UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ______)*
Palatin Technologies, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
696077 10 6
(CUSIP Number)
Edward J. Quilty
Palatin Technologies, Inc.
214 Carnegie Center, Suite 100, Princeton, NJ 08540
(609) 520-1911
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
August 21, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
Check the following box if a fee is being paid with the statement |_|.
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
CUSIP No. 696077 10 6 Page 2 of 5 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Edward J. Quilty
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
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7 SOLE VOTING POWER
696,201
NUMBER OF SHARES ------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 0
REPORTING ------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
696,201
------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
696,201
- ------- -----------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(SEE INSTRUCTIONS)
|_|
- ------- -----------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.4%
- ------- -----------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
- ------- -----------------------------------------------------------------------
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SCHEDULE 13D FOR EDWARD J. QUILTY PAGE 3 OF 5 PAGES
NOTE: A paper copy of this Schedule 13D was filed on September 2, 1997. On
September 5, 1997, the issuer effected a one-for-four reverse split of its
common stock. The quantities outstanding and issuable common stock reported
in this Schedule 13D are stated in PRE-REVERSE SPLIT terms.
Item 1. Security and Issuer.
Title of class: Common Stock.
Name and address of principle executive offices of issuer:
Palatin Technologies, Inc.
214 Carnegie Center, Suite 100
Princeton, NJ 08540
Item 2. Identity and Background.
(a) Name: Edward J. Quilty
(b) Business address: Palatin Technologies, Inc.
214 Carnegie Center, Suite 100
Princeton, NJ 08540
(c) Present principal occupation or employment and the name, principal
business and address of any corporation or other organization in which
such employment is conducted:
Chairman of the Board, President and Chief Executive Officer of Palatin
Technologies, Inc., a development-stage biopharmaceutical company, 214
Carnegie Center, Suite 100, Princeton, NJ 08540.
(d) Criminal convictions during the last five years (excluding traffic
violations or similar misdemeanors): none.
(e) Civil proceedings during the last five years with respect to federal or
state securities laws: none.
(f) Citizenship: United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
With respect to 191,673 shares of outstanding Common Stock: purchased with
$10,398.21 from personal funds, upon exercise of stock options.
With respect to 504,528 shares of Common Stock issuable on exercise of stock
options exercisable currently or within 60 days after August 21, 1997, at
exercise prices from $0.05 to
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SCHEDULE 13D FOR EDWARD J. QUILTY PAGE 4 OF 5 PAGES
$1.875 per share: acquired by grant from the issuer.
Item 4. Purpose of Transaction.
Purpose or purposes of the acquisition of securities of the issuer:
With respect to 191,673 shares of outstanding Common Stock purchased
upon exercise of stock options: investment in the issuer.
With respect to 504,528 shares of Common Stock issuable on exercise of
stock options exercisable currently or within 60 days after August 21,
1997: incentive and/or compensatory stock options granted by the
issuer.
Plans or proposals:
Mr. Quilty may purchase additional shares of Common Stock upon
exercise of stock options.
Item 5. Interest in Securities of the Issuer.
(a) Aggregate number of shares of Common Stock beneficially owned: 696,201
shares, including 191,673 shares of outstanding Common Stock and
504,528 shares of Common Stock issuable on exercise of stock options
exercisable currently or within 60 days after August 21, 1997. Does not
include 695,366 shares of Common Stock purchasable upon the exercise of
stock options not exercisable currently or within 60 days after August
21, 1997.
Percentage of class beneficially owned: 5.4%.
(b) Sole power to vote or to direct the vote: 696,201 shares. Shared power
to vote or to direct the vote: 0 shares. Sole power to dispose or to
direct the disposition: 696,201 shares. Shared power to dispose or to
direct the disposition: 0 shares.
(c) Transactions effected during the past sixty days:
August 21, 1997: the issuer's stockholders ratified the issuer's 1996
Stock Option Plan, thus making Mr. Quilty the beneficial owner of
120,000 shares of Common Stock issuable on exercise of a stock option
exercisable at $1.875 per share, granted by the issuer on December 12,
1996, subject to stockholder ratification of the issuer's 1996 Stock
Option Plan.
