Document:

exv10w2

 

Exhibit 10.2

ADVANCIS PHARMACEUTICAL CORPORATION

EXECUTIVE EMPLOYMENT AGREEMENT

          THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made this 19th
day of March 2004 by and between Donald J. Treacy, Ph.D., a resident of
Annapolis, Maryland (the “Employee”), and Advancis Pharmaceutical Corporation,
a corporation organized and existing under the laws of the State of Delaware
(the “Company”).

BACKGROUND

          The Company is engaged in the business of developing, improving and
promoting antibiotic therapies and the delivery and dosage of antibacterials,
as well as extending the market and patent life of important anti-infectives
and oncology (as may be modified or expanded by the Company during the term of
this Agreement, collectively and individually, the “Business”).

          The Company desires to employ the Employee and the Employee desires to be
employed by the Company, upon the terms and conditions set forth in this
Agreement.

          NOW, THEREFORE, in consideration of the mutual covenants and obligations
contained herein, and intending to be legally bound, the parties, subject to
the terms and conditions set forth herein, agree as follows:

          1. Employment and Term. The Company hereby employs the Employee and the
Employee hereby accepts employment with the Company, as Vice President,
Analytical Sciences, (the “Position”) commencing on January 1, 2004 (the
“Commencement Date”). Employee is employed by the Company on an at will basis.
The Employee shall be entitled to terminate this Agreement at any time upon
ninety (90) days prior written notice to the Company. The Company shall be
entitled to terminate this Agreement at any time subject to the provisions of
Section 8 hereof. (The entire period of time during which the Employee is
employed by the Company is referred to herein as the “Term”).

          2. Duties. During the Term, the Employee shall serve the Company
faithfully and to the best of his ability and shall devote his full time,
attention, skill and efforts to the performance of the duties required by or
appropriate for the Position. Subject to the oversight of the President & CEO,
the Employee shall (i) have responsibility for the planning, directing and
prioritizing of analytical science activities, and (ii) such duties and
responsibilities as may be assigned to him from time to time by the Sr. Vice
President of Pharmaceutical R&D, and/or the President & CEO. The Employee
shall perform such duties and responsibilities at the Company’s facility
located in Germantown, Maryland or at such other location as may be mutually
agreed upon by the Company and the Employee in accordance with the business
needs of the Company. The Employee, as Vice President, Analytical Sciences
shall report to the Senior Vice President, Pharmaceutical R&D.

 

 

          3. Other Business Activities. Except with the prior written consent of
the Company in its sole discretion, the Employee shall not engage, directly or
indirectly, during the Term, in any other business activities or pursuits
whatsoever, except activities in connection with charitable or civic
activities, personal investments and serving as an executor, trustee or in
other similar fiduciary capacity; provided that any such activities do not
interfere with the performance of his responsibilities and obligations pursuant
to this Agreement.

          4. Compensation. The Company shall pay the Employee, and the Employee
hereby agrees to accept, as compensation for all services to be rendered to the
Company and for the Employee’s intellectual property covenants and assignments
and covenant not to compete, as provided in Sections 6 and 7 hereof, the
compensation set forth in this Section 4.

               4.1 Salary. The Company shall pay the Employee a base salary at the
annual rate of Two Hundred Five Thousand Dollars ($205,000.00) (as the same may
hereafter be adjusted, the “Salary”) during the Term of this Agreement. The
Salary shall be inclusive of all applicable income, social security and other
taxes and charges that are required by law to be withheld by the Company
(collectively, “Taxes”) and shall be paid and withheld in accordance with the
Company’s normal payroll practice for its executive employees from time to time
in effect. The Salary shall be subject to increase at the option and in the
sole discretion of the Company based upon the demonstrated performance of the
Employee.

               4.2 Bonus. Upon the execution of this Agreement, the Employee shall be
eligible to be awarded an annual cash bonus, which bonus shall be determined by
the President & CEO and the Board of Directors and shall be in a target amount
of twenty-five percent (25%) of Salary paid during such applicable period, less
Taxes, provided that the Employee shall have achieved all of his performance
objectives established for such period. Such bonus shall be determined and
paid within ninety (90) days after the conclusion of such year.

               4.3 Fringe Benefits. The Employee shall be entitled to participate in the
following programs and receive the following benefits (collectively, the
“Benefits”) in accordance with the following provisions.

                    (a) The Employee shall be entitled to participate in any retirement,
health or dental programs generally made available to executive employees of
the Company.

                    (b) The Employee shall be entitled to participate in all vacation, life
and disability insurance and other fringe benefit programs of the Company to
the extent and on the same terms and conditions as are accorded to other
executive employees of the Company.

                    4.4 Reimbursement of Expenses. During the Term, the Employee shall be
reimbursed for items of travel, food and lodging and miscellaneous expenses
reasonably incurred by him on behalf of the Company, provided that such
expenses are incurred,

	 	 	 
	Employee Name: Donald J. Treacy, Ph.D.	 	Employment Agreement Ver. 01/2003
	Dated March 19, 2004	 	Page 2 of 14

 

 

documented and submitted to the Company, all in accordance with the
reimbursement policies of the Company as in effect from time to time.

          5. Confidentiality. The Employee recognizes and acknowledges that the
Proprietary Information (as hereinafter defined) is a valuable, special and
unique asset of the Company. As a result, both during the Term and thereafter,
the Employee shall not, without the prior written consent of the Company, for
any reason either directly or indirectly divulge to any third-party or use for
his own benefit, or for any purpose other than the exclusive benefit of the
Company, any confidential, proprietary, business and technical information or
trade secrets of the Company or of any subsidiary or affiliate of the Company
(the “Proprietary Information”) revealed, obtained or developed in the course
of his employment with the Company. Proprietary Information shall include any
confidential or proprietary information or trade secrets relating to any
patents or other intellectual property assigned by the Employee to the Company.
Proprietary Information also shall include, but shall not be limited to the
intangible personal property described in Section 6(b) hereof and, in addition,
technical information, including research design, results, techniques and
processes; apparatus and equipment design; computer software; technical
management information, including project proposals, research plans, status
reports, performance objectives and criteria, and analyses of areas for
business development; and business information, including project, financial,
accounting and personnel information, business strategies, plans and forecasts,
customer lists, customer information and sales and marketing plans, efforts,
information and data. In addition, “Proprietary Information” shall include all
information and materials received by the Company or Employee from a third
party subject to an obligation of confidentiality and/or non-disclosure.
Nothing contained herein shall restrict the Employee’s ability to make such
disclosures during the course of his employment as may be necessary or
appropriate to the effective and efficient discharge of the duties required by
or appropriate for the Position or as such disclosures may be required by law.
Furthermore, nothing contained herein shall restrict the Employee from
divulging or using for his own benefit or for any other purpose any Proprietary
Information that is readily available to the general public so long as such
information did not become available to the general public as a direct or
indirect result of the Employee’s breach of this Section 5. Failure by the
Company to mark any of the Proprietary Information as confidential or
proprietary shall not affect its status as Proprietary Information under the
terms of this Agreement.

          6. Property.

               6.1 Removal and Distribution. All right, title and interest in and to
Proprietary Information shall be and remain the sole and exclusive property of
the Company. During the Term, the Employee shall not remove from the Company’s
offices or premises any documents, records, notebooks, files, correspondence,
reports, memoranda or similar materials of or containing Proprietary
Information, or other materials or property of any kind belonging to the
Company, unless necessary or appropriate in accordance with the duties and
responsibilities required by or appropriate for the Position and, in the event
that such materials or property are removed, all of the foregoing shall be
returned to their proper files or places of safekeeping as promptly as possible
after the removal shall serve its specific purpose. The Employee shall not
make, retain, remove and/or distribute any copies of any of the foregoing for
any reason
	 	 	 
	Employee Name: Donald J. Treacy, Ph.D.	 	Employment Agreement Ver. 01/2003
	Dated March 19, 2004	 	Page 3 of 14

 

 

whatsoever, except as may be necessary in the discharge of the assigned duties
and shall not divulge to any third person the nature of and/or contents of any
of the foregoing or of any other oral or written information to which he may
have access or with which for any reason he may become familiar, except as
disclosure shall be necessary in the performance of the duties; and upon the
termination of his employment with the Company, the Employee shall return to
the Company all originals and copies of the foregoing then in his possession or
under his control, whether prepared by the Employee or by others.

