**Exhibit10.20**

 

 

**RESTORAGEN,INC.**

 

**EMPLOYMENT AGREEMENT**

 

                This EMPLOYMENT AGREEMENT, datedas of December 20, 2001 between RESTORAGEN, INC., a corporation incorporatedand existing under the laws of Delaware and having its office at 4130 NW 37thStreet in Lincoln, Nebraska (hereinafter referred to as “Company”), and **Ashleigh W.Palmer** residing currently at 19 McCatharn Road, Lebanon, NewJersey  08833  (hereinafter referred to as the “Executive”);

 

                WHEREAS, the Company desires toemploy the Executive as its Chief Executive Officer and, as such, as a memberof its Board of Directors; and the Executive desires to be so employed;

 

                NOW THEREFORE, in considerationof the foregoing and of the mutual promises hereinafter set forth, the partieshereto agree as follows:

 

1.  Employment: Powers and Duties.

                The Company hereby employs theExecutive as its Chief Executive Officer, pursuant to the provisions of thisAgreement.  The Executive shallgenerally have the responsibilities, duties and functions associated with theposition of Chief Executive Officer of the Company and shall perform servicesin such capacity for the Company and for any of its affiliates orsubsidiaries.  He shall have suchauthority with such powers and duties as may be prescribed or assigned to himfrom time to time by the Board of Directors of the Company. He will be electedand will serve as a member of the Company’s Board of Directors.

 

2.  Exclusivity.

                With the exception of a priorconsulting commitment which the Executive has disclosed to the Company, duringthe term of his employment hereunder, the Executive will devote his bestefforts, energy, skill and resources to his duties hereunder and to the affairsand interests of the Company and of its affiliates, joint ventures,collaborations and subsidiaries, as the same may be constituted from time totime, and will not, without the approval of the Board of Directors of theCompany, actively engage in consulting for, or in the conduct of, any otherbusiness for profit.

 

 

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3.  Direct Compensation

                During his employment hereunder,the Executive shall receive salary at the annual rate of Three Hundred FiftyThousand Dollars ($350,000).  Thiscompensation will be paid in equal monthly installments. All required tax andother deductions will be made from such installments.  At the end of each calendar year under this Agreement, theperformance of the Executive will be reviewed. In the event that his performance and contributions to the Company, inthe judgement of the Board of Directors, have been in accordance with orexceeded objectives and goals agreed upon at the beginning or during such year,it is anticipated that, assuming the Company’s financial situation permits, theExecutive will receive a target annual bonus of at least 25% of his then annualsalary. Also based upon substantial achievement of such objectives and goals,the Executive is expected to receive a positive adjustment to his salary levelfor the new year over the level during the previous year. In the event theBoard of Directors, for any reason, shall determine to reduce the Executive’ssalary, the Executive shall be entitled, within ten days of receiving notice ofthe same, to give written notice of his decision to terminate this Agreementpursuant to Section 9 hereof, in which event he shall continue in theemployment of the Company for one year at the salary obtaining prior to suchdecision to reduce his salary.

 

4.  Additional Benefits.

                (A)  The Executive shall be provided with such health and sickness,accident, hospitalization, disability, travel, term life and other insurancebenefits as are or may be generally provided under the Company’s grouppolicies.

 

                (B)  When and if instituted, the Executive shall be provided with suchsavings and retirement plan benefits as may be provided in general foremployees under the Company’s plans, as may be adopted or amended from time totime.  The Company has established a401(K) Plan for retirement savings for all employees. Company contributions tothis Plan on behalf of employees have been and are expected to be small ornon-existent until funding or profits of the Company permit (as determined inthe sole discretion of the Board of Directors).

 

5.  Long-Term Stock Option Incentives.

                TheExecutive shall be granted a stock options under the Company’s 1993 Stock Plan,as amended, covering a total of four hundred thousand (400,000) shares of theCompany’s Common Stock. These options will be governed by the provisions of two

 

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Option Agreements, to be executed and dated as ofthe date of this Agreement, and will vest (and be exercisable thereafter inaccordance with the provisions of those Agreements) in three equal annualinstallments at the end of each of the three years beginning after the date ofthe Option Agreements, except that the right to exercise options as to 40,000shares shall vest and be exercisable as of the date of this Agreement. Theoptions will terminate ten years after the date of the Option Agreements if notterminated sooner in accordance with the provisions of the Option Agreements.The exercise price of the options will be $11.33 per share, being the fairmarket value of the shares at the time the options are granted under the OptionAgreements, as determined by the Board of Directors.

