Exhibit 10.11


 


EMPLOYMENT
AGREEMENT


 


THIS EMPLOYMENT AGREEMENT
is made as of September 22, 2008, at San Diego, California among Lpath, Inc., a Nevada corporation (the
“Company”), and John Bender, Pharm.D.  (the
“Employee”) with reference to the following facts:


 


In consideration of their respective promises contained herein, the
parties hereto agree as follows:


 


1.    EMPLOYMENT


 


Company hired Employee, effective September 22, 2008, as its
Senior Vice President R&D.  Employee
and Company now desire to memorialize the terms and conditions associated with
such hiring, which terms and conditions shall be contained in this Agreement.


 


2.    EMPLOYEE’S DUTIES


 


The Employee shall, while contributing his services hereunder:


 


(a) Serve the Company in the capacity set forth in Section 1,
or in such other similar capacity as Company’s Chief Executive Officer (“CEO”)
or the Board of Directors (hereinafter, referred to as “the Board”) may direct,
on a full-time basis and exclusive to the Company, using his best efforts, skills,
and diligence in the performance of such duties, at such place or places as may
be required for valid business reasons and as determined in the reasonable
determination of the Board;


 


(b) Report to the Chief Executive Officer and perform the duties and
exercise the powers assigned or vested in him by the CEO or the Board;


 


(c) Comply with and conform to any lawful instructions or
directions given or made by the CEO and the Board, and faithfully,
industriously, diligently, and to the best of the Employee’s ability,
experience, and talents, serve the Company and perform all of the duties that
may be required by the terms and conditions of this Agreement to the reasonable
satisfaction of the CEO and the Board, so as to promote the Company’s business
interests; and


 


(d) Devote himself diligently to the business interests of the
Company and personally attend thereto at all times during usual business hours
and during such other times as the Board may reasonably require, except in case
of incapacity through illness or accident, in which case he shall furnish to
the CEO such evidence thereof as it may reasonably require.


 


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3.    COMPENSATION


 


In consideration of the performance by the Employee of his duties hereunder,
the remuneration of the Employee shall be (and the Company shall pay to the
Employee):


 


(a)          Effective on the date of
hire, a base salary (“Salary”) of $280,000 per annum payable in accordance with
the Company’s normal payroll procedure, subject to normal payroll deductions,
with an increase to $290,000 at that point in time that merit increases are
given generally at the Company (expected to be around February, 2009),


 


(b)         Paid vacation, which
shall accrue at the rate of four weeks per year,


 


(c)          Other benefits and
perquisites normally available to executives of the Company, as may be changed
from time to time,


 


(d)         Annual bonuses of up to
30% of base pay, to be based on individual and Company performance, all at the
sole discretion of the Company’s Board of Directors, with it being agreed that
for the “stub” year of 2008, a bonus of $20,000 will be paid early in the 2009
year, and


 


(e)          Effective on the date of
hire, a grant of Restricted Stock Units (“RSUs”) to purchase up to 480,000
shares of Lpath Class A Common Stock. 
RSUs representing 240,000 shares will time-vest on a quarterly basis
over 16 quarters, with a four-quarter “cliff.” 
RSUs representing an additional 240,000 shares will vest based upon the
achievement of specific milestones, which are expected to be similar to those
described in the offer letter.


 


(f)            Such additional
remuneration as Employee and the Company shall negotiate in the future.


 


4.    EXPENSES


 


The Company shall pay on behalf of the Employee or reimburse the
Employee (against the Employee’s submission to the Company of proper receipts
therefore) for all expenses properly incurred by him in the course of his
employment hereunder or otherwise in connection with the business of the
Company in accordance with Company policies, as such policies may be
established and revised by the Board from time to time.


 


5.    AT-WILL EMPLOYMENT


 


Employee and the Company understand and expressly agree that Employee’s
employment with the Company is at-will, is not for a specified term, and may be
terminated by the Company or by Employee at any time, with or without notice and
with or without cause.  While not
required, as a courtesy, the parties shall attempt if possible to give thirty
(30)


 


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days’ notice of termination. 
This clause shall not be interpreted to conflict with Employee’s at-will
employment status.  Employee and the
Company further understand and agree that no representation contrary to this
section is valid, and that this section may not be augmented, contradicted, or
modified in any way, by any representative or agent of the Company or any other
person, except by a writing signed by the Employee and by the Board.


 


6.  TERMINATION


 


6.1    Upon termination for any
reason, including voluntary resignation, Employee shall:


 


(a) Be entitled to the compensation set forth in Section 3(a) hereof,
prorated to the effective date of such termination;


 


(b) Remain subject to the provisions of the Proprietary
Information and Inventions Agreement, in the form attached hereto as Exhibit A,
signed concurrently herewith;


 


(c) Be entitled to receive a termination payment for any accrued,
unused vacation.


