EXHIBIT 10.44
PARADIGM GENETICS, INC.
EMPLOYMENT AGREEMENT
FOR
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EXHIBIT A
This EMPLOYMENT AGREEMENT ("Agreement") is entered into as of the 8th day
of November, 2002, by and between ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("Executive") and PARADIGM
GENETICS, INC. ("Company").
WHEREAS, the Company desires to compensate Executive for his personal
services to the Company; and
WHEREAS, Executive wishes to be employed by the Company and provide
personal services to the Company in return for certain compensation.
NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties agree to the following:
1. EMPLOYMENT BY THE COMPANY.
1.1 Effective Date and Term. The effective date of this Agreement shall be
November 8, 2002 ("Effective Date"). The employee is employed on an "at
will" basis, except as expressly modified in the Employment Agreement.
Employee's salary and performance will be reviewed at least annually for
compensation changes.
1.2 Position. Subject to terms set forth herein, the Company agrees to employ
Executive in the position of Vice President, General Counsel, and
Secretary and Executive hereby accepts such employment. Executive's
principal place of employment during the entire period of this Agreement
shall be Raleigh/Durham, North Carolina. During the term of his employment
with the Company, Executive will devote his best efforts and all of his
business time and attention (except for vacation periods as set forth
herein and reasonable periods of illness or other incapacities permitted
by the Company's general employment policies) to the business of the
Company.
1.3 Duties. Executive shall be proposed to the Board to be an officer of the
Company, and serve in an executive capacity. He shall have such duties,
responsibilities, and authority as are customarily associated with his
then current title and as assigned to Executive by
the Chief Executive Officer. The Chief Executive Officer has the right to
assign and change Executive's duties at any time.
1.4 Other Employment Policies. The employment relationship between the parties
shall also be governed by the general employment policies and practices of
the Company, including those relating to protection of confidential
information and assignment of inventions.
2. COMPENSATION.
2.1 Salary. Executive shall receive for services an annualized base salary of
$200,000 subject to standard federal and state withholding requirements,
payable in accordance with the Company's standard payroll practices.
2.2 Stock Options. Subject to the approval of the Company's Board of Directors
("Board"), the Company shall grant Executive an option ("Option") to
purchase 100,000 shares of the Company's common stock under the Company's
2000 Stock Option Plan at a strike price determined by the closing price
the last business day before your first day of employment. More
information concerning the Stock Option Plan will be provided to Executive
shortly after he begins work. This grant will consist of incentive stock
options. The Option shall vest according to the vesting schedule set forth
in the governing grant notice, which shall provide that the shares subject
to the Option will vest over a four-year period, with twenty-five percent
(25%) of the shares subject to the Option vesting upon the Executives date
of hire, and another (25%) after Executive successfully completes one year
of continuous service with Paradigm, and one-forty-eighth (1/48thth) of
the shares subject to the Option vesting for each month of Executive's
continuous service thereafter. Executive agrees to execute Paradigm's
standard form of stock option agreement.
2.3 Performance Bonus. Executive shall be eligible to participate in the 2003
Leadership Incentive Plan (LIP) designed to payout at 35 percent (at
target) of his base salary (subject to standard federal and state
withholding requirements) based on meeting his individual performance
goals and Paradigm meeting its corporate goals. The current terms and
conditions of this incentive opportunity are set forth in the attached
2002 Leadership Incentive Plan (LIP) [Exhibit B], for his reference.
Payment of the bonus shall be subject to the satisfaction of mutually
agreed upon performance goals, and within a reasonable period of time
following the execution of this Agreement, the parties shall set forth
those goals in a separate written document. The Company's Board of
Directors, in its sole discretion, shall determine the extent to which
Executive has achieved the performance goals upon which Executive's bonus
is based. As part of a yearly review of performance, Executive will be
eligible for a change in salary, bonus and stock options based on
performance, as determined by the Company's Board of Directors.
2.4 Relocation Allowance. The Company shall pay Executive an allowance for
relocation of principal residence to the greater Raleigh/ Durham, North
Carolina metropolitan area pursuant to a relocation package as specified
in the enclosed "Relocation and Moving Policy Tier III", but not to exceed
$50,000. (Attached Exhibit D) If Executive voluntarily terminates his
employment with the Company within 12 months, Executive must repay all
appropriate out-of-pocket expenses incurred by the Company regarding his
relocation package. This will be deducted from the Executive's final pay,
and the remaining amount due the Company must be paid within 60 days of
termination.
2.5 Standard Company Benefits. Executive shall be entitled to all rights and
benefits for which he is eligible under the terms and conditions of the
standard Company benefits and compensation practices which may be in
effect from time to time and provided by the Company to its employees
generally.