 

                The Executive will be eligiblefor one or more additional stock option awards under stock plans of the Companyif and to the extent that the Board of Directors at the relevant time, in itssole discretion, shall consider that the work and contributions of theExecutive merit such additional options.

 

6.  Expenses.

                The Company shall reimburse tothe Executive all reasonable travel, hotel, entertainment and otherout-of-pocket expenses which he may from time to time incur in the course ofcarrying out his duties for the Company and for any of its affiliates, jointventures, collaborations or subsidiaries (referred to hereinafter as “RelatedEntities”).

 

                It is understood that,particularly during the early months of his employment hereunder, the Executivewill be required to spend several days during most weeks in the Lincoln officesof the Company and in the Nebraska area. During these periods the Company shalleither provide appropriate accommodations in Lincoln for the Executive or shallreimburse the Executive for out-of-pocket costs incurred by him to obtain suchaccommodations. The Executive shall be provided or reimbursed for hisout-of-pocket costs for meals and transportation, in the form of a rental car,during these periods in Nebraska. The Company shall also provide forappropriate air travel and shall reimburse the Executive for all other costs oftravel from his home in New Jersey to Nebraska and back during these periods.

 

                The Company shall promptlyreimburse the Executive for such expenses after the Executive submits expensereimbursement forms along with appropriate receipts.

 

7.  Non-Competition.

                (A)          During the term of his employment hereunder, and for atwo-year period 

 

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thereafter(but only in the event that during such two-year period the Company shall inits sole discretion continue to pay compensation to the Executive aftertermination of his employment at a rate per month equal to at least one half ofthe monthly salary rate enjoyed by the Executive prior to the termination ofhis employment hereunder), the Executive agrees that, unless he obtains writtenconsent from the Company covering a particular planned competitive activity,the Executive shall not directly or indirectly engage or participate in,consult for, be employed by or finance or secure funding for any businessactivity that is competitive with the businesses which are being conducted orare planned to be conducted by the Company, any of its Related Entities, or anyclient or customer of the Company at the particular time. The foregoingnotwithstanding, the Company shall have no obligation, in the event oftermination of the employment of the Executive for any reason, to pay anycontinuing compensation under this Section 7(A) to the Executive or, in theevent such continuing compensation is paid for one or more months, to continueto pay such compensation. In the event any such continuing compensation is notpaid to the Executive, or is terminated after one or more monthly payments, theforegoing restrictions on competitive activity on the part of the Executiveshall not apply thereafter.

 

                (B)           In no event, without receiving the Company’s prior writtenconsent, will the Executive, at any time during his employment hereunder orwithin a period which is two years after termination for any reason of hisemployment hereunder, directly or indirectly:

 

                                                (i)  preempt, divert, disrupt or otherwiseinterfere with any business of the Company or of any of the Related Entities orwith any business relationship of the Company or of any of its Related Entitieswith any client, customer or business contact of the same; or

 

                                                (ii) employ orsolicit for employment for his own or another’s benefit, as employee, partner,consultant, independent contractor or otherwise, or  suggest to others to employ or to solicit for employment anyperson or contractor employed at the time by the Company or by any of itsRelated Entities or any client or customer or business contact of the same.