 


(d) Not be entitled to severance, unless as provided in Section 6.2.


 


6.2       If Company terminates the
employment of Employee without Cause (to be defined later in this section), the
Company will, in addition to the provisions of Section 6.1, and in
exchange for employee’s execution of a full and complete release of all claims
as described herein:


 


(i)  Pay Employee seven months’ base
compensation if the termination occurs before there has been a Corporate
Transaction (to be defined later in this section) or pay Employee twelve months’
base compensation if the termination occurs after there has been a Corporate
Transaction.  Such payments are to be
made in accordance with Company’s normal payroll procedures with normal payroll
deductions.


 


(ii)  Continue to provide to Employee
all heath-care benefits, and other benefits that might apply, for the remainder
of the month in which the termination occurs and reimburse Employee for
Employee’s COBRA coverage for another seven-month period beyond that, or for a
twelve-month period if the termination occurs after there has been a
Corporate Transaction.


 


(iii)  If the termination occurs within
24 months after there has been a Corporate Transaction: (a) accelerate-vest
by 24 months Employee’s unvested stock options, unvested stock grants, and any
other such assets that vest over time and (b) allow Employee up to 24 months
to exercise such options except to the extent that any such options expire
before the end of this 24-month period or to the extent that earlier exercise
is required by the Company to effect a sale or a merger.


 


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(iv) The term “Cause” is defined to mean
conduct that in the good faith judgment of the Board constitutes a material
breach of duty and is to include one or more of the following: falsification of
company documents, fraud, moral turpitude, theft, embezzlement, criminal
conduct, indictment on felony criminal charges, serious violations of Company
policies, material breach of Employee’s employment agreement, extended or
repeated absence from work that in the reasonable judgment of the Board is unjustifiable,
inability to perform duties for a period of thirty (30) or more days without
reasonable excuse and notice, or insubordination (e.g., refusal to carry out the reasonable instructions of
the Board). If the material breach of duty is reasonably curable, Company shall
provide notice to Employee of such breach of duty and shall give Employee a
30-day cure period.  Refusal to relocate
to a facility more than 50 miles from the current facility is NOT considered Cause.


 


(v) The term “Corporate Transaction” is
defined to mean (a) a transaction whereby the Company is party to a merger
or consolidation whereby the Company is NOT the surviving entity and whereby
the transaction results in the voting securities of the Company outstanding
immediately prior thereto failing to continue to represent (either by remaining
outstanding or by being converted into voting securities of the surviving or
another entity) at least fifty (50%) percent of the combined voting power of
the voting securities of the Company or such surviving or other entity
outstanding immediately after such merger or consolidation; or (b) the
sale or disposition of all or substantially all of the Company’s assets (or
consummation of any transaction having similar effect).


 


(vi) Employee will be eligible for no
other severance compensation, benefits, or vesting other than that which is
provided for in this Section 6.2 when he is terminated.  A condition precedent to the Company’s
obligation to fulfill the severance terms in this Section 6.2 shall be Employee’s
execution of a full and complete release of all claims against the Company, its
Board, officers, agents, and affiliates in reasonable form as provided by the
Company.  Nothing in this severance
provision supersedes or in any way alters the at-will provisions of Section 5
above.


 


(vii)  Employee agrees that he will
surrender to the Company, at its request, or at the conclusion of his
employment, all accounts, notes, data, sketches, drawings and reproductions,
and copies thereof, any of which (a) relate in any way to the business,
products, practices, or techniques of the Company, (b) contain
Confidential Information, whether or not created by him, or (c) come into
his possession by reason of his employment with the Company; and Employee
agrees further that all of the foregoing are the property of the Company.


 


7.  LOYAL PERFORMANCE


 


7.1  Employee shall not, during
the period of his employment by the Company, engage in any employment or
activity in any business competitive with the Company.  Employee agrees to notify the Company in
writing of any outside employment or business activity,


 


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including the name of the business and the general nature of employee’s
involvement, during the period of Employee’s employment with the Company.


 


7.2   If, at any time during the
period ending two years after Employee has ceased to be an employee of the
Company (or of any subsidiary or affiliate of the Company), whether or not
pursuant to this agreement, Employee:


 


(a) directly or indirectly engages with...


 


(b) assists or has an active interest in, whether as owner,
partner, shareholder, joint venturer, corporate officer, director, employee,
consultant, principal, agent, trustee or licensor, or in any other similar capacity
whatsoever (provided that ownership of not more than two percent of the
outstanding stock of a corporation traded on a National securities exchange or
quoted on NASDAQ OTC shall not of itself be viewed as assisting or having an
active interest)...


