Exhibit 10.16
December 12, 1997
Xxxxxx Xx Xxxxx, M.D.
IMPATH Inc.
0000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Moacyr:
In consideration of your service to IMPATH Inc. (the "Company"), you and
the Company agree as follows:
1. In connection with any merger or consolidation in which the Company is
not the surviving corporation and which results in the holders of the
outstanding voting securities of the Company (determined immediately prior to
such merger or consolidation) owning less than a majority of the outstanding
voting securities of the surviving corporation (determined immediately following
such merger or consolidation), or any sale or transfer by the Company of all or
substantially all its assets or any tender offer or exchange offer for or the
acquisition, directly or indirectly, by any person or group of all or a majority
of the then outstanding voting securities of the Company, all stock options for
the purchase of common stock of the Company awarded to you prior to September
12, 1997 ("Options") shall become exercisable in full, notwithstanding any
provision of the stock option plan of the Company pursuant to which the Options
were granted or of the stock option agreements or certificates evidencing the
Options, on and after (i) the fifteenth day prior to the effective date of such
merger, consolidation, sale, transfer or acquisition or (ii) the date of
commencement of such tender offer or exchange offer, as the case may be. With
respect to any Options which are incentive stock options, the provisions of the
foregoing sentence shall apply to the extent permitted by Section 422(d) of the
Code and such options in excess thereof shall, immediately upon the occurrence
of the event described in clause (i) or (ii) of the foregoing sentence, be
treated for all purposes as non-qualified stock options and shall be immediately
exercisable as such as provided in the foregoing sentence.
2
2. In the event that your employment with the Company shall be terminated
by the Company without Cause (as hereinafter defined), and not as a result of
your death or Disability (as hereinafter defined), the Company shall make a
severance payment to you in an amount equal to one year's base salary
(determined at your highest annualized rate of base salary in effect during the
one-year period ending on the date of termination), payable in bi-weekly
installments during the one-year period commencing on the date of termination of
your employment. You shall be under no obligation to seek other employment or
otherwise to mitigate the Company's obligation to make such severance payment to
you; provided, however, that if you do obtain another position (whether as an
employee, consultant, partner or otherwise) during such one-year period, the
Company shall have the right to offset against such severance payment any
salary, fees, bonus or other cash compensation actually earned by you during
such one-year period from such other position. The Company shall, during such
one-year period, continue to provide you with health insurance benefits on the
same basis, including Company-paid premiums, as such benefits are provided to
employees of the Company. Your rights under the other benefit plans and programs
of the Company shall be determined in accordance with the terms of such plans
and programs as then in effect.
For purposes of this agreement, a termination of your employment with the
Company by you for Good Reason (as hereinafter defined) shall constitute a
termination of your employment by the Company without Cause.
For purposes of this agreement: "Cause" shall mean (a) your gross neglect
or willful misconduct in the discharge of your duties and responsibilities to
the Company, (b) your material and repeated failure to obey appropriate
directions from the Board of Directors of the Company which failure has the
effect of materially injuring the business or business relationships of the
Company, (c) any act of willful misappropriation by you against the Company or
(d) your indictment, conviction or plea of guilty or nolo contendere with
respect to a felony crime; "Good Reason" shall mean (a) a reduction in your base
salary from the annualized rate in effect on the date hereof or as hereafter
increased or (b) a demotion in your position with the Company or change in your
duties and responsibilities inconsistent with your position, which reduction,
demotion or change shall not have been corrected by the Company within ten (10)
days following notice thereof by you to the Company; and "Disability" shall mean
your failure by reason of sickness, accident or physical or mental disability to
substantially perform the duties and
3
responsibilities of your employment with the Company for a period of six (6)
months in any period of twelve (12) consecutive months.
3. You agree that, in consideration of your employment with the Company,
you will not, during the period of your employment with the Company and
thereafter for a period of one (1) year commencing on the date of termination of
your employment with the Company, (a) engage, directly or indirectly, whether as
principal, agent, distributor, representative, consultant, employee, partner,
stockholder, limited partner or other investor (other than an investment of not
more than (i) five percent (5%) of the stock or equity of any corporation the
capital stock of which is publicly traded or (ii) five percent (5%) of the
ownership interest of any limited partnership or other entity) or otherwise, in
any business in competition with the business then conducted by the Company or
any of the Company's subsidiaries (the Company and the Company's subsidiaries,
being hereinafter collectively referred to as the "Company Group"), or (b)
solicit or entice or endeavor to solicit or entice away from any member of the
Company Group any person who was an employee of any member of the Company Group,
either for your own account or for any individual, firm or corporation, or
employ, directly or indirectly, any person who was during the one (1) year
period ending on the date of termination of your employment an employee of any
member of the Company Group.
4. In the event of a breach or threatened breach by you of any of the
provisions of Section 3 of this agreement, you hereby consent and agree that the
Company shall (i) be entitled to cease payment of the severance referred to in
Section 2 of this agreement and (ii) be entitled to an injunction or similar
equitable relief from any court of competent jurisdiction restraining you from
committing or continuing any such breach or threatened breach or granting
specific performance of any act required to be performed by you under any of
such provisions, without the necessity of showing any actual damage or that
money damages would not afford an adequate remedy and without the necessity of
posting any bond or other security. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies at law or in equity
which it may have with respect to any such breach or threatened breach.
5. This agreement shall be deemed a contract made under, and for all
purposes shall be construed in accordance with, the laws of the State of New
York applicable to contracts to be performed entirely within such State.
4
6. This agreement contains all the understandings and representations
between the parties hereto pertaining to the subject matter hereof.
7. No provision of this agreement may be amended or modified unless such
amendment or modification is agreed to in writing and signed by you and by a
duly authorized representative of the Company.
8. Should any provision of this agreement be held by a court or arbitration
panel of competent jurisdiction to be enforceable only if modified, such holding
shall not affect the validity of the remainder of this agreement, the balance of
which shall continue to be binding upon the parties hereto with any such
modification to become a part hereof and treated as though originally set forth
in this agreement. The parties further agree that any such court or arbitration
panel is expressly authorized to modify any such unenforceable provision of this
agreement in lieu of severing such unenforceable provision from this agreement
in its entirety, whether by rewriting the offending provision, deleting any or
all of the offending provision, adding additional language to this agreement, or
by making such other modifications as it deems warranted to carry out the intent
and agreement of the parties as embodied herein to the maximum extent permitted
by law. The parties expressly agree that this agreement as so modified by the
court or arbitration panel shall be binding upon and enforceable against each of
them. In any event, should one or more of the provisions of this agreement be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions hereof, and
if such provision or provisions are not modified as provided above, this
agreement shall be construed as if such invalid, illegal or unenforceable
provisions had never been set forth herein.
9. Anything to the contrary notwithstanding, all payments required to be
made by the Company hereunder shall be subject to withholding of such amounts
relating to taxes as the Company may reasonably determine it should withhold
pursuant to any applicable law or regulation.
* * *
5
Please indicate your acceptance of and agreement with the
foregoing by signing and returning this agreement to the Company, whereupon this
shall constitute a binding agreement between you and the Company.
Very truly yours,
IMPATH INC.
By /s/ Xxx X. Xxxx
---------------
Accepted and Agreed:
/s/ Xxxxxx Xx Xxxxx
-------------------
Xxxxxx Xx Xxxxx