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SCHEDULE 13D FOR EDWARD J. QUILTY PAGE 5 OF 5 PAGES
(d) Other persons known to have the right to receive or power to direct the
receipt of dividends from, or the proceeds from the sale of, securities
listed above: none.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Pursuant to the terms of various stock option grants, options to
purchase an additional approximately 53,489 shares, at exercise prices from
$0.05 to $1.24 per share, will become exercisable on the 16th of each month
through November 16, 1998.
During the term of the Employment Agreement dated as of November 16,
1995 between the issuer and Mr. Quilty, the issuer is obligated to issue
anti-dilution options to Mr. Quilty so that at any given time, the number of
shares of Common Stock purchased or purchasable under Mr. Quilty's anti-dilution
options equals at least 3.75% of the issuer's outstanding Common Stock on a
fully-diluted basis (i.e., assuming all securities convertible into or
exercisable for common stock have been fully converted or exercised).
Item 7. Material to Be Filed as Exhibits.
Exhibit A: Employment Agreement, as amended, dated as of November 16, 1995,
between the issuer and Edward J. Quilty.
Signature.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
August 29, 1997 /s/ Edward J. Quilty
--------------- -------------------------
Date Signature
Edward J. Quilty
Name/Title
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EXHIBIT A
---------
EXECUTION COPY
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of November 16, 1995, between RHOMED
INCORPORATED (the "Corporation"), a Delaware corporation, and EDWARD J. QUILTY,
an individual residing at 620 Grindan Drive, Yardly, Pennsylvania 19067 (the
"Executive").
W I T N E S S E T H:
WHEREAS, the Corporation desires to employ the Executive, and the
Executive desires to be employed by the Corporation, upon the terms and subject
to the conditions hereinafter provided.
NOW, THEREFORE, the parties hereto hereby agree as follows:
FIRST: Employment. The Corporation hereby employs the Executive, and
the Executive hereby enters into the employ of the Corporation, for a term (the
"Employment Period") of one year commencing as of the date of this Employment
Agreement, which term shall thereafter be automatically extended for successive
twelve-month periods (the "Renewal Periods") unless either party shall give the
other written notice to the contrary no less than three months prior to the
commencement of any such twelve-month period, and which term is subject to
earlier termination as hereinafter provided.
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SECOND: Duties, Powers and Authority. During the Employment Period
the Executive shall be employed by the Corporation in the capacity of President
and Chief Executive Officer of the Corporation, with all such duties, powers
and authority as appertain to such office in accordance with the Corporation's
by-laws, subject to overall direction consistent with the legal authority of
the Board of Directors of the Corporation (the "Board"), and such duties,
powers and authority shall not be limited or materially changed by the
Corporation during the Employment Period. As President and Chief Executive
Officer, the Executive shall supervise, control and be responsible for the
general management and operations of the Corporation and have such other
executive powers and duties as may from time to time be prescribed by the
Board. The Executive shall report solely to the Board and there shall be no
employee of the Corporation who shall have authority equal or superior to the
authority of the Executive. The Corporation shall cause the Executive to be
elected to the Board at all times during the Employment Period, and the
Executive shall serve as a member of the Board at all times during the
Employment Period. The Executive shall devote all of his business time and
efforts to the business of the Corporation.
THIRD: Compensation.
A. The Corporation shall pay the Executive, and the Executive shall
accept from the Corporation, for the Executive's services during the Employment
Period, payable in accordance with
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the Corporation's customary payroll policy as in effect from time to time, but
in no event less frequently than semi-monthly, a base salary at the rate of no
less than $300,000 per annum (the "Base Salary"), subject to increase pursuant
to part B of this Article THIRD.
B. The Base Salary of the Executive shall be reviewed by the Board at
least semi-annually during the Employment Period, commencing on the six-month
anniversary of the date of this Agreement and such Base Salary may be increased
or maintained (but not decreased), in the sole and absolute discretion of the
Board. Any increase in Base Salary or other compensation shall in no way reduce
any other obligation of the Corporation hereunder.
C. At the sole and absolute discretion of the Board, the Executive
may be awarded an annual incentive bonus equal to one year's Base Salary, or
such other amount as the Board deems appropriate.
