EXHIBIT 10.58
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement") made and entered into as of December
18, 2003 and to take effect, if at all, upon the date of the Closing (as
defined hereafter) (the "Effective Date"), by and between GENAISSANCE
PHARMACEUTICALS, INC. (the "Corporation"), a Delaware corporation with its
principal office at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, and ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ("Executive"), an individual who resides at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, the Corporation and Lark Technologies, Inc. ("Lark") have
entered into agreements pursuant to which Lark would become a wholly-owned
subsidiary of the Corporation if and when the transactions contemplated by
such agreements take final effect (the "Closing "); and
WHEREAS, the Corporation and Executive desire to enter into this
Agreement to set forth the terms and conditions of their employment
relationship, commencing as of the Effective Date; and
WHEREAS, Executive will have terminated his employment with Lark, as of
the Effective Date, in accordance with the provisions of that certain letter,
of even date, a copy of which is attached hereto as EXHIBIT A.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:
1. EMPLOYMENT. The Corporation shall employ Executive in the capacity
of Senior Vice President of the Corporation and President of Lark (together,
"SVP") during the term of this Agreement, and Executive hereby accepts such
employment, on the terms and conditions hereinafter set forth. Executive
represents that his employment by the Corporation pursuant to this Agreement
does not violate any agreement, covenant or obligation to which he is a party
or by which he is bound.
2. DUTIES. During the term of this Agreement, Executive shall perform
all duties, consistent with his position as SVP in order to advance the
Corporation's and Lark's genomics technology and related business efforts,
assigned or delegated to him by the Chief Executive Officer of the
Corporation or his delegate (the "CEO"), and normally associated with the
position of SVP, including, without limitation, administrative and operating
responsibility for Lark's business. He shall devote his full business time
and best efforts to the advancement of the interests and business of the
Corporation. Nothing herein shall prevent Executive from investing or
participating in other business activities PROVIDED (i) such other activities
do not directly or indirectly compete with the Corporation's business, (ii)
the Corporation has consented to Executive's participation in such other
activities, such consent not to be unreasonably withheld, and (iii)
Executive's participation therein does not interfere with the Executive's
performance of his duties and responsibilities to the Corporation.
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3. TERM. The term of this Agreement shall begin on the Effective Date,
and shall expire on the fourth anniversary of the Effective Date, unless
earlier terminated as provided in this Agreement (the "Initial Term"). Upon
expiration of the Initial Term and any subsequent term or extension thereof,
this Agreement shall automatically be extended for an additional term of one
(1) year, unless Executive or the Corporation elect to terminate this
Agreement in accordance with the provisions of Section 12 of this Agreement
(the "Initial Term", together with any subsequent terms or extensions, until
termination or expiration in accordance with the provisions of this
Agreement, shall be referred to herein as the "Employment Term"). If
Executive continues in the employ of the Corporation after the end of any
Employment Term, then Executive's continued employment by the Corporation
shall, notwithstanding anything to the contrary expressed or implied herein,
be terminable by the Corporation or the Executive at will.
4. COMPENSATION. As compensation for any and all services to be
rendered by Executive to the Corporation pursuant to this Agreement, the
Corporation shall pay Executive and provide Executive with the following
compensation and benefits, which Executive agrees to accept in full
satisfaction for his services:
a. BASE SALARY. The Corporation shall pay Executive a Base
Salary, payable in equal installments at such payment intervals as are
the usual payroll practices of the Corporation, at an annual rate of Two
Hundred Ten Thousand and no/100 U.S. Dollars (U.S.$210,000.00), less
such deductions or amounts to be withheld as shall be required by
applicable law or as may be allowed at the request of Executive (the
"Base Salary"). The Base Salary shall be reviewed annually by the
Corporation's Board of Directors (the "Board") in the fourth quarter of
each fiscal year of the Corporation and shall be increased, but not
decreased (effective as of January 1 of the next fiscal year) by such
amount, if any, as the CEO, in his sole discretion, shall determine and
the Board, in its sole discretion, shall approve.
b. BONUS. Provided Executive first meets the Corporation's
expectations for his performance during the Employment Term and remains
employed on the date of payment, Executive shall be eligible for a
discretionary bonus (a "Discretionary Bonus") in an amount, if any,
determined by the Board in its sole discretion based upon Executive's
achievements in meeting his performance goals and those of the
Corporation for its most recently ended fiscal year. Executive's target
Discretionary Bonus for the Initial Term is sixty percent (60%) of his
Base Salary. Goals shall be established in the first quarter of each
fiscal year after the commencement of the Employment Term. Each
Discretionary Bonus may be payable in cash, stock options, and/or
restricted stock upon such terms and conditions as determined by the
CEO. The Corporation shall pay any Discretionary Bonus as soon as
reasonably possible after the close of its books at the end of the
fiscal year. As any bonus paid to Executive is discretionary, the
payment of any bonus in respect of a particular fiscal year must not be
construed as requiring the payment of a bonus in respect of any other
fiscal year.
