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EXHIBIT 10.3
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this
"Agreement") is entered into as of the 1st day of September 1998, by and between
Artificial Life, Inc., a Delaware corporation, with its principal office at Four
Xxxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxxxxx, 00000 (the "Company") and Xxxx.
Xxxxxxxx Schoneburg, an individual residing in Luzern, Switzerland (the
"Executive").
WHEREAS, the Executive entered into that certain Executive Employment
Agreement dated as of July 1, 1998 (the "Original Employment Agreement");
WHEREAS, the Company and the Executive mutually desire to amend and
restate the Original Employment Agreement;
WHEREAS, the Company desires the benefit of the experience, supervision
and services of the Executive and desires to employ the Executive upon the terms
and conditions set forth herein; and
WHEREAS, the Executive is willing and able to accept such employment on
such terms and conditions.
NOW, THEREFORE, in consideration of the covenants and the mutual
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Executive hereby agree as follows:
1. Employment. The Company shall employ the Executive and the
Executive agrees to be employed by the Company as its (i) President and Chief
Executive Officer and (ii) Chairman of the Board of Directors ("Chairman")
throughout the term hereof on the terms and conditions provided below. The
Executive hereby accepts such employment.
2. Duties and Powers.
a. Executive shall serve as President, Chief Executive Officer and
Chairman and shall have such responsibilities, duties and authority as is
customary to such positions, including, without limitation, general supervision
and control over, and responsibility for, the general management and operation
of the Company and its subsidiaries, including the performance of all duties
incident thereto, and using his full and best efforts to accomplish:
(1) Subject to the oversight of the Board of Directors,
development and implementation of the Company's business
strategy, including specifically the preparation of annual and
long-term business and budgeting plans for the Company.
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(2) Identification, recruitment, training, motivation and
supervision of all subordinate management personnel.
(3) Pursuit of additional acquisition opportunities for the
Company.
(4) Expansion of the market for the Company's products and
services.
(5) Reporting regularly to the Board of Directors of the Company
in a reasonable manner as reasonably determined by the Board
of Directors in consultation with the Executive.
(6) In addition to the foregoing, the Executive shall perform such
other duties and services which are customary to the positions
held or which the Executive considers to be in the best
interests of the Company.
b. The Executive shall have the following powers in connection with the
fulfillment of the duties set forth in Section 2(a) above:
(1) Subject to the reasonable oversight of the Board of Directors,
the power to develop and implement the Company's business strategy.
(2) Subject to the final authority of the Board of Directors (except
as described below in subsection (3) of this Section 2(b)), the ability to
determine the actions to be taken and the contracts to be entered into by
the Company.
(3) The Executive shall have the authority to commit the Company to
contracts involving amounts of $2,000,000 or less without the requirement
of prior approval from the Board of Directors; provided, however, that the
Executive may commit the Company to any contract contemplated by the
Company's business plan or any other strategic document approved by the
Board of Directors.
(4) The Executive shall have the authority to hire and dismiss all
employees of the Company, including subordinate officers, which authority
may be delegated to subordinates in the Executive's discretion.
(5) Subject to the ultimate authority of the Board of Directors, the
Executive shall have such other powers as are (i) commensurate with the
position of Chief Executive Officer and (ii) otherwise necessary to
perform the duties set forth in Section 2(a) above.
c. The Company acknowledges and agrees that in performing his duties and
responsibilities as Chief Executive Officer, Executive may, for extended periods
of time, be required to execute his duties and responsibilities from outside the
United States because the Executive resides in Switzerland and because the
Company believes that Europe and other
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markets will be important to develop and that it will be advantageous to have
technical and other services performed in countries where the cost of such
services is lower than in the United States.
3. Best Efforts of the Executive. The Executive shall (i) devote such of
his business time to the management of the business and affairs of, and to the
furtherance of the interests of, the Company as is reasonably necessary, and
(ii) devote the necessary and appropriate amount of time and perform to the
highest standard of care in performing his services. The Executive shall perform
all of his duties hereunder in a diligent and proper manner and shall abide by
and carry out the written and reasonable policies, procedures and instructions
of the Company as attached or as agreed to in the future or as determined by the
Board of Directors.
4. Term of Employment. Subject to Section 6 hereof, the Executive's
employment and appointment hereunder shall be for a term commencing on the date
hereof and expiring on September 1, 2001, unless extended or earlier terminated
as provided in accordance with the terms hereof (the "Term") On September 1,
2001, and each anniversary thereof, the Term shall be automatically extended for
an additional period of one (1) year, unless the Executive or the Company shall
have given notice to the other at least sixty (60) days prior to the end of the
then current Term indicating that the Term will not be so extended.
