board of Directors of the Corporation for the
full time high quality performance of directing, supervising and having
responsibility for all aspects of the company’s operations and the general
affairs of the Corporation as directed by the Board of Directors.

(b)           The CEO shall devote substantially all of his professional time
under this Agreement at the Corporation’s executive offices and manufacturing
facility in Ann Arbor or clinical laboratory in Chicago or traveling on
corporate business, with travel to and from Employee’s residence to the
Corporation’s Ann Arbor or Chicago locations to be at Employee’s own expense.

(c)           The Corporation shall provide a computer, cellular phone and
office for the Employee.

2.           TERM

The term of the Employee’s employment shall be three years from the execution
date of this Agreement unless terminated earlier under Section 8 of this
Agreement.

3.           COMPENSATION

(a)           As compensation for the performance of his duties on behalf of the
Corporation, Employee shall receive the following:

(i)           Base Salary. Employee shall receive a base salary of one hundred
ninety nine thousand dollars ($199,000) per year (the “Base Salary”), payable
semi-monthly.

(ii)           Bonus. On the first of each calendar year while employed, the
Employee may be entitled to receive a discretionary performance bonus based upon
the sales and profitability of the Corporation payable in cash or equity in the
sole and absolute discretion of both the Compensation Committee and the Board of
Directors of the Corporation.
 

 
 
 

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

 
(iii)           Discretionary Transactional Bonus. In connection with a
significant transaction consummated by the Corporation or its subsidiaries in
which the Employee is directly or indirectly involved in, the Employee may be
entitled to receive a discretionary transactional bonus payable in cash or
equity in the sole and absolute discretion of both the Compensation Committee
and the Board of Directors of the Corporation.
 
(iv)           Stock Options. The Employee shall receive a non-restricted option
to purchase the Corporation’s publicly traded common stock equal to four hundred
thousand (400,000) shares exercisable at the market price per share on the date
of issue. One hundred thousand (100,000) of these options will vest immediately
and the remaining will vest monthly on each monthly anniversary of the start
date of employment and for thirty six (36) successive months while employed by
the Corporation and such options will remain exercisable for a period of ten
years from the date of grant, unless terminated earlier. Other terms of the
option shall be according to the Company’s existing stock option plan.

(b)           The Corporation shall reimburse Employee for all normal, usual and
necessary expenses incurred by Employee, including all travel, lodging and
entertainment, against receipt by the Corporation, as the case may be, of
appropriate vouchers or other proof of Employee’s expenditures and otherwise in
accordance with such Expense Reimbursement Policy as may from time to time be
adopted by the Corporation.

(c)           The Corporation shall provide Employee with full advance
indemnification to the extent permitted by Delaware law, including
indemnification for activities at all subsidiaries.\

(d)           The Employee shall be entitled to three (3) weeks paid vacation
per year while employed, accruing quarterly and sick leave in accordance with
the Corporation’s policies. The Corporation shall provide Employee and his
family with healthcare coverage pursuant to the Corporation’s healthcare
insurance policy plan.

4.           REPRESENTATIONS AND WARRANTIES BY EMPLOYEE

(a)           Employee hereby represents and warrants to the Corporation as
follows:

(i)           Neither the execution and delivery of this Agreement nor the
performance by Employee of his duties and other obligations hereunder violates
or will violate any statute, law, determination or award, or conflict with or
constitute a default under (whether immediately, upon the giving of notice or
lapse of time or both) any prior employment agreement, contract, or other
instrument to which Employee is a party or by which he is bound.

(ii)           Employee has the full right, power and legal capacity to enter
and deliver this Agreement and to perform his duties and other obligations
hereunder. This Agreement constitutes the legal, valid and binding obligation of
Employee enforceable against his in accordance with its terms. No approvals or
consents of any persons or entities are required for Employee to execute and
deliver this Agreement or perform his duties and other obligations hereunder.

(iii)           Employee understands that some or all of the stock received by
Employee pursuant to section 3(a) (iii) hereof will not be registered under the
United States Securities Act of 1933 (the “1933 Act”), and acknowledges that he
will be obligated to agree, as a condition to the issuance thereof, that he will
acquire such stock for his own account for investment and not with a view to, or
for resale in connection with a distribution thereof, and will bear the economic
risk of his investment in such stock for an indefinite period of time.
 