 

8.  Intellectual Property Rights.

                (A)  As between the Company or any of its affiliates, joint ventures,collaborations or subsidiaries, as the case may be, and the Executive, allproducts, know-how, methods, formulas, processes, discoveries, data, sourcecodes, materials, written or oral texts including articles, papers and books,ideas, strategies, creations, inventions, medical or clinical conceptions orresults, innovations and properties, tangible or intangible, pertaining 

 

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orrelating in any way to the businesses or potential businesses of the Company,or of any affiliate, joint venture, collaboration or subsidiary of the Company(referred to below as “Proprietary Concepts and Properties”), which theExecutive may conceive, invent, discover, create or develop by himself or withothers, or to which he may become exposed, whether or not conceived, inventedor developed by the Executive, and whether or not conceived, invented,developed or exposed by or to him during regular working hours or on or outsidethe premises of the Company or of any of the Related Entities, shall be thesole and absolute property of the Company or the particular one or more of theRelated Entities, as the case may be, for any and all purposes. The Executiveshall not claim to have, under this Agreement or otherwise, any right, title orinterest of any kind or nature in any of the Proprietary Concepts andProperties, shall hold the same in trust for the sole right and benefit of theCompany or the particular one or more of the Related Entities, as the case maybe, and shall promptly disclose and deliver to the Company or one or more ofthe Related Entities, as the case may be, all information relating to the sameincluding all relevant papers, drawings, electronic records and software,formulas, designs, charts schematics, specifications, descriptions and sourcecodes.  The Executive agrees to executeand deliver to the Company such oaths; specifications; licenses; contracts oragreements; patent, copyright and other applications; consents; releases;assignments; or other instruments as the Company may reasonably request inorder to vest title to Proprietary Concepts and Properties in the Company, orin any of the Related Entities, as the case may be, and to permit the Companyand any of the foregoing entities to establish, protect and defend itsproprietary rights therein by way of patent, copyright, or otherwise. TheExecutive hereby irrevocably designates the Company as his attorney in fact andauthorizes and empowers the Company, by and through its duly elected and actingofficers, to act for and on his behalf to execute, file and deliver in hisplace and stead, to the maximum extent permitted by law, any and all oaths, specifications,licenses, consents, agreements, contracts, assignments, applications, releasesor other instruments that may be necessary or appropriate, in the opinion ofCompany counsel, to convey Proprietary Concepts and Properties to, or vest theentire right, title and interest in Proprietary Concepts and Properties in, theCompany or any of the Related Entities, as the case may be, and to enable theCompany or any of the Related Entities to establish, or perfect and defend itsproprietary rights in Proprietary Concepts and Properties by way of patent,copyright, or otherwise; it being the express intent of the Executive that thispower of attorney shall continue in full force and effect, notwithstanding hismental or physical incapacity, or termination of his employment hereunder. TheExecutive agrees that, during the term of this Agreement and at any timethereafter whenever reasonably necessary, the Employee will cooperate with theCompany and its counsel and take all such action as may be reasonably requestedin 

 

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connectionwith the efforts of the Company, or of any of its Related Entities, toestablish, perfect and defend any and all patents, copyrights or otherproprietary rights in the Proprietary Concepts and Properties and in connectionwith prosecution or defense in  anylitigation which may arise in connection with the same. All out-of-pocket costsincurred by the Executive as a result of such cooperation and efforts on behalfof the Company pursuant to this Section 8(A) shall be reimbursed by the Companyto the Executive.

 

                (B)  The Executive acknowledges that in the course of his employmenthereunder he will make use of, be exposed to, acquire and add to confidentialmaterials and information of the Company and of Related Entities as well as ofits customers, clients, contract providers and other persons and entitieshaving a business relationship with the Company (all such other entities beingreferred to collectively for purposes of this Section 8(B) as “Other Entities”)relating (but not limited) to trade secrets, products, formulas, data,technical systems, processes and procedures, medical or clinical concepts andresults, ideas, results or innovations, know-how, conceptions, inventions, manuals,documents and reports on paper and in electronically stored form, plans, sourcecodes, properties and strategies which are of material importance to therespective businesses of the Company or the Other Entities (referred to as“Confidential Information”); and that such Confidential Information will have aspecial and unique nature and value for the Company and the OtherEntities.  The Executive agrees thatwith respect to any and all Confidential Information, during and following theterm of this Agreement and for so long as the same remains confidential (andbeyond this time should loss of confidentiality be caused directly orindirectly by the Executive), he will not, for any purpose (unless otherwiseagreed to by the Company in writing), divulge or disclose to persons, otherthan those authorized by the Company (or by the Other Entities, as the case maybe) to receive the same, directly or indirectly use or otherwise exploit any ofsuch Confidential Information or let or suffer others to use or otherwiseexploit such Confidential Information for any purpose other than for thebenefit of the Company or the Other Entities, as the case may be.

