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Exhibit 10(vii)
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December 18, 1996
Dr. J. Xxxxx Xxxxxx
BioClin (Europe) AG
Xxxxxxxxxxxxxx 0
XX-0000 Xxxx/Xxxxxxxxxxx
Dear Xxxxx:
This letter sets forth our agreement with respect to your employment with
BioClin AG and any subsidiary or affiliate thereof (collectively referred to
herein as the "Company" and individually referred to herein as a "Protected
Party") and special separation benefits relating to the termination thereof, as
follows:
1. POSITIONS, DUTIES AND PLACES OF PERFORMANCE: Your employment will
commence effective as of the closing of the acquisition of BioClin (Europe) AG
by DNX Corporation (the "Effective Date"). During the term of this agreement
(unless earlier terminated as provided below), you will devote your full time
and attention to the operations and affairs of the Company with such duties and
responsibilities as the Chief Executive Officer of DNX Corporation may
reasonably determine; provided, however, that such duties and responsibilities
shall be consistent with being President - International Services of the Company
and an employee and signatory under German law of the BioClin Institute of
Clinical Pharmacology GmBh (the "Institute"); and provided, further, that if the
duties and responsibilities are changed so they are not consistent with being
the President of International Services of the Company and an employee and
signatory of the Institute, such duties and responsibilities as you and the
Chief Executive Officer may mutually agree within 30 days, and if no mutual
agreement is reached, you may treat such change of duties and responsibilities
as a termination of your employment by the Company pursuant to paragraph 4
below. You will perform your duties and responsibilities at the Company's
facilities in Cham and Zug, Switzerland, except for travel to the Institute in
Dusseldorf, Germany, and other travel required for Company business. During the
term of this agreement, the Company will not change these primary places of
performance of your duties and responsibilities without your consent.
2. COMPENSATION: During the term of this agreement (unless earlier
terminated as provided below), you will be paid at the annualized rate of CHF
233,000, or such greater amount as may be authorized by the Compensation
Committee (the "Compensation Committee") of the Board of Directors of DNX
Corporation (the "Board"). Such compensation shall be paid in accordance with
the normal procedures of the Company and the Compensation Committee for
compensating the Company's employees and shall be subject to withholding for
applicable taxes and governmental charges. As soon as practicable after the
Effective Date, you will provide to the Company a withholding certificate and
such other written representations regarding your status under United States,
Swiss and German tax law as the Company may require, and the Company will be
entitled to rely in good faith on such certificate and representations.
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Dr. J. Xxxxx Xxxxxx
December 18, 1996
Page 2
3. Benefits:
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(a) IN GENERAL: During the term of this agreement (unless earlier
terminated as provided below): you will be eligible to participate in
such medical, dental, life and disability benefit programs as may be
established by the Company; you will be eligible beginning in 1997 to
participate in the DNX Corporation Executive Bonus Plan at the same
levels as other senior executives of the Company, as authorized by the
Compensation Committee; and you will receive a grant under the DNX
Corporation 1996 Stock Option Plan of options to purchase 50,000
shares of DNX Corporation common stock, on the same terms and subject
to the same vesting requirements as the Compensation Committee shall
determine for other senior executives of the Company.
(b) CONTRIBUTION TO INTERNATIONAL SCHOOL: Each academic year during the
term of this agreement (unless earlier terminated as provided below),
the Company will contribute on your behalf to such school as you may
designate CHF 27,000 to provide for the enrollment and attendance at
such school by your two children.
(c) SPECIAL RETIREMENT BENEFITS: During the term of this agreement (unless
earlier terminated as provided below), the Company will transfer to
the Institute the lesser of DEM 32,000 or the amount provided under
your current employment agreement as a contribution to your individual
pension plan as currently in effect. DNX Corporation, as the parent
corporation of the Institute, will cause the Institute to contribute
such amount to such pension plan on your behalf.
(d) AUTOMOBILE EXPENSES. During the term of this agreement (unless earlier
terminated as provided below), the Company will pay or reimburse you
the lesser of CHF 1,500 per month or the amount provided to you under
your current employment agreement for the lease, insurance,
maintenance and repair of an automobile.
(e) VACATION. During the term of this agreement (unless earlier terminated
as provided below), you will be entitled to take 25 days of vacation
per year in accordance with the Company's vacation policies in effect
from time to time for senior executives.
(f) RELOCATION. Subject to the last sentence of section 1, if the primary
place of performance of your duties and responsibilities is changed
during the term of this agreement to a location outside of
Switzerland, the Company will pay or reimburse you for reasonable and
necessary expenses incurred by you in connection with your relocation
outside of Switzerland and in connection with your return to
Switzerland, provided that such return occurs prior to or upon the
expiration or termination of this agreement.
