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Exhibit 10.3
NETGENICS EXECUTIVE
EMPLOYMENT AGREEMENT
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XXXXXX XXXXXXX
This Agreement is made as of this 25th day of June, 1996, by and
between XXXXXX XXXXXXX, an individual ("Xx. Xxxxxxx"), and NETGENICS, INC., a
Delaware corporation ("NetGenics").
WHEREAS, Xx. Xxxxxxx and NetGenics desire to enter into an employment
relationship;
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and promises
herein contained, and subject to the terms and conditions herein set forth, Xx.
Xxxxxxx and NetGenics hereby agree as follows:
1. TERM OF EMPLOYMENT; DUTIES.
a. The "Term of Employment" shall commence on the date of
this Agreement and shall terminate on the fifth anniversary of the date hereof
or as provided below.
b. During the Term of Employment, NetGenics shall employ
Xx. Xxxxxxx, and Xx. Xxxxxxx shall work for NetGenics, as President and Chief
Executive Officer. In this capacity, Xx. Xxxxxxx shall have such duties as are
customarily associated with and incidental to such position and as may be
assigned to Xx. Xxxxxxx from time to time by the Board of Directors of NetGenics
(the "Board"), specifically including without limitation acting as one of the
members of the Board. Xx. Xxxxxxx shall report to and be responsible to the
Board. Xx. Xxxxxxx shall perform such other or further duties as shall from time
to time be requested by the Board which are consistent with his position as an
executive officer of NetGenics or as may be mutually agreed upon by Xx. Xxxxxxx
and the Board.
c. During the Term of Employment, Xx. Xxxxxxx shall devote
one hundred percent of Xx. Xxxxxxx'x business time to carrying out Xx. Xxxxxxx'x
duties hereunder, will not engage in any activity which would be inconsistent
with such duties or with the objectives and business of NetGenics and will
diligently perform Xx. Xxxxxxx'x obligations and discharge Xx. Xxxxxxx'x duties
hereunder.
2. COMPENSATION. During the Term of Employment, the
following compensation and benefits shall be payable and provided to Xx.
Xxxxxxx:
a. NetGenics shall pay Xx. Xxxxxxx at the annual rate of
$120,000 which will be payable in accordance with the standard practice of
NetGenics in the payment of salaries of its employees;
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b. Xx. Xxxxxxx'x annual rate of pay shall be reviewed
annually on January 1 of each year, commencing January 1, 1997, and shall be
subject to increase, but not decrease, in the sole discretion of the Board;
c. NetGenics may (but shall not be required to) provide Xx.
Xxxxxxx with an annual incentive bonus upon such terms as the Board shall
approve and which shall be considered annually at the time as salary increases
as provided above.
d. NetGenics will provide Xx. Xxxxxxx with such "fringe"
benefits as are appropriate for an executive employee and as shall be approved
by the Board.
e. NetGenics shall promptly reimburse Xx. Xxxxxxx for all
business expenses incurred in furtherance of the business of NetGenics in
accordance with policies established from time to time by the Board.
3. EARLY TERMINATION: DEATH. Notwithstanding anything to the
contrary in paragraph 1 hereof: if Xx. Xxxxxxx dies during the Term of
Employment, the Term of Employment shall terminate. Upon such termination, Xx.
Xxxxxxx'x estate or beneficiaries shall be entitled to receive any salary and
other benefits earned and accrued prior to the date of termination and
reimbursement for expenses incurred prior to the date of termination, and his
beneficiary shall be entitled to any proceeds of insurance payable to such
beneficiary pursuant to any life insurance maintained by NetGenics for the
benefit of Xx. Xxxxxxx including without limitation the $500,000 of life
insurance provided for below.
4. EARLY TERMINATION: DISABILITY. Notwithstanding anything to
the contrary in paragraph 1 hereof: if Xx. Xxxxxxx by virtue of ill health or
other disability has at any time been unable to perform substantially and
continuously the duties assigned to Xx. Xxxxxxx under this Agreement for a
period of 180 days and such disability is expected to be permanent and
continuous thereafter for the balance of the then Term of Employment, then
NetGenics shall have the right to terminate the Term of Employment upon notice
to Xx. Xxxxxxx. Upon such termination, Xx. Xxxxxxx shall be entitled to receive
any salary and other benefits earned and accrued prior to the date of
termination, and reimbursement for expenses incurred prior to the date of
termination. The parties shall have no further obligation under this Agreement,
EXCEPT that Xx. Xxxxxxx shall not be relieved of Xx. Xxxxxxx'x obligations under
paragraph 8 concerning confidentiality and non-competition.