5. Compensation. Subject to Sections 7 and 8 hereof, in consideration of
the performance by the Executive of his duties hereunder, during the Term and
any applicable severance period the Company shall pay or provide to the
Executive the following compensation and benefits which the Executive agrees to
accept in full satisfaction for his services, it being understood that necessary
withholding taxes, FICA contributions and any other standard Company deductions
shall be deducted from such compensation:
(a) Base Salary. The Executive shall receive an initial base salary
equal to Two Hundred Forty Thousand Dollars ($240,000) per annum, which base
salary shall be paid in arrears in equal biweekly installments. The amount of
such base salary shall be reviewed yearly with a view to increases based on
performance; provided, however, that the minimum increase per annum shall be ten
percent (10%). Base Salary will increase during the prior calendar year in any
event each January 1 by the amount of increases in the Consumer Price Index, for
All Urban Consumers, U.S. City Average (as published by the U.S. Department of
Labor, Bureau of Labor Statistics).
(b) Bonus. The Executive shall be entitled to participate in any
bonus program which is made available to executive officers of the Company.
Executive shall also receive as an additional bonus an amount per annum equal to
three percent (3%) of the Company's net profits from operations for such year.
(c) Bereavement Leave. The Executive shall be entitled to
bereavement leave in accordance with the Company policy from time to time, but
not less than the entitlement in effect on the date of this Agreement.
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(d) Vacation; Sick Days. The Executive shall be entitled to four (4)
weeks paid vacation per calendar year; ten (10) paid sick days per calendar
year, five (5) paid personal days per calendar year and holidays accorded
employees of the Company from time to time, but at least those accorded
employees of the Company on. the date of this Agreement.
(e) Insurance Coverages and Pension Plans. The Executive shall be
entitled to such insurance, pension and all other benefits as are generally made
available by the Company to its executive officers from time to time.
(f) Specific Guaranteed Benefits. Notwithstanding the provisions set
forth above the following benefits or their equivalent will be provided to
Executive by the Company or paid for by the Company during the Term and during
any applicable severance period in accordance with the provisions of Section
7(d):
(i) noncontributory health and dental insurance coverage for
Executive and his family under a health insurance plan equivalent in all
material respects to the Company's health plan as it. exists on the date hereof
(not including retiree medical benefit coverage);
(ii) life and dismemberment insurance coverage for Executive
equivalent to the highest insurance benefits provided under the Company's
present insurance or any successor insurance from time to time; provided in no
event will the Company be liable for such insurance benefits to the Executive;
and
(iii) short term and long term disability insurance coverage
for Executive with coverage at least as good as the best coverage offered by the
Company from time to time during the term hereof
(g) Health and Dental Insurance to Age 65. If the Term hereof and
any applicable severance period should expire prior to the Executive's 65th
birthday, the Company shall continue to provide or arrange to continue to
provide Executive at Executive's expense, with health and dental insurance
coverage, substantially equivalent to the coverage specified in subsection (f)
above.
(h) Expense Reimbursement. The Company shall reimburse Executive for
all reasonable expenses incurred by him in the course of performing his duties
under this Agreement which are consistent with the Company's policies in effect
from time to time with respect to travel, entertainment and other business
expenses, subject to the Company's requirements with respect to reporting and
documentation of such expenses.
6. Termination.
(a) Termination by the Company with Cause. The Company shall have
the right at any time to terminate the Executive's employment hereunder upon the
occurrence of any of the following events (any such termination being referred
to as a termination for "Cause"): (i)
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willful, substantial and continued failure or neglect by the Executive, to
follow the reasonable directions of the Board, after notice thereof specifically
identifying the deficiency, and a reasonable opportunity to take remedial action
which resolves the issue, (ii) disloyalty, gross negligence, dishonesty or
breach of fiduciary duty to the Company; (iii) the commission of an act of
embezzlement or fraud; (iv) the willful disregard of the rules or policies of
the Company which results in direct or indirect loss, damage or injury to the
Company which is material to the Company; (v) the willful unauthorized
disclosure of any trade secret or confidential information of the Company to a
third party which is material and thereby xxxxx the interests of the Company; or
(vi) the willful commission of an act which constitutes unfair competition with
the Company or which induces any customer or supplier to breach a contract with
the Company. For purposes of this subsection, no act, or failure to act on, the
Executive's part shall be deemed "willful" unless done, or omitted to be done,
by him not in good faith and without the reasonable belief that his action or
omission was in the best interest of the Company. Notwithstanding the foregoing,
the Executive shall not be deemed to have been terminated for Cause unless and
until there shall have been delivered to him a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters (3/4) of the entire
membership of the Board at a meeting of the Board called and held for such
purpose (after reasonable notice to the Executive and an opportunity for him,
together with his counsel, to be heard before the Board), finding that in the
good faith opinion of the Board the Executive was guilty of conduct set forth
above in this subsection and specifying the particulars thereof in detail.
