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EXHIBIT 10(l)(iii)
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of the 4th of January 1998, between CN
Biosciences, Inc., a Delaware corporation (the "Company") and Xxxxxxx X.
Xxxxxxxxxxxx (the "Employee").
1. Effective Date. This Employment Agreement shall become
effective on the 4th day of January 1998 (the "Effective Date").
2. Employment. The Company hereby employs the Employee and the
Employee hereby accepts employment all upon the terms and conditions herein set
forth.
3. Duties. The Employee is engaged as the Chairman of the Board
and Chief Executive Officer of the Company and promises to perform and
discharge well and faithfully the duties, which may be assigned to him from
time to time by the Company in connection with the conduct of its business. If
the Employee is elected as a director or officer of any subsidiary of the
Company, the Employee shall serve in such capacity or capacities without
further compensation.
4. Extent of Services. The Employee shall devote his entire
time, attention and energies to the business of the Company and shall not
during the term of this Agreement be engaged in any other business activity
whether or not such business activity is pursued for gain, profit or other
pecuniary advantage; but this shall not be construed as preventing the Employee
from investing his personal assets in businesses which do not compete with the
Company in such form or manner as will not require any services on the part of
the Employee in the operation of the affairs of the companies in which such
investments are made and in which his participation is solely that of an
investor, nor shall this be construed as preventing the Employee from
purchasing securities in any corporation whose securities are regularly traded
provided that such purchases shall not result in his collectively owning
beneficially at any time one percent (1%) or more of the equity securities of
any corporation engaged in a business competitive to that of the Company,
without the express prior written consent of the Company.
5. Compensation.
(a) For services rendered under this Employment
Agreement, the Company shall pay the Employee a salary at the rate determined
annually by
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the Compensation Committee of the Board of Directors (the "Base Salary"),
payable (after deduction of applicable payroll taxes as an employee in the
State of California) in equal bi-weekly installments. The Employee shall also
be eligible for and participate in such fringe benefits as shall be generally
provided to executives of the Company, including medical insurance and
retirement programs which may be adopted from time to time during the term
hereof by the Company.
(b) The Compensation Committee shall review the
Employee's compensation at least once a year and award such bonuses and effect
such increases in the Base Salary as the Board of Directors, in its sole
discretion, determines are merited, based upon the Employee's performance and
consistent with the Company's compensation policies.
(c) In addition to his participation in any group life
insurance programs that the Company may provide to its employees, the Company
shall, at its sole expense, provide for the Employee term life insurance in the
amount of $150,000.
6. Paid Time Off. During the term of this Employment Agreement,
the Employee shall be entitled to twenty-nine (29) paid days off pursuant to
the Company's customary paid time off policy ("CalTime").
7. Expenses. During the term of this Employment Agreement, the
Company shall reimburse the Employee for all reasonable out-of- pocket expenses
incurred by the Employee in connection with the business of the Company and in
performance of his duties under this Employment Agreement upon the Employee's
presentation to the Company of an itemized accounting of such expenses with
reasonable supporting data. The Employee shall be entitled to utilize business
(or club) class service for all international flights, and first-class service
for all transcontinental flights within the United States, in each case, in
connection with business-related travel.
8. Term.
(a) The Employee's employment under this Employment
Agreement shall commence on the Effective Date and shall expire on the second
year anniversary date thereof. Notwithstanding the foregoing, the Company may
at its election, subject to paragraph 8(b) below, terminate the Employee's
employment hereunder as follows:
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(i) Upon thirty (30) days' notice if the Employee
becomes physically or mentally incapacitated or is injured so
that he is unable to perform the services required of him
hereunder and such inability to perform continues for a period in
excess of six months and is continuing at the time of such
notice; or
(ii) For "Cause" upon notice of such termination to the
Employee. For purposes of this Employment Agreement, the Company
shall have "Cause" to terminate its obligations hereunder upon
(A) the reasonable determination by the Board of Directors of the
Company (the "Board") that the Employee has ceased to perform his
duties hereunder (other than as a result of his incapacity due to
physical or mental illness or injury), which failure amounts to
an intentional and extended neglect of his duties hereunder, (B)
the Board's determination that the Employee has engaged or is
about to engage in conduct materially injurious to the Company,
(C) the Employee's having been convicted of a felony, or (D) the
Employee's participation in activities prescribed by the
provisions of paragraphs 11 or 13 hereof or a material breach by
the Employee of any of the other covenants or representations
herein; or
(iii) Without Cause upon 30 day's notice of such
termination to the Employee; or
(iv) Upon the death of the Employee.
