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Exhibit 10.4
AGREEMENT
THIS AGREEMENT is made as of the 1st day of October, 1998, by and
between CELLOMICS, INC., a Pennsylvania corporation (hereinafter called
"Company") and D. LANSING XXXXXX (hereinafter "Executive").
Company is engaged in the business of creating and selling products for
multicolor fluorescence microscopy applications and drug discovery (hereinafter
called "Company's Business").
Executive has extensive experience in the Company's Business and
related fields.
Company desires to employ Executive and Executive desires to remain an
employee of the Company on the terms hereinafter set forth.
Now, therefore, intending to be legally bound hereby, the parties
covenant, promise and agree as follows:
EMPLOYMENT
1.01 Executive currently occupies and hereby agrees to remain in the
position of President and Chief Executive Officer of the Company and shall
report to the Company's Board of Directors ("Board"). Executive shall render
such business and professional services in the performance of his duties as
shall be assigned to him by the Board and which are reasonably consistent with
the position held by Executive.
1.02 Executive shall execute his duties effectively and faithfully on a
full-time basis. Executive shall not serve as a director, employee, consultant
or advisor to any other corporation or other business enterprise without prior
written consent of the Board. Notwithstanding the foregoing, Executive shall be
permitted reasonable time to serve on scientific advisory boards for other
businesses not in competition with the Company and to honor commitments to
Carnegie Mellon University ("CMU"), the National Academy of Sciences, and
similar entities, such time not to exceed eight (8) hours per month, subject
always to the non-disclosure of information and non-competition provisions of
Article 4 hereof.
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TERM
2.01 Executive shall be employed for a period of three (3) years
commencing October 1, 1998 and ending September 30, 2001.
2.02 Executive may terminate this Agreement without cause, upon six (6)
months written notice to the company.
2.03 Company may immediately terminate this Agreement for "cause", upon
written notice to Executive. For the purposes of this Agreement, "cause" means
that (i) Executive has been found guilty of a felony by a court of competent
jurisdiction, (ii) Executive has committed an act of embezzlement, fraud or
theft with respect to the property of the Company, or (iii) Executive has
materially breached his obligations hereunder or has engaged in a consistent
pattern of material neglect of his duties to the Company. In such event his
compensation shall cease on the date of termination.
2.04 Company may terminate this Agreement at any time without cause
upon written notice to Executive. In the event of such termination, Executive,
in addition to receiving all salary, bonuses and fringe benefits through the
date of notice, shall receive twelve (12) months' salary, payable monthly
following the effective date of his termination, plus full and immediate vesting
of all stock options set forth in Section 3.06 below, except those options
contingent upon the occurrence of a Transaction.
2.05 Death or permanent total disability of Executive shall be treated
as a termination by the Company without cause.
COMPENSATION
3.01 Executive's salary shall be set for the first year of this
Agreement and may be increased during the term of this Agreement based upon
annual reviews, as determined by the Board in its sole discretion.
3.02 Executive shall be paid a salary of Two Hundred Fifty-Five
Thousand ($255,000) Dollars per year for the first year of this Agreement, which
shall be paid to him at the company's normal payroll intervals, subject to
normal payroll deductions.
3.03 Dependent upon his first year annual review, it is contemplated
that Executive will be paid a salary of Two Hundred Sixty Thousand ($260,000)
Dollars per year for the
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second year of this Agreement, which shall be paid to him at the company's
normal payroll intervals, subject to normal payroll deductions.
3.04 Dependent upon his second year annual review, it is contemplated
that Executive will be paid a salary of Two Hundred Seventy Thousand ($270,000)
Dollars per year for the third year of this Agreement, which shall be paid to
him at the company's normal payroll intervals, subject to normal payroll
deductions.
3.05 In addition to the annual base salaries payable to Executive
pursuant to Sections 3.01, 3.02 and 3.03 hereof, Executive shall be entitled to
incentive compensation, up to a maximum amount of twenty (20%) percent of his
salary, in accordance with a formula as agreed upon in each year of this
Agreement with the Board of Directors. Executive and the Board of Directors will
mutually agree upon the formula for attainment of the incentive compensation no
later than November 30 in each year of the Agreement. The formula for the first
year of this Agreement is attached hereto as Exhibit "A".
3.06 In addition to the annual base salaries payable to Executive
pursuant to Sections 3.01, 3.02 and 3.03 hereof and the incentive compensation
pursuant to Section 3.05 hereof, Executive shall be entitled to non-qualified
stock options pursuant to the provisions of the Cellomics, Inc. Stock Plan.