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c. BENEFITS.
(i) Executive shall be entitled to participate, to
the extent he is eligible, in all group insurance programs, health,
medical, dental, and disability plans and other employee benefit
plans (including, without limitation, the Corporation's 401(k)
plan), which the Corporation may hereafter in its sole and absolute
discretion make available generally to members of its senior
management team (other than any incentive compensation or equity
ownership plan), but the Corporation shall not be required to
establish or maintain any such program or plan.
(ii) Executive shall be entitled to four (4) weeks
paid vacation during each calendar year, in accordance with the
Corporation's vacation policies. Such vacation may be taken at
such time or times as is reasonably consistent with the
Corporation's vacation policies and the performance by Executive of
his duties and responsibilities under this Agreement. Up to one
week of unused vacation time in one year may be carried over and
used in the subsequent year.
(iii) Executive shall be entitled to participate in
the Corporation's 2000 Amended and Restated Equity Incentive Plan
(the "Plan") and the Corporation's Employee Stock Purchase Plan, or
any successor plans. In addition, Executive shall be eligible to
participate in the Plan with respect to his future performance as a
senior executive of the Corporation. Executive understands and
agrees that any stock rights granted to Executive shall be subject
to the provisions of the Plan and any separate written agreements
embodying the grant of the rights that are required by the Plan.
The rights shall be set forth in a separate agreement embodying the
grant of the rights which shall be otherwise in the form stipulated
in the Plan.
(iv) The Corporation shall purchase and throughout
the Employment Term pay the premiums for a $1,000,000 policy of
term life insurance insuring the life of Executive (subject to his
meeting the suitability requirements of the insurer). Executive
shall be the owner of such policy and entitled to all of the rights
of ownership including designation of the beneficiary thereof.
(v) Subject to reasonable guidelines adopted by
the Board, throughout the Employment Term, the Corporation shall
pay the costs of dues for Executive's membership in professional
organizations whose activities are reasonably related to the
business of the Corporation.
(vi) The Corporation shall provide Executive with a
policy of long-term disability insurance with reasonable coverages,
which shall include the payment of benefits equal to at least 60%
of Executive's Base Salary during the disability coverage period,
and the Corporation shall pay the premiums or a portion thereof (as
specified hereafter) for such disability insurance policy up to the
cost charged by the insurer to insure a healthy male non-smoker of
Executive's age.
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d. TAXES. All compensation and benefits are subject to
applicable withholding taxes, federal, state, and local, and any other
proper deductions.
e. BENEFIT PLANS. Executive understands that the Corporation
may amend, change, or cancel its employment policies and benefit plans
that are applicable to all employees of the Corporation and members of
the senior management team at any time as allowed by law or by any
applicable plan documents.
5. BUSINESS EXPENSES. The Corporation shall pay, or reimburse
Executive for, the reasonable and necessary business expenses of Executive
incurred in the performance of his duties hereunder, provided Executive
provides timely and reasonable documentation thereof in accordance with the
rules and regulations of the Corporation relating thereto.
6. COMPLIANCE WITH POLICIES. Executive acknowledges and agrees that,
except as set forth in this Agreement, compliance with the Corporation's
generally applicable policies, practices and procedures is a term and
condition of his employment under this Agreement.
7. INVENTIONS AND IMPROVEMENTS. Executive acknowledges, covenants and
agrees that the Corporation shall be the sole owner of all the fruits and
proceeds of Executive's services to the Corporation, including but not
limited to all writings, inventions, discoveries, designs, systems,
processes, software or other improvements relating to the business or
products of the Corporation, whether or not patentable, registerable, or
copyrightable, which Executive may, alone or with others, conceive, create,
develop, produce or make during or as a result of his employment with the
Corporation (collectively, the "Invention"), free and clear of any claims by
Executive of any kind or character whatsoever other than Executive's rights
to compensation under this Agreement. Executive agrees that he shall
disclose each of the Inventions promptly and completely to the Corporation,
and shall, at the request of the Board, execute such assignments,
certificates or other instruments as the Board or the Corporation from time
to time deem necessary or desirable to evidence, establish, maintain,
perfect, protect, enforce or defend the Corporation's right, title and
interest in or to any or all of the Inventions. Executive agrees that he
also shall be bound by the terms of a certain Employee Agreement on Ideas,
Inventions, and Confidential Information, dated on or about the Effective
Date (the "Inventions Agreement"), which shall continue in full force and
effect according to its terms and nothing in this Agreement shall be
interpreted or construed as modifying the Inventions Agreement. To the
extent that there is any conflict between the provisions of this Section and
the provisions of the Inventions Agreement, the provisions of the Inventions
Agreement shall govern.
8. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
a. Executive acknowledges that, in and as a result of his
employment by the Corporation, he will be making use of, acquiring
and/or adding to the Corporation's Confidential Information (as
hereinafter defined). As a material inducement to the Corporation to
employ Executive and to pay Executive the compensation and benefits set
forth in this Agreement, Executive covenants and agrees that he shall
not, at any time during or following the term of his employment with the
Corporation, directly or indirectly divulge or disclose for any purposes
whatsoever, any Confidential Information that has been obtained by, or
disclosed to, him as a result of his employment with the
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Corporation. For purposes of this Agreement, "Confidential Information"
means, collectively, all confidential matters and materials of the
Corporation, including without limitation, (i) the Corporation's
proprietary information, inventions, trade secrets, knowledge, data,
know-how, intellectual property, systems, procedures, manuals, pricing
policies, operational methods and information relating to the
Corporation's products, processes, formulae, business plans, marketing
plans and strategies, pricing strategies, customer lists, and all other
subject matters pertaining to the business and/or financial affairs of
the Corporation; (ii) the Corporation's information regarding plans and
strategies for research, development, new products, future business
plans, budgets and unpublished financial statements, licenses, prices
and costs; (iii) information regarding the skills and compensation of
other employees of the Corporation; and (iv) information disclosed in
confidence to the Corporation by a third party with a duty on the
Corporation to maintain the confidentiality of such information. The
term "Confidential Information" shall not include any information that
(x) has been made available generally to the public either by the
Corporation or by a third party with the Corporation's consent, unless
such information became available as a result of any action by Executive
in violation of this Agreement, any other agreement, or his obligations
under law, or (y) has been made available as a result of a final award,
order, or ruling by an arbitration tribunal or a court of competent
jurisdiction that has determined that such Confidential Information may
be disclosed.
b. If Executive is required by a court, arbitration tribunal,
or governmental agency (by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigation demand or
similar process) to disclose any Confidential Information, Executive may
disclose such Confidential Information to such court, tribunal, or
agency without liability hereunder, PROVIDED, THAT Executive first
provides the Corporation with notice of any such requirement(s) as
promptly as practicable, but in any case with sufficient timeliness to
enable the Corporation to seek an appropriate protective order and/or
waive its compliance with the relevant provisions of this Agreement.
9. COVENANTS AGAINST COMPETITION.
a. NON-SOLICITATION OF EMPLOYEES. While employed by the
Corporation and for a period of six (6) months, followed by a second
period of six (6) months, for a total period of twelve (12) months, from
the date of termination, for any reason, of Executive's Employment Term
with the Corporation Executive shall not directly or indirectly solicit,
induce or encourage any of the Corporation's employees to terminate
their employment with the Corporation or to accept employment with any
competitor, supplier, client, agent or broker of the Corporation, nor
shall Executive cooperate with any others in doing or attempting to do
so. As used in this Section 9a, the term "solicit, induce or encourage"
includes, but is not limited to, (i) initiating communications with any
employee of the Corporation relating to possible employment or
independent contractor relationship, (ii) offering bonuses or additional
compensation to encourage any employee of the Corporation to terminate
his or her employment with the Corporation and accept employment with a
competitor, supplier, client, agent or broker of the Corporation, or
(iii) referring any employee of the Corporation to recruiters, personnel
or agents employed by competitors, suppliers, clients, agents or brokers
of the Corporation.
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Notwithstanding the foregoing, the term "solicit, induce or encourage",
as used in this Section 9a, specifically excludes any action by the
Executive related to any of the Corporation's employees where it is in
the Corporation's best interest to terminate any such employees as in
the case of a planned reduction in force by the Corporation.
b. NON-COMPETE. While Executive is employed by the
Corporation and for a period of six (6) months, followed by a second
period of six (6) months, for a total period of twelve (12) months, from
the date of termination, for any reason, of Executive's Employment Term
Executive shall not directly or indirectly, as a principal, agent,
contractor, employee, employer, partner, shareholder, proprietor,
investor, member, director, officer, or consultant, or in any other
capacity, engage in or perform any managerial or executive services (a)
for any corporation, partnership, individual or entity which is engaged
in a business competitive with the Corporation or an affiliate of the
Corporation or (b) for any customer of the Corporation or an affiliate
of the Corporation.
c. For the purposes of this Agreement:
(i) The term "engaged in a business competitive
with the Corporation" means directly or indirectly engaging in the
business of pharmacogenomics or pharmacogenetics or in the same or
any similar business as the Corporation or any of its affiliates in
any manner whatsoever within any geographic area in which the
Corporation's products or services are offered or distributed;
(ii) The term "affiliate" means any legal entity
that directly or indirectly through one or more intermediaries
controls, is controlled by, or is under common control with the
Corporation; and
(iii) The term "customer" means any business,
company, person, and any other entity to whom the Corporation or
any of its affiliates has provided any product or service, whether
or not for compensation, within a period of two (2) years prior to
the time Executive ceases to be employed by the Corporation.
d. EXCLUSION FOR INVESTMENTS. None of the provisions of this
Section 9 shall prohibit Executive from investing in securities (i)
listed on a national securities exchange or actively traded
over-the-counter so long as such investments are not greater than five
percent (5%) of the outstanding securities of any issuer of the same
class or issue, or (ii) of entities engaged in a business competitive
with the Corporation so long as any such entity was not engaged in a
business competitive with the Corporation at the time Executive made
such investment.