In addition, the Employee shall have the right to terminate this Employment
Agreement upon notice to the Company if he shall have been assigned to duties
which are materially inconsistent with those specified in paragraph 3 hereof (a
"Material Demotion").
(b) In the event that the Employee resigns during the 90-day
period following the effective date of a "Change of Control" (as defined below)
of the Company, the Employee shall receive salary continuation pay for 12
months from the date of such termination equal to the Employee's base salary in
effect at the time of the Change of Control. For purposes of this Employment
Agreement, "Change of Control" shall mean (a) an acquisition (other than
directly from the Company) by an individual, entity or a group (excluding the
Company, an employee benefit plan of the Company or X.X. Xxxxxxx, Xxxxxx & Co.,
LLC
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or its affiliates) of 50% or more of the Company's Common Stock, par value $.01
per share, or voting securities; (b) a change in a majority of the Company's
current Board of Directors (the "Incumbent Board") (excluding any persons
approved by a vote of at least a majority of the Incumbent Board or persons
elected with the concurrence of a majority of the Incumbent Board); or (c) the
consummation of a complete liquidation or dissolution of the Company or a
merger, consolidation or sale of all or substantially all of the Company's
assets (collectively, a "Business Combination") other than a Business
Combination in which all or substantially all of the Company's stockholders
receive 50% or more of the stock of the Company resulting from the Business
Combination, at least a majority of the board of directors of the resulting
corporation were members of the Incumbent Board, and after which no Person owns
50% or more of the stock of the resulting corporation, who did not own such
stock immediately before the Business Combination.
(c) (i) if this Employment Agreement is terminated pursuant to
paragraph 8(a)(i) above, the Employee shall receive disability
pay from the date of such termination until the second
anniversary of the Effective Date at the rate of 50% of the Base
Salary, reduced by applicable payroll taxes and further reduced
by the amount received by the Employee during such period under
any Company-maintained disability insurance policy or plan or
under Social Security or similar laws. Such disability payments
shall be paid periodically to the Employee as provided in
paragraph 5(a) for the payment of salary.
(ii) If the Employment Agreement is terminated pursuant to
paragraph 8(a) (ii) or 8(a)(iv) above, the Employee shall
receive no salary continuation pay or severance pay.
(iii) If this Employment Agreement is terminated pursuant
to paragraph 8(a)(iii) above or as a result of the Employee
having terminated this Employment Agreement following a Material
Demotion, or if the Company does not offer to continue the
Employee's employment with the Company at the expiration of the
stated term of this Employment Agreement at a Base Salary at
least equal to his then most recent Base Salary, the Employee
shall receive salary continuation pay for Twelve (12) months from
the date of such termination (the "Salary Continuation Period")
equal to the Base Salary. Such salary continuation payments (less
applicable payroll taxes) shall be paid periodically to the
Employee as provided in paragraph 5(a) for the payment of the
Base Salary.
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(d) During the Salary Continuation Period, the Employee
shall be under no obligation to mitigate the costs to the Company of the salary
continuation payments, and, provided that the Employee is not in breach of his
obligations under paragraph 13 hereof, no compensation that the Employee may
receive from another employer during the Salary Continuation Period shall be
offset against amounts owed to Employee hereunder.
(e) Not later than ninety (90) days prior to the
expiration of the stated term of this Employment Agreement, the parties shall
begin to negotiate in good faith the terms of any extension of this Employment
Agreement, provided that neither party shall be under any obligation to enter
into such an extension.