D. The Corporation shall reimburse the Executive for all reasonable
and necessary expenses incurred by him in connection with the performance of
his duties hereunder, including, without limitation, expenses for entertainment
and travel (including lodging). The Executive shall account to the Corporation
for all such expenses.
E. During the Employment Period, the Executive and his dependents
shall be entitled to participate in all employee benefit plans and arrangements
now in effect or which may hereafter be established which are generally
applicable to other
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senior executives of the Corporation and their dependents, including, without
limitation, all medical, hospital, dental, other health benefits, disability
insurance, retirement, pension, bonus, profit sharing, management incentive,
stock option and other related fringe benefit plans and policies, so long as
such plans and policies remain in effect with respect to senior executives of
the Corporation. In addition, during the Employment Period the Corporation
shall reimburse the Executive for any premiums, co-payments, deductibles and
other expenses incurred by the Executive to maintain the $1,000,000 term life
insurance policy issued in 1992, procured by the Executive from New England
Life Insurance Company for his benefit and the benefit of his designees. The
Executive shall also be entitled to the same amount of vacation time as is
generally available to other senior executives of the Corporation, but in no
event less than three weeks of paid vacation per year.
F. During the Employment Period, the Executive shall be an insured
under all director's and officer's insurance policies now in effect or which
may hereafter be established which are generally applicable to other senior
executives of the Corporation.
FIFTH: Termination.
A. The Employment Period, and the Executive's employment hereunder,
shall terminate as a result of any of the following events:
(i) the Executive's death;
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(ii) in the event the Executive shall have been unable
substantially to perform his duties hereunder by reason of illness,
accident or other physical or mental disability for a continuous
period of 180 days or an aggregate period of 270 days during any
continuous twelve-month period (a "Disability"), upon the election of
the Board;
(iii) upon the election of the Board based on its
determination that the Executive's employment should be terminated by
the Corporation for "Cause" (as hereinafter defined), provided that
the Corporation shall have given the Executive proper notice thereof,
and the Executive shall have had at least a 30 day period in order to
cure such "Cause";
(iv) upon the election of the Executive based on his
determination that he has "Good Reason" (as hereinafter defined) for
such termination, provided that the Executive shall have given the
Corporation proper notice thereof, and the Corporation shall have had
at least a 30 day period in order to cure such "Good Reason";
(v) upon the election of the Executive following a "Change
in Control" (as hereinafter defined);
(vi) upon the mutual agreement of the Executive and the
Corporation; or
(vii) upon the decision of the Board without Cause.
B. The party terminating the Employment Period pursuant to clause
(ii), (iii), (iv), (v) or (vii) of part A of this Article FIFTH shall provide
the other with a written notice (a "Termination Notice") of such termination,
which notice shall
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indicate the specific provision being relied upon and set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination.
The date on which termination is deemed to be effective is hereinafter referred
to as the "Termination Date."
C. For purposes of this Agreement, (i) the Corporation shall have
"Cause" to terminate the Executive's employment hereunder only if (a) the
Executive shall engage in fraudulent activities materially injurious to the
Corporation, (b) the Executive shall be convicted of a felony, (c) the
Executive shall willfully refuse to carry out the reasonable instructions,
consistent with the terms of this Agreement, of the Board, which willful
refusal shall materially adversely affect the Corporation, or (d) a
determination shall be made by any federal or state governmental agency, self
regulatory organization or other regulatory administrative agency having
jurisdiction over the business conducted by the Corporation that the Executive
should be removed or disqualified from acting as an officer of the Corporation;
(ii) "Good Reason" shall mean a breach by the Corporation of any of its
obligations under this Agreement; and (iii) a "Change in Control" shall be
deemed to occur upon (a) the sale by the Corporation of all or substantially
all of its assets to any person (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934), the consolidation of the
Corporation with any person, or the merger of the Corporation with any person
as a result of which merger the Corporation is not the surviving entity, or if
the survivor, the Corporation is
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owned by a parent company; or (b) the sale or transfer by one or more of the
Corporation's shareholders, in one or more transactions, related or unrelated,
to one or more persons under circumstances whereby any person and its
"affiliates" (as hereafter defined) shall own, as a result of such sale or
transfer and thereafter, at least one-half of the outstanding shares of the
Corporation. Nothing contained in the definition of Change in Control shall
limit or restrict the right of the Executive, in his capacity as a member of
the Board, from participating in any discussions or voting on any matter
referred to in said definition at any meeting of the Board. An "affiliate"
shall mean any person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
any other person.