(b) Termination by Company for Death or Disability. The Company
shall have the right at any time to terminate the Executive's employment
hereunder upon the Executive's inability to perform his duties hereunder by
reason of any mental, physical or other disability for a period of at least six
(6) consecutive months or until such earlier time as the Executive's eligibility
is confirmed and he commences to receive payments under the Company's long-term
disability policy. The Executive's employment hereunder shall also terminate
automatically upon the death of the Executive.
(c) Termination by Company Without Cause. The Company shall have the
right at any time to terminate the Executive's employment hereunder for any
other reason without Cause upon ninety (90) days prior written notice to the
Executive.
(d) Voluntary Termination by Executive. The Executive shall be
entitled to terminate his employment hereunder upon thirty (30) days prior
written notice to the Company. Any such termination shall be treated as a
termination by the Company for "Cause" under Section 7.
(e) Constructive Termination by the Executive. The Executive shall
be entitled to terminate his employment hereunder upon the occurrence of a
Constructive Termination. Any such termination shall be treated as a termination
by the Company without cause. For this purpose, a "Constructive Termination"
shall mean:
(i) the material diminution in the requirements of the
Executive's employment other than as expressly contemplated by this Agreement;
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(ii) any other material change in such position, including
titles, authority or responsibilities from those contemplated by Sections 1 and
2 of this Agreement;
(iii) any reduction in the Executive's annual base salary
as set from year to year upon a renewal or otherwise;
(iv) any change in the Executive's reporting
responsibilities;
(v) any removal of the Executive as President, Chief
Executive Officer, or Chairman of the Company;
(vi) any material breach of this Agreement by the Company or
any material breach by the Company of its obligations under any other agreement
with the Executive or of any other duty or obligation owed to the Executive,
including but not limited to those with respect to any stock options granted or
bonus payable to the Executive;
(vii) conditioning any nontermination or renewal of this
Agreement on any revision of this Agreement which is material and adverse to
the Executive;
(viii) the occurrence of a "Change of Control" (as defined in
Section 8(a)) by means of a sale by the Company of substantially all of its
assets in which the purchaser does not assume the obligations and liabilities of
the Company under this Agreement.
(ix) a liquidation or dissolution of the Company.
The Executive's right to terminate his employment pursuant to this
subsection shall not be affected by his incapacity due to physical or mental
illness. The Executive's continued employment shall not constitute consent to,
or a waiver of rights with respect to, any circumstance constituting
Constructive Termination hereunder.
(f) Notice of Termination. Any termination of the Executive's
employment hereunder (other than upon the death of the Executive) shall be
communicated by Notice of Termination to the other party hereto given in
accordance with this Section 6 (if applicable) and Section 11. For purposes of
this Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
if the termination is by the Company for Cause or by the Executive for
Constructive Termination, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and is otherwise in accordance with
the terms of Section 6(a) or 6(e), as the case may be, and (iii) sets forth the
date on which such termination shall be effective, which date shall be no sooner
than permitted by the applicable Section, but in no event less than thirty (30)
days after the giving of such notice (the "Date of Termination"). The failure by
any party to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Cause or Constructive Termination shall
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not waive any right of such party hereunder or preclude such party from
asserting such fact or circumstance in enforcing its rights hereunder.