9. Stock Options. If this Employment Agreement is terminated
pursuant to either paragraph 8(a) (iii) or paragraph 8(b) above, any stock
options relating to Company Common Stock , par value $.01 per share, then held
by the Employee shall become exercisable to the full extent that they would
otherwise have become exercisable on January 4, 2000, without regard to any
restrictions or deferrals of the right to exercise such options upon such
termination, and the Employee shall have the right to exercise such options
during the thirty (30) day period following such termination.
10. Representations. The Employee hereby represents to the
Company that (a) he is legally entitled to enter into this Employment Agreement
and to perform the services contemplated herein and is not bound under any
employment or consulting agreement to render services to any third party, (b)
he has the full right, power and authority, subject to no rights of third
parties, to grant to the Company the rights contemplated by paragraph 12
hereof, and (c) he does not now have, nor within the last three years has he
had, any ownership interest in any business enterprise (other than interests in
publicly traded corporations where his ownership does not exceed one percent
(1%) or more of the equity capital) which is a customer of the Company, any of
its subsidiaries, or from which the Company or any of its subsidiaries
purchases any goods or services or to whom such corporations owe any financial
obligations or are required or directed to make any payments.
11. Disclosure of Information. The Employee recognizes and
acknowledges that the trade secrets, know-how and proprietary processes of the
Company and its subsidiaries ("the CNBI Group") as they may exist from time to
time are valuable, special and unique assets of the business of the CNBI Group,
access to and knowledge of which are essential to the performance of the
Employee's duties hereunder. The Employee will not, during or after the term
of
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his employment by the Company, in whole or in part, disclose such secrets,
know-how or processes to any perform, firm, corporation, association or other
entity for any reason or purpose whatsoever, nor shall the Employee make use of
any such property for his own purposes or for the benefit of any person, firm,
corporation or other entity (except the Company or a member of the CNBI Group)
under any circumstances during or after the term of his employment, provided
that after the term of his employment these restrictions shall not apply to
such secrets, know-how and processes which are then in the public domain
(provided that the Employee was not responsible, directly or indirectly, for
such secrets, know-how or processes entering the public domain without the
Company's consent).
12. Inventions.
(a) The Employee hereby sells, transfers and assigns to
the Company or to any person, or entity designated by the Company all of the
entire right, title and interest of the Employee in and to all inventions,
ideas, disclosures and improvements, whether patented or unpatented, and
copyrightable material, made or conceived by the Employee, solely or jointly,
during the term hereof which relate to methods, apparatus, designs, products,
processes or devices, sold, leased, used or under consideration or development
by the Company or any of its subsidiaries, or which otherwise relate to or
pertain to the business, functions or operations of the Company or any of its
subsidiaries or which arise from the efforts of the Employee during the course
of his employment for the Company or any of its subsidiaries. The Employee
shall communicate promptly and disclose to the Company, in such form as the
Company requests, all information, details and data pertaining to the
aforementioned inventions, ideas, disclosures and improvements; and the
Employee shall execute and deliver to the Company such formal transfers and
assignments and such other papers and documents as may be necessary or required
of the Employee to permit the Company or any person or entity designated by the
Company to file and prosecute the patent applications and, as to copyrightable
material, to obtain copyright thereof. Any invention relating to the business
of the CNBI Group and disclosed by the Employee within one year following the
termination of this Employment Agreement shall be deemed to fall within the
provisions of this paragraph unless proved to have been first conceived and
made following such termination.
(b) The Employee has been notified and understands that
the provisions of this paragraph 12 do not apply to any of the aforementioned
inventions, ideas, disclosures and improvements that qualify fully under the
provisions of Section 2870 of the California Labor Code, which states as
follows:
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(i) Any provision in an employment agreement
which provides that an employee shall assign, or offer to
assign, any of his or her rights in an invention to his or her
employer shall not apply to an invention that the employee
developed entirely on his or her own time without using the
employer's equipment, supplies, facilities, or trade secret
information except for those inventions that either:
(1) Relate at the time of conception or
reduction to practice of the invention to the
employer's business, or actual or demonstrably
anticipated research or development of the employer.