10. REASONABLENESS OF RESTRICTIONS.
a. Executive has carefully read and considered the provisions
of Section 8 and Section 9, and, having done so, agrees that:
(i) The restrictions set forth in Section 8 and
Section 9, including but not limited to the character, duration,
and geographical area of restriction, are fair
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and reasonable and are reasonably required for the protection of
the good will and other legitimate business interests of the
Corporation and its affiliates, officers, directors, shareholders,
and other employees;
(ii) Executive has received, or is entitled to
receive pursuant to the terms of this Agreement, adequate
consideration for such obligations; and
(iii) Such obligations do not prevent Executive from
earning a livelihood.
b. If, notwithstanding the foregoing, any of the provisions
of Section 8 or Section 9 shall be held to be invalid or unenforceable,
the remaining provisions thereof shall nevertheless continue to be valid
and enforceable as though the invalid and unenforceable parts had not
been included therein. If any provision of Section 8 or Section 9 is
determined by a court of competent jurisdiction that the character,
duration, geographical scope, or related aspects are unreasonable in
light of the circumstances as they then exist, then it is the intention
of the parties that Section 8 and/or Section 9 shall be construed by the
court in such a manner as to impose only those restrictions on the
conduct of Executive that are reasonable in light of the circumstances
as they then exist and as are necessary to assure the Corporation of the
intended benefit of this Agreement and such restrictions, as so
modified, shall become and thereafter be the maximum restriction in such
regard, and the restriction shall remain enforceable to the fullest
extent deemed reasonable by such court.
11. REMEDIES FOR BREACH OF EXECUTIVE'S COVENANTS OF NON-DISCLOSURE AND
NON-COMPETITION. Executive recognizes and agrees that the Corporation's
remedy at law for any breach of Section 8 or Section 9 would be inadequate as
such a breach would cause irreparable harm to the Corporation, and he agrees
that, for any actual or threatened breach of such provisions, the Corporation
shall, in addition to such other remedies as may be available to it at law or
in equity, be entitled to injunctive relief and to enforce its rights by an
action for specific performance. All of the Corporation's remedies for any
breach of this Agreement shall be cumulative and the pursuit of any one
remedy shall not exclude the Corporation's pursuit of any other remedies.
12. TERMINATION AND SEVERANCE.
a. DEATH. In the event that Executive dies during the
Employment Term, this Agreement shall terminate automatically upon his
death, upon which event Executive's legal representatives shall be
entitled to receive, and the Corporation shall pay or cause to be paid
to Executive's legal representatives, any Base Salary and other
compensation or benefits accrued but as yet unpaid on the date of
Executive's death.
b. INCAPACITY OR DISABILITY. If during the Employment Term,
Executive is prevented from performing the duties or fulfilling
responsibilities of his employment under this Agreement by reason of any
incapacity or disability for a continuous period of six (6) months, as
determined by an independent qualified physician selected by the
Corporation and reasonably acceptable to Executive (or his
representative), then the
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Corporation may terminate Executive's employment hereunder, but
Executive shall continue to be eligible to receive any benefits to which
he may be entitled under the terms of any long-term disability plan or
insurance policy maintained by the Corporation for its employees
generally or for Executive specifically. In the event of such
incapacity or disability, the Corporation shall continue to pay full
compensation to Executive in accordance with the terms of this Agreement
until the date of such termination.
c. BY CORPORATION FOR CAUSE. The Corporation may, upon
written notice to Executive, terminate Executive's employment hereunder
for Cause (as defined hereafter); For purposes of this Agreement, the
term "Cause" shall mean (i) Executive's material breach of this
Agreement if the Corporation has notified Executive of such breach and
he has not cured such breach within 15 days of having received such
notice; (ii) Executive's material failure to adhere to any policy of the
Corporation generally applicable to employees of the Corporation if
Executive has been given a reasonable opportunity to comply with such
policy or cure his failure to comply; (iii) Executive's appropriation
(or attempted appropriation) of a business opportunity of the
Corporation, including attempting to secure or securing any personal
profit in connection with any transaction entered into on behalf of the
Corporation; (iv) Executive's misappropriation (or attempted
misappropriation) of any of the Corporation's funds or property; (v)
Executive's conviction of, or the entering of a guilty plea or plea of
no contest with respect to, a felony, the equivalent thereof, or of a
lesser crime having as its predicate element fraud, dishonesty or
misappropriation of property of the Corporation; (vi) Executive's
willful misconduct or insubordination; (vii) Executive's physical or
mental disability or other inability to perform the essential functions
of his position for a consecutive six (6) month period, with or without
reasonable accommodation, if Executive is not eligible for the benefits
in Section 12b; (viii) Executive's engaging in bad faith or gross
negligence in the performance of his duties under this Agreement as
determined in good faith by the Board; or (ix) any other conduct of
Executive sufficiently detrimental to the Corporation so as to warrant
immediate termination of Executive's employment with the Corporation.
