Exhibit
10.11


 


AGREEMENT


 


In
consideration of his employment by INNOCOLL, INC. (“Company”) and the compensation and benefits outlined below,
and intending to be legally bound, MICHAEL MYERS, Ph.D. (“Executive”) agrees with Company as follows:


 


		1.	Definitions.
                                         As used in this Agreement, the following terms whether used in the singular or plural
                                         form shall have the meanings set forth below:



 


		1.1	An
                                         “Affiliate” of any Person means any Person directly or indirectly controlling,
                                         controlled by or under common control with such Person including without limitation any
                                         direct or indirect Subsidiary of such Person.



 


		1.2	“Board”
                                         means the Board of Directors of Company.



 


		1.3	“Change
                                         of Control” means either of the following:



 


		(a)	A
                                         tender offer, stock purchase, other stock acquisition, merger, consolidation or recapitalization
                                         whereby any Person or group of Persons other than (1) Existing Shareholders, and (2)
                                         Executive Management become the beneficial owners, directly or indirectly, of securities
                                         of Company representing more than fifty percent (50%) of the combined voting power of
                                         all of Company’s then outstanding securities, or



 


		(b)	Any
                                         transfer of substantially all of the assets of Company, including without limitation
                                         Company’s rights under this Agreement, to any entity where more than fifty percent (50%)
                                         of the combined voting power of all of such entity’s then outstanding securities is owned
                                         by a Person or group of Persons other than (1) Existing Shareholders, and (2) Executive
                                         Management.



 


		1.4	“Company’s
                                         Business” means:



 


		(a)	the
                                         business of development and commercialization of products based on the Company’s proprietary
                                         collagen based drug delivery technologies, including without limitation, products
                                         that are administered by implantation, topically, bucally, orally or intra-ocularly;
                                         and



 


		(b)	any other business conducted during
                                         the Restrictive Period by Company
                                         or any Affiliate of Company.



 


		1.5	“Executive
                                         Management” means collectively, all Persons who have been, are or hereafter shall
                                         be officers of the Company or otherwise in an executive or management position with Company.



 


		1.6	“Existing
                                         Shareholders” means collectively, all shareholders of record of Company as of the
                                         date of this Agreement, all general and limited



 




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			partners
                                         of any shareholder of record of Company as of the date of this Agreement (each such partner
                                         being hereinafter referred to as “Partner”), all members of the immediate family
                                         of each such Partner, including without limitation, all parents,
                                         children, grandchildren, spouses and siblings thereof, and all spouses of each of the
                                         foregoing, all other Persons, directly or indirectly, owned or controlled by any Existing
                                         Shareholder or Partner or in which any Existing Shareholder or Partner has any material
                                         interest.



 


		1.7	“Exit
                                         Date” means the date on which Executive ceases to be employed by Company or
                                         any of its Affiliates.



 


		1.8	“Person”
                                         means any association, company, corporation, estate, individual, limited liability
                                         company, limited liability partnership,
                                         limited partnership, family limited partnership, general partnership, individual, trust
                                         or other entity or organization of any nature.



 


		1.9	“Restrictive
                                         Period” means the period of time that commences on the date of this Agreement and
                                         ends three hundred sixty-five (365) days following the Exit Date.



 


		1.10	“Subsidiary” means any corporation
                                         of which Company owns or controls, directly or indirectly, through one (1) or more Affiliates
                                         or other Subsidiaries, more than fifty percent (50%) of the combined voting power of
                                         all of the outstanding securities of capital stock of such corporation and includes,
                                         without limitation, Syntacoll
                                         (Pty) Ltd. (a South African corporation), Syntacoll, A.G. (a Swiss corporation), and
                                         Innocoll GmbH (a German corporation).