               6.2 Developments.

                    (a) The Employee acknowledges that all right, title and interest in and to
any and all writings, documents, inventions, discoveries, ideas, developments,
information, computer programs or instructions (whether in source code, object
code, or any other form), algorithms, formulae, plans, memoranda, tests,
research, designs, innovations, systems, analyses, specifications, models,
data, diagrams, flow charts, and/or techniques (whether patentable or
non-patentable or whether reduced to written or electronic form or otherwise)
that the Employee creates, makes, conceives, discovers or develops, either
solely or jointly with any other person, at any time during the Term, whether
during working hours or at the Company’s facility or at any other time or
location, and whether upon the request or suggestion of the Company or
otherwise, (collectively, “Intellectual Work Product”) shall be the sole and
exclusive property of the Company. The Employee shall promptly disclose to the
Company all Intellectual Work Product, and the Employee shall have no claim for
additional compensation for the Intellectual Work Product, except for any
excluded Intellectual Work Product that is wholly unrelated to the
pharmaceutical industry, in the broadest sense, provided that such Intellectual
Work Product is not conceived, discovered or developed, either solely or
jointly with any other person during working hours or at the Company’s facility
or using any other Company resource.

                    (b) The Employee acknowledges that all the Intellectual Work Product that
is copyrightable shall be considered a work made for hire under United States
Copyright Law. To the extent that any copyrightable Intellectual Work Product
may not be considered a work made for hire under the applicable provisions of
the United States Copyright Law, or to the extent that, notwithstanding the
foregoing provisions, the Employee may retain an interest in any Intellectual
Work Product, the Employee hereby irrevocably assigns and transfers to the
Company any and all right, title, or interest that the Employee may have in the
Intellectual Work Product under copyright, patent, trade secret and trademark
law, in perpetuity or for the longest period otherwise permitted by law,
without the necessity of further consideration. The Company shall be entitled
to obtain and hold in its own name all copyrights, patents, trade secrets, and
trademarks with respect thereto.

                    (c) The Employee shall reveal promptly all information relating to any
such Intellectual Property to the Board of Directors of the Company, and, at
the Company’s expense, shall cooperate with the Company and execute such
documents as may be necessary or appropriate (i) in the event that the Company
desires to seek copyright, patent or trademark protection, or other analogous
protection, thereafter relating to the Intellectual Work Product, and when such
protection is obtained, renew and restore the same, or (ii) to defend any
	 	 	 
	Employee Name: Donald J. Treacy, Ph.D.	 	Employment Agreement Ver. 01/2003
	Dated March 19, 2004	 	Page 4 of 14

 

 

opposition proceedings in respect of obtaining and maintaining such copyright,
patent or trademark protection, or other analogous protection.

                    (d) In the event the Company is unable after reasonable effort to secure
the Employee’s signature on any of the documents referenced in Section 6.2 (c)
hereof, whether because of the Employee’s physical or mental incapacity or for
any other reason whatsoever, the Employee hereby irrevocably designates and
appoints the Company and its duly authorized officers and agents as the
Employee’s agent and attorney-in-fact, to act for and on the behalf and stead
to execute and file any such documents and to do all other lawfully permitted
acts to further the prosecution and issuance of any such copyright, patent or
trademark protection, or other analogous protection, with the same legal force
and effect as if executed by the Employee.

                    (e) The Employee represents that the innovations, designs, systems,
analyses, ideas, and all copyrights, patents, trademarks and trade names, or
similar intangible personal property (collectively, the “Pre-existing
Property”) identified on Schedule I hereof comprise all of the innovations,
designs, systems, analyses, ideas and all copyrights, patents, trademarks and
trade names, or similar intangible personal property that the Employee has made
or conceived of prior to the date hereof, and same are excluded from the
operation of the other provisions of this Section 6.2. In the event that the
Employee learns of any Pre-existing Property that he inadvertently failed to
include in Schedule I, and the circumstances surrounding the failure of such
inclusion are reasonably satisfactory to the Company, the Employee and the
Company shall jointly amend Schedule I to include such property.

          7. Covenant not to Compete.

               7.1 Restrictions. Provided that the Company is in compliance with Section
8.4 hereof, if applicable, the Employee shall not, during the Term and for a
period of two (2) years thereafter (the “Restricted Period”), except as an
employee of the Company and in order to carry out the Employee’s duties
hereunder, do any of the following directly or indirectly without the prior
written consent of the Company in its sole discretion:

                    (a) engage or participate, directly or indirectly, in any business
activity competitive with the Business or the business of the Company or any of
the Company’s subsidiaries or affiliates as conducted during the Term;

                    (b) become interested (as owner, stockholder, lender, partner,
co-venturer, director, officer, employee, agent, consultant or otherwise) in
any person, firm, corporation, association or other entity engaged in any
business that is competitive with the Business or of the business of the
Company or any subsidiary or affiliate of the Company as conducted during the
Term, or become interested in (as owner, stockholder, lender, partner,
co-venturer, director, officer, employee, agent, consultant or otherwise) any
portion of the business of any person, firm, corporation, association or other
entity where such portion of such business is competitive with the Business of
the Company or the business of any subsidiary or affiliate of the Company as
conducted during the Term (notwithstanding the foregoing, the
	 	 	 
	Employee Name: Donald J. Treacy, Ph.D.	 	Employment Agreement Ver. 01/2003
	Dated March 19, 2004	 	Page 5 of 14

 

 

Employee may hold not more than one percent (1%) of the outstanding securities
of any class of any publicly-traded securities of a company that is engaged in
activities referenced in this Section 7.1.

                    (c) solicit, call on or transact or engage in any business activity with,
either directly or indirectly, any (i) customer with whom the Company shall
have dealt at any time during the one (1) year period immediately preceding the
termination of the Employee’s employment hereunder, or (ii) corporate partner,
collaborator, independent contractor or supplier with whom the Company shall
have dealt at any time during the one (1) year period immediately preceding the
termination of the Employee’s employment hereunder;

                    (d) influence or attempt to influence any then current or prospective
supplier, customer, corporate partner, collaborator, or independent contractor
of the Company to terminate or modify any written or oral agreement or course
of dealing with the Company; or

                    (e) influence or attempt to influence any person either (i) to terminate
or modify an employment, consulting, agency, distributorship or other
arrangement with the Company, or (ii) to employ or retain, or arrange to have
any other person or entity employ or retain, any person who has been employed
or retained by the Company as an employee, consultant, agent or distributor of
the Company at any time during the one (1) year period immediately preceding
the termination of the Employee’s employment hereunder.

               7.2 Acknowledgment. The Employee acknowledges that he has carefully read
and considered the provisions of this Section 7. The Employee acknowledges
that the foregoing restrictions will limit his ability to earn a livelihood in
a business competitive with the Business, but he nevertheless believes that he
has received and will receive sufficient consideration and other benefits in
connection with the payment by the Company of the compensation set forth in
Sections 4 and 8.4 to justify such restrictions, which restrictions the
Employee does not believe would prevent him from earning a living in businesses
that are not competitive with the Business and without otherwise violating the
restrictions set forth herein.