 

 
 
 

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

 
6.           CONFIDENTIAL INFORMATION

(a)           Employee agrees that during the course of his employment or at any
time thereafter, he will not disclose or make accessible to any other person,
the Corporation’s products, services and technology, both current and under
development, promotion and marketing programs, lists, trade secrets and other
confidential and proprietary business information of the Corporation or any
affiliates or any of their clients. Employee agrees: (i) not to use any such
information for himself or others, and (ii) not to take any such material or
reproductions thereof from the Corporation’s facilities at any time during his
employment by the Corporation. Employee agrees immediately to return all such
material and reproductions thereof in his possession to the Corporation upon
request and in any event upon termination of employment.

(b)           Except with prior written authorization by the Corporation,
Employee agrees not to disclose or publish any of the confidential, technical or
business information or material of the Corporation, its clients or any other
party to whom the Corporation owes an obligation of confidence, at any time
during or after his employment with the Corporation.

(c)           In the event that Employee breaches any provisions of this Section
6 or there is a threatened breach, then, in addition to any other rights which
the Corporation may have, the Corporation shall be entitled, without the posting
of a bond or other security, to injunctive relief to enforce the restrictions
contained herein. In the event that an actual proceeding is brought in equity to
enforce the provisions of this Section 6, Employee shall not urge as a defence
that there is an adequate remedy at law, nor shall the Corporation be prevented
from seeking any other remedies which may be available. In addition, Employee
agrees that in event that he breaches the covenants in this Section 6, in
addition to any other rights that the Corporation may have, Employee shall be
required to pay to the Corporation any amounts he receives in connection with
such breach.

(d)           Employee recognizes that in the course of his duties hereunder, he
may receive from the Corporation or others information which may be considered
“material, non-public information” concerning a public company that is subject
to the reporting requirements of the United States Securities and Exchange Act
of 1934, as amended. Employee agrees not to:

(i)           Buy or sell any security, option, bond or warrant while in
possession of relevant material, non-public information received from the
Corporation or others in connection herewith, and

(ii)           Provide the Corporation with information with respect to any
public company that may be considered material, non-public information, unless
first specifically agreed to in writing by the Corporation.
 

 
 
 

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

 
7.           INVENTIONS DISCOVERED BY THE EMPLOYEE

The Employee shall promptly disclose to the Company any invention, improvement,
discovery, process, formula, or method or other intellectual property, whether
or not patentable or copyrightable (collectively, "Inventions"), conceived or
first reduced to practice by the CEO, either alone or jointly with others, while
performing services hereunder (or, if based on any Confidential Information,
within one (1) year after the Term), (a) which pertain to any line of business
activity of the Company, whether then conducted or then being actively planned
by the Company, with which the CEO was or is involved, (b) which is developed
using time, material or facilities of the Company, whether or not during working
hours or on the Company premises, or (c) which directly relates to any of the
CEO's work during the Term, whether or not during normal working hours. The CEO
hereby assigns to the Company all of the CEO's right, title and interest in and
to any such Inventions. During and after the Term, the CEO shall execute any
documents necessary to perfect the assignment of such Inventions to the Company
and to enable the Company to apply for, obtain and enforce patents, trademarks
and copyrights in any and all countries on such Inventions, including, without
limitation, the execution of any instruments and the giving of evidence and
testimony, without further compensation beyond the CEO's agreed compensation
during the course of the CEO's employment. All such acts shall be done without
cost or expense to CEO. CEO shall be compensated for the giving of evidence or
testimony after the term of CEO's employment at the rate of $2,000/day. Without
limiting the foregoing, the CEO further acknowledges that all original works of
authorship by the CEO, whether created alone or jointly with others, related to
the CEO's employment with the Company and which are protectable by copyright,
are "works made for hire" within the meaning of the United States Copyright Act,
17 U.S .C. (S) 101, as amended, and the copyright of which shall be owned
solely, completely and exclusively by the Company. If any Invention is
considered to be work not included in the categories of work covered by the
United States Copyright Act, 17 U. S. C. (S) 101, as amended, such work is
hereby assigned or transferred completely and exclusively to the Company. The
CEO hereby irrevocably designates counsel to the Company as the CEO's agent and
attorney-in-fact to do all lawful acts necessary to apply for and obtain patents
and copyrights and to enforce the Company's rights under this Section. This
Section 5 shall survive the termination of this Agreement. Any assignment of
copyright hereunder includes all rights of paternity, integrity, disclosure and
withdrawal and any other rights that may be known as or referred to as "moral
rights" (collectively "Moral Rights"). To the extent such Moral Rights cannot be
assigned under applicable law and to the extent the following is allowed by the
laws in the various countries where Moral Rights exist, the CEO hereby waives
such Moral Rights and consents to any action of the Company that would violate
such Moral Rights in the absence of such consent. The CEO agrees to confirm any
such waivers and consents from time to time as requested by the Company.