In the event of termination for Cause of Executive's
employment, Executive's right to receive compensation and other benefits
hereunder (other than any Base Salary and any vacation accrued but as
yet unpaid on the effective date of such termination) shall terminate on
the effective date of such termination, and Executive shall not be
entitled to any severance payments or other benefits.
d. TERMINATION BY THE CORPORATION WITHOUT CAUSE. The
Corporation may elect to terminate Executive's employment at any time
without Cause upon written notice to Executive. In the event of such
termination without Cause, Executive shall be entitled to a severance
payment in an amount equal to 125% of Executive's Base Salary as of the
date of termination, such payment to be made in equal installments over
a twelve (12) month period on the Corporation's usual pay periods.
e. NONRENEWAL OF AGREEMENT. The Corporation may elect to not
renew or extend this Agreement at any time without Cause upon written
notice to Executive not later than thirty (30) days prior to the end of
any Initial Term or any extended
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Employment Term. In the event of a nonrenewal or non-extension pursuant
to this Section 12e, Executive's rights to receive compensation and
other benefits (other than any Base Salary and vacation accrued but as
yet unpaid on the effective date of such termination) shall terminate at
the expiration of the Initial Term or Employment Term. In the event of
such termination, Executive shall be entitled to a severance payment
following the end of such Initial Term or Employment Term in an amount
equal to 125% of Executive's Base Salary as of the date of termination,
such payment to be made in equal installments over a twelve (12) month
period on the Corporation's usual pay periods.
f. BY EXECUTIVE FOR CERTAIN REASONS. Executive may, at his
option, upon at least thirty (30) days written notice to the
Corporation, terminate his employment hereunder, if the Corporation,
without Executive's express written consent, (i) removes him as an
officer of the Corporation, (ii) demotes him from SVP, (iii) assigns him
duties materially inconsistent with the position and/or duties described
in Sections 1 or 2, (iv) materially diminishes his responsibilities
described in Sections 1 or 2, (v) breaches any material obligations to
Executive under this Agreement, or (vi) in connection with a Change of
Control (as defined hereafter), the Corporation requires Executive to
relocate his office to a location that is more than thirty-five (35)
miles from its existing location in Houston, Texas. Upon any termination
by Executive under this Paragraph the Corporation shall be obligated to
pay Executive the severance payments specified in Section 12d.
g. BY EXECUTIVE FOLLOWING CHANGE OF CONTROL. Executive may,
at his option, upon thirty (30) days written notice to the Corporation,
terminate his employment hereunder for Good Reason (as hereinafter
defined) following a Change of Control of the Corporation. Upon any
termination by Executive under this Paragraph, the Corporation shall be
obligated to pay Executive a severance payment in an amount equal to
150% of Executive's Base Salary as of the date of termination for an
eighteen (18) month period, payable in equal installments over such
eighteen (18) month period on the Corporation's usual pay periods.
Termination by Executive of his employment pursuant to this paragraph
shall not be deemed a voluntary termination by Executive pursuant to
Section 12i below.
h. GOOD REASON DEFINED. For purposes of this Agreement, the
term "Good Reason" means, during the thirty (30) day period prior to or
the twelve (12) month period following a Change of Control, without
Executive's express written consent, the occurrence of any of the
following circumstances:
(i) the assignment to Executive of any duties
inconsistent (except in the nature of a promotion) with the
position in the Corporation that he held immediately prior to the
Change of Control or substantial adverse alteration in the nature
or status of his position or responsibilities or the conditions of
his employment from those in effect immediately prior to the Change
of Control;
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(ii) a reduction, other than a de minimis
reduction, by the Corporation in Executive's annual Base Salary as
in effect on the date hereof, as the same may be increased from
time to time;
(iii) the failure by the Corporation to continue in
effect any material compensation or benefit plan in which Executive
participates immediately prior to the Change of Control unless an
equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the
failure by the Corporation to continue Executive's participation
therein (or in such substitute or alternative plan) on a basis not
materially less favorable, both in terms of the amount of benefits
provided and the level of his participation relative to other
participants, than existed immediately prior to the Change of
Control.
i. VOLUNTARY TERMINATION BY EXECUTIVE. Executive may, at his
option, upon thirty (30) days prior written notice to the Corporation,
terminate his employment hereunder. In the event of a voluntary
termination of his employment by the Executive pursuant to this
Paragraph, Executive's rights to receive compensation and other benefits
(other than any Base Salary and vacation accrued but as yet unpaid on
the effective date of such termination) shall terminate on the effective
date of such termination, and Executive shall not be entitled to any
severance payments or other benefits.