               8. Early Termination. The Employee’s employment hereunder may be
terminated during the Term upon the occurrence of any one of the events
described in this Section 8. Upon termination, the Employee shall be entitled
only to such compensation and benefits as described in this Section 8.
	 	 	 
	Employee Name: Donald J. Treacy, Ph.D.	 	Employment Agreement Ver. 01/2003
	Dated March 19, 2004	 	Page 6 of 14

 

 

               8.1 Involuntary Termination.

                    (a) Termination for Disability.

                         (i) In the event of the disability of the Employee such that the Employee
is unable to perform the duties and responsibilities hereunder to the full
extent required by this Agreement by reasons of illness, injury or incapacity
for a period of more than one hundred eighty (180) consecutive days or more
than one hundred eighty (180) days, in the aggregate, during any three hundred
sixty-five (365) day period (“Disability”), the Company shall have the right to
terminate Employee’s employment hereunder by written notice to the Employee.

                         (ii) In the event of a termination of the Employee’s employment hereunder
pursuant to Section 8.1(a)(i), the Employee will be entitled to receive all
accrued and unpaid (as of the date of such termination) Salary and applicable
Benefits; provided that the Employee has complied with all of his obligations
under this Agreement and continues to comply with all of his surviving
obligations hereunder listed in Section 10 and a pro-rata percentage of the
bonus (provided in Section 4.2) for the last fiscal year of the Company prior
to the date of Employee’s termination. Except as specifically set forth in
this Section 8.1(a)(ii) or as provided by applicable law, the Company shall
have no liability or obligation to the Employee for compensation or benefits
hereunder by reason of, or subsequent to, such termination.

                    (b) Termination by Death. In the event that the Employee dies during the
Term, the Employee’s employment hereunder shall be terminated thereby and the
Company shall pay to the Employee’s executors, legal representatives or
administrators an amount equal to the accrued and unpaid portion of the Salary
for the month in which he dies and a pro-rata percentage of the bonus (provided
in Section 4.2) for the last fiscal year of the Company prior to the date of
Employee’s termination. Except as specifically set forth in this Section 8.1(b)
or as provided by applicable law, the Company shall have no liability or
obligation hereunder to the Employee’s executors, legal representatives,
administrators, heirs or assigns or any other person claiming under or through
him by reason of or subsequent to the Employee’s death.

               8.2 Termination for Cause.

                    (a) The Company shall have the right to terminate the Employee’s
employment hereunder at any time for “cause” upon written notice to the
Employee. For purposes of this Agreement, “cause” shall mean the Employee’s
(including, if the Employee is not a natural person, any employee of or
contractor to the Employee who is involved, directly or indirectly, in the
provision of services to the Corporation) (a) dishonesty, embezzlement, theft
or fraudulent misconduct; (b) abuse of a controlled substance that materially
impairs the performance of the Employee’s duties to the Corporation; (c)
conduct adverse to the business, interests, or reputation of the Corporation;
(d) material breach of any of the terms hereof or of any agreement between the
Corporation and the Employee, (including, but not limited to, terms relating to
non-disclosure, non-competition and invention assignment) which, if curable,
remains
	 	 	 
	Employee Name: Donald J. Treacy, Ph.D.	 	Employment Agreement Ver. 01/2003
	Dated March 19, 2004	 	Page 7 of 14

 

 

uncured thirty (30) days after the Employee receives written notice of such
breach; or (e) commission of a felony.

                    (b) In the event of a termination of the Employee’s employment hereunder
pursuant to Section 8.2(a), the Employee shall be entitled to receive all
accrued but unpaid (as of the effective date of such termination) Salary and
Benefits. All Salary and Benefits shall cease at the time of such termination,
subject to the requirements of applicable law. Except as specifically set
forth in this Section 8.2, the Company shall have no liability or obligation
hereunder by reason of or subsequent to such termination.

               8.3 Termination by the Company Without Cause.

                    (a) Notwithstanding anything to the contrary set forth herein, the Company
shall have the right to terminate the Employee’s employment hereunder at any
time, for any reason or no reason, with or without cause, effective upon the
date designated by the Company upon written notice to the Employee.

                    (b) In the event of a termination of the Employee’s employment hereunder
pursuant to Section 8.3(a), the Employee shall be entitled to receive all
accrued but unpaid (as of the effective date of such termination) Salary; a
pro-rata percentage of the bonus (provided in Section 4.2) for the last fiscal
year of the Company prior to the date of the Employee’s termination; and the
severance payments and Benefits in the manner set forth in Section 8.4;
provided that the Employee has complied with all of his obligations under this
Agreement and continues to comply with all of his surviving obligations
hereunder listed in Section 10. All Salary shall cease at the time of such
termination, except as required under applicable law. Except as specifically
set forth in this Section 8.3, the Company shall have no liability or
obligation hereunder by reason of or subsequent to such termination.

               8.4 Severance.

                    (a) In the event of the termination of the Employee’s employment under
Section 8.3 the Employee shall be entitled to severance pay in an amount equal
to twenty-four (24) months of Salary, subject to all withholding obligations,
calculated on the basis of the Salary in effect at the date of termination and
paid in the same manner as Salary was then paid hereunder.

                    (b) The Employee shall be entitled to receive all Benefits to which he was
entitled on the date preceding his termination for the period of time during
which he is entitled to receive severance pay hereunder.

                    (c) Except as provided in subsections (a) and (b) above, the Company shall
have no liability or obligation by reason of or subsequent to the termination
of the employment relationship between the Company and the Employee.

	 	 	 
	Employee Name: Donald J. Treacy, Ph.D.	 	Employment Agreement Ver. 01/2003
	Dated March 19, 2004	 	Page 8 of 14

 

          9. Representations, Warranties and Covenants of the Employee.

               9.1 Restrictions. The Employee represents and warrants to the Company
that:

                    (a) There are no restrictions, agreements or understandings whatsoever to
which the Employee is a party which would prevent or make unlawful the
Employee’s execution of this Agreement or the Employee’s employment hereunder,
or which is or would be inconsistent or in conflict with this Agreement or the
Employee’s employment hereunder, or, except as set forth in any agreements
previously provided to the Company, would prevent, limit or impair in any way
the performance by the Employee of the obligations hereunder; and

                    (b) The Employee has disclosed to the Company all restraints,
confidentiality commitments or other employment restrictions that he has with
any other employer, person or entity.

               9.2 Obligations to Former Employers. The Employee covenants that in
connection with his provision of services to the Company, he shall not breach
any obligation (legal, statutory, contractual or otherwise) to any former
employer or other person, including, but not limited to obligations relating to
confidentiality and proprietary rights.

               9.3 Obligations Upon Termination. Upon and after his termination or
cessation of employment with the Company and until such time as no obligations
of the Employee to the Company hereunder exist, the Employee (i) shall provide
a complete copy of this Agreement to any prospective employer or other person,
entity or association engaged in the Business, with whom or which the Employee
proposes to be employed, affiliated, engaged, associated or to establish any
business or remunerative relationship prior to the commencement thereof and
(ii) shall notify the Company of the name and address of any such person,
entity or association prior to his employment, affiliation, engagement,
association or the establishment of any business or remunerative relationship.

          10. Survival of Provisions. The provisions of this Agreement set forth in
Sections 5, 6, 7, 8, 9, 10, 19 and 20 hereof shall survive the termination of
the Employee’s employment hereunder.

          11. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company and the Employee and their respective
successors, executors, administrators, heirs and/or assigns; provided that
neither party shall make any assignment of this Agreement or any interest
herein, by operation of law or otherwise, without the prior written consent of
the other party.