8.           TERMINATION

(a)           Employee’s employment hereunder shall continue as set forth in
Section 2 hereof unless terminated upon the first to occur of the following
events:

(i)           The death or disability of Employee,

(ii)          Termination by the Corporation for Just Cause.

(iii)         Termination by the Corporation without Just Cause.
 

 
 
 

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

 
 
 
(For the purpose of this Agreement, termination for “Just Cause” shall mean a
termination for gross insubordination; acts of embezzlement or misappropriation
of funds; fraud; dereliction of fiduciary obligation; conviction of a felony, a
willful unauthorized disclosure of confidential information belonging to the
Corporation or entrusted to the Corporation by a client; a material violation of
any provision of the Agreement which is not cured by the Employee within 15 days
of receiving written notice of such violation by the Corporation; being under
the influence of drugs (other than prescription medicine or other
medically-related drugs to the extent that they are taken in accordance with
their directions) during the performance of Employee’s duties under this
Agreement, engaging in behavior that would constitute grounds for liability for
harassment (as proscribed by the U.S. Equal Employment Opportunity Commission
Guidelines or any other applicable state or local regulatory body) or other
egregious conduct that violates laws governing the workplace; Termination for
Just Cause shall also include the failure of the President to perform his
written assigned tasks, where such failure is attributable to the fault of the
President. In this event, the Corporation will first provide a written warning
of such failure and the allocation of fault, and provide a reasonable time
period to cure such failure, in no case less than thirty days.)

(iv)          Material breach by the Corporation of any provision of this
agreement that is not cured within fifteen (15) days of written notice thereof
from the Employee, or.

(v)           Termination by the Employee at any time.

The Corporation shall not be required to pay any severance to Employee in case
of any termination of Employee’s employment.

9.           NOTICES

Any notice or other communication under this Agreement shall be in person or in
writing and shall be deemed to have been given (i) when delivered personally
against receipt therefor, (ii) one (1) day after being sent by Federal Express
or similar overnight delivery, (iii) three (3) days after being mailed
registered or certified mail, postage prepaid, return receipt requested, to
either party at the address set forth above, or to such other address as such
party shall give by notice hereunder to the other party, or (iv) when sent by
facsimile, followed by oral confirmation and with a hard copy sent as in (ii) or
(iii) above.

10.           SEVERABILITY OF PROVISIONS

If any provision of this Agreement shall be declared by a court of competent
jurisdiction to be invalid, illegal or incapable of being enforced in whole or
in part, such provision shall be interpreted so a to remain enforceable to the
maximum extent permissible consistent with applicable law and the remaining
conditions and provisions or portions thereof shall nevertheless remain in full
force and effect and enforceable to the extent they are valid, legal and
enforceable, and no provision shall be deemed dependent upon any other covenant
or provision unless so expressed herein.

11.           ENTIRE AGREEMENT MODIFICATION

This Agreement contains the entire agreement of the parties relating to the
subject matter hereof, and the parties hereto have made no agreements,
representations or warranties relating to the subject matter of this Agreement
which are not set forth herein. No modification of this Agreement shall be valid
unless made in writing and signed by the parties hereto.
 

 
 
 

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

 
 
 
12.           BINDING EFFECT

The rights, benefits, duties and obligations under this Agreement shall inure
to, and be binding upon, the Corporation, its successors and assigns, and upon
Employee and his legal representatives. This Agreement constitutes a personal
service agreement, and the performance of the Employee’s obligations hereunder
may not be transferred or assigned by the Employee.

13.           NON-WAIVER

The failure of either party to insist upon the strict performance of any of the
terms, conditions and provisions of this Agreement shall not be construed as a
waiver or relinquishment of future compliance therewith, and said terms,
conditions and provisions shall remain in full force and effect. No waiver of
any term or condition of this Agreement on the part of either party shall be
effective for any purpose whatsoever unless such waiver is in writing and signed
by such party.

14.           GOVERNING LAW, DISPUTE RESOLUTION

This Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of Michigan of the United States of America without
regard to principles of conflict of laws.

15.           HEADING

The headings of paragraphs are inserted for convenience and shall not affect any
interpretation of this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

Corporation:

ADEONA PHARMACEUTICALS, INC.

By:  ________________________________                                                              
Title:  Authorized agent

Employee
 
____________________________________
James S. Kuo
 
 
 

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