2.6 Expense Reimbursement. The Company will reimburse Executive for reasonable
business expenses in accordance with the Company's standard travel and
expense reimbursement policy.
3. PROPRIETARY INFORMATION, INVENTIONS AND NON-COMPETITION OBLIGATIONS.
3.1 Agreement. Executive agrees to execute and abide by the Proprietary
Information, Inventions, Non-Competition, and Non-Solicitation Agreement
attached hereto as Exhibit E.
4. OUTSIDE ACTIVITIES.
4.1 Other Employment/Enterprise. Except with the prior written consent of the
Board, Executive will not, while employed by the Company, undertake or
engage in any other employment, occupation or business enterprise, other
than ones in which Executive is a passive investor. Executive has advised
Paradigm of a non-conflicting prior commitment during December 2002 for an
arbitration proceeding. Executive may engage in civic and not-for-profit
activities so long as such activities do not materially interfere with the
performance of his duties hereunder.
4.2 Conflicting Interests. Except as permitted by Section 4.3, while employed
by the Company, Executive agrees not to acquire, assume or participate in,
directly or indirectly, any position, investment or interest known by him
to be adverse or antagonistic to the Company, its business or prospects,
financial or otherwise.
4.3 Competing Enterprises. While employed by the Company, except on behalf of
the Company, Executive will not directly or indirectly, whether as an
employee, officer, director, stockholder, partner, proprietor, associate,
representative, consultant, or in any capacity whatsoever engage in,
become financially interested in, be employed by or have
any business connection with any other person, corporation, firm,
partnership or other entity whatsoever which compete directly with the
Company, throughout the world, in any line of business engaged in (or
planned to be engaged in) by the Company; provided, however, that anything
above to the contrary notwithstanding, he may own, as a passive investor,
securities of any competitor corporation, so long as his direct holdings
in any one such entity shall not in the aggregate constitute more than 1%
of the voting stock of such corporation.
5. FORMER EMPLOYMENT.
5.1 No Conflict With Existing Obligations. Executive represents that his
performance of all the terms of this Agreement and as an employee of
Paradigm does not and will not breach any agreement or obligation of any
kind made prior to his employment by Paradigm, including agreements or
obligations he may have with prior employers or entities for which he has
provided services. Executive has not entered into, and agrees he will not
enter into, any agreement or obligation either written or oral in conflict
herewith.
5.2 No Disclosure of Confidential Information. If, in spite of the second
sentence in Section 5.1, Executive should find that confidential
information belonging to any former employer might be usable in connection
with Paradigm's business, Executive will not intentionally disclose to
Paradigm or use on behalf of Paradigm any confidential information
belonging to any of Executive's former employers (except in accordance
with agreements between Paradigm and any such former employer); but during
Executive's employment by Paradigm, he will use in the performance of his
duties all information which is generally known and used by persons with
training and experience comparable to his own and all information which is
common knowledge in the industry or otherwise legally in the public
domain.
6. TERMINATION OF EMPLOYMENT. The parties acknowledge that Executive's
employment with Paradigm is at-will, except as expressly modified in the
Employment Agreement. The provisions of Sections 6.1 through 6.6 govern
the amount of compensation, if any, to be provided to Executive upon
termination of employment and do not alter this at-will (as modified)
status.
6.1 Termination Without Cause. The Chief Executive Officer and Compensation
Committee of the Board shall have the right to terminate Executive's
employment with the Company at any time without Cause by giving notice as
described in Section 6.6 of this Agreement.
a) In the event Executive's employment is terminated by the Company
without Cause or for a reason other than Executive's death,
disability or cessation of the Company's business pursuant to Section
6.5 below, Paradigm will continue to pay Executive his salary at the
date of termination (less applicable
deductions and withholdings), and provide his healthcare benefits in
effect on the date of his termination through reimbursement of COBRA
expense (less applicable employee premium sharing amounts) for a
maximum time period of up to twelve (12) months following the
Executive's final date of employment, or the date comparable benefits
are secured through new employer, whichever comes first. These
payments will only be made if: 1) Executive executes a general
release of all claims against Paradigm, including but not limited to
language waiving any all claims Executive has or has had against
Paradigm or relating to any event or claim occurring prior to the
date of the release, any state law claims and claims under federal
employment law statutes, or any claims relating to his employment by
or separation from Paradigm and language including a confidentiality
and non-disparagement provision with language acceptable to the
Company no later than twenty-one (21) days after the date of
termination (or within 45 days of the date of termination if the
separation is subject to the Older Workers Benefit Protection Act;
the parties agree that the determination of whether this Act applies
will be made solely by Paradigm).