          12. Notice. Any notice hereunder by either party shall be given by
personal delivery or by sending such notice by certified mail, return-receipt
requested, or telecopied, addressed or telecopied, as the case may be, to the
other party at its address set forth below or at

	 	 	 
	Employee Name: Donald J. Treacy, Ph.D.	 	Employment Agreement Ver. 01/2003
	Dated March 19, 2004	 	Page 9 of 14

 

 

such other address designated by notice in the manner provided in this section.
Such notice shall be deemed to have been received upon the date of actual
delivery if personally delivered or, in the case of mailing, two (2) days after
deposit with the U.S. mail, or, in the case of facsimile
transmission, when confirmed by the facsimile machine report.

	 	 	 
	 	(a)     	if to the Company, to:

	 
	 	 
	

	 	Advancis Pharmaceutical Corporation
	

	 	20425 Seneca Meadows Parkway
	

	 	Germantown, Maryland 20876
	

	 	Attention: Human Resources
	

	 	Facsimile: (301) 944-6701
	 
	 	 
	

	 	with a copy to:
	 
	 	 
	

	 	Howard Schwartz, Esquire
	

	 	Piper Rudnick LLP
	

	 	6225 Smith Avenue
	

	 	Baltimore, Maryland 21209-3600
	

	 	Facsimile: (410) 580-3251

	 	 	 
	 	(b)     	if to the Employee, to:

	 
	 	 
	

	 	Donald J. Treacy, Ph.D.
	

	 	1907 White Heron Road
	

	 	Annapolis, MD 21401

          13. Entire Agreement; Amendments. This Agreement contains the entire
agreement and understanding of the parties hereto relating to the subject
matter hereof, and merges and supersedes all prior and contemporaneous
discussions, agreements and understandings of every nature between the parties
hereto relating to the employment of the Employee with the Company. This
Agreement may not be changed or modified, except by an agreement in writing
signed by each of the parties hereto.

          14. Waiver. The waiver of the breach of any term or provision of this
Agreement shall not operate as or be construed to be a waiver of any other or
subsequent breach of this Agreement.

          15. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware, without regard to the
principles of conflicts of laws of any jurisdiction.
	 	 	 
	Employee Name: Donald J. Treacy, Ph.D.	 	Employment Agreement Ver. 01/2003
	Dated March 19, 2004	 	Page 10 of 14

 

 

          16. Invalidity. If any provision of this Agreement shall be determined to
be void, invalid, unenforceable or illegal for any reason, the validity and
enforceability of all of the remaining provisions hereof shall not be affected
thereby. If any particular provision of this Agreement shall be adjudicated to
be invalid or unenforceable, such provision shall be deemed amended to delete
therefrom the portion thus adjudicated to be invalid or unenforceable, such
amendment to apply only to the operation of such provision in the particular
jurisdiction in which such adjudication is made; provided that, if any
provision contained in this Agreement shall be adjudicated to be invalid or
unenforceable because such provision is held to be excessively broad as to
duration, geographic scope, activity or subject, such provision shall be deemed
amended by limiting and reducing it so as to be valid and enforceable to the
maximum extent compatible with the applicable laws of such jurisdiction, such
amendment only to apply with respect to the operation of such provision in the
applicable jurisdiction in which the adjudication is made.

          17. Section Headings. The section headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.

          18. Number of Days. In computing the number of days for purposes of this
Agreement, all days shall be counted, including Saturdays, Sundays and legal
holidays; provided that, if the final day of any time period falls on a
Saturday, Sunday or day which is a legal holiday in Delaware or Maryland, then
such final day shall be deemed to be the next day which is not a Saturday,
Sunday or legal holiday.

          19. Specific Enforcement The Employee acknowledges that the restrictions
contained in Sections 5, 6, and 7 hereof are reasonable and necessary to
protect the legitimate interests of the Company and its affiliates and that the
Company would not have entered into this Agreement in the absence of such
restrictions. The Employee also acknowledges that any breach by him of
Sections 5, 6, or 7 hereof will cause continuing and irreparable injury to the
Company for which monetary damages would not be an adequate remedy. The
Employee shall not, in any action or proceeding to enforce any of the
provisions of this Agreement, assert the claim or defense that an adequate
remedy at law exists. In the event of such breach by the Employee, the Company
shall have the right to enforce the provisions of Sections 5, 6, and 7 of this
Agreement by seeking injunctive or other relief in any court, and this
Agreement shall not in any way limit remedies of law or in equity otherwise
available to the Company.

          20. Consent to Suit. Subject to the provisions of Section 21 hereof, any
legal proceeding arising out of or relating to this Agreement shall be
instituted in the Court of Chancery of New Castle County, or if such court does
not have jurisdiction or will not accept jurisdiction, in any state or federal
court of general jurisdiction in the State of Delaware, and each of the Company
and the Employee hereby consents to the personal and exclusive jurisdiction of
such court and hereby waives any objection that either party may have to the
laying of venue of any such proceeding and any claim or defense of inconvenient
forum. If an action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to recover,
in addition to any other relief, reasonable attorneys’ fees, costs and
disbursements.
	 	 	 
	Employee Name: Donald J. Treacy, Ph.D.	 	Employment Agreement Ver. 01/2003
	Dated March 19, 2004	 	Page 11 of 14

 

 

          21. Arbitration. Subject to the last sentence of this Section 21, if any
dispute arises over the terms of this Agreement between the parties to this
Agreement, either Employee or Company may submit the dispute to binding
arbitration within thirty (30) days after such dispute arises, to be governed
by the evidentiary and procedural rules of the American Arbitration Association
(Commercial Arbitration). Employee and Company shall mutually select one (1)
arbitrator within ten (10) days after a dispute is submitted to arbitration.
In the event that the parties do not agree on the identity of the arbitrator
within such period, the arbitrator shall be selected by the American
Arbitration Association. The arbitrator shall hold a hearing on the dispute in
Wilmington, Delaware within thirty (30) days after having been selected and
shall issue a written opinion within fifteen (15) days after the hearing. The
arbitrator shall also decide on the allocation of the costs of the arbitration
to the respective parties, but Employee and Company shall each be responsible
for paying the fees of their own legal counsel, if legal counsel is obtained.
Either Employee or Company, or both parties, may file the decision of the
arbitrator as a final, binding and unappealable judgment in a court of
appropriate jurisdiction. Notwithstanding the foregoing provisions of this
Section 21 to the contrary, matters in which an equitable remedy or injunctive
relief is sought by a party, including but not limited to the remedies referred
to in Section 19 hereof, shall not be required to be submitted to arbitration,
if the party seeking such remedy or relief objects thereto, but shall instead
be subject to the provisions of Sections 19 and 20 hereof.

          22. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.

          23. Authorization. In connection with the execution of this Agreement,
the Employee shall be provided with a copy of the resolutions of the Board of
Directors of the Company authorizing the execution of this Agreement on behalf
of the Company.

[SIGNATURES ON FOLLOWING PAGE]

	 	 	 
	Employee Name: Donald J. Treacy, Ph.D.	 	Employment Agreement Ver. 01/2003
	Dated March 19, 2004	 	Page 12 of 14

 

 

          IN WITNESS WHEREOF, the parties have caused this Executive Employment
Agreement to be executed the day and year first written above.

	 	 	 	 	 
	 	 	ADVANCIS PHARMACEUTICAL CORPORATION
	 
	 	 	 	 
	

	 	By:
	 	/s/ Edward M. Rudnic, Ph.D.
	

	 	 	 	
 
	

	 	 	 	Edward M. Rudnic, Ph.D.
	

	 	 	 	President & CEO
	 
	 	 	 	 
	

	 	 	 	/s/ Donald J. Treacy, Ph.D.
	

	 	 	 	
 
	

	 	 	 	Donald J. Treacy, Ph.D.
	