SIXTH: Options.
A. The Corporation shall give to the Executive an Option (the "Initial
Option") to acquire such number of shares as will equal a 10% fully diluted
equity interest in the Corporation (the "Optioned Shares") at an exercise price
of $0.01 per share (the "Exercise Price"), which Option shall vest and become
exercisable solely during the Employment Period in 36 equal increments on each
of the first 36 monthly anniversaries of the commencement of the Executive's
employment with the Corporation, unless this Agreement is terminated by the
Executive because there is a Change in Control of the Corporation in which case
the Initial Option shall vest and be exercisable in full immediately upon
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such event. If the Executive's employment is terminated by the Corporation
other than for Cause or is terminated by the Executive for Good Reason, any
shares that shall be issued upon the exercise of the portion of the Initial
Option that has theretofore vested and become exercisable shall be subject to
any lock up agreement between the Corporation and any underwriter in effect
upon such event, and the portion of the Initial Option that would have vested
and become exercisable in the twelve-month period occurring immediately after
the Termination Date shall vest and be exercisable upon such event, but any
shares that shall be issued upon the exercise of such portion of the Initial
Option shall be subject to any lock up agreement between the Corporation and
any underwriter in effect upon such event. If the Corporation effects an
Initial Public Offering, any shares that shall be issued upon the exercise of
the portion of the Initial Option that has vested and become exercisable prior
to such Initial Public Offering shall be subject to any lock up agreement
between the Corporation and any underwriter in connection therewith. If the
Executive's employment is terminated because of his death, any shares that
shall be issued to the executors and administrators of the Executive's estate
upon the exercise of the portion of the Initial Option that has vested and
become exercisable before his death shall be subject to any lock up agreement
between the Corporation and any underwriter in effect at such time. In addition
to the foregoing, the Board in its sole discretion may from time to time issue
additional stock options to the Executive.
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B. The Exercise Price in effect from time to time and the number of
shares represented by the Initial Option shall be subject to adjustment, as
follows:
(i) In the event that a dividend shall be declared on the
Common Stock payable in shares of the Common Stock, the Optioned
Shares shall be adjusted by adding to each Optioned Share the number
of shares which would be distributable thereon if such Optioned Share
had been outstanding on the date fixed for determining the
stockholders entitled to receive such stock dividend. In the event
that the outstanding shares of the Common Stock shall be changed into
or exchanged for a different number or kind of shares of stock or
other securities of the Corporation or of another corporation,
whether through reorganization, recapitalization, stock split-up,
combination of shares, sale of assets, merger or consolidation in
which the Corporation is the surviving corporation, then, there shall
be substituted for each Optioned Share the number and kind of shares
of stock or other securities into which each outstanding share of the
Common Stock shall be so changed or for which each such share shall
be exchanged.
