Exhibit 10.07
EMPLOYMENT AGREEMENT
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This Employment Agreement is made as of May 23, 2001, by and between Xxxxx
X. XxXxx, Xx. (the "Executive") and Sontra Medical, Inc. (the "Company").
WHEREAS, the Company desires to employ the Executive, and the Executive
desires to be employed by the Company on the terms specified herein; and
WHEREAS, the Executive's senior managerial position requires that he be
trusted with extensive confidential information and trade secrets of the Company
and that he develop a thorough and comprehensive knowledge of all details of the
Company's business, including, but not limited to, information relating to
research, development, inventions, purchasing, accounting, marketing,
distribution and licensing of the Company's products and services;
NOW, THEREFORE, in consideration of the foregoing and the agreements herein
contained, and intending to be legally bound, the parties hereby agree as
follows:
1. Position and Responsibilities. The Executive agrees to serve as
President and Chairman of the Board of Directors for the Company. The Executive
shall at all times report to, and his activities shall at all times be subject
to the direction and control of the Board of Directors of the Company, and the
Executive shall exercise such powers and comply with and perform, faithfully and
to the best of his ability, such directions and duties in relation to the
business and affairs of the Company as may from time to time be vested in or
requested of him. The Executive shall have such duties as may be assigned to the
Executive from time to time by the Board of Directors.
2. Term. The parties agree that the Executive's employment with the Company
shall be on an "at-will" basis, which means that either the Executive or the
Company may terminate the employment relationship and this Agreement at any
time, for any or no reason, with or without Cause (as defined below), with or
without prior notice to the other party, but subject to Section 4 hereof.
3. Compensation and Benefits. As compensation for the satisfactory
performance by the Executive of his duties and obligations hereunder to the
Company and subject to the provisions of Section 4, the Executive shall receive:
3.1. Base Salary. The Executive's initial salary shall be paid at a
rate of Ten Thousand Dollars ($10,000) per month (the "Base Salary"). The
Base Salary shall be payable in accordance with the customary payroll
practices of the Company as may be established or modified from time to
time. The Board of Directors in its sole discretion may adjust the
Executive's salary at any time. All payments shall be subject to all
applicable federal, state and/or local payroll and withholding taxes.
3.2. Benefits. During Executive's employment, and subject to any
contribution generally required of executives of the Company, the Executive
shall be eligible to participate in all employee health and benefits plans,
as may be from time to time adopted by the Company and in effect for
executives of the Company in similar positions. Executive's participation
shall be subject to (i) the terms of the applicable plan documents, (ii)
generally applicable Company policies, and (iii) the discretion of the
Board or any administrative or other committee provided for in, or
contemplated by, such plan. In addition, the Executive shall be entitled to
receive three weeks vacation, which shall be accrued and utilized in
accordance with the Company's vacation policy/practice as established
and/or modified from time to time.
The Company's plans and policies shall govern all other benefits. The
Company and/or the Board of Directors may alter, modify, add to, or delete its
employee benefits plans and policies at any time as the Company and/or the Board
of Directors, in its or their sole judgment, determines to be appropriate.
3.3. Business Expenses. The Company shall pay or reimburse the
Executive for all reasonable business expenses incurred or paid by the
Executive in the performance of his duties and responsibilities hereunder,
subject to (i) any reasonable expense policy of the Company, as set by the
Company and/or the Board of Directors from time to time and generally
applicable to executives of the Company in similar positions, and (ii) such
reasonable substantiation and documentation requirements as may be
specified by the Company and/or Board of Directors from time to time.
4. Termination of Employment. The Executive's employment and this Agreement
shall terminate under the following circumstances:
4.1. Death or Disability. In the event of the Executive's death or
Disability (as defined herein) during the Executive's employment hereunder,
the Executive's employment and this Agreement shall immediately and
automatically terminate, and the Company shall pay to the Executive (or in
the case of death, the Executive's designated beneficiary or, if no
beneficiary has been designated by the Executive, his estate), any Base
Salary earned but unpaid through the date of death or Disability. For the
purposes of this Agreement, "Disability" shall mean any physical incapacity
or mental incompetence (i) as a result of which the Executive is unable to
perform the essential functions of his job for an aggregate of 90 days,
whether or not consecutive, during any calendar year, and (ii) which cannot
be reasonably accommodated by the Company without undue hardship.
4.2. By the Company for Cause.
(a) The Company may terminate the Executive's employment and this
Agreement for Cause at any time. Upon termination for Cause, the
Company shall have no further obligation or liability to the Executive
relating to the Executive's employment or this Agreement, other than
any Base Salary earned but unpaid and accrued but unused vacation
through the date of termination.