(g) Notwithstanding the provisions of Section 6(f) above, if at any
time prior to fifteen (15) days after any Notice of Termination is given, or, if
later, prior to the Date of Termination (as determined without regard to this
proviso), the party receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination, the Date of Termination
shall be the date on which the dispute is finally determined, either by mutual
written agreement of the parties or by a binding arbitration award; and provided
further that the Date of Termination shall be extended by a notice of dispute
only if such notice is given in good faith and the party giving such notice
pursues the resolution of such dispute with reasonable diligence. During the
pendency of any such dispute, (i) the Executive shall not be required to report
for work or otherwise continue to perform his duties with the Company, and (ii)
the Company will continue to pay to the Executive his full compensation in
effect when the notice giving rise to the dispute was given (including, but not
limited to, base salary) and continue the Executive and his dependents as a
participant in all compensation, benefit and insurance plans in which he or they
were participating when the notice giving rise to the dispute was given, until
the dispute is finally resolved in accordance with this Subsection. Amounts paid
under this Subsection are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under
this Agreement.
7. Effect of Termination of Employment Prior to a Change of Control.
(a) With Cause. If the Executive's employment is terminated for
Cause, the Executive's salary and other benefits specified in Section 5 shall
cease on the Date of Termination, except that he will be paid all other amounts
to which he was entitled prior to the Date of Termination under the retirement,
benefit, insurance and compensation programs required to be provided by Section
5(e) at the time such payments are payable under such plans.
(b) Death. If the Executive's employment is terminated by the death
of the Executive (pursuant to Section 6(b) the Executive's compensation provided
in Section 5 shall be paid to the Executive's estate as follows:
(i) the Executive's then current base salary shall continue to
be paid through the last day of the month during which such termination occurred
and for six (6) months thereafter; and
(ii) the Executive's estate shall be entitled to a pro-rata
portion of any bonus payment referenced in Section 5(b) hereof with respect to
the fiscal year in which such termination shall occur (such pro-ration to be
based upon (A) the results actually achieved by the Company for the full fiscal
year and (B) the actual number of days of active employment during such fiscal
year).
(iii) the Executive's estate shall be paid all other amounts
to which he was entitled prior to the date of termination under the retirement,
benefit, insurance, and
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compensation programs required to be provided by Section 5 at the time such
payments are payable under such plans.
(c) Disability.
(i) if the Executive's employment is terminated as a result of
disability, the Executive's base salary shall continue until the monthly
benefits specified in Section 5(f)(iii) are confirmed and actually commence to
be paid and such payments shall continue to be available to the Executive to the
extent provided in the long term disability insurance plan to which the
Executive is entitled under this Agreement.
(ii) the Executive's estate shall be entitled to a pro-rata
portion of any bonus payment referenced in Paragraph (b) hereof with respect to
the fiscal year in which such termination shall occur (such pro-ration to be
based upon (A) the results actually achieved by the Company for the full fiscal
year and (B) the actual number of days of active employment during such fiscal
year).
(iii) the Executive's estate shall be paid all other amounts
to which he was entitled prior to the date of termination under the retirement,
benefit, insurance, and compensation programs required to be provided by Section
5 at the time such payments are payable under such plans.
(d) Without Cause or Upon Constructive Termination. If the
Executive's employment is terminated by the Company without Cause (pursuant to
Section 6(a)) or by the Executive upon the occurrence of a Constructive
Termination (pursuant to Section 6(e)), the Executive's compensation provided in
Section 5 shall be paid as follows:
(i) the Company shall pay the Executive his full base salary
through the Date of Termination at the rate in effect at the time Notice of
Termination is given, plus all other amounts to which he is entitled under any
retirement, benefit, insurance and compensation plans of the Company required to
be provided by Section 5, at the time such payments are due, except as otherwise
provided in this Agreement.
(ii) in lieu of any further salary payments to the Executive
for periods subsequent to the Date of Termination, the Company shall pay as a
severance payment to the Executive in six equal, consecutive monthly
installments, an aggregate severance payment (together with the payments
provided in the paragraphs below, (the "Severance Payments') equal to his annual
rate of base salary in effect immediately prior to the Date of Termination and
the greater of (a) the average of the last two annual bonuses (annualized in the
case of any bonus paid with respect to a partial year) earned by him preceding
the Date of Termination, or (b) the annual bonus (annualized in the case of any
bonus paid with respect to a partial year) earned by him for the year in which
the Termination occurs;
(iii) for a six (6) month period after such termination, the
Company shall arrange to provide, at its cost, the Executive and his dependents
with the benefits set forth
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in Section 5. Benefits otherwise receivable by the Executive pursuant to this
Subsection (iii) shall be reduced to the extent comparable benefits are actually
received by him from a subsequent employer during the six (6) month period
following the Date of Termination, and any such benefits actually received by
him shall be reported to the Company; and
(iv) at the request of Executive, continuing participation in
the Company's 401(k) Plan, if any, during the severance period. It is understood
that if this request is made, the payments described in Section 7(a)(ii) above
shall be made as accelerated salary continuation payments, although the
obligation of the employee to perform services shall be waived. In this event,
all references to termination of employment shall mean the point in time when
performance of duties and responsibilities ceases.