 


		2.	No
                                         Conflicting Agreements. Executive (a) represents to Company that he is not currently
                                         subject to, and shall not hereafter become subject to, any employment agreement, confidentiality
                                         agreement, non-competition agreement,
                                         non-disclosure agreement or any other agreement,
                                         covenant, understanding or restriction which would prohibit Executive from fully observing
                                         and performing his duties and responsibilities to Company or would otherwise in any manner,
                                         directly or indirectly, limit or affect the duties and responsibilities which may now
                                         or in the future be assigned to Executive by Company; and (b) represents to Company that
                                         to the best of his knowledge no current employee of Company is currently subject to any
                                         employment agreement, confidentiality agreement, non-competition agreement, non-disclosure
                                         agreement or any other agreement, covenant, understanding or restriction which prohibits
                                         such employee from fully observing and performing his or her duties and responsibilities
                                         to Company or would otherwise in any manner, directly or indirectly, limit or effect
                                         the duties and responsibilities which may now or in the future be assigned to such employee
                                         by Company.



 


		3.	Employment.
                                         Company employs Executive and Executive accepts such employment in accordance with
                                         the terms of this Agreement
                                         including without limitation:



 




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		3.1	Executive
                                         shall serve on a full-time basis as President and Chief Executive Officer of Company
                                         and shall perform all duties and accept all responsibilities assigned to him by
                                         Company’s Board.



 


		3.2	Within thirty (30) days of the date
                                         of this Agreement, Company shall pay Executive a signing bonus of twenty-five thousand
                                         dollars ($25,000) in recognition of the anticipated first full year of employment.



 


		3.3	For all services rendered by Executive
                                         hereunder, so long as Executive is employed by Company, Company shall pay Executive annual
                                         base compensation (“Base Salary”) payable in installments at such time as Company
                                         customarily pays its other employees and shall provide Executive with such
                                         retirement, profit sharing, group insurance and other fringe benefits, if any, (individually
                                         and collectively, “Benefits”) as Company in its sole discretion provides from
                                         time to time for other executives of Company generally. All Base Salary payable to Executive
                                         and applicable to the time period beginning Juiy 28, 2003, and ending December 31, 2003,
                                         shall be at the minimum annual rate of Two Hundred Sixty Two Thousand Five Hundred and
                                         00/100 Dollars ($262,500.00) and all Base Salary payable to Executive applicable to the
                                         period of time beginning January 1, 2004, and ending December 31, 2004, shall be payable
                                         at a minimum annual rate of Two Hundred Seventy-Five Thousand and 00/100 Dollars ($275,000.00).
                                         Further increases to Base Salary for the time periods referenced above may be awarded
                                         at the discretion of the Board. All Base Salary payable to Executive subsequent to December
                                         31, 2004, shall be at such annual rate as Executive and Company shall agree. Nothing
                                         contained in this Section 3.3 shall be deemed to establish any specific term of employment.



 


		3.4	So
                                         long as Executive is employed by Company, Executive shall be entitled to a monthly
                                         automobile allowance of Seven Hundred Fifty and 00/100 Dollars ($750.00) per month after
                                         all federal and state taxes have been paid.



 


		3.5	So long as Executive is employed by
                                         Company, Executive shall be entitled to four (4) weeks annual vacation in accordance
                                         with such policies as Company shall from time to time promulgate.



 


		3.6	Annually throughout the employment relationship,
                                         the Board shall establish annual corporate goals and objectives (“Annual Corporate
                                         Goals”) and annual individual goals and objectives (“Annual Individual Goals”)
                                         applicable to Executive for the then current calendar year which shall be
                                         embodied in resolutions duly adopted by the Board. In the event that Company shall fully
                                         achieve all of the Annual Corporate Goals and Executive shall fully achieve all of his
                                         Annual Individual Goals applicable to any calendar year, Executive shall be entitled
                                         to a performance bonus (“Performance Bonus”) in an amount determined by the
                                         Board, provided however that in no event shall the Performance Bonus be less than thirty
                                         percent (30%) nor more than sixty percent (60%) of Executive’s Base Salary applicable
                                         as of December 31 of such calendar year. Such Performance Bonus shall be payable at such
                                         time and in such manner during the one hundred twenty (120) day period



 




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			immediately
                                         following December 31 of such calendar year as the Board shall determine in its sole
                                         discretion.



