EMPLOYMENT AGREEMENT
THIS
AGREEMENT ("Agreement") is made and entered into effective the 6th day of
November, 2007 by and among BIOANALYTICAL SYSTEMS, INC. (“BASi”, “Company”) a
corporation organized under the laws of the State of Indiana, and Xxxxxxx X.
Xxx, ("Employee") as Vice President-Chief Financial Officer and Chief
Administrative Officer of BASi. This agreement replaces and supersedes the
employment agreement between BASi and Employee dated April 1, 2004.
Preliminary
Statements:
A. BASi
is engaged in the business of providing contract research services and
manufacturing and distributing scientific instruments. The Company is in the
business of conducting laboratory experiments and research on behalf of other
businesses (“Business”) which is expected to add significantly to the value of
the Company and BASi.
B. Employee
is experienced in the Business, and is familiar with the management and
operations of the Company. The Company wishes to continue to employ Employee
on
the terms and conditions contained herein.
In
consideration of the premises and mutual covenants and agreements contained
herein, the parties hereby agree as follows:
ARTICLE
1
Term,
Compensation, and Benefits
Section
1.1.
Term
The
Company hereby agrees to employ the Employee, and the Employee hereby accepts
employment with the Company, on the terms and conditions set forth in this
Agreement until December 30, 2010 (the “Initial Term”). The Initial Term shall
be extended for successive one year periods (the “Additional Terms,” and
together with Initial Term, the “Employment Period”)), except that if either
Employee or Company gives the other party written notice at least ninety days
(90) before the end of the Initial Term, then this Agreement shall expire at
the
end of its then current term. The Employee shall take absences at such time
as
shall be approved by the Chief Executive Officer.
Section
1.2 Compensation
and Benefits
Section
1.2.1 Salary:
BASi
will pay an initial base salary of $13,750.00 per month. Salary shall be paid
in
equal semi-monthly installments in arrears. All amounts to be paid hereunder
shall be paid in accordance with normal payroll procedures of the Company and
shall be subject to all required withholdings and deductions.
Section
1.2.2. Stock Options:
Employee
has been granted options to purchase BASi shares. Such options will continue
under their initial terms and conditions. Company may also grant additional
options to employee at the discretion of its Board of Directions, with terms
and
conditions determined at the time of grant.
Section
1.2.3.
Bonus:
Employee will also be eligible for bonus grants under bonus plans adopted by
the
Company at the discretion of the Compensation Committee of the Board of
Directors.
Section
1.2.4 Vacation
Policy: During
the initial term, Employee will accumulate one (1) vacation day per month in
accordance with policies described in the BASi Employee Handbook. Employee
shall
also be granted an additional ten days vacation at the start of the initial
term, and again at the start of any subsequent term, effectively granting
employee 15 years seniority. Employee's compensation shall continue to be paid
in full during this period. Any vacation at the end of any year ending on an
anniversary date shall carry over to the following one-year period commencing
on
such anniversary date (the “Following Year”), but shall not carry over beyond
the Following Year. Vacation time not used prior to the expiration will be
banked for short-term disability as described in the BASi Employee Handbook.
Section
1.2.5 Other
Benefits:
During
the Employment Period, the Employee shall be entitled to participate in all
employee benefit plans which are generally made available to employees of the
Company, subject to the eligibility, qualification, waiting period and other
terms and conditions of such plans as they shall be in effect from time to
time
unless listed herein as exceptions from those terms and conditions. The
highlights of the benefits are as follows: group health insurance (after ninety
days); two weeks unpaid vacation (optional); term life insurance ($100,000);
long term disability insurance; and a 401K deferred tax savings incentive/profit
sharing plan. Optional participation benefits include a flexible spending
account, dental, vision, and short-term disability.
ARTICLE
2
Duties
Section
2.1. Duties
During
the Employment Period, the Employee will be the ranking financial and
administrative officer of the company. The Employee will lead the accounting,
treasury, human resources, facilities and administrative areas of the Company.