 


or


 


(c) enters the employment of or acts as an agent for or advisor or
consultant to...


 


... any person, firm, partnership, association, corporation, business
organization, entity, or enterprise (the Business”) that is, or is about to
become, directly or indirectly, engaged in any business or program that
competes directly with or is substantially similar to any business or program
that the Company (or any subsidiary or affiliate of the Company) was involved
in (or was in the planning or development stage) during the 120-day period
immediately prior to Employee’s ceasing to provide services to the Company (or
any subsidiary or affiliate of the Company) [such business or program shall
include, but not be limited to, those that involve: (a) any composition of
matter or method that is protected by (i) any Company trade secret or (ii) any
Company intellectual property that is either issued, pending, or filed at the
time of termination or (b) the use, research or development, for any
therapeutic or diagnostic purpose, of (i) any sphingolipid, (ii) 
lysophosphatidic acid, Ceramide-1-phosphate, PAF, or HETE or (iii) any
component of their respective pathways], then Employee shall immediately notify
Company in writing of such involvement, including the name of the Business and
the nature of Employee’s involvement, and Employee agrees to fully respond to
reasonable questions by the Company regarding such involvement and to provide
such further assurances reasonably requested by Company that Employee is not
and will not be in breach of the Proprietary Information and Inventions
Agreement attached hereto as Exhibit A.


 


7.3   Employee will not, at any
time, without prior written consent of the Company:


 


(a) Directly or indirectly take any action or make or cause to be
made any statements which would disparage the reputation of the Company or any
subsidiary or affiliate of the Company, or


 


(b) Induce or attempt to influence any employee or consultant of
the Company or


 


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any of its or their subsidiaries or affiliates to terminate his or her
employment.


 


7.4  Nothing contained in this Section 7
is intended to supercede or alter in any way the provisions of the Proprietary
Information and Inventions Agreement attached hereto as Exhibit A.


 


8.    CONFIDENTIALITY MATTERS


 


8.1    It is an express condition
to the employment of Employee by Company that Employee sign and deliver a
Proprietary Information and Inventions Agreement in the form attached hereto as
Exhibit A concurrently with the execution of this Agreement.


 


8.2  .  The covenants contained in the Proprietary
Information and Inventions Agreement constitute separate covenants.  If in any judicial proceeding, a court shall
hold that any of the covenants set forth in the Proprietary Information and
Inventions Agreement is not permitted by applicable laws, Employee and Company
agree that such provision shall and is hereby reformed to the maximum time,
geographic, or occupational limitations permitted by such laws.  Further, in the event a court shall hold
unenforceable any of the separate covenants deemed included herein, then such
unenforceable covenant or covenants shall be deemed eliminated from the
provisions of this Agreement for the purpose of such proceeding to the extent necessary
to permit the remaining separate covenants to be enforced in such
proceeding.  Employee and Company further
agree that the covenants in the Proprietary Information and Inventions
Agreement shall each be construed as a separate agreement independent of any
other provisions of this Agreement, and the existence of any claim or cause of
action by Employee against the Company whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
any of the covenants set forth in the Proprietary Information and Inventions
Agreement.


 


9.    ACKNOWLEDGMENT


 


Employee acknowledges that he has been advised by Company to consult
with independent counsel of his own choice, at his expense, as to the entering
into this Agreement, that he has had the opportunity to do so, and that he has
taken advantage of the opportunity to the extent that he desires.  The Employee further acknowledges that he has
read and that he understands this Agreement, is fully aware of its legal effect,
and has entered into it freely based on his own judgment and such professional
advice as he has seen fit to obtain.


 


10.    ARBITRATION


 


Employee and the Company agree that in the event of any dispute
concerning, arising out of, or related in any way to this Agreement, such
dispute shall be submitted to arbitration. 
Except as otherwise provided for herein, the disputes subject to this
agreement to arbitrate include, to the fullest extent allowable by law, all
potential claims between


 


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Employee and Company including, but not limited to, breach of contract,
tort, discrimination, harassment, wrongful termination, compensation and
benefits claims, constitutional claims and claims for the violation of any
local, state or federal statute, ordinance or regulation. Arbitration
proceedings may be commenced by either party by giving the other party written
notice thereof and proceeding thereafter in accordance with the rules and
procedures of the American Arbitration Association and California law.  Any such arbitration shall take place before
a single arbitrator only in San Diego, California.  Any such arbitration shall be governed by and
be subject to the applicable laws of the State of California and the then-prevailing
rules of the American Arbitration Association (the “AAA”).  If the parties are unable to agree on a
single neutral arbitrator, the arbitrator shall be selected pursuant to the AAA
rules.  The arbitrator’s award in any
such arbitration shall be final and binding, and a judgment upon such award may
be entered and enforced by any court of competent jurisdiction.  Each party
to this Agreement understands that by agreeing to arbitrate their disputes,
they are giving up their right to have their disputes heard in a court of law
and, if applicable, by a jury. 
Company shall bear the costs of the arbitrator, the forum, and filing
fees.  Each party shall bear its own
respective attorney’s fees and all other costs, unless otherwise required or
allowed by law and awarded by the arbitrator.