 


		3.7	In
                                         the event that on or before December 31, 2003, Executive shall have secured and closed
                                         on equity funding (“Equity Funding”) from sources other than Existing Shareholders
                                         and Executive Management in conjunction with a strategic funding plan which shall hereafter
                                         be adopted by the Board, the annual rate of Executive’s Base Salary shall be increased
                                         by Twenty Five Thousand Dollars ($25,000.00) which would increase Executive’s
                                         Base Salary effective as of January 1, 2004, to Three Hundred Thousand and 00/100 Dollars
                                         ($300,000.00).



 


		3.8	Executive shall be entitled to such
                                         stock options as the Board shall determine. The Board shall
                                         use reasonable efforts to make such determination on or before October 31, 2003. Executive
                                         shall participate fully with the Board in formulating
                                         a stock option program.



 


		4.	No
                                         Solicitation/Hire. During the Restrictive Period, Executive shall not, either directly
                                         or indirectly, employ or solicit the employment of any Person or engage, solicit the
                                         engagement as a consultant of any Person, who is employed by Company or any of its Affiliates
                                         in an executive, management, marketing, scientific or technical capacity on a full or
                                         part-time basis as of the date of termination of the employment relationship between
                                         Company and Executive or within the one (1) year period immediately preceding the Exit
                                         Date.



 


		5.	Covenant-Not-To-Compete.
                                         During the Restrictive
                                         Period, Executive shall not, and shall not encourage or permit any of his Affiliates,
                                         or any other Person, directly or indirectly, to:



 


		5.1	engage
                                         in competition with, or acquire a direct or indirect interest or an option to acquire
                                         such an interest in any Person engaged in competition with Company’s Business
                                         anywhere in the world (other than an interest of not more than five percent (5%) of the
                                         outstanding stock of any publicly traded company);



 


		5.2	serve as a director, officer, employee,
                                         consultant, agent or representative of, or furnish information to, or otherwise facilitate
                                         in any way the efforts of, any Person engaged in competition with Company’s Business
                                         anywhere in the world;



 


		5.3	solicit, employ, interfere with or attempt
                                         to entice away from Company or any Affiliate of Company any Person who has been employed
                                         or was engaged by Company or any such Affiliate in an executive, management, marketing,
                                         scientific or technical capacity in connection with the conduct of Company’s Business
                                         within one year prior to such solicitation, employment, interference or enticement; or



 


		5.4	approach for any business or commercial
                                         purpose any Person who competes with or has plans of which Executive is aware to compete
                                         with Company’s Business, or solicit or deal with any Person who at any time during the
                                         one (1) year period immediately
                                         preceding the Exit Date;



 




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		(a)	was
                                         a customer, client, supplier, agent or distributor of Company or any Affiliate;



 


		(b)	was a potential customer, client,
                                         supplier, agent or distributor of Company or any Affiliate and with whom employees reporting
                                         to or under Executive’s direct control had personal contact on behalf of Company or any
                                         Affiliate; or



 


		(c)	was a Person
                                         with whom Executive had regular, substantial or a series of business dealings on behalf
                                         of Company or any Affiliate of Company (whether or not a customer, client, supplier,
                                         agent or distributor of Company or any Affiliate).



 


The
Restrictive Period shall be automatically extended for any period of time during which the Executive has breached, or threatened
to breach, any provisions hereof. The geographic scope of the covenants set forth in this Section 5 shall be worldwide and Executive
acknowledges that the business of Company and its Affiliates is worldwide and therefore the geographic scope of such covenants
is reasonable and necessary to protect the interests of Company.


 


		6.	Benefits Payable Upon Termination
                                         of Employment.



 


		6.1	Except
                                         as specifically provided in this Agreement or required by applicable law, upon termination
                                         of the employment relationship between Company and Executive for any reason, all
                                         duties and obligations of Company to Executive and all rights, remedies, compensation,
                                         Benefits, privileges, grants and options of Executive shall cease and terminate as of
                                         the Exit Date.



 


		6.2	Executive shall be entitled to the compensation
                                         and benefits specified in Section 6.3 hereof if Executive’s employment by Company
                                         is terminated by Company, other than by reason of any of the events set forth in Section
                                         6.4 below.