(ii) In the event that any sale of shares of Common Stock
(except any such sale made pursuant to any right, option, warrant or
convertible security outstanding prior to the date of this
Agreement), or the issuance of any rights, options, or warrants to
subscribe for or purchase Common Stock (or securities convertible
into or exchangeable for Common Stock) occurs after the date of this
Agreement and during the Employment Period,
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then, upon each such sale or issuance, the Executive shall be
issued an additional Option (an "Anti-Dilution Option") to
acquire the number of shares that, when aggregated with the
Optioned Shares, equals not less than 3.75% of the outstanding
(fully diluted) shares of the outstanding Common Stock of the
Corporation, at an exercise price equal to the Exercise Price,
and shall vest and be exercisable solely during the Employment
Period in equal increments during the period commencing with
the date of the issuance of such Anti-Dilution Option and ending
on the third anniversary of the commencement of the Executive's
employment with the Corporation, unless this Agreement is
terminated by the Executive because there is a Change in Control
of the Corporation in which case each Anti-Dilution Option shall
vest and be exercisable in full immediately upon such event. If
the Executive's employment is terminated by the Corporation other
than for Cause or the Executive terminates for Good Reason, any
shares that shall be issued upon the exercise of the portion of
the Anti-Dilution Option that has theretofore vested and become
exercisable shall be subject to any lock up agreement between the
Corporation and any underwriter in effect upon such event, and the
portion of the Anti-Dilution Option that would have vested and become
exercisable in the twelve-month period occurring immediately after
the Termination Date shall vest and be exercisable upon such event,
but any shares that shall be issued upon the exercise of such portion
of the Anti-Dilution Option shall be subject to any lock up agreement
between the Corporation and any underwriter in effect upon such
event. If the Corporation effects an Initial
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Public Offering, any shares that shall be issued upon the exercise of
the portion of the Anti-Dilution Option that has vested and become
exercisable prior to such Initial Public Offering shall be subject to
any lock up agreement between the Corporation and any underwriter in
connection therewith. If the Executive's employment is terminated
because of his death, any shares that shall be issued to the
executors and administrators of the Executive's estate upon the
exercise of the portion of the Anti-Dilution Option that has vested
and become exercisable before his death shall be subject to any lock
up agreement between the Corporation and any underwriter in effect at
such time. Each Anti-Dilution Option shall be entitled to the full
anti-dilution protection in clause (i) of this paragraph B.
Hereinafter the Initial Option and the Anti-dilution Option are
referred to as the "Options".
(iii) Neither the Executive nor the Executive's legal
representatives nor the executors or administrators of his estate
shall be or be deemed to be the holder of any share of the Common
Stock covered by an Option unless and until a certificate for such
share shall have been issued. Upon payment of the Exercise Price
therefore, a share issued upon exercise of the Option shall be fully
paid and nonassessable.
(iv) In order to exercise an Option, the Executive shall
give written notice of intent to exercise the Option to the Chief
Financial Officer of the Corporation or his delegate, in form and
substance reasonably satisfactory to the Board, specifying the number
of shares of Common Stock with respect to
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which the Option is being exercised, and accompanied by payment to
the Corporation of the amount of the Exercise Price for the number of
shares of Common Stock so specified.
(v) Unless the shares of Common Stock to be issued upon the
exercise of an Option shall be registered prior to the issuance
thereof under the Securities Act of 1933, as amended, the Executive
(or, in the event of his death, the executors or administrators of
his estate) shall, as a condition of the Corporation's obligation to
issue such shares, give a representation in writing that he is (or
they are) acquiring such shares for his (or their) own account as an
investment and not with a view to, or for sale in connection with,
the distribution of any thereof and the certificate representing such
shares shall bear such legend, if any, as counsel for the Corporation
may deem to be necessary or desirable in order to comply with the
provisions of said Act.
(vi) In the event that the Corporation shall register
shares under the Securities Act of 1933, as amended, subsequent to
the Initial Public Offering, then, the Corporation shall at any time
during the period commencing with the first anniversary of such
Initial Public Offering and ending on the fifth anniversary of such
Initial Public Offering, upon the request of the Executive (or, in
the event of his death, of the executors or administrators of his
estate), include in such first mentioned registration the number of
shares of the Common Stock owned by the Executive (or his executors
or administrators) on the date of such request, for re-sale by him or
his executors or
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administrators. Notwithstanding the foregoing, the Corporation's
obligations under clause (vi) of this paragraph B shall be reduced to
the extent that the lead underwriter in such first mentioned
registration requests in good faith, in a letter addressed to the
Executive, such reduction.