	 	 	 	Vice President, Analytical Sciences

	 	 	 
	Employee Name: Donald J. Treacy, Ph.D.	 	Employment Agreement Ver. 01/2003
	Dated March 19, 2004	 	Page 13 of 14

 

 

Schedule I

Preexisting Property:

	 	 	 
	Employee Name: Donald J. Treacy, Ph.D.	 	Employment Agreement Ver. 01/2003
	Dated March 19, 2004	 	Page 14 of 14exv10w3

 

Exhibit 10.3

ADVANCIS PHARMACEUTICAL CORPORATION

EXECUTIVE EMPLOYMENT AGREEMENT

          THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made this 1st
day of July 2004 by and between David J. Kudla, Jr., a resident of Frederick,
Maryland (the “Employee”), and Advancis Pharmaceutical Corporation, a
corporation organized and existing under the laws of the State of Delaware (the
“Company”).

BACKGROUND

          The Company is engaged in the business of developing, improving and
promoting antibiotic therapies and the delivery and dosage of antibacterials,
as well as extending the market and patent life of important anti-infectives
and oncology (as may be modified or expanded by the Company during the term of
this Agreement, collectively and individually, the “Business”).

          The Company desires to employ the Employee and the Employee desires to be
employed by the Company, upon the terms and conditions set forth in this
Agreement.

          NOW, THEREFORE, in consideration of the mutual covenants and obligations
contained herein, and intending to be legally bound, the parties, subject to
the terms and conditions set forth herein, agree as follows:

          1. Employment and Term. The Company hereby employs the Employee and the
Employee hereby accepts employment with the Company, as Vice President, Quality
Assurance, (the “Position”) commencing on July 1, 2004 (the “Commencement
Date”). Employee is employed by the Company on an at will basis. The Employee
shall be entitled to terminate this Agreement at any time upon ninety (90) days
prior written notice to the Company. The Company shall be entitled to
terminate this Agreement at any time subject to the provisions of Section 8
hereof. (The entire period of time during which the Employee is employed by
the Company is referred to herein as the “Term”).

          2. Duties. During the Term, the Employee shall serve the Company
faithfully and to the best of his ability and shall devote his full time,
attention, skill and efforts to the performance of the duties required by or
appropriate for the Position. Subject to the oversight of the Chairman & CEO,
the Employee shall (i) have responsibility for the planning, directing and
prioritizing of quality assurance activities, and (ii) such duties and
responsibilities as may be assigned to him from time to time by the Chairman &
CEO. The Employee shall perform such duties and responsibilities at the
Company’s facility located in Germantown, Maryland or at such other location as
may be mutually agreed upon by the Company and the Employee in accordance with
the business needs of the Company. The Employee, as Vice President shall
report to the Chairman & CEO.

 

 

          3. Other Business Activities. Except with the prior written consent of
the Company in its sole discretion, the Employee shall not engage, directly or
indirectly, during the Term, in any other business activities or pursuits
whatsoever, except activities in connection with charitable or civic
activities, personal investments and serving as an executor, trustee or in
other similar fiduciary capacity; provided that any such activities do not
interfere with the performance of his responsibilities and obligations pursuant
to this Agreement.

          4. Compensation. The Company shall pay the Employee, and the Employee
hereby agrees to accept, as compensation for all services to be rendered to the
Company and for the Employee’s intellectual property covenants and assignments
and covenant not to compete, as provided in Sections 6 and 7 hereof, the
compensation set forth in this Section 4.

               4.1 Salary. The Company shall pay the Employee a base salary at the
annual rate of Two Hundred Five Thousand Dollars ($205,000.00) (as the same may
hereafter be adjusted, the “Salary”) during the Term of this Agreement. The
Salary shall be inclusive of all applicable income, social security and other
taxes and charges that are required by law to be withheld by the Company
(collectively, “Taxes”) and shall be paid and withheld in accordance with the
Company’s normal payroll practice for its executive employees from time to time
in effect. The Salary shall be subject to increase at the option and in the
sole discretion of the Company based upon the demonstrated performance of the
Employee.

               4.2 Bonus. Upon the execution of this Agreement, the Employee shall be
eligible to be awarded an annual cash bonus, which bonus shall be determined by
the Chairman & CEO and the Board of Directors and shall be in a target amount
of twenty five percent (25%) of Salary paid during such applicable period, less
Taxes, provided that the Employee shall have achieved all of his performance
objectives established for such period. Such bonus shall be determined and
paid within ninety (90) days after the conclusion of such year.

               4.3 Fringe Benefits. The Employee shall be entitled to participate in the
following programs and receive the following benefits (collectively, the
“Benefits”) in accordance with the following provisions.

                    (a) The Employee shall be entitled to participate in any retirement,
health or dental programs generally made available to executive employees of
the Company.

                    (b) The Employee shall be entitled to participate in all vacation, life
and disability insurance and other fringe benefit programs of the Company to
the extent and on the same terms and conditions as are accorded to other
executive employees of the Company.

               4.4 Reimbursement of Expenses. During the Term, the Employee shall be
reimbursed for items of travel, food and lodging and miscellaneous expenses
reasonably incurred by him on behalf of the Company, provided that such
expenses are incurred,

	 	 	 
	Employee Name: David J. Kudla, Jr.	 	Employment Agreement Ver. 01/2003
	Dated July 1, 2004	 	Page 2 of 14

 

 

documented and submitted to the Company, all in accordance with the
reimbursement policies of the Company as in effect from time to time.

          5. Confidentiality. The Employee recognizes and acknowledges that the
Proprietary Information (as hereinafter defined) is a valuable, special and
unique asset of the Company. As a result, both during the Term and thereafter,
the Employee shall not, without the prior written consent of the Company, for
any reason either directly or indirectly divulge to any third-party or use for
his own benefit, or for any purpose other than the exclusive benefit of the
Company, any confidential, proprietary, business and technical information or
trade secrets of the Company or of any subsidiary or affiliate of the Company
(the “Proprietary Information”) revealed, obtained or developed in the course
of his employment with the Company. Proprietary Information shall include any
confidential or proprietary information or trade secrets relating to any
patents or other intellectual property assigned by the Employee to the Company.
Proprietary Information also shall include, but shall not be limited to the
intangible personal property described in Section 6(b) hereof and, in addition,
technical information, including research design, results, techniques and
processes; apparatus and equipment design; computer software; technical
management information, including project proposals, research plans, status
reports, performance objectives and criteria, and analyses of areas for
business development; and business information, including project, financial,
accounting and personnel information, business strategies, plans and forecasts,
customer lists, customer information and sales and marketing plans, efforts,
information and data. In addition, “Proprietary Information” shall include all
information and materials received by the Company or Employee from a third
party subject to an obligation of confidentiality and/or non-disclosure.
Nothing contained herein shall restrict the Employee’s ability to make such
disclosures during the course of his employment as may be necessary or
appropriate to the effective and efficient discharge of the duties required by
or appropriate for the Position or as such disclosures may be required by law.
Furthermore, nothing contained herein shall restrict the Employee from
divulging or using for his own benefit or for any other purpose any Proprietary
Information that is readily available to the general public so long as such
information did not become available to the general public as a direct or
indirect result of the Employee’s breach of this Section 5. Failure by the
Company to mark any of the Proprietary Information as confidential or
proprietary shall not affect its status as Proprietary Information under the
terms of this Agreement.

          6. Property.

               6.1 Removal and Distribution. All right, title and interest in and to
Proprietary Information shall be and remain the sole and exclusive property of
the Company. During the Term, the Employee shall not remove from the Company’s
offices or premises any documents, records, notebooks, files, correspondence,
reports, memoranda or similar materials of or containing Proprietary
Information, or other materials or property of any kind belonging to the
Company, unless necessary or appropriate in accordance with the duties and
responsibilities required by or appropriate for the Position and, in the event
that such materials or property are removed, all of the foregoing shall be
returned to their proper files or places of safekeeping as promptly as possible
after the removal shall serve its specific purpose. The Employee shall not
make, retain, remove and/or distribute any copies of any of the foregoing for
any reason

	 	 	 
	Employee Name: David J. Kudla, Jr.	 	Employment Agreement Ver. 01/2003
	Dated July 1, 2004	 	Page 3 of 14

 

 

whatsoever, except as may be necessary in the discharge of the assigned duties
and shall not divulge to any third person the nature of and/or contents of any
of the foregoing or of any other oral or written information to which he may
have access or with which for any reason he may become familiar, except as
disclosure shall be necessary in the performance of the duties; and upon the
termination of his employment with the Company, the Employee shall return to
the Company all originals and copies of the foregoing then in his possession or
under his control, whether prepared by the Employee or by others.