The employee will be called upon to perform certain services for the Company,
including, without limitation, the following
a)
Recruit, train, monitor and manage corporate accounting staff at all sites
in
appropriate current practices
and regulatory requirements.
b)
Ensure
sufficient internal controls over financial transactions and reporting to meet
internal operating
and public reporting requirements.
c)
Provide senior management and direction to the Company’s Information
Technology
department.
d)
Serve
as the principal compliance officer for the Company’s responsibilities with the
Securities and
Exchange Commission.
e)
Manage
the Company’s human resources, administrative and facilities
operations.
f)
Select and maintain relationships with the Company’s banks.
g)
Determine the amount, timing and required sources for financing the capital
and
operational financial
needs.
h)
Set
financial goals and measure attainment for the operational units with the
Company.
i)
Collaborate with the Company’s other executive officers in planning and managing
the affairs of
the
Company.
Section
2.2 The
employee shall serve the Company by performing such other services as
the
Company
may reasonably require to conduct the Company’s business. The Company shall also
have the absolute right and power to direct and control the Employee in carrying
out duties assigned by the Company, including, but not limited to, the right
(1)
to review, modify and cancel all work performed, and (2) to assign specific
duties to be performed, including the general means and manner by which such
duties shall be performed. Notwithstanding any other provisions of this
Agreement, the Company shall not impose employment duties or constraints of
any
kind upon the Employee which would require the Employee to violate any
ordinance, regulation, statute or other law. The Employee shall devote his
full
working time, attention and energy to the performances of the duties imposed
hereunder. The Employee shall conform to such hours of work as may from time
to
time reasonably be required of him and shall not be entitled to receive any
additional remuneration for work outside his normal hours. The Employee will
NOT
be held
financially, legally, or otherwise liable for any past practices or actions
or
decisions made by BASi, or its predecessors prior to the start of the Employee’s
beginning date of employment.
ARTICLE
3
Confidentiality
and Other Matters
Section
3.1.
Confidentiality
Agreement.
The
Employee, prior to and during the term of employment under this Agreement,
has
had and will have access to and has become or will become familiar with
information, whether or not originated by the Employee, which is used in or
related to the Business or the business of BASi or certain subsidiaries or
affiliates of BASi and is (a) proprietary to, about, or created by the Company
its subsidiaries or its affiliates; (b) designated as confidential by the
Company, its subsidiaries or its affiliates; or (c) not generally known to
or
ascertainable by proper means by the public ("Confidential
Information").
Further,
the Employee has had and will have access to items proprietary to the Company,
its subsidiaries or its affiliates ("Proprietary Items"). "Proprietary Items"
shall mean all legally-recognized rights which result from or are derived from
the Employee's work product or the work product of others made for the Company,
its subsidiaries or its affiliates, including all past, present and future
work
product made for the Company, its subsidiaries or its affiliates, or with
knowledge, use or incorporation of Confidential Information, including, but
not
limited to works of authorship, developments, inventions, innovations, designs,
discoveries, improvements, trade secrets, trademarks, applications, techniques,
know-how and ideas, whether or not patentable or copyrightable, conceived or
made or developed by the Employee (solely or in cooperation with others) or
others during the term of this Agreement or prior to or during his tenure with
the Company, or which are reasonably related to the Business or the business
of
BASi or certain subsidiaries or affiliates of BASi or the actual or demonstrably
anticipated research and development of the Company.
The
Employee agrees that any Confidential Information and Proprietary Items will
be
treated in full confidence and shall not be used, directly or indirectly, by
him, nor shall the same be disclosed to any other firms, organizations, or
persons outside of the Company's employees bound by similar agreement, during
the term of this Agreement or at any time thereafter, except as required in
the
course of his employment with the Company. All Confidential Information and
Proprietary Items, whether prepared by the Employee or otherwise, coming into
his possession, shall remain the exclusive property of the Company and shall
not
be permanently removed from the premises of the Company under any circumstances
whatsoever, without the prior written consent of the Company.
The
Employee will not be obliged to keep information confidential to the extent
that
the information has ceased to be confidential and has entered the public domain
otherwise than due to the Employee's acts. The provisions of this Section
3.1
shall be
in addition to, and shall not affect, the Employee's common law duty of fidelity
to the Company.
Section
3.2.