Unless Executive's employment is terminated by death, disability or
cessation of business under Section 6.5, or for cause, Executive will
receive an additional 25% for a total of 50% vesting of his stock
options under Section 2.2 above if terminated other than for cause in
less than one year from the date of hire.
b) Executive shall not receive severance pay or continuation of benefits
unless and until the above-referenced release of all claims becomes
effective, and can no longer be revoked under its terms.
c) If the Company is acquired or a change of control of ownership with
respect to the Company (as defined below) occurs at anytime during
the twelve (12) month severance period, described above, all amounts
of salary and the cash equivalent of the cost of COBRA expense (to
provide benefits continuation) for the remainder of the twelve (12)
month period shall be due and payable to Executive in full, effective
upon the closing date of the acquisition or change of control.
d) If Paradigm is acquired or a change of control of ownership with
respect to Paradigm (as defined below) occurs, Paradigm will increase
two-fold the amount of stock options otherwise vested up to 100%, and
all such options shall become fully vested upon the effective date of
the acquisition or change of control. . If redundancy occurs within
twelve (12) months of the closing after change of control, Executive
is entitled to a full twelve (12) months of severance pay and health
and dental benefits under COBRA on a non-contingent basis.
"Change of Control" means the occurrence of any of the following
events: (a) Ownership. Any "Person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended)
becomes the "Beneficial Owner" (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of Paradigm representing
50% or more of the total voting power represented by Paradigm's then
outstanding voting securities (excluding for this purpose Paradigm or
its Affiliates or any employee benefit plan of Paradigm) pursuant to
a transaction or a series of related transactions which the Board of
Directors does not approve; or (b) Merger/Sale of Assets. A merger or
consolidation of Paradigm whether or not approved by the Board of
Directors, other than a merger or consolidation which would result in
the voting securities of Paradigm outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity or
the parent of such corporation) at least 80% of the total voting
power represented by the voting securities of Paradigm or such
surviving entity or parent of such corporation outstanding
immediately after such merger or consolidation, or the stockholders
of Paradigm approve an agreement for the sale or disposition by
Paradigm of all or substantially all of Paradigm's assets.
6.2 Termination for Cause.
(a) The Chief Executive Officer and the Compensation Committee of the
Board shall have the right to terminate Executive's employment with
the Company at any time for Cause by giving notice as described in
Section 6.6 of this Agreement.
(b) "Cause" for termination shall mean: (1) conviction of, or pleading
guilty or nolo contendere to, a felony or other crime involving
theft, fraud or moral turpitude; (2) drug or alcohol abuse; (3)
Executive's material breach of this Agreement, including
unsatisfactory job performance; (4) Executive's refusal to abide by
or comply with the directives of the Board; (5) Executive's
dishonesty, fraud, or misconduct with respect to the business affairs
of the Company, including, without limitation, fraud,
misappropriation or embezzlement; (6) intentional damage of any
property worth in excess of $1,000 of the Company; (7) conduct by
Executive which demonstrates gross unfitness to serve or (8) any
violation of Paradigm rules or policies for which termination is the
normal discipline based on policy or past practice
(c) If the Chief Executive Officer and Compensation Committee of the
Board of Paradigm believe Executive is guilty of poor job performance
referenced above in Section 6.2 (b)(3) that could lead to
termination, Executive shall be provided sixty (60) days notice of
possible termination and the opportunity to cure the stated
deficiencies. This 60-day period will only apply to poor job
performance under Section 6.2 (b) (3).
(d) In the event Executive's employment is terminated at any time with
Cause, he will not receive severance pay, accelerated vesting of
stock options, or any other compensation or benefits as the result of
his termination.
6.3 Voluntary or Mutual Termination.
(a) Executive may voluntarily terminate his employment with the Company
at any time by giving notice as described in Section 6.6.
(b) In the event Executive voluntarily terminates his employment, he will
not receive severance pay, accelerated vesting of stock options, or
any other compensation or benefits as the result of his termination.
6.4 Termination for Inability to Regularly Perform Duties.
(a) The Company's Chief Executive Officer may terminate Executive in the
event of any illness, disability or other physical or mental
incapacity in such a manner that Executive is physically rendered
unable regularly to perform the essential functions of his job duties
hereunder, with or without reasonable accommodation, as validated by
certified physician. This paragraph 6.4 is not intended to supplant
or waive any rights Executive may otherwise have to claim benefits,
financial or otherwise, for illness, disability or incapacity under
any federal, state or local law, or any company policy.