Executive shall be entitled to purchase twenty thousand (20,000) shares of the
Company's common capital stock immediately at its current option price of
56 cents per share. Thirty thousand (30,000) additional Stock Options shall be
granted hereunder subject to a three (3) year vesting period that commences on
the date of this Agreement. Ten thousand (10,0000) options shall vest on each
anniversary of the date of this Agreement, such that the final 10,000 options
shall vest on October 1, 2002. Any such exercise may be made only to the extent
of the number of shares which were purchasable on the date of such termination
of employment. If Executive dies during such three (3) month period, any
unexercised options shall be exercisable by Executive's personal
representatives, heirs or legatees to the same extent and during the same period
that Executive could have exercised such options on the date of his death.
In the event of a reorganization, merger or consolidation in which the
Company is not the surviving entity, or the liquidation, dissolution or sale of
substantially all of the assets of the Company (each a "Transaction"), during
the calendar year 1999, Executive shall be granted additional options fully
vested at the current option price of 56 cents. If the cash or stock
consideration paid in the Transaction exceeds $75,000,000 dollars Executive will
be entitled to an additional 20,000 options for a total of 40,000 options. If
the cash or stock consideration paid in the Transaction exceeds $95,000,000
dollars Executive shall be entitled to 15,000 additional options or a total of
65,000 options.
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In the event of a transaction after calendar year 1999, the Company, or
the entity assuming the obligations of the Company, shall, as to any Stock
Options granted but not yet exercised under this Agreement, either (i) make
appropriate provision for the protection of such Stock Options by the
substitution on an equitable basis of appropriate securities of the Company or
of the merged, consolidated, reorganized, or other successor entity which will
be issuable in respect of the shares of Common Stock of the Company, provided
that the excess of the aggregate Fair Market Value of the securities subject to
the Stock Options immediately after such substitution over the purchase price
thereof is not more than the excess of the aggregate Fair Market Value of the
shares subject to such Stock Options immediately before such substitution over
the purchase price thereof, (ii) upon written notice to the Optionee, provide
that all unexercised Stock Options (including, without limitation, those which
would, but for this Section 6.1, not yet be exercisable) must be exercised
within a specified number of days from the date of such notice or such Stock
Options will be terminated, or (iii) upon written notice to the Optionee,
provide that the Company or the merged, consolidated, reorganized, or other
successor entity shall have the right, upon the effective date of any such
Transaction, to purchase all unexercised Stock Options at an amount equal to the
aggregate Fair Market Value on such date of the shares subject to such Stock
Options less the aggregate purchase price therefor, such amount to be paid in
cash or, if securities of the merged, consolidated, reorganized, or other
successor entity are issuable in respect of the shares of the Common Stock or
assets of the Company, then, in the discretion of the Company, in securities of
such merged, consolidated, reorganized, or other successor entity equal in Fair
Market Value to the aforesaid amount. In any such case the Company shall, in
good faith, determine Fair Market Value and may, in its discretion, advance the
lapse of any installment periods and exercise dates.
3.07 In addition to the annual base salaries pursuant to Sections 3.02,
3.03 and 3.04, the incentive compensation pursuant to Section 3.05, and the
stock options pursuant to Section 3.06, Company will provide Executive with
fringe benefits in the aggregate not less favorable than those provided to other
executives of Company who hold comparable positions.
CONFIDENTIAL INFORMATION, NON-COMPETITION,
AND ASSIGNMENT OF INVENTIONS
4.01 Executive acknowledges that the Company's business is a
specialized business which has the potential to be marketed worldwide, and which
will involve proprietary research, product and marketing information and that
his agreement to the terms of this Section is an important consideration in the
Company's decision to continue to employ him.
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4.02 The Company recognizes that Executive brings with him a great deal
of knowledge in the field of the Company's Business which is not the subject of
any restrictions imposed by this Agreement except the non-competition provision
hereafter set forth.
4.03 Executive agrees to keep secret all confidential information
relating to the Company's business or that of any present or future affiliated
company, including without limitation, proprietary research and development
information, marketing studies and plans, cost information, customer lists and
other confidential business affairs, developed by or for the Company before or
after the commencement of the term of this Agreement, and not to disclose the
same to anyone inside or outside of the Company who has not executed a non-
disclosure agreement with the Company, and to disclose in the course of
performing his duties for the Company.
Upon request by the Company, Executive agrees to promptly return to the
company at the termination of his employment or any time thereafter upon
request, all Company or affiliated organizations' documents and information, in
any and all media, and all copies thereof which he may have acquired during his
term of employment with the Company or which he thereafter acquired without
authorization from the Company.