The
parties foresee that the Employee may make inventions or create other
intellectual property in the course of his duties hereunder and agree that
in
this respect the Employee has a special responsibility to further the interests
of the Company and its affiliates.
Section
3.3
The
Employee agrees that during the Employee’s employment with the Company and for
an additional period of the two (2) years immediately following termination
of
the Employee’s employment with the Company, the Employee shall not directly or
indirectly, as an individual or as a director, officer, contractor, employee,
consultant, partner, investor or in any other capacity with any corporation,
partnership or other person or entity, other than the Company (an “Other
Entity”), (i) contact or communicate any then current material customer or
client of the Company in the Business, or any person or entity with which the
Company is then engaged in material discussions regarding that person or entity
becoming a client or customer of the Company in the Business, for the purpose
of
inducing any such customer or client to move its account from the Company to
another company in the Business; provided, however, that nothing in this
sentence shall prevent the Employee from becoming employed by or providing
consulting services to any such customer or client of the Company in the
Business, or (ii) solicit any other employee of the Company for employment
or a
consulting or other services arrangement with an Other Entity. The restrictions
of this Section
3.3
shall
not be deemed to prevent the Employee from owning not more than 5% of the issued
and outstanding shares of any class of securities of an issuer whose securities
are listed on a national securities exchange or registered pursuant to Section
12(g) of the Securities Exchange Act of 1934, as amended. In the event a court
of competent jurisdiction determines that the foregoing restriction is
unreasonable in terms of geographic scope or otherwise then the court is hereby
authorized to reduce the scope of said restriction and enforce this Section
3.3
as so
reduced. If any sentence, word or provision of this Section
3.3
shall be
determined to be unenforceable, the same shall be severed herefrom and the
remainder shall be enforced as if the unenforceable sentence, word or provision
did not exist. Notwithstanding any provision of this Agreement to the contrary,
the terms and conditions of this Section
3.3
shall
survive for a period of two (2) years following termination of the Employee’s
employment with the Company, at which time the terms and conditions of this
Section
3.3
shall
terminate.
Section
3.4 The
Employee agrees to abide by all the conditions of the Company Code of Conduct
and
Ethics.
Section
3.5 As
CFO,
the Employee agrees to adopt and fulfill all the obligations dictated in the
Company
Disclosure Committee Charter as a Certifying Officer of Bioanalytical Systems,
Inc.
ARTICLE
4
Termination
of Employment
Section
4.1.
Resignation
by the Employee.
The
Employee may resign from his employment with the Company at any time by
providing written notice to the Company of resignation at least ninety days
(90)
prior to the effective date of the resignation (the "Resignation Date”).
Employee may resign at any time for “good reason,” due to (a) a material breach
of this Agreement by the Company which continues after the Employee has given
the Company thirty days (30) written notice of such breach, or (b) the
assignment to the Employee of duties materially inconsistent with this Agreement
other than in accordance with the terms of this Agreement, and the Company
has
not rectified such assignment within thirty days (30) after the Employee has
given the Company written notice of such breach. A termination by the Employee
for “good reason” shall entitle the Employee to the same compensation and
benefits as if the Employee had been terminated by the Company without cause.
In
the event of a termination by the Employee for “good reason,” the provisions of
Section
3.3
shall
not apply and shall be of no force or effect. Upon any resignation by the
Employee, the Employee shall use reasonable best efforts to assist the Company
in good faith to effect a smooth transition. If employee voluntarily resigns
his
position without “good reason” prior to the termination of this contract the
compensation terms of this agreement are null and void.
Section
4.2.
Termination
by the Company without Cause.
At any
time, the Company may, in its sole and absolute discretion, terminate the
Employee's employment with the Company (the actual date of termination being
referred to as the "Termination Date") without cause, by providing written
notice thereof to the Employee ("Termination Notice") at least ninety days
(90)
prior to the Termination Date. In the event of termination of the Employee's
employment pursuant to this Section, the Company shall continue to pay to the
Employee the Employee’s then current Annual Salary throughout such ninety-day
(90) notice period and shall pay the Employee as compensation for loss of office
(a) twelve months Annual Salary at the Employee’s then current salary in equal
monthly installments over the twelve month period following the Termination
Date, provided that such payments shall cease if the Employee becomes employed
by a company which is in the Business during such twelve month period, and
(b)
all vacation accrued as of the Termination Date calculated in accordance with
Section
1.2.4.