               6.2 Developments.

                    (a) The Employee acknowledges that all right, title and interest in and to
any and all writings, documents, inventions, discoveries, ideas, developments,
information, computer programs or instructions (whether in source code, object
code, or any other form), algorithms, formulae, plans, memoranda, tests,
research, designs, innovations, systems, analyses, specifications, models,
data, diagrams, flow charts, and/or techniques (whether patentable or
non-patentable or whether reduced to written or electronic form or otherwise)
that the Employee creates, makes, conceives, discovers or develops, either
solely or jointly with any other person, at any time during the Term, whether
during working hours or at the Company’s facility or at any other time or
location, and whether upon the request or suggestion of the Company or
otherwise, (collectively, “Intellectual Work Product”) shall be the sole and
exclusive property of the Company. The Employee shall promptly disclose to the
Company all Intellectual Work Product, and the Employee shall have no claim for
additional compensation for the Intellectual Work Product, except for any
excluded Intellectual Work Product that is wholly unrelated to the
pharmaceutical industry, in the broadest sense, provided that such Intellectual
Work Product is not conceived, discovered or developed, either solely or
jointly with any other person during working hours or at the Company’s facility
or using any other Company resource.

                    (b) The Employee acknowledges that all the Intellectual Work Product that
is copyrightable shall be considered a work made for hire under United States
Copyright Law. To the extent that any copyrightable Intellectual Work Product
may not be considered a work made for hire under the applicable provisions of
the United States Copyright Law, or to the extent that, notwithstanding the
foregoing provisions, the Employee may retain an interest in any Intellectual
Work Product, the Employee hereby irrevocably assigns and transfers to the
Company any and all right, title, or interest that the Employee may have in the
Intellectual Work Product under copyright, patent, trade secret and trademark
law, in perpetuity or for the longest period otherwise permitted by law,
without the necessity of further consideration. The Company shall be entitled
to obtain and hold in its own name all copyrights, patents, trade secrets, and
trademarks with respect thereto.

                    (c) The Employee shall reveal promptly all information relating to any
such Intellectual Property to the Board of Directors of the Company, and, at
the Company’s expense, shall cooperate with the Company and execute such
documents as may be necessary or appropriate (i) in the event that the Company
desires to seek copyright, patent or trademark protection, or other analogous
protection, thereafter relating to the Intellectual Work Product, and when such
protection is obtained, renew and restore the same, or (ii) to defend any

	 	 	 
	Employee Name: David J. Kudla, Jr.	 	Employment Agreement Ver. 01/2003
	Dated July 1, 2004	 	Page 4 of 14

 

opposition proceedings in respect of obtaining and maintaining such copyright,
patent or trademark protection, or other analogous protection.

                    (d) In the event the Company is unable after reasonable effort to secure
the Employee’s signature on any of the documents referenced in Section 6.2 (c)
hereof, whether because of the Employee’s physical or mental incapacity or for
any other reason whatsoever, the Employee hereby irrevocably designates and
appoints the Company and its duly authorized officers and agents as the
Employee’s agent and attorney-in-fact, to act for and on the behalf and stead
to execute and file any such documents and to do all other lawfully permitted
acts to further the prosecution and issuance of any such copyright, patent or
trademark protection, or other analogous protection, with the same legal force
and effect as if executed by the Employee.

                    (e) The Employee represents that the innovations, designs, systems,
analyses, ideas, and all copyrights, patents, trademarks and trade names, or
similar intangible personal property (collectively, the “Pre-existing
Property”) identified on Schedule I hereof comprise all of the innovations,
designs, systems, analyses, ideas and all copyrights, patents, trademarks and
trade names, or similar intangible personal property that the Employee has made
or conceived of prior to the date hereof, and same are excluded from the
operation of the other provisions of this Section 6.2. In the event that the
Employee learns of any Pre-existing Property that he inadvertently failed to
include in Schedule I, and the circumstances surrounding the failure of such
inclusion are reasonably satisfactory to the Company, the Employee and the
Company shall jointly amend Schedule I to include such property.

          7. Covenant not to Compete.

               7.1 Restrictions. Provided that the Company is in compliance with Section
8.4 hereof, if applicable, the Employee shall not, during the Term and for a
period of two (2) years thereafter (the “Restricted Period”), except as an
employee of the Company and in order to carry out the Employee’s duties
hereunder, do any of the following directly or indirectly without the prior
written consent of the Company in its sole discretion:

                    (a) engage or participate, directly or indirectly, in any business
activity competitive with the Business or the business of the Company or any of
the Company’s subsidiaries or affiliates as conducted during the Term;

                    (b) become interested (as owner, stockholder, lender, partner,
co-venturer, director, officer, employee, agent, consultant or otherwise) in
any person, firm, corporation, association or other entity engaged in any
business that is competitive with the Business or of the business of the
Company or any subsidiary or affiliate of the Company as conducted during the
Term, or become interested in (as owner, stockholder, lender, partner,
co-venturer, director, officer, employee, agent, consultant or otherwise) any
portion of the business of any person, firm, corporation, association or other
entity where such portion of such business is competitive with the Business of
the Company or the business of any subsidiary or affiliate of the Company as
conducted during the Term (notwithstanding the foregoing, the

	 	 	 
	Employee Name: David J. Kudla, Jr.	 	Employment Agreement Ver. 01/2003
	Dated July 1, 2004	 	Page 5 of 14

 

 

Employee may hold not more than one percent (1%) of the outstanding securities
of any class of any publicly-traded securities of a company that is engaged in
activities referenced in this Section 7.1.

                    (c) solicit, call on or transact or engage in any business activity with,
either directly or indirectly, any (i) customer with whom the Company shall
have dealt at any time during the one (1) year period immediately preceding the
termination of the Employee’s employment hereunder, or (ii) corporate partner,
collaborator, independent contractor or supplier with whom the Company shall
have dealt at any time during the one (1) year period immediately preceding the
termination of the Employee’s employment hereunder;

                    (d) influence or attempt to influence any then current or prospective
supplier, customer, corporate partner, collaborator, or independent contractor
of the Company to terminate or modify any written or oral agreement or course
of dealing with the Company; or

                    (e) influence or attempt to influence any person either (i) to terminate
or modify an employment, consulting, agency, distributorship or other
arrangement with the Company, or (ii) to employ or retain, or arrange to have
any other person or entity employ or retain, any person who has been employed
or retained by the Company as an employee, consultant, agent or distributor of
the Company at any time during the one (1) year period immediately preceding
the termination of the Employee’s employment hereunder.

               7.2 Acknowledgment. The Employee acknowledges that he has carefully read
and considered the provisions of this Section 7. The Employee acknowledges
that the foregoing restrictions will limit his ability to earn a livelihood in
a business competitive with the Business, but he nevertheless believes that he
has received and will receive sufficient consideration and other benefits in
connection with the payment by the Company of the compensation set forth in
Sections 4 and 8.4 to justify such restrictions, which restrictions the
Employee does not believe would prevent him from earning a living in businesses
that are not competitive with the Business and without otherwise violating the
restrictions set forth herein.

               8. Early Termination. The Employee’s employment hereunder may be
terminated during the Term upon the occurrence of any one of the events
described in this Section 8. Upon termination, the Employee shall be entitled
only to such compensation and benefits as described in this Section 8.