8. Effect of Termination After a Change of Control.
(a) For purposes of this Section, a "Change in Control" shall mean a
change in control of the Company of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
whether or not the Company is in fact required to comply therewith; provided,
that, without limitation, such a change in control shall be deemed to have
occurred if:
(i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the Company or a
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 30% or
more of the combined voting power of the Company's then outstanding securities;
(ii) during any period of twenty-four (24) consecutive months
(not including any period prior to the date of this Agreement), individuals who
at the beginning of such period constitute the Board and any new director whose
election by the Board or nomination for election by the Board or by the
stockholders of the Company was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the beginning
of such period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof; or
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (i) a merger
or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 50% of the combined voting securities of the Company
or such surviving entity outstanding immediately after such merger or
consolidation or (ii) a merger or consolidation effected to implement a
recapitalization of the
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Company (or similar transaction) in which no "person" (as hereinabove defined)
acquires 30% or more of the combined voting power of the Company's then
outstanding securities; or
(iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company' assets.
(b) If any of the events described in Subsection 8 (a) hereof
constituting a Change in Control shall have occurred, upon the subsequent
termination of his employment during the term of this Agreement the Executive
shall be entitled to receive the benefits described in Section 7(d) except that
the Severance Payment referred to in Section 7(d)(ii) shall continue for a
period of eighteen months, unless such termination is (A) because of the
Executive's death or Disability, (B) by the Company for Cause, or (C) by the
Executive other than for reasons constituting a Constructive Termination. In the
event termination is because of (A), (B) or (C) immediately above, the
provisions of Section 7 shall apply.
(c) Upon any Change of Control, regardless of whether the
Executive's employment terminates, any options held by the Executive to purchase
securities of the Company shall become fully vested and exerciseable.
9. Agreement Not to Compete.
(a) Except in the case of a termination without cause or a
constructive termination, the Executive hereby agrees that during the
Non-Competition Period (as defined below), he will not, directly or indirectly;
alone or as a partner, joint venturer, officer, director, employee, consultant,
agent, independent contractor or stockholder of any company or other business
entity, engage (for anyone other than the Company) in any Competitive
Enterprise. For the purpose hereof, "Competitive Enterprise" is defined as
activities involving the provision of services and/or products to any of the
Company's existing customers that are substantially similar to those provided by
the Company. The ownership by the Executive of not more than five percent (5%)
of the shares of stock of any corporation having a class of equity securities
actively traded on a national securities exchange or -on The Nasdaq Stock Market
shall not be deemed, in and of itself, to violate the prohibitions of this
Section 9(a). The "Non-Competition Period" is (a) the longer of the Executive's
employment hereunder or time period which he serves as a director of the Company
plus (b) a period of one (1) year thereafter.
(b) The Executive agrees during any applicable Non-Competition
Period not to take any action having the purpose or effect of interfering with
or otherwise damaging in any material respect the Company's business
relationship with any of its principal vendors.
(c) The Executive agrees that during an applicable Non-Competition
Period, he shall not, other than in connection with employment for the Company,
directly or indirectly, knowingly, employ, or knowingly permit any company or
business organization directly or indirectly controlled by the Executive to
employ (i) any person entitled to receive a base salary of
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at least $40,000, who in either case, is employed by the Company at any time
during the Non-Competition Period, or in any manner seek to induce any such
person to leave his or her employment with the Company, unless such person has
been involuntarily discharged by the Company.
(d) If a court determines that the foregoing restrictions are too
broad or otherwise unreasonable under applicable law, including with respect to
time or space, the court is hereby requested and authorized by the parties
hereto to revise the -foregoing restrictions to include the maximum restrictions
allowed under the applicable law.
(e) For purposes of this Section 9, the "Company" refers to the
Company and any of its subsidiaries, subdivisions or affiliates.
10. Other Activities. Nothing herein shall be construed as preventing the
Executive from engaging in other business activities, provided that (i) they are
not prohibited by Section 9(a); (ii) they do not interfere in any material
respect with the performance of his duties as President, Chief Executive Officer
and Chairman; and (iii) they do not violate any of his fiduciary duties to the
Company`. In pursuing these activities, the Executive shall not use the assets
of the Company, shall not make representations on behalf of the Company, and
shall have no authority to bind or act as agent for the Company or its employees
for any purpose.