j. ELIGIBILITY FOR SEVERANCE; REQUIREMENT OF RELEASE. Except
as provided in Sections 12d, 12e, 12f and 12g, Executive shall not be
eligible for or entitled to any severance payments in the event of
termination of his employment hereunder. No severance shall be paid
under this Agreement unless Executive first executes and agrees to be
bound by a release of all claims (other than claims that Executive may
then or thereafter have in respect of Base Salary, reimbursement of
reasonable expenses incurred within the three (3) month period prior to
the date of his termination or other expenses due to him under this
Agreement), on a form provided by the Corporation, which releases any
and all claims that Executive has or might have against the Corporation
and which contains terms customary in such agreements.
k. RESIGNATION. In the event of termination of his
employment other than for death, Executive shall be deemed to have
resigned from all positions held in the Corporation, including without
limitation any position as a director, officer, agent, trustee, or
consultant of the Corporation or any affiliate of the Corporation. Upon
request of the Corporation, Executive shall promptly sign and deliver to
the Corporation any and all documents reflecting such resignations as of
the date of termination of his employment.
13.VESTING UPON CHANGE IN CONTROL; EXERCISE.
a. Any stock grant or options granted to Executive by the
Corporation shall accelerate and immediately vest upon a Change of
Control if Executive does not retain his position and duties with the
Corporation (or its successor) at the time of said Change of Control.
"Change of Control" means the occurrence of the following events: if (a)
any "person," as such term is used in Sections 13d and 14e of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act")
(other than the Corporation, any trustee or
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other fiduciary holding securities under an employee benefit plan of the
Corporation, or any corporation owned directly or indirectly by the
stockholders of the Corporation in substantially the same proportion as
their ownership of stock in the Corporation) is or becomes the
"Beneficial Owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation representing
50% or more of the combined voting power of the Corporation's then
outstanding securities (other than as a result of acquisitions of such
securities from the Corporation); (b) individuals who, as of the date
hereof, constitute the Board of Directors of the Corporation (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director
after the date hereof whose election, or nomination for election by the
Corporation's stockholders, was approved by a majority of the directors
then comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of the directors of the Corporation) shall be, for purposes of
this Agreement, considered to be a member of the Incumbent Board; (c)
the stockholders of the Corporation approve a merger or consolidation of
the Corporation with any other corporation, other than (i) a merger or
consolidation that would result in the voting securities of the
Corporation outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Corporation or such
surviving entity outstanding immediately after such merger or
consolidation or (ii) a merger or consolidation effected to implement a
recapitalization of the Corporation (or similar transaction) in which no
"person" (as defined above, acquires more than 20% of the combined
voting power of the Corporation's then outstanding securities; or (d)
the stockholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all of the
Corporation's assets. Notwithstanding the foregoing, if the Incumbent
Board specifically determines in good faith that any transaction does
not constitute a Change of Control for purposes of this Agreement, such
determination shall be conclusive and binding.
b. In the event Executive's stock grants and/or options
accelerate pursuant to this Agreement, Executive shall be permitted to
exercise any and all vested options which he holds for a period of up to
twelve (12) months following the date of termination or expiration of
his employment to the extent permitted by applicable law.
14. PAYMENT OR BENEFIT IN CONNECTION WITH CHANGE OF CONTROL.
a. Notwithstanding any other provision of this Agreement, in
the event that any payment or benefit received or to be received by the
Executive (i) is deemed to be in connection with a Change in Control
(whether payable pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Corporation, its successors, any
person whose actions result in a Change in Control or any corporation
("Affiliates") affiliated (or which, as a result of the completion of
the transactions causing a Change in Control will become affiliated)
with the Corporation within the meaning of Section 1504 of the Internal
Revenue Code of 1986, as amended (the "Code") (collectively with the
payments and benefits pursuant to
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this Agreement if deemed to be paid pursuant to a Change in Control,
"Total Payments")) and (ii) it is determined by the Corporation's
independent certified accounting firm (the "Tax Advisor") that the Total
Payments exceed 2.99 times the base amount (as such term is defined
under Section 280G(b)(3) of the Code) but equal less than 4 times such
base amount and that an excise tax is payable by Executive under Section
4999 of the Code, then the amount of payments to the Executive shall be
reduced so that the payments do not exceed the limits then set forth in
Section 280G of the Code.