(vii) If a holding company shall register shares under the
Securities Act of 1933, as amended, and the only material assets of
such holding company are shares of stock of the Corporation, and the
holding company has no material liabilities, the Corporation shall
arrange, at the timely request of the Executive (or, in the event of
his death, at the timely request of the executors or administrators
of his estate), to convert the Common Stock, and Options of the
Corporation owned by the Executive into shares of stock of the
holding company and options to acquire shares of stock of the holding
company so that after such conversion the Executive will own the same
percentage of the shares of stock of the holding company that he
owned in the Corporation and have options exercisable into the same
percentage of the shares of stock of the holding company that he was
entitled to acquire in the Corporation. If the holding company has
material assets other than shares of stock of the Corporation, or if
the holding company has material liabilities, the Executive and the
Corporation agree to negotiate in good faith an appropriate exchange
ratio between shares and options of the Corporation and shares and
options of the holding company.
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SEVENTH: Payments on Termination.
A. If prior to the first anniversary of the date of this Agreement
the Executive's employment is terminated by the Corporation other than for
Cause (but including by reason of death or Disability), or by the Executive for
Good Reason, then the Corporation shall pay to the Executive, (i) the
Executive's full Base Salary through the Termination Date, together with all
benefits, bonuses and incentive and other compensation earned or accrued
through such date and (ii) an amount equal to one year's Base Salary. All
payments provided in the foregoing clause (ii) shall be made at the time when
the same would have become due if such termination had not occurred, unless the
Executive's employment is terminated by reason of his death or Disability, in
which case such payments shall be made on the fifth business day following the
Termination Date.
B. If during any Renewal Period the Executive's employment is
terminated by the Corporation other than for Cause, (but including death and
Disability), or terminated by the Executive for Good Reason, then, the
Corporation shall pay to the Executive, (i) the Executive's full Base Salary
through the Termination Date, together with all benefits, bonuses and incentive
and other compensation through such date and (ii) an amount equal to one year's
Base Salary. All payments provided in the foregoing clause (ii) shall be made
at the time when the same would have become due if such termination had not
occurred, unless the Executive's employment is terminated by reason of his
death or Disability, in which case such payments shall be made on
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the fifth business day following the Termination Date.
C. The Executive shall not be required to mitigate the amount of any
payment provided for in parts A or B of this Article SEVENTH by seeking other
employment or otherwise, nor shall the amount of any payment or benefit
provided for therein be reduced by any compensation or retirement benefits
heretofore or hereafter earned by the Executive as the result of employment by
any other person, firm or corporation.
D. If during the Employment Period the Executive's employment is
terminated by the Corporation for Cause, or terminated by the Executive other
than for Good Reason, the Corporation shall pay to the Executive the
Executive's full Base Salary through the Termination Date, together with all
benefits, bonuses and incentive and other compensation through such date, on
the fifth day following the Termination Date.
EIGHTH: Confidentiality; Non-Solicitation.
A. The Executive acknowledges that by virtue of his employment
hereunder he will have access to "Confidential Information" (as hereinafter
defined) of the Corporation and that the communication of such Confidential
Information to third parties could irreparably injure the business of the
Corporation. Accordingly, the Executive agrees that he will treat and safeguard
as confidential and secret all Confidential Information received by him at any
time and that without the prior written consent of the Corporation, except as
required by law, he will not disclose or reveal any of the Confidential
Information to any
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third party whatsoever or use the same in any manner, except in connection with
the business of the Corporation. For purposes of this Agreement, "Confidential
Information" means any information not generally known to the public or
recognized as standard industry practice, including, without limitation,
customer lists, trade secrets, inventions, formulas, methods or processes,
whether or not patented or patentable, pricing policies and records of the
Corporation and such other information normally understood to be confidential
or otherwise designated as such in writing by the Corporation, all of which the
Executive expressly acknowledges and agrees shall be confidential and
proprietary information belonging to the Corporation. Upon termination of his
employment with the Corporation, the Executive shall return to the Corporation
all documents and papers belonging to the Corporation, including any
Confidential Information, together with any copies, abstracts or summaries
thereof.
B. The Executive acknowledges and agrees that, because of the unique
and extraordinary nature of his services and in view of the nature and business
of the Corporation, any breach of any provisions of this Article EIGHTH will
cause irreparable injury and incalculable harm to the Corporation and that the
Corporation shall, accordingly, in addition to damages and reasonable
attorney's fees and expenses, be entitled to preliminary and permanent
injunctive or other equitable relief, without the necessity of proving actual
damages.