 


		6.3	Upon termination
                                         of employment as set forth in Section 6.2 or Section 8 of this Agreement, Executive shall
                                         be entitled to the following:



 


	.	(a)	Compensation.
                                         Executive shall be entitled to Base Salary payable in installments and in such amounts
                                         as were in effect on the date of termination of Executive’s employment which shall
                                         continue until the earlier of (i) one (1) year after the date the employment relationship
                                         between Company and Executive ends, or (ii) Executive becomes employed or engaged on
                                         a full-time basis.



 


		(b)	Employee Benefits. Executive
                                         shall be entitled to a continuation of all medical, dental and life insurance benefits
                                         in substantially the same manner and amount to which Executive was entitled on the date
                                         of termination of Executive’s employment until the earlier of (i) one (1) year
                                         after termination of Executive’s employment by Company, or (ii) Executive becomes
                                         eligible for similar benefits with any new employer or other Person.



 




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		6.4	Executive
                                         shall not be entitled to any compensation or Benefits of any nature, including without
                                         limitation those referred in Section 6.3 of this Agreement, in the event that the employment
                                         relationship between Company and Executive ends by reason of: death; Executive’s inability
                                         to perform fully his duties and responsibilities to Company to the full extent required
                                         by the Board by reason of illness, injury or incapacity for ninety (90) consecutive days,
                                         or for more than one hundred
                                         twenty (120) days in the aggregate during any period of twelve (12) consecutive calendar
                                         months; Executive’s admission of any dishonest or illegal act or omission; Executive’s
                                         conviction of any misdemeanor or felony pertaining to or involving dishonesty, harassment
                                         or violence; any negligent act or omission by Executive which has a material adverse
                                         effect upon Company; Executive’s willful misconduct; any representation to Company by
                                         Executive contained in this Agreement is materially false or misleading; Executive’s
                                         failure to implement or observe any directive of the Board or Executive’s breach, violation
                                         or default of any of the covenants, duties or obligations imposed upon Executive pursuant
                                         to this Agreement and the failure to cure the same as permitted by this Agreement; Executive’s
                                         failure to fully perform such performance standards as shall be determined from time
                                         to time by the Board and the failure to cure the same as permitted by this Agreement;
                                         or a good faith determination by the Board or Company’s outside accountants that Company
                                         is insolvent using the balance sheet test or is unable to pay its debts as they mature.



 


		6.5	Upon
                                         termination of Executive’s employment for any reason, all Company property shall be returned
                                         by Executive to Company within
                                         three (3) days of such termination. All other compensation and Benefits of any nature
                                         provided by Company not otherwise addressed in this Agreement shall terminate as of the
                                         date of termination of Executive’s employment.



 


		7.	Confidential
                                         Information/Developments.



 


		7.1	Executive
                                         recognizes and acknowledges that by reason of his employment by and service to Company,
                                         he shall have access to financial, marketing, scientific, technical, proprietary and
                                         other confidential information of Company and its Affiliates, including information and
                                         knowledge pertaining to Company’s standard operating procedures, processes
                                         and formulae, whether patentable or not, Company’s pharmaceutical procedures, products
                                         and services offered, research ideas, product testing and development, clinical test
                                         results, methods, inventions, innovations, recipes and formulae, designs, ideas, plans,
                                         trade secrets, know-how, distribution and sales methods and systems, sales and profit
                                         figures, customer and client lists, supplier lists, confidential information obtained
                                         from third parties and relationships between Company and its Affiliates, distributors,
                                         customers, clients, suppliers and others who have business dealings with Company and
                                         its Affiliates and other information not known to Company’s competitors (all of the foregoing
                                         being hereinafter referred to as “Confidential Information”). Executive acknowledges
                                         that the Confidential Information is a valuable and unique asset of Company and covenants
                                         that he shall



 




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			not,
                                         either during the period of time during which Executive is employed by Company or at
                                         any time thereafter, disclose any such Confidential Information to any Person for any
                                         reason whatsoever without the prior written authorization of the Board, unless such information
                                         is in the public domain through no fault of Executive or except (a) as may be required
                                         by law with prior notice to Company, or (b) to
                                         the extent that such disclosure is provided on a “need-to-know” basis in the
                                         proper service of Company’s business interests.