b. Notwithstanding any other provisions of this Agreement or
the provisions of subsection 14a. above, in the event that the Tax
Advisor determines that the Total Payments would be subject (in whole or
part), to an excise tax pursuant to Section 4999 of the Code (such tax
hereinafter referred to as the "Excise Tax") and the Tax Advisor
determines that the Total Payments equal or exceed four (4) times the
base amount (as such term is defined under Section 280G(b)(3) of the
Code), then the Total Payments shall be grossed up to the extent
necessary to reflect any Excise Taxes due by Executive (and the income
taxes attributable to the additional payment) so that the Executive will
be entitled to a net amount equal to the Total Payments (the "Grossed-Up
Payment"). For purposes of determining whether and the extent to which
the Total Payments will be subject to the Excise Tax, (i) no portion of
the Total Payments the receipt or enjoyment of which Executive shall
have effectively waived in writing prior to the date of this termination
of employment shall be taken into account, (ii) no portion of the Total
Payments shall be taken into account which in the opinion of Tax Advisor
does not constitute a "parachute payment" within the meaning of Section
280G(b)(2) of the Code, (including by reason of Section 280(b)(4)(A) of
the Code) and, in calculating the Excise Tax, no portion of such Total
Payment shall be taken into account which constitutes reasonable
compensation for services actually rendered, within the meaning of
Section 280G(b)(4)(B) of the Code, in excess of the base amount as
defined in Section 280G(b)(3) of the Code allocable to such reasonable
compensation, and (iii) the value of any non-cash benefit or any
deferred payment or benefit included in the Total Payments shall be
determined by Corporation in accordance with the principles of Sections
280G(d)(3) and (4) of the Code. Prior to the thirtieth day following
the date of Executive's termination of employment, Corporation shall
provide Executive with its calculation of the amounts referred to in
this Section and such supporting materials as are reasonably necessary
for Executive to evaluate Corporation's calculations but the Tax
Advisor's calculations shall be used for purposes of any payments
pursuant to this Section.
c. If the Corporation's Tax Advisor determines that the Total
Payments received or to be received by Executive fall under subsection
14a above and upon audit by the Internal Revenue Service (the "IRS"),
the IRS determines that an Excise Tax is due and payable due to the
amount of the Total Payments received by Executive, notwithstanding the
reductions in payments under subsection 14a, then in lieu of any further
reduction the Corporation agrees to make a Grossed-Up Payment calculated
in the same manner as provided in subsection 14b above.
d. In the event of any IRS audit concerning the Total
Payments payable or paid to Executive, the Corporation may in its sole
discretion choose to respond to the audit. If the Corporation chooses
not to respond, then it shall be the sole responsibility of Executive to
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respond to the audit. Each party shall reasonably cooperate with the
other in any such proceedings.
15. WAIVER. A party's failure to insist on compliance or enforcement
of any provision of this Agreement shall not affect the validity or
enforceability or constitute a waiver of future enforcement of that provision
or of any other provision of this Agreement by that party or any other party.
16. GOVERNING LAW. This Agreement shall in all respects be subject to,
and governed by, the laws of the State of Connecticut without reference to
its conflict of laws. The parties acknowledge that each of them will act in
good faith and deal fairly with respect to their respective rights and
obligations under this Agreement.
17. SEVERABILITY. The invalidity or unenforceability of any provision
in the Agreement shall not in any way affect the validity or enforceability
of any other provision and this Agreement shall be construed in all respects
as if such invalid or unenforceable provision had never been in the Agreement.
18. NOTICE. Any and all notices required or permitted herein shall be
in writing and shall be deemed to have been duly given (a) when delivered if
delivered personally, (b) on the fifth day following the date of deposit in
the United States mail if sent first class, postage prepaid, or by certified
mail, or (c) one day after delivery to a nationally recognized overnight
courier service. The parties' respective addresses for such notices shall be
those set forth below, or such other address or addresses as either party may
hereafter designate in writing to the other.
If to the Corporation: Genaissance Pharmaceuticals, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Employee: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to: Berie, Lamberth & ▇▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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19. ASSIGNMENT. This Agreement shall inure to the benefit of, and
shall be binding upon, the parties hereto and their respective successors,
assigns, heirs, and legal representatives, including any entity with which
the Corporation may merge or consolidate or to which all or substantially all
of its assets may be transferred. The duties and covenants of Executive
under this Agreement, being personal, may not be delegated.
20. AMENDMENTS. This Agreement may be amended at any time by mutual
consent of the parties hereto, with any such amendment to be invalid unless
in writing and signed by the Corporation and Executive and expressly
referring to this Agreement.
21. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding by and between Executive and the Corporation with respect to
the employment of Executive and supersedes all existing agreements between
the Corporation and Executive with respect to such subject matter. No
representations, promises, agreements, or understandings, written or oral,
relating to the employment of Executive by the Corporation, or any of its
officers, directors, employees, or agents, not contained herein shall be of
any force or effect, provided that, ▇▇▇▇▇▇▇▇ ▇, ▇, ▇, ▇, ▇▇▇ ▇ ▇▇▇▇▇ ▇▇
supplemental to any other agreement of Executive with the Corporation related
to the matters identified therein.
22. NO UNDUE INFLUENCE; CONSTRUCTION. This Agreement is executed
voluntarily and without any duress or undue influence. Executive
acknowledges that he has read this Agreement and executed it with his full
and free consent. No provision of this Agreement shall be construed against
any party by virtue of the fact that such party or its counsel drafted such
provision or the entirety of this Agreement.
23. REFERENCES TO GENDER AND NUMBER TERMS. In construing this
Agreement, feminine or neuter pronouns shall be substituted for those
masculine in form and vice versa, and plural terms shall be substituted for
singular and singular for plural in any place in which the context so
requires.