	 	 	 
	Employee Name: David J. Kudla, Jr.	 	Employment Agreement Ver. 01/2003
	Dated July 1, 2004	 	Page 6 of 14

 

 

               8.1 Involuntary Termination.

                    (a) Termination for Disability.

                         (i) In the event of the disability of the Employee such that the Employee
is unable to perform the duties and responsibilities hereunder to the full
extent required by this Agreement by reasons of illness, injury or incapacity
for a period of more than one hundred eighty (180) consecutive days or more
than one hundred eighty (180) days, in the aggregate, during any three hundred
sixty-five (365) day period (“Disability”), the Company shall have the right to
terminate Employee’s employment hereunder by written notice to the Employee.

                         (ii) In the event of a termination of the Employee’s employment hereunder
pursuant to Section 8.1(a)(i), the Employee will be entitled to receive all
accrued and unpaid (as of the date of such termination) Salary and applicable
Benefits; provided that the Employee has complied with all of his obligations
under this Agreement and continues to comply with all of his surviving
obligations hereunder listed in Section 10 and a pro-rata percentage of the
bonus (provided in Section 4.2) for the last fiscal year of the Company prior
to the date of Employee’s termination. Except as specifically set forth in
this Section 8.1(a)(ii) or as provided by applicable law, the Company shall
have no liability or obligation to the Employee for compensation or benefits
hereunder by reason of, or subsequent to, such termination.

                    (b) Termination by Death. In the event that the Employee dies during the
Term, the Employee’s employment hereunder shall be terminated thereby and the
Company shall pay to the Employee’s executors, legal representatives or
administrators an amount equal to the accrued and unpaid portion of the Salary
for the month in which he dies and a pro-rata percentage of the bonus (provided
in Section 4.2) for the last fiscal year of the Company prior to the date of
Employee’s termination. Except as specifically set forth in this Section 8.1(b)
or as provided by applicable law, the Company shall have no liability or
obligation hereunder to the Employee’s executors, legal representatives,
administrators, heirs or assigns or any other person claiming under or through
him by reason of or subsequent to the Employee’s death.

               8.2 Termination for Cause.

                    (a) The Company shall have the right to terminate the Employee’s
employment hereunder at any time for “cause” upon written notice to the
Employee. For purposes of this Agreement, “cause” shall mean the Employee’s
(including, if the Employee is not a natural person, any employee of or
contractor to the Employee who is involved, directly or indirectly, in the
provision of services to the Corporation) (a) dishonesty, embezzlement, theft
or fraudulent misconduct; (b) abuse of a controlled substance that materially
impairs the performance of the Employee’s duties to the Corporation; (c)
conduct adverse to the business, interests, or reputation of the Corporation;
(d) material breach of any of the terms hereof or of any agreement between the
Corporation and the Employee, (including, but not limited to, terms relating to
non-disclosure, non-competition and invention assignment) which, if curable,
remains

	 	 	 
	Employee Name: David J. Kudla, Jr.	 	Employment Agreement Ver. 01/2003
	Dated July 1, 2004	 	Page 7 of 14

 

 

uncured thirty (30) days after the Employee receives written notice of such
breach; or (e) commission of a felony.

                    (b) In the event of a termination of the Employee’s employment hereunder
pursuant to Section 8.2(a), the Employee shall be entitled to receive all
accrued but unpaid (as of the effective date of such termination) Salary and
Benefits. All Salary and Benefits shall cease at the time of such termination,
subject to the requirements of applicable law. Except as specifically set
forth in this Section 8.2, the Company shall have no liability or obligation
hereunder by reason of or subsequent to such termination.

               8.3 Termination by the Company Without Cause.

                    (a) Notwithstanding anything to the contrary set forth herein, the Company
shall have the right to terminate the Employee’s employment hereunder at any
time, for any reason or no reason, with or without cause, effective upon the
date designated by the Company upon written notice to the Employee.

                    (b) In the event of a termination of the Employee’s employment hereunder
pursuant to Section 8.3(a), the Employee shall be entitled to receive all
accrued but unpaid (as of the effective date of such termination) Salary; a
pro-rata percentage of the bonus (provided in Section 4.2) for the last fiscal
year of the Company prior to the date of the Employee’s termination; and the
severance payments and Benefits in the manner set forth in Section 8.4;
provided that the Employee has complied with all of his obligations under this
Agreement and continues to comply with all of his surviving obligations
hereunder listed in Section 10. All Salary shall cease at the time of such
termination, except as required under applicable law. Except as specifically
set forth in this Section 8.3, the Company shall have no liability or
obligation hereunder by reason of or subsequent to such termination.

               8.4 Severance.

                    (a) In the event of the termination of the Employee’s employment under
Section 8.3 the Employee shall be entitled to severance pay in an amount equal
to twenty-four (24) months of Salary, subject to all withholding obligations,
calculated on the basis of the Salary in effect at the date of termination and
paid in the same manner as Salary was then paid hereunder.

                    (b) The Employee shall be entitled to receive all Benefits to which he was
entitled on the date preceding his termination for the period of time during
which he is entitled to receive severance pay hereunder.

                    (c) Except as provided in subsections (a) and (b) above, the Company shall
have no liability or obligation by reason of or subsequent to the termination
of the employment relationship between the Company and the Employee.
	 	 	 
	Employee Name: David J. Kudla, Jr.	 	Employment Agreement Ver. 01/2003
	Dated July 1, 2004	 	Page 8 of 14

 

 

          9. Representations, Warranties and Covenants of the Employee.

               9.1 Restrictions. The Employee represents and warrants to the Company
that:

                    (a) There are no restrictions, agreements or understandings whatsoever to
which the Employee is a party which would prevent or make unlawful the
Employee’s execution of this Agreement or the Employee’s employment hereunder,
or which is or would be inconsistent or in conflict with this Agreement or the
Employee’s employment hereunder, or, except as set forth in any agreements
previously provided to the Company, would prevent, limit or impair in any way
the performance by the Employee of the obligations hereunder; and

                    (b) The Employee has disclosed to the Company all restraints,
confidentiality commitments or other employment restrictions that he has with
any other employer, person or entity.

               9.2 Obligations to Former Employers. The Employee covenants that in
connection with his provision of services to the Company, he shall not breach
any obligation (legal, statutory, contractual or otherwise) to any former
employer or other person, including, but not limited to obligations relating to
confidentiality and proprietary rights.

               9.3 Obligations Upon Termination. Upon and after his termination or
cessation of employment with the Company and until such time as no obligations
of the Employee to the Company hereunder exist, the Employee (i) shall provide
a complete copy of this Agreement to any prospective employer or other person,
entity or association engaged in the Business, with whom or which the Employee
proposes to be employed, affiliated, engaged, associated or to establish any
business or remunerative relationship prior to the commencement thereof and
(ii) shall notify the Company of the name and address of any such person,
entity or association prior to his employment, affiliation, engagement,
association or the establishment of any business or remunerative relationship.

          10. Survival of Provisions. The provisions of this Agreement set forth in
Sections 5, 6, 7, 8, 9, 10, 19 and 20 hereof shall survive the termination of
the Employee’s employment hereunder.

          11. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company and the Employee and their respective
successors, executors, administrators, heirs and/or assigns; provided that
neither party shall make any assignment of this Agreement or any interest
herein, by operation of law or otherwise, without the prior written consent of
the other party.

          12. Notice. Any notice hereunder by either party shall be given by
personal delivery or by sending such notice by certified mail, return-receipt
requested, or telecopied, addressed or telecopied, as the case may be, to the
other party at its address set forth below or at

	 	 	 
	Employee Name: David J. Kudla, Jr.	 	Employment Agreement Ver. 01/2003
	Dated July 1, 2004	 	Page 9 of 14

 

 

such other address designated by notice in the manner provided in this section.
Such notice shall be deemed to have been received upon the date of actual
delivery if personally delivered or, in the case of mailing, two (2) days after
deposit with the U.S. mail, or, in the case of facsimile
transmission, when confirmed by the facsimile machine report.