Upon
receipt by the Employee of a Termination Notice pursuant to this Section
4.2,
(a) the
Employee shall assist the Company in good faith to effect a smooth transition,
and (b) the Company may request the Employee to vacate the premises owned by
the
Company and used in connection with the Business within a reasonable time,
provided that the obligation of the Company to make payments to the Employee
pursuant to this Section
4.2
and the
other provisions of this Agreement shall not be affected, provided further,
that
in the event of a termination by the Company without cause pursuant to this
Section
4.2,
the
provisions of Section
3.3
shall
not apply and shall be of no further force or effect.
Section
4.3.
Termination
by the Company With Cause.
This
Agreement shall be deemed to be terminated and the employment relationship
between the Employee and the Company shall be deemed severed upon written notice
to the Employee by the Company after the occurrence of any of the
following:
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a)
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The
final, non-appealable imposition of any restrictions or limitations
by any
governmental authority having jurisdiction over the Employee to such
an
extent that he cannot render the services for which he was
employed.
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b)
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The
Employee (i) willfully and continually fails or refuses (without
proper
cause) to substantially perform the duties of his employment and
to adhere
in all material respects to the provisions of this Agreement and
the
written policies of the Company, which failure shall not be remedied
within thirty (30) days after written notice from the Company to
the
Employee, or (ii) conducts himself in a fraudulent manner, or (iii)
conducts himself in an unprofessional or unethical manner which in
the
reasonable judgment of the Board of Directors of the Company is
detrimental to the Company.
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c)
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The
Employee willfully and continually fails or refuses to adhere to
any
written agreements to which the Employee and the Company or any of
its
affiliates are parties, which failure shall not be remedied within
thirty
(30) days after written notice from the Company to the
Employee.
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d)
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In
the event of death of the Employee during employment. In such event
the
Company shall pay to the estate of the Employee the compensation
earned by
the Employee prior to his death but not yet paid to him by the Company.
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ARTICLE
5
Change
in Control
The
Board
of Directors of the Company (“the Board”) has determined that it is in the best
interests of the Company and its shareholders to assure that the Company will
have the continued dedication of the Executive, notwithstanding the possibility
or occurrence of a Change in Control of the Company. The Board believes it
is
imperative to diminish the inevitable distraction of the Employee by virtue
of
the personal uncertainties and risks created by a pending or threatened Change
in Control and to encourage the Executive’s full attention and dedication to the
Company currently and in the event of any pending, threatened or actual Change
in Control, and to provide the Employee with compensation and benefits
arrangements upon a Change in Control which are consistent with the Employee’s
significant leadership position and which are competitive. (See Addendum A
for
Definition of Change in Control)
Section
5.1 Involuntary Termination/Change in Control. In
the
case of involuntary termination of the Employee, resulting from a Change in
Control of the Company, and due to one or more of the following conditions
being
met up to one year following such Change in Control:
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a.
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Elimination
or diminution of the Employee’s position, authority, duties and
responsibilities relative to the most significant of those held,
exercised and assigned at any time during the six month period immediately
preceding a Change in Control;
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b.
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Change
in location requiring the Employee’s services to be performed at a
location other than the location where the Employee was employed
immediately preceding a Change in Control, other than any office
which is
the headquarters of the Company and is less than 35 miles from such
location.
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The
Employee will receive written notice of involuntary termination and will be
paid
compensation in terminal pay and participation in benefits, savings and
retirement plans as summarized below.
Section
5.2 Voluntary Termination/Change in Control. In
the
event of change in control, which does not result in involuntary termination
of
the Employee or diminution of the Employee’s position, authority, duties and
responsibilities, the Employee may elect to voluntarily terminate within one
year of the Change in Control and may elect the Change in Control provisions
summarized below.
Section
5.3 Terminal Pay.
The
Employee will receive terminal pay, to be paid in equal installments in
semi-monthly installments, at least equal to two(2) years annual base salary
payable to the Employee by the Company in respect of the twelve-month period
immediately preceding termination.