(b) The following events or conditions shall constitute "Cause"
for termination of Executive's employment and this Agreement: (i)
disregard of or failure to follow
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any written rules or policies of the Company; (ii) failure or refusal
of the Executive to perform his duties hereunder; (iii) dishonesty,
embezzlement, misappropriation of assets or property (tangible or
intangible) of the Company, gross negligence, misconduct, neglect of
duties, theft, fraud, or breach of fiduciary duty to the Company; (iv)
violation of federal or state securities laws; (v) breach of an
employment, consulting or other agreement (including, without
limitation, the Employee Non-competition, Nondisclosure and
Developments Agreement between the Executive and the Company); (vi)
the unauthorized disclosure of any trade secret or confidential
information of the Company, including confidential information of
third parties which the Company treats as confidential; (vii) the
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; or (viii) the commission of a felony.
(c) If the Board of Directors, in its sole discretion, determines
that the reason(s) constituting Cause for termination is subject to
cure, then the Executive shall be given written notice of the pending
termination, notice of the action required by the Executive to cure
the circumstances constituting Cause, and thirty days in which to
attempt to cure. If in the Board of Directors' determination, the
reason(s) constituting Cause has been cured, then Executive's
employment shall not be terminated. If, however, the Board of
Directors determines, in its sole discretion, that the reason(s) has
not been cured in the thirty day period, Executive's employment shall
be subject to immediate termination for Cause.
4.3 By the Company other than for Cause.
(a) The Company may terminate the Executive's employment and this
Agreement other than for Cause at any time. In the event of such
termination, it is agreed by and between the Company and the Executive
that they will enter into an independent consulting agreement - the
terms of which will be subject to negotiation at such time as the
Executive's employment is terminated under this provision. At a
minimum, the parties agree that the independent consulting agreement
will provide for payment of $10,000 per month for consulting services
for a term of twelve months. Upon execution of an independent
consulting agreement with Executive, the Company shall have no further
obligation or liability to the Executive relating to his employment or
this Agreement, other than any Base Salary earned but unpaid and
accrued but unused vacation through the date of termination.
(b) Should the Company elect not to enter into such an
independent consulting agreement with the Executive, the Executive
will be entitled to salary continuation at the Base Salary rate for a
period of six months from the termination date, to be paid in
accordance with the Company's payroll practice then in effect. If the
Executive elects to continue medical insurance coverage after the
termination date in accordance with the provisions of the Consolidated
Omnibus Reconciliation Act of 1985 ("COBRA"), then the Company shall
pay his monthly COBRA premium payments for the period of salary
continuation payments or until he accepts other employment, whichever
occurs first. The Company shall have no other obligations to the
Executive upon termination of employment other than for Cause. The
Company's obligation to provide any of the amounts and benefits
hereunder shall be subject to, and conditioned upon, the Executive's
execution of a full release of claims satisfactory to the Company,
releasing the Company and its employees and agents from any claims
arising from or
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related to the Executive's employment or severance from employment
with the Company, including any claims arising from this Agreement.
(c) Should the Company and Executive, despite good-faith
negotiations, fail to reach agreement on a consulting agreement within
thirty days of Executive's termination from employment, unless the
thirty day period is otherwise extended in writing by the Company, the
Company, provided it has offered a consulting agreement specifying
payment of $10,000 per month for consulting services for a term of
twelve months, shall have no further obligation or liability to the
Executive relating to his employment or this Agreement, other than any
Base Salary earned but unpaid and accrued but unused vacation through
the date of termination.
4.4 By the Executive. If the Executive chooses to terminate his
employment with the Company for any reason other than to transition from
employment with the Company to an independent consultant relationship with
the Company, the Company shall have no further obligation or liability to
the Executive relating to the Executive's employment or this Agreement,
other than for Base Salary earned but unpaid and accrued but unused
vacation through the date of termination. In the event the Executive
terminates his employment to transition to an independent consulting
relationship with the Company, the provisions of Section 4.3 shall apply
with respect to the Company's obligation to negotiate and enter into an
independent consulting agreement with Executive.
5. Effect of Termination. The provisions of this Section 5 shall apply
in the event of termination of this Agreement and/or the Executive's employment
pursuant to Section 4.
5.1. Payment in Full. Payment by the Company to the Executive of any
Base Salary and other compensation amounts as specified in Section 4.2
(upon termination for Cause) and Sections 4.3 and 4.4, as well as
fulfillment of the Company's obligation to negotiate in good-faith with
Executive for an independent consulting agreement pursuant to Section 4.3,
shall constitute the entire obligation of the Company to the Executive,
except that nothing in this Section 5.1 is intended or shall be construed
to affect the rights and obligations of the Company, on the one hand, and
the Executive, on the other, with respect to any loans, stock warrants,
stock pledge arrangements, option plans or other agreements to the extent
said rights or obligations survive the Executive's termination of
employment under the provisions of documents relating thereto.
5.2. Termination of Benefits. Except for any right of continuation of
benefits coverage to the extent provided by this Agreement and/or COBRA, or
other applicable law, benefits shall terminate pursuant to the terms of the
applicable benefit plans as of the termination date of the Executive's
employment.