5. EARLY TERMINATION: TERMINATION BY NETGENICS FOR CAUSE.
Notwithstanding anything to the contrary in paragraph 1 hereof: the Term of
Employment may be terminated by NetGenics upon notice to Xx. Xxxxxxx for
"cause." The term "cause" shall mean Xx. Xxxxxxx'x (i) conviction of a felony or
like criminal conduct as determined by the Board or (ii) material breach of this
Agreement which has not been cured of a prospective basis following written
notice from the Board and the opportunity to be heard before the Board. Upon
such termination, Xx. Xxxxxxx shall be entitled to receive any salary and other
benefits earned and accrued prior to the date of termination, and reimbursement
for expenses incurred prior to the date of termination. The parties shall have
no further obligation under this Agreement EXCEPT
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that Xx. Xxxxxxx shall not be relieved of Xx. Xxxxxxx'x obligations under
paragraph 8 concerning confidentiality and non-competition.
6. EARLY TERMINATION: TERMINATION BY NETGENICS WITHOUT CAUSE.
Notwithstanding anything to the contrary in paragraph 1 hereof: the Term of
Employment may be terminated by NetGenics upon notice of Xx. Xxxxxxx without
cause, which shall mean for any reason other than one permitting termination for
"cause." Upon such termination, Xx. Xxxxxxx shall be entitled to receive any
salary and other benefits earned and accrued prior to the date of termination,
and reimbursement for expenses incurred prior to the date of termination, and
continuation of salary and health care benefits hereunder for a period of six
months. The parties shall have no further obligation under this Agreement EXCEPT
that Xx. Xxxxxxx shall not be relieved of Xx. Xxxxxxx'x obligations under
paragraph 8 concerning confidentiality and non-competition.
7. EARLY TERMINATION: TERMINATION BY RESIGNATION OF XX.
XXXXXXX. Notwithstanding anything to the contrary in paragraph 1 hereof: the
Term of Employment may be terminated by Xx. Xxxxxxx upon not less than 90 days
notice of resignation to NetGenics (provided that circumstances did not then
exist that would permit NetGenics to terminate Xx. Xxxxxxx for cause). Upon such
termination, Xx. Xxxxxxx shall be entitled to receive any salary and other
benefits earned and accrued prior to the date of termination, and reimbursement
for expenses incurred prior to the date of termination. The parties shall have
no further obligation under this Agreement EXCEPT that Xx. Xxxxxxx shall not be
relieved of Xx. Xxxxxxx'x obligations under paragraph 8 concerning
confidentiality and non-competition.
8. CONFIDENTIALITY AND NON-COMPETITION.
a. Xx. Xxxxxxx acknowledges that Xx. Xxxxxxx has had or
will have unlimited access to the confidential information and business methods
relating to NetGenics's business and operations and that NetGenics would be
irreparably injured and the goodwill of NetGenics would be irreparably damaged
if Xx. Xxxxxxx were to breach the covenants set forth in this paragraph 8. Xx.
Xxxxxxx further acknowledges that the covenants set forth in this paragraph 8
are reasonable in scope and duration and do not unreasonably restrict Xx.
Xxxxxxx'x association with other business entities, either as an employee or
otherwise as set forth herein.
b. During the Term of Employment and thereafter, Xx.
Xxxxxxx shall not disclose to any person, firm or other organization in any
manner, directly or indirectly, any confidential information or data relevant to
the business of NetGenics disclosed by NetGenics to Xx. Xxxxxxx, whether of a
technical or commercial nature, or use, in any manner, directly or indirectly,
any such confidential information or data, excepting only use of such data or
information as is (i) at the time disclosed, through no act or failure to act on
the part of Xx. Xxxxxxx, generally known or available; (ii) furnished to Xx.
Xxxxxxx by a third party as a matter of right and without restriction on
disclosure; or (iii) required to be disclosed by court order. Upon termination
of the Term of Employment, Xx. Xxxxxxx shall return to NetGenics any and all
materials and information in tangible or electronic form concerning the business
and affairs of NetGenics.