Section
5.4 Special Bonus.
In
addition to the Terminal Pay and Annual Bonus, the Employee will be eligible,
based on performance, for any special bonus program which may be instituted
by
the Company in recognition of particular assignments, duties or responsibilities
required during the crucial transition period leading up to, or following,
the
Change in Control.
Section
5.5 Benefits, Savings and Retirement Plans.
During
the period of terminal payments, the Employee will remain in employee status
for
benefits purposes only and will be entitled to participate in all benefits,
savings and retirement plans, practices, policies and programs of the Company
applicable generally to other peer executives of the Company, with the
expectation that the Employee continues to make all applicable employee
contributions to said program(s).
ARTICLE
6
Guarantee
BASi
hereby unconditionally and irrevocably guarantees to the Employee the due
performance by the Company of all its obligations under or in respect of the
terms of this Agreement and shall as primary obligor and not as surety on demand
pay to the Employee all sums due to be paid by the Company to the Employee.
This
guarantee shall be a continuing guarantee and shall inure to the benefit of
the
Employee, his heirs, successors and assigns.
ARTICLE
7
Miscellaneous
Section
7.1.
Relationship
between the Parties.
The
relationship between the Company and the Employee shall be that of an employer
and an employee, and nothing contained herein shall be construed or deemed
to
give the Employee any interest in any of the assets of the Company.
Section
7.2.
Notices.
Any
notice required or permitted to be given under this Agreement shall be in
writing and delivered personally or sent by certified mail, addressed to the
party entitled to receive said notice, at the following addresses:
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If
to Company:
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Bioanalytical
Systems Evansville
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0000
Xxxx Xxxxxx
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Xxxx
Xxxxxxxxx, XX 00000
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If
to Employee:
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Xxxxxxx
X. Xxx
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0000
Xxxxxx Xxxx Xxxx
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Xxxxxxxxxx,
XX 00000
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or
at
such other address as may be specified from time to time in notices given in
accordance with the provisions of this Section
7.2.
Section
7.3 Enforceability.
Both
the Company and the Employee stipulate and agree that if any portion, paragraph
sentence, term or provision of this Agreement shall to any extent be declared
illegal, invalid or unenforceable by a duly authorized court of competent
jurisdiction, then, (a) the remainder of this Agreement or the application
of
such portion, paragraph, sentence, term or provision in circumstances other
than
those as to which it is so declared illegal, invalid or unenforceable, shall
not
be affected thereby, (b) this Agreement shall be construed in all respects
as if
the illegal, invalid or unenforceable matter had been omitted and each portion
and provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law and (c) the illegal, invalid or unenforceable portion,
paragraph, sentence, term or provision shall be replaced by a legal, valid
and
enforceable provision which most closely reflects the intention of the parties
hereto as reflected herein.
Section
7.4.
Nonwaiver.
The
failure of either party hereto to insist in any one or more instances upon
performance of any of the provisions of this Agreement or to pursue its or
his
rights hereunder shall not be construed as a waiver of any such provisions
or as
the relinquishment of any such rights.
Section
7.5.
Succession.
This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and upon their heirs, personal representatives, and successor entities. This
Agreement may not be assigned by either party without prior written agreement
of
both parties.
Section
7.6.
Governing Law.
The
laws of the United States and the State of Indiana shall govern the construction
and enforceability of this Agreement.
Section
7.7.
Entire
Agreement.
This
Agreement constitutes the entire Agreement between the parties as to the subject
matter contained herein and all other agreements or understandings are hereby
superseded and terminated.
Section
7.8.
Collective
Agreements.
There
are no collective agreements which directly affect the terms and conditions
of
the Employee's employment.
Section
7.9.
Grievance
and Disciplinary Procedures.
If the
Employee wishes to obtain redress of any grievance relating to his employment
or
if he is dissatisfied with any reprimand, suspension or other disciplinary
steps
taken by the Company, he shall apply in writing to the Chairman of the board
of
directors of the Company, setting out the nature and details of any such
grievance or dissatisfaction.
Section
7.10.
Heading.
The
headings of the sections are inserted for convenience only and do not effect
the
interpretation or construction of the sections.