4.04 (a) Executive agrees that he will promptly make full written
disclosure to the Company, will hold in trust for the sole right and benefit of
the Company, and hereby assigns to the Company, or its designee, all of his
right, title and interest in and to any and all inventions, original works of
authorship, developments, concepts, improvements or trade secrets, whether or
not patentable or registerable under copyright or similar laws, which he may
solely or jointly conceive or develop or reduce to practice, or cause to be
conceived or developed or reduced to practice, during the period of time he is
in the employ of the Company (collectively referred to as "Inventions").
Executive further acknowledges that all original works of authorship which are
made by him (solely or jointly with others) within the scope of and during the
period of his employment with the Company and which are protectable by copyright
are "works made for hire" as that term is defined in the United States Copyright
Act.
(b) Executive agrees to assign to the United States government all of
his right, title and interest in and to any and all Inventions whenever such
full title is required to be in the United States by a contract between the
Company and the United States or any of its agencies.
(c) Executive agrees to keep and maintain adequate and current written
records of all Inventions made by him (solely or jointly with others) during the
term of his employment with the Company. The records will be in the form of
notes, sketches, drawings
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and any other format that may be specified by the Company. The records will be
available to and remain the sole property of the Company at all times.
(d) Executive agrees to assist the Company, or its designee, at the
Company's expense, in every proper way to secure the Company's rights in the
Inventions and any copyrights, patents, mask work rights or other intellectual
property rights relating thereto in any and all countries, including the
disclosure to the Company of all pertinent information and data with respect
thereto, the execution of all applications, specifications, oaths, assignments
and all other instruments which the Company shall deem necessary in order to
apply for and obtain such rights and in order to assign and convey to the
Company, its successors, assigns and nominees, the sole and exclusive rights,
title and interest in and to such Inventions, and any copyrights, patents, mask
work rights or other intellectual property rights relating thereto. Executive
further agrees that his obligation to execute or cause to be executed, when it
is in his power to do so, any such instrument or papers shall continue after the
termination of this Agreement. If the Company is unable, because of Executive's
mental or physical incapacity or for any other reason, to secure his signature
to apply for or to pursue any application for any United States or foreign
patents or copyright registrations covering Inventions or original works of
authorship assigned to the Company as above, then Executive hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents
as his agent and attorney-in-fact, to act for and in his behalf and stead to
execute and file any such applications and to do all other lawfully permitted
acts to further the prosecution and issuance of letters patent or copyright
registrations thereon with the same legal force and effect as if executed by
Executive.
4.05 (a) Executive agrees that during his employment by the Company and
for a period of eighteen (18) months after the termination thereof regardless of
the basis upon which it is terminated, he will not in any place in the world,
directly or indirectly, (a) engage in any of the businesses actively conducted
by the Company on the date of the termination of his employment, or (b) any
business which, to his knowledge, had been under development by the Company as a
potential future business for the Company.
(b) In the event Executive leaves the employ of the Company, he hereby
grants consent to notification by the Company to his new employer about his
rights and obligations under this Agreement.
(c) Executive agrees that for a period of twelve (12) months
immediately following the termination of his relationship with the Company for
any reason, he shall not either directly or indirectly solicit, induce, recruit
or encourage any of the Company's employees to leave their employment, or take
away such employees, or attempt to solicit,
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induce, recruit, encourage or take away employees of the Company, either for
himself or for any other person or entity.
4.06 If Executive commits a material breach of this Article 4, he shall
forfeit all rights to receive any future amounts of any nature whatsoever from
the Company under this Agreement, excluding vested stock options. Executive
further agrees that the provisions of this Article 4 may be specifically
enforced by a court of competent jurisdiction, it being acknowledged by
Executive that any such material breach will cause irreparable harm to the
Company, and that money damages will not provide an adequate remedy to the
Company. Such rights and remedies shall be in addition to and not in lieu of any
other rights that the Company may have in law or in equity.
CONFLICT OF INTEREST
5.01 Executive agrees to diligently adhere to the Conflict of Interest
Guidelines attached hereto as Exhibit "B".
MISCELLANEOUS
6.01 All notices in connection with this Agreement shall be in writing
and shall be deemed to have been given:
i. at the time delivered to the recipient;
ii. with respect to telecopies, at the time of electronic
confirmation by the recipient; or
iii. four (4) days after deposit at any general or branch
United States Post Office, enclosed in an envelope
marked Certified or Registered Mail, Return Receipt
Requested, postage prepaid, addressed to the party at
the following address:
To the Company:
Cellomics, Inc.