 


		7.2	Executive
                                         further recognizes and acknowledges that, in light of his particular duties and responsibilities
                                         to Company, all inventions, discoveries, programs, programming techniques, underlying
                                         program designs and/or concepts, machinery, products, processes, computer hardware, information
                                         systems, software (including without limitation source code, object code, documentation,
                                         diagrams and flow charts) and improvements, whether patentable or not, which have
                                         been or may in the future be made by him during the course of his duties to Company which
                                         relate to any business or activity of Company, whether solely or jointly with others,
                                         whether during or outside normal working hours and whether on or off the premises of
                                         Company (all of the foregoing being hereinafter referred to as “Inventions and Discoveries”),
                                         are and shall be and remain the exclusive property of Company, whether or not disclosed,
                                         assigned or transferred at the time of the termination of the employment relationship
                                         established pursuant to this Agreement.



 


		7.3	Without request, Executive shall promptly
                                         and fully disclose to the Board and to no other Person the Inventions and Discoveries
                                         referred to in Section 7.2 above and shall assign to Company all of his rights throughout
                                         the world to such Inventions and Discoveries. Upon the request of Company, either during
                                         the period of time during which Executive is employed by Company or thereafter, Executive
                                         or his personal representatives, at the sole expense and subject to the exclusive control
                                         of Company, shall apply or join with Company in applying for a patent, trademark, trade
                                         name or registered mark or design in all such countries of the world as Company may in
                                         its sole discretion determine, and further shall execute all papers necessary therefore
                                         including without limitation
                                         assignments to Company, or its nominee, without further consideration.



 


		8.	Termination
                                         of Employment Following Change in Control. If a Change in Control shall occur and
                                         if thereafter within ninety (90) days following the date of the Change in Control there
                                         shall be: (a) any termination by Company of the employment relationship established pursuant
                                         to this Agreement other than for any of the reasons referred to in Section 6.4 of this
                                         Agreement; (b) any material
                                         reduction in Executive’s title, authority, responsibilities or annual Base Salary
                                         as such exist as of the date of Change of Control; or (c) any failure to continue Executive’s
                                         participation in any bonus plans or benefit programs in which Executive participated
                                         as of the date of the Change in Control the effect of which is to materially decrease
                                         the potential benefits to Executive in the aggregate; then, at the option of Executive,
                                         exercisable within thirty (30) days of the occurrence of any of the foregoing events,
                                         Executive may resign from the employment relationship established pursuant to this Agreement,
                                         or, if involuntarily



 




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			terminated
                                         as provided in Section 8(a) of this Agreement, give notice of intention to collect compensation
                                         and benefits under this Agreement by delivering a notice in writing
                                         (“Notice of Termination”) to the Chairman of the Board of the Company, and
                                         in such event, Executive shall be entitled to the compensation and benefits specified
                                         in Section 6.3 hereof.



 


		9.	Remedies.
                                         Except as otherwise provided in this Agreement, upon any breach, violation or default
                                         by either party to this Agreement (“Defaulting Party”) of any of the representations,
                                         covenants, duties or obligations imposed upon such Defaulting Party pursuant to this
                                         Agreement, and, if curable, the failure of such Defaulting Party to cure such breach,
                                         violation or default within ten (10) days of the date of the giving of notice by the
                                         other party to this Agreement (“Non-Defaulting Party”), the Non-Defaulting
                                         Party shall have all rights and remedies which are contained in this Agreement and all
                                         other rights and remedies which are at law, in equity or by statute permitted or provided,
                                         all such rights and remedies to be cumulative and concurrent. Notwithstanding anything
                                         to the contrary, Executive shall have no right to cure any breach, violation or default
                                         of any representation, covenant, duty or obligation imposed upon Executive pursuant to
                                         this Agreement which arises out of, pertains to or constitutes any dishonest or illegal
                                         act or omission, any conviction of any misdemeanor or felony pertaining to or involving
                                         dishonesty, harassment or violence, commission of any willful misconduct or any breach,
                                         violation or default upon the provisions of Sections 5 or 7 of this Agreement.