Section
7.11. Remedies.
Employee acknowledges that a remedy at law for any breach or threatened breach
of the provisions of Sections 3.1 through 3.3 of this Agreement would be
inadequate and therefore agrees that the Company shall be entitled to injunctive
relief, both preliminary and permanent, in addition to any other available
rights and remedies in case of any such breach or threatened breach; provided,
however, that nothing contained herein shall be construed as prohibiting the
Company from pursuing any other remedies available for any such breach or
threatened breach. Employee further acknowledges and agrees that in the event
of
a breach by Employee of any provision of Sections 3.1 through 3.3 of this
agreement, the Company shall be entitled, in addition to all other remedies
to
which the Company may be entitled under this Agreement to recover from Employee
its reasonable costs including attorney's fees if the Company is the prevailing
party in an action by the Company. This Agreement is entered into by the Company
for itself and in trust for each of its affiliates with the intention that
each
company will be entitled to enforce the terms of this Agreement directly against
Employee.
IN
WITNESS WHEREOF, the Company and the Employee have executed, or caused to be
executed, this Agreement as of the day and year first written
above.
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"COMPANY"
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"EMPLOYEE"
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/s/ Xxxxxxx
X. Xxxxxxxx
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/s/ Xxxxxxx
X. Xxx
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Xxxxxxx
X. Xxxxxxxx
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President
& CEO
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Xxxxxxx
X. Xxx
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Bioanalytical
Systems, Inc.
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ADDENDUM
A
Xxxxxxx
X. Xxx Employment Agreement
A
“Change
in Control” shall mean the occurrence of any of the following
events:
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1.
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Approval
by stockholders of the Company of (a) any consolidation or merger of the
Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of stock of the company would
be
converted into cash, securities or other property, other than a
consolidation or merger of the company in which holders of its common
stock immediately prior to the consolidation or merger have substantially
the same proportionate ownership of common stock of the surviving
corporation immediately after the consolidation or merger as immediately
before, or (b) a sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially
all the assets of the company.
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2.
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A
change in the majority of members of the board within a 24-month
period
unless the election or nomination for election by the Company stockholders
of each new director was approved at a vote of two thirds of the
directors
then still in office who were in office at the beginning of the 24-month
period.
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3.
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Either
(A) receipt by the Company of a report on schedule 13D, or an amendment
to
such a report, filed with the Securities and Exchange Commission
(“SEC”)
pursuant to Section 13(d) of the Securities Exchange Act of 1934
(the
“1934 Act”) disclosing that any person, group, corporation or other entity
is the beneficial owner, directly or indirectly, of 20 per cent or
more of
the outstanding stock of the company or (B) actual knowledge by the
company of facts, on the basis of which any person is required to
file
such a report on schedule 13D, or an amendment to such a report,
with the
SEC (or would be required to file such a report or amendment upon
the
lapse of the applicable period of time Specified in Section 13(d)
of the
0000 Xxx) disclosing that such a person is the beneficial owner,
directly
or indirectly, of 20 per cent or more of the outstanding stock of
the
company.
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4.
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Purchase
by any person (as defined in section 13(d) of the 1934 Act), corporation
or other entity, other than the company or a wholly-owned subsidiary
of
the company, of shares pursuant to a tender or exchange offer, to
acquire
any stock of the Company (or securities convertible into stock) for
cash,
securities or any other consideration provided that, after consummation
of
the offer, such person, group, corporation or other entity is the
beneficial owner (as defined in rule 13d-3 under the 1934 Act), directly
or indirectly, of 20 per cent or more of the outstanding stock of
the
Company (calculated as provided in paragraph (d) of Rule 13d-3 under
the
1934 Act in the case of rights to acquire
stock.
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ADDENDUM
A, Page 2
5.
The
Company combines with another company and is the surviving corporation but,
immediately after the combination, the shareholders of the Company immediately
prior to the combination do not hold, directly or indirectly, more than 50
per
cent of the Voting Stock of the combined company (there being excluded from
the
number of shares held by such shareholders, but not from the Voting Stock of
the
combined company, any shares received by affiliates (as defined in the rules
of
the Securities and Exchange Commission) of such other company in exchange for
stock of such other company).