000 Xxxxxxx Xxxx Xxx
Xxxxxxxxxx, XX 00000
Att: CFO
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To Executive:
D. Lansing Xxxxxx
000 Xxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
or at such other address as the parties provide to
each other by written notice.
6.02 This Agreement may be modified only in writing signed by Executive
and the Chairman of the Board of Directors of the Company. No waiver by either
party of any breach by the other or any condition or provision of this Agreement
to be performed by the other party shall be a waiver of similar or dissimilar
performance, provisions or conditions at the same or at any future time.
6.03 This Agreement constitutes the entire Agreement relating to the
employment of Executive by the Company, and supersedes all prior agreements and
understandings, whether written or oral, related thereto.
6.04 The parties represent to each other that this Agreement is not
contrary to any other agreement or understanding that applies to them and that
this will be a valid and binding obligation. The parties agree to execute such
documents and take such further action as may be necessary to implement the
intent of this Agreement.
6.05 This Agreement may not be assigned by Executive to any other
person or entity. The Company's rights and obligations hereunder shall inure to
and be binding upon the successors and assigns of the Company, but may not be
assigned by the Company without Executive's consent, except in connection with
the sale or other transfer of substantially all of the Company's business.
6.06 The validity, interpretation, construction, performance and
enforcement of this Agreement shall be governed by the internal laws of the
Commonwealth of Pennsylvania without application of conflicts of law.
6.07 The invalidity or unenforceability of any term of this Agreement
shall not invalidate or affect any other term of this Agreement.
6.08 Any and all disputes arising from this Agreement or from
Executive's employment relationship, with the exception of the equitable
remedies set forth in Section 4.05 hereof, with Company shall be resolved by
binding arbitration in Pittsburgh,
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Pennsylvania, in accordance with the Employment Dispute Resolution Rules of the
American Arbitration Association.
6.09 This Agreement may be executed in counterparts, each of which
shall be deemed to be an original.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this 8 day of M, 1999.
Attest: CELLOMICS, INC.
/s/ XXXXXX XXXXXXXX XXXXXX CHANCE By: /s/ ???
--------------------------------- -------------------------------
Title: NOTARY PUBLIC Title: DIRECTOR
-------------------------- ----------------------------
MY COMMISSION EXPIRES
OCTOBER 31, 1999
Witness: EXECUTIVE
/s/ XXXXXX XXXXXXXX /s/ D. Lansing Xxxxxx
-------------------------------- ----------------------------------
XXXXXX XXXXXXXX D. Lansing Xxxxxx
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EXHIBIT "A"
OBJECTIVES FOR CEO BONUS
1. Hire 4 VPs and a COO 30%
2. Meet milestones for 2nd takedown 30%
3. Meet 80% of revenue forecast and not exceed 25%
105% of costs in plan
4. Complete 1 major corporate partnering deal 15%
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100%
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EXHIBIT "B"
CONFLICT OF INTEREST GUIDELINES
It is the policy of Cellomics, Inc. to conduct its affairs in strict
compliance with the letter and spirit of the law and to adhere to the highest
principles of business ethics. Accordingly, all officers, employees and
independent contractors must avoid activities which are in conflict, or give the
appearance of being in conflict, with these principles and with the interests of
the Company. The following are potentially compromising situations which must be
avoided. Any exceptions must be reported to the President and written approval
for continuation must be obtained.
Revealing confidential information to outsiders or misusing
confidential information. Unauthorized divulging of information is a violation
of this policy whether or not for personal gain and whether or not harm to the
Company is intended. (The Employment Confidential Information and Invention
Assignment Agreement elaborates on this principle and is a binding agreement.)
Accepting or offering substantial gifts, excessive entertainment,
favors or payments may be deemed to constitute undue influence or otherwise be
improper or embarrassing to the Company.
Participating in civic or professional organizations that might involve
divulging confidential information of the Company.
Initiating or approving personnel actions attaching reward or
punishment of employees or applicants where there is a family relationship or is
or appears to be a personal or social involvement.
Initiating or approving any form of personal or social harassment of
employees.
Investing or holding outside directorships in suppliers, customers or
competing companies, including financial speculation, where such investment or
directorship might influence in any manner a decision or course of action of the
Company.
Borrowing from or lending to employees, customers or suppliers.
Acquiring real estate of interest to the Company.
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Improperly using or disclosing to the Company any proprietary
information or trade secrets or any former or concurrent employer or other
person or entity with whom obligations of confidentiality exist.
Unlawfully discussing prices, costs, customers, sales or markets with
competing companies or their employees.
Making any unlawful agreements with distributors with respect to
prices.
Improperly using or authorizing the use of any inventions which are the
subject of patent claims or any other person or entity.