C. During the Employment Period and for a period of one year
thereafter, the Executive will not directly or indirectly
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employ, solicit for employment, or advise or recommend to any other person that
they employ or solicit for employment, any person whom he knows to be an
employee of the Corporation or any parent, subsidiary or affiliate of the
Corporation.
NINTH: Non-Compete.
A. The Executive agrees that, during the Employment Period and, to
the extent applicable, for the period specified in paragraph B of this Article
NINTH, the Executive shall not, without the prior written approval of the
Board, for any reason whatsoever, directly or indirectly:
(i) Own, manage, operate, join or control, or participate
in the ownership, management, operation or control of, or be a
director, officer or employee of, or a consultant to, any business
enterprise which reasonably may be deemed "competitive" (as
hereinafter defined) with any business engaged in by the Corporation.
Nothing in this paragraph shall preclude the Executive from holding
an interest or investment of less than 5% of a publicly owned company
or business entity.
B. The provisions of paragraph A of this Article NINTH shall be
applicable, in the event of (a) the termination of the Executive's employment
hereunder by the Corporation for Cause, (b) the termination of the Executive's
employment by reason of the Executive's Disability, (c) the termination of the
Executive's employment by the Executive without Good Reason, or (d) the
termination of the Executive's employment by the Executive following a Change
in Control, for a period of twelve
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months after the Termination Date. In the event of the termination of the
Executive's employment hereunder by the Corporation other than for Cause and
other than by reason of the Executive's Disability, or by the Executive for
Good Reason, the provisions of paragraph A of this Article NINTH shall not be
applicable after the Termination Date.
C. A business shall be considered "competitive" with the business of
the Corporation only if it is located in the United States and is engaged in
the development, manufacture, production, distribution or marketing of
radiopharmaceutical or peptide drugs intended to diagnose or treat diseases
such as infection, cancer and blood clots.
D. In the event a court of competent jurisdiction should find any
provision in this Article NINTH to be unfair or unreasonable, such finding
shall not render such provision unenforceable, but, rather, this provision
shall be modified as to subject matter, time and geographic area so as to
render the entire paragraph valid and enforceable.
TENTH: Indemnification. The Corporation shall indemnify the Executive
to the fullest extent permitted by the General Corporation Law of the State of
Delaware, as amended from time to time, for all amounts (including, without
limitation, judgements, fines, settlement payments, expenses and attorney's
fees) incurred or paid by the Executive in connection with any action, suit,
investigation or proceeding arising out of or relating to the performance by
the Executive of services for, or acting by
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the Executive as a director, officer or employee of, the Corporation or any
other person or enterprise at the Corporation's request, and shall to the
fullest extent permitted by the General Corporation Law of the State of
Delaware, as amended from time to time, advance all expenses incurred or paid
by the Executive in connection with, and until disposition of any action, suit,
investigation or proceeding arising out of or relating to the performance by
the Executive of services for, or acting by the Executive as a director,
officer or employee of, the Corporation or any other person or enterprise at
the Corporation's request.
ELEVENTH: Insurance. If requested by the Corporation, the Executive
agrees to cooperate with the Corporation in obtaining for the Corporation's
benefit, at the Corporation's expense, life insurance on his life. Such
cooperation shall include completing and signing such forms or applications,
undergoing physical examinations, and such other acts as may be required in
order to obtain such insurance.
TWELFTH: Notices. All notices hereunder shall be in writing and
personally delivered or sent by registered or certified mail, return receipt
requested, or by overnight courier service, and shall be deemed given when so
delivered or when deposited in the mail, postage prepaid, or delivered to such
service and addressed to a party at its address set forth below
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(or at such other address as each party may from time to time
designate):
If to the Corporation, to:
RhoMed Incorporated
__________________________
__________________________
with a copy to:
The Castle Group Ltd.
375 Park Avenue
New York, New York 10152
Attention: Michael S. Weiss, Esq.
If to the Executive, to:
Edward J. Quilty
620 Grindan Drive
Yardly, Pennsylvania 19067
with a copy to:
Rosenman & Colin LLP
575 Madison Ave.
New York, New York 10022
Attention: Eric J. Wallach, Esq.