 


11.    VIOLATION OF THE
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT


 


The Employee agrees and acknowledges that the violation of any of the
provisions contained in the Proprietary Information and Inventions Agreement
attached hereto as Exhibit A would cause irreparable injury to the
Company, the remedy at law for any violation or threatened violation thereof
would be inadequate, and that the Company shall be entitled to temporary and
permanent injunctive or other equitable relief without the necessity of proving
actual damages.  The Employee agrees that
such relief shall be available in a court of law in San Diego, California,
regardless of the arbitration provisions contained in Section 10 of this
Agreement.


 


12.    MISCELLANEOUS


 


12.1    Amendment.  This Agreement may not be modified or amended
without the express prior written consent of the Company and the Employee.


 


12.2    Notices.  All notices required or permitted under this
Agreement shall be in writing, shall be sent either certified mail, return
receipt requested, or by facsimile transmission and mailed or sent to the
relevant party at its address (or facsimile number) set out below (or such
other address or facsimile number as the addressee has given to the other
parties in accordance with the terms of this Section):


 


To the Company:


Lpath, Inc.


6335 Ferris Square, Suite A


San Diego, CA 92121


Facsimile (858) 678-0900


 


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To the Employee:


John F.
Bender, PharmD


2342 Casa
Hermosa CT.


Encinitas, CA
92024


 


Any notice, demand or other communication so addressed to the relevant
party shall be deemed to have been delivered (a) if given or made by
certified letter, return receipt requested, when actually delivered to the relevant
party; and (b) if given or made by facsimile, upon receipt of a
transmission report confirming receipt.


 


12.3    Entire Agreement.  This Agreement and the Exhibits attached
hereto contain the entire agreement of the parties regarding the employment of
the Employee, and there are no other promises or conditions regarding the
Employee’s employment in any other agreement, whether oral or written.  This Agreement shall terminate and supersede
any previous employment agreements or arrangements between Employee and
Company.


 


12.4    Assignment.  The rights and obligations of the Company
under this Agreement shall inure to the benefit of and shall be binding upon
the successors and assigns of the respective corporation.  Employee shall not be entitled to assign any
of his rights or obligations under this Agreement.


 


12.5    Sections.  References herein to Sections are to the
sections in this Agreement, unless the context requires otherwise.


 


12.6   Headings.   The section headings are inserted for
convenience only and shall not affect the construction of this Agreement.


 


12.7    Rules of
Construction.  Unless the context
requires otherwise, words importing the singular include the plural and vice
versa, and words importing a gender include every gender.


 


12.8    Severability.  Whenever possible, each
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other jurisdiction,
but this Agreement will be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained therein.


 


12.9    Survival.  Any variation in salary or conditions
mutually agreed upon after the effective date of this Agreement shall not
constitute a new agreement; instead, the terms and conditions of this
Agreement, except as to such variation, shall continue in force.


 


12.10   Waiver.  The failure of either party to enforce any
provision of this Agreement


 


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shall not be construed as a waiver or limitation of that party’s right
to subsequently enforce and compel strict compliance with every provision of
this Agreement.


 


12.11    Interpretation.  This Agreement shall not be construed against
any party on the grounds that such party drafted the Agreement or caused it to
be drafted.


 


12.12    Governing Law.  This Agreement shall be governed by the laws
of the State of California.  Any
controversy or claim arising out of or relating to this Agreement or the breach
thereof, whether involving remedies at law or equity, shall be adjudicated in
San Diego, California.


 


12.13    No Conflicting
Agreements.  Employee represents and
warrants to the Company that he is not a party to or bound by any
confidentiality, noncompetition, nonsolicitation or other agreement or
restriction which could conflict with or be violated by the performance of
Employee’s duties to the Company under this Agreement or otherwise.  Employee agrees that he will not disclose to
the Company, use, or induce the Company to use, any invention or confidential
information belonging to any third party.


 


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


 


	
  LPATH, INC.

  	
   

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Scott R. Pancoast

  	
   

  	
  /s/ John F. Bender

  
	
   

  	
   

  	
  Signature

  
	
  Its: President & Chief Executive Officer

  	
   

  	
  John F. Bender

  
	
   

  	
   

  	
  Print Name

  
				



 


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EXHIBIT
A


 


(PROPRIETARY
INFORMATION AND INVENTIONS AGREEMENT)


 


10