11. Notices. All notices or other communications hereunder shall be in
writing and shall be deemed to have been duly given (a) when delivered
personally, (b) upon confirmation of receipt when such notice or other
communication is sent by facsimile or telex, (c) one day after delivery to an
overnight delivery courier, or (d) on the fifth day following the date of
deposit in the United States mail if sent first class, postage prepaid, by
registered or certified mail. The addresses for such notices shall be as
follows:
(a) For notices and communications to the Company:
Artificial Life, Inc.
Four Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx. XX 00000
Attention: Board of Directors
with a copy to:
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxx, Esq.
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(b) For notices and communications to the Executive:
Xxxx. Xxxxxxxx Schoneburg
000 Xxxxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
with a copy to:
Xxxxxxx X. Xxxxxx
Busing, Muffelman & Xxxxx
60323 Frankfurt Am Main
Xxxxxxxx-Xxx-Xxxxx-Xxx. 00
Xxxxxxx
Any party hereto may, by notice to the other, change its address for receipt of
notices hereunder.
12. Governing Law. This Agreement shall be construed under and
governed by the laws of the Commonwealth of Massachusetts, without reference
to its conflicts of law principles.
13. Amendment; Waiver. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms hereof may be waived,
only by a written instrument executed by all of the parties hereto or, in the
case of a waiver, by the party waiving compliance. The failure of any party at
any time or times to require performance of any provision hereof shall in no
manner affect the right at a later time to enforce the same. No waiver by any
party of the breach of any term or covenant contained in this Agreement, whether
by conduct or otherwise, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such breach or a waiver of
the breach of any other term or covenant contained in this Agreement.
14. Successors and Assigns. Except as set forth herein this Agreement
shall be binding upon the Executive, without regard to the duration of his
employment by the Company or reasons for the cessation of such employment, and
inure to the benefit of his administrators, executors, heirs and assigns,
although the obligations of the Executive are personal and may be performed only
by him. This Agreement shall also be binding upon and inure to the benefit of
the Company and its subsidiaries, successors and assigns, including any
corporation with which or into which the Company or its successors may be merged
or which may succeed to their assets or business.
15. Counterparts. This Agreement may be executed in two counterparts,
each of which shall be deemed an original but which together shall constitute
one and the same instrument.
16. Attorneys' Fees. In the event that any action is brought to enforce
any of the provisions of this Agreement, or to obtain money damages for the
breach thereof, and such action results in the award of a judgment for money
damages or in the granting of any injunction in
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favor of one of the parties to this Agreement, all expenses, including
reasonable attorneys' fees, shall be paid by the nonprevailing party. In the
event any such action is brought and the action does not result in the award of
a judgment for money damages or in the granting of any injunction in favor of
the party bringing such action, such party shall pay to the successful defending
party all expenses, including reasonable attorney's fees, incurred by such party
in defending against such action.
17. Equitable Relief. The Executive expressly agrees that breach of any
provision of Section 9 of this Agreement would result in irreparable injuries to
the Company, that the remedy at law for any such breach will be inadequate and
that upon breach of such provisions, the Company, in addition to all other
available remedies, shall be entitled as a matter of right to injunctive relief
in any court of competent jurisdiction without the necessity of proving the
actual damage to the Company.
18. Entire Agreement. This Agreement, including the exhibits and
schedules hereto, constitutes the entire understanding of the parties hereto
with respect to the subject matter hereof and supersedes all prior
negotiations, discussions, writings and agreements between them.
19. Arbitration. In the event of a dispute regarding a termination for
constructive cause or termination arising under this Agreement, the parties
agree to submit the same to arbitration in Boston, Massachusetts in accordance
with the rules of the American Arbitration Association. Any award shall be
enforceable in a court of competent jurisdiction.
20. Indemnification. The Company shall indemnify the Executive to the
extent presently provided in its Bylaws. The Executive agrees to promptly
notify the Company of any actual or threatened claim arising out of or as a
result of his employment with the Company.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
THE COMPANY:
ARTIFICIAL LIFE, INC.
By: /s/ Eberhard Schoneburg
---------------------------
Name: Eberhard Schoneburg
Title: Chief Executive Officer
THE EXECUTIVE:
/s/ Eberhard Schoneburg
-------------------------------
Eberhard Schoneburg
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