	 	 	 
	 
	(a)     	 if to the Company, to:
	 
	 	 
	

	 	Advancis Pharmaceutical Corporation
	

	 	20425 Seneca Meadows Parkway
	

	 	Germantown, Maryland 20876
	

	 	Attention: Human Resources
	

	 	Facsimile: (301) 944-6701
	 
	 	 
	

	 	with a copy to:
	 
	 	 
	

	 	Howard Schwartz, Esquire
	

	 	Piper Rudnick LLP
	

	 	6225 Smith Avenue
	

	 	Baltimore, Maryland 21209-3600
	

	 	Facsimile: (410) 580-3251

	 	 	 
	 
	(b)     	if to the Employee, to:
	 
	 	 
	

	 	David J. Kudla, Jr.
	

	 	4826 Marsden Court
	

	 	Frederick, MD 21703

          13. Entire Agreement; Amendments. This Agreement contains the entire
agreement and understanding of the parties hereto relating to the subject
matter hereof, and merges and supersedes all prior and contemporaneous
discussions, agreements and understandings of every nature between the parties
hereto relating to the employment of the Employee with the Company. This
Agreement may not be changed or modified, except by an agreement in writing
signed by each of the parties hereto.

          14. Waiver. The waiver of the breach of any term or provision of this
Agreement shall not operate as or be construed to be a waiver of any other or
subsequent breach of this Agreement.

          15. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware, without regard to the
principles of conflicts of laws of any jurisdiction.

          16. Invalidity. If any provision of this Agreement shall be determined to
be void, invalid, unenforceable or illegal for any reason, the validity and
enforceability of all of the remaining provisions hereof shall not be affected
thereby. If any particular provision of this

	 	 	 
	Employee Name: David J. Kudla, Jr.	 	Employment Agreement Ver. 01/2003
	Dated July 1, 2004	 	Page 10 of 14

 

Agreement shall be adjudicated to be invalid or unenforceable, such provision
shall be deemed amended to delete therefrom the portion thus adjudicated to be
invalid or unenforceable, such amendment to apply only to the operation of such
provision in the particular jurisdiction in which such adjudication is made;
provided that, if any provision contained in this Agreement shall be
adjudicated to be invalid or unenforceable because such provision is held to be
excessively broad as to duration, geographic scope, activity or subject, such
provision shall be deemed amended by limiting and reducing it so as to be valid
and enforceable to the maximum extent compatible with the applicable laws of
such jurisdiction, such amendment only to apply with respect to the operation
of such provision in the applicable jurisdiction in which the adjudication is
made.

          17. Section Headings. The section headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.

          18. Number of Days. In computing the number of days for purposes of this
Agreement, all days shall be counted, including Saturdays, Sundays and legal
holidays; provided that, if the final day of any time period falls on a
Saturday, Sunday or day which is a legal holiday in Delaware or Maryland, then
such final day shall be deemed to be the next day which is not a Saturday,
Sunday or legal holiday.

          19. Specific Enforcement The Employee acknowledges that the restrictions
contained in Sections 5, 6, and 7 hereof are reasonable and necessary to
protect the legitimate interests of the Company and its affiliates and that the
Company would not have entered into this Agreement in the absence of such
restrictions. The Employee also acknowledges that any breach by him of
Sections 5, 6, or 7 hereof will cause continuing and irreparable injury to the
Company for which monetary damages would not be an adequate remedy. The
Employee shall not, in any action or proceeding to enforce any of the
provisions of this Agreement, assert the claim or defense that an adequate
remedy at law exists. In the event of such breach by the Employee, the Company
shall have the right to enforce the provisions of Sections 5, 6, and 7 of this
Agreement by seeking injunctive or other relief in any court, and this
Agreement shall not in any way limit remedies of law or in equity otherwise
available to the Company.

          20. Consent to Suit. Subject to the provisions of Section 21 hereof, any
legal proceeding arising out of or relating to this Agreement shall be
instituted in the Court of Chancery of New Castle County, or if such court does
not have jurisdiction or will not accept jurisdiction, in any state or federal
court of general jurisdiction in the State of Delaware, and each of the Company
and the Employee hereby consents to the personal and exclusive jurisdiction of
such court and hereby waives any objection that either party may have to the
laying of venue of any such proceeding and any claim or defense of inconvenient
forum. If an action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to recover,
in addition to any other relief, reasonable attorneys’ fees, costs and
disbursements.

          21. Arbitration. Subject to the last sentence of this Section 21, if any
dispute arises over the terms of this Agreement between the parties to this
Agreement, either Employee or Company may submit the dispute to binding
arbitration within thirty (30) days after such

	 	 	 
	Employee Name: David J. Kudla, Jr.	 	Employment Agreement Ver. 01/2003
	Dated July 1, 2004	 	Page 11 of 14

 

 

dispute arises, to be governed by the evidentiary and procedural rules of the
American Arbitration Association (Commercial Arbitration). Employee and
Company shall mutually select one (1) arbitrator within ten (10) days after a
dispute is submitted to arbitration. In the event that the parties do not
agree on the identity of the arbitrator within such period, the arbitrator
shall be selected by the American Arbitration Association. The arbitrator
shall hold a hearing on the dispute in Wilmington, Delaware within thirty (30)
days after having been selected and shall issue a written opinion within
fifteen (15) days after the hearing. The arbitrator shall also decide on the
allocation of the costs of the arbitration to the respective parties, but
Employee and Company shall each be responsible for paying the fees of their own
legal counsel, if legal counsel is obtained. Either Employee or Company, or
both parties, may file the decision of the arbitrator as a final, binding and
unappealable judgment in a court of appropriate jurisdiction. Notwithstanding
the foregoing provisions of this Section 21 to the contrary, matters in which
an equitable remedy or injunctive relief is sought by a party, including but
not limited to the remedies referred to in Section 19 hereof, shall not be
required to be submitted to arbitration, if the party seeking such remedy or
relief objects thereto, but shall instead be subject to the provisions of
Sections 19 and 20 hereof.

          22. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.

          23. Authorization. In connection with the execution of this Agreement,
the Employee shall be provided with a copy of the resolutions of the Board of
Directors of the Company authorizing the execution of this Agreement on behalf
of the Company.

[SIGNATURES ON FOLLOWING PAGE]

	 	 	 
	Employee Name: David J. Kudla, Jr.	 	Employment Agreement Ver. 01/2003
	Dated July 1, 2004	 	Page 12 of 14

 

          IN WITNESS WHEREOF, the parties have caused this Executive Employment
Agreement to be executed the day and year first written above.

	 	 	 	 	 
	

	 	ADVANCIS PHARMACEUTICAL CORPORATION
	 
	 	 	 	 
	

	 	By:
	 	/s/ Edward M. Rudnic, Ph.D.
	

	 	 	 	
 
	

	 	 	 	Edward M. Rudnic, Ph.D.
	

	 	 	 	Chairman & CEO
	 
	 	 	 	 
	

	 	 	 	/s/ David J. Kudla, Jr.
	

	 	 	 	
 
	

	 	 	 	David J. Kudla, Jr.

	 	 	 
	Employee Name: David J. Kudla, Jr.	 	Employment Agreement Ver. 01/2003
	Dated July 1, 2004	 	Page 13 of 14

 

 

Schedule I

Preexisting Property:

	 	 	 
	Employee Name: David J. Kudla, Jr.	 	Employment Agreement Ver. 01/2003
	Dated July 1, 2004	 	Page 14 of 14

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