24. COUNTERPARTS; HEADINGS; SECTIONS. This Agreement may be executed
in multiple counterparts, each of which shall be considered to have the force
and effect of any original but all of which taken together shall constitute
but one and the same instrument. The various headings in this Agreement are
inserted for convenience only and are not part of the Agreement. All
references to "Sections" and "Paragraphs" in this Agreement refer to the
various corresponding sections and paragraphs of this Agreement.
25. SURVIVAL. The covenants and agreements contained in Sections 5
through 9 shall survive any termination of Executive's employment with the
Corporation.
26. ARBITRATION. Executive and the Corporation shall submit any
disputes arising under this Agreement to an arbitration panel conducting a
binding arbitration in Hartford, Connecticut or at such other location as may
be agreeable to the parties, in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association in
effect on the date of such arbitration (the "Rules"), and judgment upon the
award rendered by the arbitrator or arbitrators may be entered in any court
having jurisdiction thereof; PROVIDED, HOWEVER, that nothing herein shall
impair the Corporation's right to seek equitable
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relief for any breach or threatened breach of Section 8 or Section 9. The
award of the arbitrators shall be final and shall be the sole and exclusive
remedy between the parties regarding any claims, counterclaims, issues or
accountings presented to the arbitration panel. The parties hereto further
agree that the arbitration panel shall consist of one (1) person mutually
acceptable to the Corporation and Executive, PROVIDED that if the parties
cannot agree on an arbitrator within thirty (30) days of filing a notice of
arbitration, the arbitrator shall be selected by the manager of the principal
office of the American Arbitration Association in Hartford County in the
State of Connecticut. Each party will pay for the fees and expenses of its
own attorneys, experts, witnesses, and preparation and presentation of proofs
and post-hearing briefs (unless (i) the party prevails on a claim for which
attorney's fees and expenses are recoverable under the Rules and those
amounts are included as part of the award or (ii) Executive prevails on a
claim for breach of this Agreement after the Corporation has terminated
Executive pursuant to Section 12c(ix) hereof, in which case, the Corporation
will pay for Executive's above-described fees and expenses related to such a
claim). Any action to enforce or vacate the arbitrator's award shall be
governed by the federal Arbitration Act, if applicable, and otherwise by
applicable state law. If either the Corporation or Executive pursues any
claim, dispute or controversy against the other in a proceeding other than
the arbitration provided for herein, the responding party shall be entitled
to dismissal or injunctive relief regarding such action and recovery of all
costs, losses and attorney's fees related to such action. Executive
acknowledges and expressly agrees that this arbitration provision constitutes
a voluntary waiver of trial by jury in any action or proceeding to which
Executive and the Corporation may be parties arising out of or pertaining to
this Agreement.
THE NEXT PAGE IS THE SIGNATURE PAGE
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IN WITNESS WHEREOF, the Corporation and Executive have duly executed
this Agreement on the dates set forth below.
CORPORATION:
GENAISSANCE PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Its President and Chief Executive Officer
Date: December 18, 2003
-------------------------------------
EXECUTIVE:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Date: December 18, 2003
-------------------------------------
Personally appeared, ▇▇▇▇▇ ▇▇▇▇▇, President and Chief Executive Officer
of Genaissance Pharmaceuticals, Inc., who acknowledged that the execution of
this Agreement was his free act and deed, and the free act and deed of the
corporation, before me, this 18th day of December, 2003.
-------------------------------------------
Notary Public
My Commission Expires:
Personally appeared, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, who acknowledged that the
execution of this Agreement was his free act and deed, before me, this 18th
day of December, 2003.
-------------------------------------------
Notary Public
My Commission Expires:
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EXHIBIT A
Dated as of December 18, 2003
VIA HAND DELIVERY
Lark Technologies, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Board of Directors
RE: EMPLOYMENT AGREEMENT BY AND BETWEEN LARK TECHNOLOGIES, INC. ("LARK") AND
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, DATED AS OF 31 JULY 2000 (THE "AGREEMENT")
Gentlemen:
In accordance with Section 5(b) of the Agreement, I, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
hereby terminate my employment with Lark under the Agreement effective on the
Closing Date (as defined hereafter).
The "Closing Date" means the date on which those certain transactions by and
between Lark and Genaissance Pharmaceuticals, Inc. ("GNSC"), pursuant to
which Lark would become a wholly-owned subsidiary of GNSC, take final effect.
In addition, I acknowledge that, when this termination becomes effective,
Lark shall have no obligations to me under the Agreement, including
specifically (but without limitation), obligations related to any rights to
accelerated vesting of options described in the Agreement (the "Acceleration
Rights") and that I hereby waive any and all Acceleration Rights I may have,
or which may accrue to me, under Sections 4(b) and 5(c) of the Agreement.
Kindly countersign this letter to acknowledge Lark's receipt of my
termination of employment and of its agreement with and acceptance of the
provisions set forth herein.
Sincerely,
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
AGREED AND ACCEPTED:
Lark Technologies, Inc.
By:
----------------------------------
Its:
----------------------------------
Duly Authorized
cc: ▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President & Chief Financial Officer,
Genaissance Pharmaceuticals, Inc.
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