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c. During the Term of Employment anywhere in the world, and
for six months thereafter in any country in the world where NetGenics then has
made sales or granted licenses or otherwise done business or is actively
contemplating doing any of such activities, Xx. Xxxxxxx shall not engage,
directly or indirectly, whether as an individual on Xx. Xxxxxxx'x own account,
or as a shareholder, partner, joint venturer, director, officer, employee,
consultant, creditor and/or agent, of any person, firm or organization or
otherwise, directly or indirectly, in any or all of the following activities:
(1) Enter into or engage in any business which competes
with the business carried on by NetGenics;
(2) Solicit customers or business patronage which
results in competition with the business of NetGenics;
(3) Promote or assist, financially or otherwise, any
person, firm, association, corporation or other entity engaged in any business
which competes with NetGenics; or
(4) Approach or solicit or hire, or own any interest in
any firm, association, corporation or other entity that approaches or solicits
or hires any employee of NetGenics with respect to a business in competition
with NetGenics.
d. Notwithstanding anything herein to the contrary, Xx.
Xxxxxxx shall be permitted to own shares of any class of capital stock of any
publicly held corporation so long as the aggregate holdings of Xx. Xxxxxxx
represent less than 1% of the outstanding shares of such class of capital stock.
9. RIGHTS AND REMEDIES UPON BREACH.
a. Xx. Xxxxxxx acknowledges and agrees that NetGenics's
remedy at law for any breach of any of Xx. Xxxxxxx'x obligations under paragraph
8 hereof would be inadequate, and agrees and consents that temporary and
permanent injunctive relief may be granted in any proceeding which may be
brought to enforce any provision of paragraph 8 without the necessity of proof
of actual damage.
b. With respect to any provision of this Agreement finally
determined by a court of competent jurisdiction to be unenforceable, Xx. Xxxxxxx
and NetGenics hereby agree that such court shall have jurisdiction to reform
such provision so that it is enforceable to the maximum extent permitted by law,
and the parties agree to abide by such court's determination. In the event that
any provision of this Agreement cannot be reformed, such provision shall be
deemed to be severed from this Agreement, but every other provision of this
Agreement shall remain in full force and effect.
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10. COVENANTS.
a. Xx. Xxxxxxx agrees to cooperate (including taking any
required physical exams and making any required disclosures) with NetGenics so
that NetGenics can obtain and pay the premiums on insurance on his life in the
amount of $1,500,000 as promptly as possible, with NetGenics to be the
beneficiary of $1,000,000 and with Xx. Xxxxxxx to have the right to designate
the beneficiary of the remaining $500,000 of such insurance.
b. Xx. Xxxxxxx represents and warrants that he is free to
enter into and perform this Agreement and that the same will not result in the
breach or violation of any other agreement to which he is a party or bound, and
that his performance as contemplated hereunder will not violate any restriction
or other obligation or commitment to which he is subject.
11. BINDING EFFECT. This Agreement shall be binding on and
inure to the benefit of the parties and their respective successors, permitted
assigns heirs, executors and legal representatives.
12. AMENDMENTS, WAIVER. No amendment, modification, or waiver
of any provision of this Agreement, nor consent to any departure by Xx. Xxxxxxx
therefrom, shall be effective unless the same shall be in writing and signed by
NetGenics and approved by the Board. The failure of NetGenics at any time or
from time to time to require performance of any Xx. Xxxxxxx'x obligations under
this Agreement shall in no manner affect the right to enforce any provision of
this Agreement at a subsequent time, and the waiver of any rights arising out of
any breach shall not be construed as a waiver of any rights arising out of any
subsequent or prior breach.
13. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio.
14. NOTICES. Any notices or other communications required or
permitted under this Agreement shall be deemed to have been effectively given
and made if in writing and if served either by personal delivery or facsimile
transmission to the party for whom it is intended or by being deposited postage
prepaid, in the first class United States mail, certified or registered mail,
return receipt requested, addressed as follows:
If to NetGenics:
NetGenics, Inc.
x/x Xxxxx & Xxxxxxxxx
Xxxxxxxxx: Xxxxx X. Xxxxxxxx
0000 National City Center
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
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If to Xx. Xxxxxxx:
Xx. Xxxxxx Xxxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
15. ATTORNEY FOR XX. XXXXXXX. Xx. Xxxxxxx acknowledges that
Xx. Xxxxxxx has retained such separate and independent legal counsel and advice
as Xx. Xxxxxxx deems appropriate to advise Xx. Xxxxxxx in connection with the
execution and delivery of this Agreement, and that Xx. Xxxxxxx understands the
terms and conditions hereof which have been reviewed with Xx. Xxxxxxx and
explained by such separate and independent legal counsel as Xx. Xxxxxxx deems
appropriate.
IN WITNESS WHEREOF, the parties hereto have executed or caused
to be executed this instrument on the day first above written.
/s/ Xxxxxx X. Xxxxxxx
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XXXXXX XXXXXXX
NETGENICS, INC.
By: /s/ Xxxxxx Xxxxxxx
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Its: Chairman of the Board of Directors
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