5.3 Cessation of Severance and Benefits. If the Executive breaches his
obligations under this Agreement and/or the Non-competition, Nondisclosure
and Developments Agreement, the Company may immediately cease payment of
all severance and benefits described in this Agreement. The cessation of
these payments shall be in addition to, and not as an alternative to, any
other remedies at law or in equity available to the Company, including the
right to seek specific performance or an injunction.
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6. Non-competition, Nondisclosure and Developments Obligations. As a
condition of the Company entering into this Agreement, the Employee agrees to
execute, prior to the execution of this Agreement by the Company, the Company's
Employee Non-competition, Nondisclosure and Developments Agreement (the
"Nondisclosure Agreement") attached hereto as Exhibit A. The obligations of the
Executive under the Nondisclosure Agreement expressly survive any termination of
the Executive's employment, regardless of the manner of such termination, or
termination of this Agreement.
7. Conflicting Agreements. The Executive hereby warrants that the execution
of this Agreement and the performance of his obligations hereunder will not
breach or be in conflict with any other agreement to which or by which the
Executive is a party or is bound and that the Executive is not now subject to
and will not enter into any agreement, including, without limitation, any
covenants against competition or similar covenants that would affect the
performance of his obligations hereunder.
8. Withholding; Taxes. All payments made by the Company under this
Agreement shall be subject to and reduced by any federal, state and/or local
taxes or other amounts required to be withheld by the Company under any
applicable law.
9. Miscellaneous.
9.1. Assignment. The Executive shall not assign this Agreement or any
interest herein. The Company may assign this Agreement, and it is
specifically understood and agreed that no such assignment by the Company
shall be deemed to be a "termination" of the Executive's employment with
the Company within the meaning of Section 4 hereof. This Agreement shall
inure to the benefit of the Company and shall be binding upon the Company
and the Executive, and their respective successors, executors,
administrators, heirs and permitted assigns.
9.2. Severability. If any portion or provision of this Agreement shall
to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the application of such provision in such circumstances
shall be modified to permit its enforcement to the maximum extent permitted
by law, and both the application of such portion or provision in
circumstances other than those as to which it is so declared illegal or
unenforceable and the remainder of this Agreement shall not be affected
thereby, and each portion and provision of this Agreement shall be valid
and enforceable to the fullest extent permitted by law.
9.3. Waiver; Amendment. No waiver of any provision hereof shall be
effective unless made in writing and signed by the waiving party. The
failure of the Company to require the performance of any term or obligation
of this Agreement, or the waiver by the Company of any breach of this
Agreement, shall not prevent any subsequent enforcement of such term or
obligation or be deemed a waiver of any subsequent breach. This Agreement
may be amended or modified only by a written instrument signed by the
Executive and/or an authorized member of the Board of Directors.
9.4. Notices. All notices, requests and other communications provided
for by this Agreement shall be in writing and shall be effective when
delivered in person or three (3)
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business days after being deposited in the mail of the United States,
postage prepaid, registered or certified, and addressed (a) in the case of
the Executive, to the address set forth underneath his signature to this
Agreement or (b) in the case of the Company, to the attention of the
Chairman of the Board, at 00 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx,
00000, and/or to such other address as either party may specify by notice
to the other.
9.5. Entire Agreement. This Agreement and the Non-competition,
Nondisclosure and Developments Agreement constitute the entire agreement
between the Company and the Executive with respect to the terms and
conditions of the Executive's employment with the Company and supersede all
prior communications, agreements and understandings, written or oral,
between the Executive and the Company with respect to the terms and
conditions of the Executive's employment with the Company.
9.6. Counterparts. This Agreement may be executed in counterparts,
each of which shall be original and all of which together shall constitute
one and the same instrument.
9.7. Governing Law. This Agreement, the employment relationship
contemplated herein and any claim arising from such relationship, whether
or not arising under this Agreement, shall be governed by and construed in
accordance with the internal laws of the Commonwealth of Massachusetts
without giving effect to any choice or conflict of laws provision or rule
thereof.
9.8. Consent to Jurisdiction. Each of the Company and the Executive,
by its or his execution hereof, hereby irrevocably submits to the exclusive
jurisdiction of the state or federal courts of the Commonwealth of
Massachusetts for the purpose of any claim or action arising out of or
based upon this Agreement, the Executive's employment with the Company
and/or termination thereof, or relating to the subject matter hereof, and
agrees not to commence any such claim or action other than in the
above-named courts.
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IN WITNESS WHEREOF, this Agreement has been executed by the Company, by its
duly authorized representative, and by the Executive, as of the date first above
written.
SONTRA MEDICAL, INC.
By: /s/ Xxxxxx Xxxx
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Name: Xxxxxx Xxxx
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Title: Chief Scientific Officer
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THE EXECUTIVE
/s/ Xxxxx X. XxXxx, Xx.
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Signature
Xxxxx X. XxXxx, Xx.
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Name - please print
ADDRESS:
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