(2) Result from any work performed by the
employee for the employer.
(ii) To the extent a provision in an employment
agreement purports to require an employee to assign an
invention otherwise excluded from being required to be
assigned under subsection (i), the provision is against the
public policy of this state and is unenforceable.
13. Covenants Not to Compete or Interfere. For a period ending
twelve (12) months from and after the date of termination of the Employee's
employment hereunder, except for a termination of employment pursuant to
paragraph 8(a) (i) or 8(a) (iii) or a voluntary termination by the Employee
following a Material Demotion or following any change in control of the Company
or the sale or transfer of the Company to, or the merger of the Company with or
into, a party not controlled by, or under common control of, Warburg, Xxxxxx
Investors, L.P., the Employee shall not engage in any business (whether as an
officer, director, owner, employee, partner or other direct or indirect
participant) which is engaged in the manufacturing, distribution or research and
development of any products being sold by, or under development by, the Company
or its subsidiaries as of the date of such termination of employment, in any
geographic area where the Company or such subsidiaries are then so manufacturing
or distributing such products, nor shall the Employee interfere with, disrupt or
attempt to disrupt the relationship, contractual or otherwise, between the
Company and any customer, supplier, lessor, lessee or employee of the Company.
It is the desire and intent of the parties that the provisions
of this paragraph 13 shall be enforced to the fullest extent permissible under
the laws and public policies applied in each jurisdiction in which enforcement
is sought.
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Accordingly, if any particular portion of this paragraph 13 shall be
adjudicated to be invalid or unenforceable, this paragraph 13 shall be deemed
amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable, such deletion to apply only with respect to the operation of
this paragraph in the particular jurisdiction in which such adjudication is
made.
14. Injunctive Relief. If there is a breach or threatened
breach of the provisions of paragraph 11, 12 or 13 of this Employment
Agreement, the Company shall be entitled to an injunction restraining the
Employee from such breach. Nothing herein shall be construed as prohibiting
the Company from pursuing any other remedies for such breach or threatened
breach.
15. Insurance. The Company may, at its election and for its
benefit, insure the Employee against accidental loss or death, and the Employee
shall submit to such physical examination and supply such information as may be
required in connection therewith.
16. Notices. Any notice required or permitted to be given under
this Employment Agreement shall be sufficient if in writing and if sent by
registered mail to Xxxxxxx X. Xxxxxxxxxxxx at his home address as reflected on
the records of the Company, in the case of the Employee, or, in the case of the
Company, to CN Biosciences, Inc., 00000 Xxxxxxx Xxxxxx Xxxxx, Xxx Xxxxx, XX
00000, Attention: Chief Financial Officer, or to such other officer or address
as the Company shall notify Employee.
17. Waiver of Breach. A waiver by the Company or the Employee of
a breach of any provision of this Employment Agreement by the other party shall
not operate or be construed as a waiver of any subsequent breach by the other
party.
18. Governing Law. This Employment Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of
California without giving effect to the choice of law or conflict of law
provisions thereof.
19. Assignment. This Employment Agreement may be assigned,
without the consent of the Employee, by the Company to any person, partnership,
corporation, or other entity which has purchased substantially all the assets
of the Company, provided such assignee assumes all the liabilities of the
Company hereunder.
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20. Entire Agreement. This Employment Agreement contains the
entire agreement of the parties and supersedes any and all agreements, letter
of intent or understandings between the Employee and (a) the Company, (b) any
member of the CNBI Group or (c) any of the Company's principal shareholders,
affiliates or subsidiaries. This Employment Agreement may be changed only by
an agreement in writing signed by a party against whom enforcement of any
waiver, change, modification, extension or discharge is sought.
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the day first herein above written.
CN BIOSCIENCES, INC.
By: /S/ XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx
Chief Financial Officer
EMPLOYEE
By: /S/ XXXXXXX X. XXXXXXXXXXXX
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Xxxxxxx X. Xxxxxxxxxxxx
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