(b) The Company's Chief Executive Officer shall make the determination
regarding whether Executive is unable regularly to perform his duties
as described in subsection (a) above.
(c) In the event Executive's employment is terminated at any time for
inability to regularly perform duties as described in subsection (a)
above, he will not receive severance pay, accelerated vesting of
stock options, or any other compensation or benefits as the result of
his termination.
6.5 Dissolution, Liquidation or Insolvency of the Company. Notwithstanding the
above, in the event Executive's employment is terminated by the Company in
connection with or as a result of the liquidation, dissolution, insolvency
or other winding up of the affairs of the Company without the
establishment of a successor entity to the Company, the Company shall have
no obligation to provide severance or further financial consideration to
Executive, including a performance bonus, except for any reasonable
expense reimbursements or base salary that Executive has accrued and
earned at the time of such termination.
6.6 Notice: Effective Date of Termination. Termination of Executive's
employment
pursuant to this Agreement shall be effective:
a) immediately after Executive, for any reason, gives written notice to
the Company's Chief Executive Officer of his termination, unless an
effective date is otherwise mutually agreed upon, or
b) immediately upon the Company's Chief Executive Officer giving written
notice to Executive of his termination for Cause, without Cause or as
a result of an event listed in Section 6.4 or 6.5 above, unless an
effective date is otherwise established by the CEO.
6.7 Non-Solicitation Provision. To be further discussed in good faith within
thirty (30) days of start date.
In further consideration of his employment with Paradigm, Executive for
the duration of his employment with Paradigm and for the longer of twelve
(12) months after the separation of his employment with the Company for
any reason, whether Executive's resignation or termination by Paradigm, or
any period for which he is receiving severance payments from Paradigm
under the terms of Section 6.1 (a) of this Agreement, he shall not recruit
or encourage employees of Paradigm to leave Paradigm or to be hired by any
company or business with which he affiliated or allow any such company or
business, to the extent it is in his control, to engage in any activity
which, were it done by him, would violate any provision of this Section
6.7; provided, however, that Paradigm acknowledges and agrees that a
company or business with which Executive is affiliated may employee or
engage Paradigm employees that have left Paradigm, so long as the company
or business did not recruit or encourage the Paradigm employee to leave
Paradigm. It is understood that discussions, whether occurring before or
after the date of this Agreement, resulting from general employment
advertisements or initiated by Paradigm employees, do not constitute
recruitment or encouragement to leave.
7. GENERAL PROVISIONS.
7.1. Notices. Any notices provided hereunder must be in writing and shall be
deemed effective upon the earlier of personal delivery (including personal
delivery by hand, telecopier, or telex) or the third day after mailing by
first class mail, to the Company at its primary office location and to
Executive at his address as listed on the Company payroll.
7.2 Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal
or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not
affect any other provision or any other jurisdiction, but this Agreement
will be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provisions had never been contained
herein.
7.3 Waiver. If either party should waive any breach of any provisions of this
Agreement, he or it shall not thereby be deemed to have waived any
preceding or succeeding breach of the same or any other provision of this
Agreement.
7.4 Complete Agreement. This Agreement and its Exhibits A - E constitute the
entire agreement between Executive and the Company. This Agreement is the
complete, final and exclusive embodiment of their agreement with regard to
this subject matter and supercedes any prior oral discussions or written
communications and agreements. This Agreement is entered into without
reliance on any promise or representation other than those expressly
contained herein, and it cannot be modified or amended except in writing
signed by the President and Chief Executive Officer of the Company.
7.5 Counterparts. This Agreement may be executed in separate counterparts, any
one of which need not contain signatures of more than one party, but all
of which taken together will constitute one and the same Agreement.
7.6 Headings. The headings of the sections hereof are inserted for convenience
only and shall not be deemed to constitute a part hereof nor to affect the
meaning thereof.
7.7 Successors and Assigns. This Agreement is intended to bind and inure to
the benefit of and be enforceable by Executive and the Company, and their
respective successors, assigns, heirs, executors and administrators,
except that Executive may not assign any of his duties hereunder and he
may not assign any of his rights hereunder without the written consent of
the Company, which shall not be withheld unreasonably.
7.8 Choice of Law. All questions concerning the construction, validity and
interpretation of this Agreement will be governed by the law of the State
of North Carolina. Executive expressly consents to the jurisdiction of the
state and federal courts for Durham County, North Carolina, for all
actions arising out of or relating to this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first below written.
Paradigm Genetics, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ Date: 11/12/02
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For Paradigm Genetics, Inc.
Accepted and agreed this 12th day of November, 2002.
/s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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