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Dr. J. Xxxxx Xxxxxx
December 18, 1996
Page 3
4. SEVERANCE OBLIGATIONS: If your employment is terminated by the Company
(or is treated as terminated by the Company under section 1) during the term of
this agreement for any reason other than Cause, then, subject to sections 5, 6
and 7 below, the Company will provide to you:
(a) regular severance payments at the rate of your annualized base salary
at the time of termination until 12, 24 or 36 months after your
termination date, as elected in writing by the Company at the time of
such termination. Any payments made will be reduced by applicable
taxes and other required withholdings;
(b) continuation of medical and dental insurance coverage until the
earlier of (1) the date you obtain other full-time employment or (2)
the date your salary continuation ceases; and
(c) continuation of the contribution under section 3(b) until the date
your salary continuation ceases.
For the purposes of this agreement, the term "Cause" means your (a) commission
of an act that is determined by the Board to be fraudulent or dishonest conduct
or a material breach of any of the Company's policies, (b) conviction of a
felony or knowing violation of any federal, state, or local law applicable to
the Company or (c) intentional refusal, without proper cause, to substantially
perform your duties after a demand for substantial performance has been
delivered to you in writing by your supervisor(s). Upon termination for Cause,
the Company shall have no further liability or obligation to you, except for
salary earned but not paid and other obligations mandated by law.
5. RELEASE: In consideration for the special separation benefits set forth
in section 4 above, you shall agree to the conditions outlined on the attached
Release. The Company's severance obligations under section 4 above are expressly
conditioned upon your (a) execution and delivery of the Release at the time of
your termination of employment and (b) not revoking the Release within the
revocation period described therein.
6. COMPETITIVE ACTIVITY: In consideration for the special separation
benefits set forth in section 4 above, you agree that (a) if your employment is
terminated by the Company (or is treated as terminated by the Company under
section 1) during the term of this agreement for any reason other than Cause,
then you will not, without the prior written consent of the Board in its sole
discretion, engage in any Competitive Activity during the period of your salary
continuation under section 4 above and (b) if your employment is terminated by
you for any reason other than as provided in section 1 or by the Company for
Cause, then you will not, without the prior written consent of the Board in its
sole discretion, engage in any Competitive Activity until the later of (1) five
years after the date of this agreement or (2) two years after your termination
date. The Company's severance obligations under section 4 above are expressly
conditioned upon your satisfaction of your obligations under this section 6.
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Dr. J. Xxxxx Xxxxxx
December 18, 1996
Page 4
For the purposes of this agreement, the term "Competitive Activity" means your
participation in the management, clinical or preclinical operations of any
business enterprise if (a) such enterprise engages in substantial and direct
competition with any Protected Party in North America or Europe, (b) such
enterprise's sales of any product or service competitive with any product or
service of a Protected Party amounted to at least 10% of such enterprise's net
sales for its most recently completely fiscal year, and (c) such Protected
Party's sales of said product or service amounted to at least 10% of its net
sales for its most recently completely fiscal year. Competitive Activity will
not include the mere ownership of less than 5.0% of any class of the outstanding
securities of any such enterprise and the exercise of rights appurtenant
thereto.
7. NO SOLICITATION OR HIRING: In consideration for the special separation
benefits set forth in section 4 above, you agree that (a) for a period of three
years after your termination date, you will not, without the prior written
consent of the Board in its sole discretion, directly or indirectly induce or
attempt to induce any employee of any Protected Party to leave the employment of
such Protected Party or to accept any other employment or position and (b) for a
period of two years after your termination date, you will not, without the prior
written consent of the Board in its sole discretion, directly or indirectly hire
or cause to be hired any employee of any Protected Party. The Company's
severance obligations under section 4 above are expressly conditioned upon your
satisfaction of your obligations under this section 7.
8. TERM OF AGREEMENT: This agreement shall have a two-year term commencing
on the Effective Date, provided that thereafter the term will automatically be
extended for successive one-year periods unless either party gives written
notice, not less than 90 days prior to the otherwise scheduled expiration of the
term, that it or he does not want the term to so extend.
9. GOVERNING LAW: This agreement shall be governed by and construed in
accordance with the internal laws of Switzerland without regard to conflicts of
law principles.
10. ENTIRE AGREEMENT; MODIFICATION: This agreement and the attached Release
constitute the entire agreement between you and the Company relating to your
employment with the Company and the termination thereof and supersede all other
prior understandings or agreements relating to your employment with the Company
and the termination thereof. This agreement may not be modified or amended
except by a writing signed by you and the Company.
Sincerely,
/s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Chairman
/s/ Dr. J. Xxxxx Xxxxxx December 18, 1996
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Dr. J. Xxxxx Xxxxxx Date
Enclosure