 


		10.	Disability Payments. In the
                                         event that Company shall obtain or procure any disability or similar insurance which
                                         makes payments to Executive (“Disability Payments”) on account of Executive
                                         being unable to perform his duties and obligations to Company by reason of illness, injury
                                         or incapacity, the aggregate amount of such Disability Payments shall constitute a credit
                                         on a dollar for dollar basis against all amounts, including without limitation Base Salary,
                                         owing by Company to Executive and shall decrease on a dollar for dollar basis such amounts
                                         owing by Company, and Company shall be released to such extent. Nothing contained in
                                         this Section shall impose any duty or obligation upon Company to obtain any such insurance.



 


		11.	Papers. All correspondence,
                                         memoranda, notes, records, reports, drawings, lists, photographs, plans and other papers
                                         and items received or made by Executive in connection with his employment by Company
                                         shall be the property of Company. Executive shall deliver all such materials, and all
                                         copies thereof in whatever form stored, to Company upon request of Company and, even
                                         if it does not request, when his employment by Company ends.



 


		12.	Enforcement. Executive acknowledges
                                         that any breach, violation or default by Executive of any of the representations, duties
                                         or obligations imposed upon Executive pursuant to this Agreement
                                         may cause Company immediate and irreparable harm for which Company’s remedies at law
                                         (such as money damages) will be inadequate. Company shall have the right, in addition
                                         to any other rights it may have, to obtain an injunction to restrain any breach or threatened
                                         breach of this Agreement. Should any provision of this Agreement be adjudged to any extent
                                         invalid by any competent tribunal, that provision shall be deemed modified to the extent
                                         necessary to make it enforceable. Company may



 




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			contact
                                         any Person with or for whom Executive works after his employment by Company ends
                                         and may send that Person a copy
                                         of this Agreement.



 


		13.	Binding
                                         Effect. Executive’s undertakings hereunder shall bind him and his heirs and legal
                                         representatives regardless of (a) the duration of his employment by Company, (b) any
                                         change in his title, duties or the nature of his employment, (c) the reasons
                                         for or manner of termination of his employment, (d) the amount of his compensation, or
                                         (e) Change of Control. The duties and responsibilities of Executive to Company are of
                                         a personal nature and shall not be assignable or delegatable in whole or in part by Executive.
                                         Company shall have the absolute right to assign all or any part of this Agreement without
                                         the consent of Executive. In the event of any assignment by Company of this Agreement,
                                         Company’s assignee shall have the right to enforce each of the provisions of this Agreement,
                                         including without limitation, Sections 4, 5, 7, 9, 10, 12 and 13 of this Agreement and
                                         in such event, as used in this Agreement, “Company’’ shall include without limitation
                                         any assignee or other successor to its business or assets.



 


		14.	Miscellaneous.
                                         This Agreement (a) establishes an at will employment relationship between Company
                                         and Executive, and, notwithstanding any other provision of this Agreement, shall in no
                                         way bind Executive or Company to a specific term of employment, and either party may
                                         terminate such employment relationship at
                                         any time for any or no reason whatsoever, (b) supersedes all prior understandings, discussions,
                                         negotiations, correspondence and other writings and constitutes the entire understanding
                                         between Company and Executive about the subject matter covered by this Agreement, (c)
                                         may be modified or varied only in writing signed by Company and Executive, (d) shall
                                         survive the termination of the employment relationship between Company and Executive,
                                         (e) is subject to and contingent and conditioned upon approval by the Board and shall
                                         not be binding upon Company unless and until such approval by the Board is given, and
                                         (f) shall be governed by Pennsylvania law without giving effect to any conflict of laws
                                         provisions.



 


IN
WITNESS WHEREOF, and INTENDING TO BE LEGALLY BOUND HEREBY, the parties to this Agreement have executed this Agreement
as of the  28th day of July, 2003.


 





	 		 	 	INNOCOLL, INC.
	 	/s/
    Rolf Schmidt	BY:		
	 	 	 	 	TITLE: Chairman
	 	 	 	 	 
	 	/s/ Michael
    Myers	 	 	 
	 	MICHAEL MYERS, Ph.D.	 	 	 







 




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