 

9.  Term of Employment.

                The Executive’s employment shallbegin on December 20, 2001 and continue indefinitely hereunder, unless anduntil terminated by either party upon delivery of one year’s prior writtennotice of termination to the other party.

 

                Notwithstanding the foregoing,the Company shall be entitled by notice in writing to the Executive toterminate forthwith his employment with the Company under this Agreement if heshall have engaged in any willful misconduct or serious misconduct 

 

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involvingnegligence or gross negligence or shall have committed any material breach ofhis obligations or duties to the Company, to any of the Related Entities or tothe Company’s employees hereunder, except that in the event of seriousmisconduct involving negligence (but not gross negligence) the Executive, afterreceiving notice of termination for cause for such reason, shall have twentydays to take steps to remedy the course of misconduct which had been cited asinvolving negligence, thereby deactivating such notice of termination.

 

10.  Vacation.

                The Executive shall be entitledto four weeks of paid vacation in each calendar year.

 

 

11.  Return of Documents in Hard Copy orElectronically Stored.

                Upon the termination of hisemployment with the Company hereunder, the Executive shall promptly deliver andtransfer over to the Company all copies, both in hard copy and electronicallycreated, of reports, memoranda, accounts, laboratory, clinical and othernotebooks, records, correspondence, data, source code and e-mail (referred toas “Company Documents”) which may have been prepared by him or have come intohis possession or control in the course of his employment and the discharge ofhis duties hereunder.  Unless otherwiseagreed to in writing by the Company, or unless the particular item has beenpublished in its entirety in the public domain, the Executive, after any suchtermination, shall not retain any of copies of Company Documents either in theform of hard copy or in electronically stored form.

 

12.  Notices.

                All notices hereunder shall bein writing and delivered personally or by registered or certified mail,addressed to the Company at its principal office and marked to the attention ofthe Chairman of the Board and the Chief Financial Officer, and to the Executiveat the address stated in the first paragraph of this Agreement, or in eithercase at such other address as shall have previously been designated in writingby the party, to whom the notice is to be sent, to the other party.  Any such communication so sent by mail shallbe deemed made or given upon mailing.

 

13.  Miscellaneous.

                The Restoragen Employee Handbook(the “Handbook”) has been furnished to the Executive and shall form part ofthis Agreement.  The Executive agrees tocomply with operational rules of the Company as adopted from time to time andset forth in the  Handbook, with theexception that, in the event that there is a conflict between the 

 

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provisionsof the Handbook and the provisions of this Agreement, the provisions of thisAgreement shall be controlling. This Agreement constitutes the entire agreementof the parties hereto relating to the subject matter hereof and there are nowritten or oral terms or representations made by either party relative to thesubject matter hereof other than those contained herein.  All of the terms and provisions of thisAgreement shall be binding upon, and shall inure to the benefit of and beenforceable by and against, the parties to this Agreement and their respectiveheirs, executors, and successors in interest. The provisions of Sections 7, 8, 11, 12, 13 and 14 hereunder shallsurvive the termination of this Agreement to the extent necessary to accomplishthe purposes of the provisions in such Sections.

 

14.  Governing Law.

                This Agreement shall be governedby, and construed in accordance with, the laws of Nebraska.

 

                IN WITNESS WHEREOF, the Companyhas caused this Agreement to be executed by its duly authorized officer and theExecutive has executed this Agreement, as of the date first written above.

 

 
|                                           | **RESTORAGEN, INC.** |
|------------------------------------------------|----------------------|
|                                           |
|                                           |
|                                           |
|                                           | By                   | /s/ Thomas R. Coolidge |
|                                           |                 | Thomas R. Coolidge |
|                                           |                 | Chairman of the Board |
|                                           |
|                                           |
|                                           |
| /s/  Ashleigh W. Palmer                        |                 |
| **Ashleigh W. Palmer**                         |                 |
|      (the  Executive) |                 |
|                                                |                      |  |  |

 

 

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