Any change in address shall be sent by notice as set forth above but
shall be deemed given only upon its receipt.
THIRTEENTH: Entire Agreement; Waivers; Merger. This Agreement
constitutes the entire understanding between the parties with respect to the
subject matter hereof and no waiver, amendment or revision of, or addition to,
the terms hereof shall be valid unless in writing signed by the parties hereto
and only to the extent therein set forth. The failure of a party to insist upon
strict adherence to any term of this Agreement on any
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occasion shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement. All prior and contemporaneous agreements and understandings
with respect to the subject matter hereof, whether written or oral, are hereby
terminated and superseded by this Agreement.
FOURTEENTH: Severability. If any provision of this Agreement is
invalid, illegal or unenforceable, the balance of this Agreement shall remain
in effect, and if any provision is inapplicable to any person or circumstance,
it shall nevertheless remain applicable to all other persons and circumstances.
FIFTEENTH: Binding Effect. This Agreement shall inure to the benefit
of and shall bind the parties hereto and their respective heirs,
administrators, executors, successors, legal representatives and permitted
assigns.
SIXTEENTH: Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York, without
regard to its principles of conflict of laws.
SEVENTEENTH: Survival. The provisions of Articles EIGHTH and NINTH
shall survive the expiration or termination of this Agreement.
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EIGHTEENTH: Section Headings. The section headings herein have been
inserted for convenience of reference only and shall in no way modify, define
or restrict any of the terms or provisions hereof.
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the day and year first above written.
RhoMed Incorporated
By: /s/ Carl Spana
-----------------------------
Carl Spana
( TITLE )
/s/ Edward J. Quilty
-----------------------------
Edward J. Quilty
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AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to that certain Employment Agreement dated as of November
16, 1995 (the "Employment Agreement") between RhoMed Incorporated, a Delaware
corporation ("RhoMed"), and Edward J. Quilty, an individual residing at 1031
Creamery Rd., Newtown, Pennsylvania 18940 (the "Executive"), is made and
entered into as of _____________, 1996, by and among RhoMed, the Executive,
and Palatin Technologies, Inc., a Delaware corporation of which RhoMed is a
wholly-owned subsidiary ("Palatin").
WHEREAS, Palatin desires to employ the Executive, and the Executive
desires to be employed by Palatin, on the same terms and capacities as are
contemplated in the Employment Agreement, by amending the Employment Agreement
to effect such employment, and whereas RhoMed has consented to such
arrangement;
WHEREAS, the Executive, RhoMed and Palatin have determined that it is in
the best interest of the parties to this Amendment to clarify certain of the
terms of the Employment Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
1. Effective as of _________, 1996, RhoMed will not be a party to the
Employment Agreement and the Employment Agreement shall from such time and
thereafter be between Palatin and the Executive, and all references in the
Employment Agreement to "RhoMed" shall be references to "Palatin."
2. The merger of Palatin's wholly-owned subsidiary, Interfilm
Acquisition Corporation, with and into RhoMed on June 25, 1996 (the "Merger")
was not intended to and did not constitute a "change-in-control" under
Paragraph C of Article FIFTH of the Employment Agreement.
Upon the execution hereof, each reference in the Employment Agreement to
"the Employment Agreement", "this Agreement", "hereby", "hereunder", "herein",
"hereof" or words of like import referring to the Employment Agreement shall
mean and refer to the Employment Agreement as amended by this Amendment to the
Employment Agreement. All other provision of the Employment Agreement shall
remain in full force and effect except and to the extent explicitly amended
hereby.
This Amendment may be executed in any number of counterparts, each of
which shall be an original and all of which together shall constitute one and
the same Amendment.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have signed this Amendment or
caused this Amendment to be signed by their respective officers thereunto duly
authorized as of the date first written above.
PALATIN TECHNOLOGIES, INC. RHOMED INCORPORATED
/s/ Edward J. Quilty /s/ John J. McDonough
By:----------------------- By:----------------------
Name: E. J. Quilty Name: John J. McDonough
Title: Chairman & CEO Title: VP & CFO
/s/ Edward J. Quilty
By:-----------------------
Edward J. Quilty
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