Exhibit 10.12
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into as of October 31, 1995 by and between GENE LOGIC INC., a
Delaware corporation (the "Company") and XXXXXXX X. XXXXXXX, a Maryland
resident ("Xxxxxxx").
RECITALS:
A. The Company desires to secure the services of Xxxxxxx and
Xxxxxxx desires to perform such services for the Company on the terms and
conditions as set forth in this Agreement.
NOW, THEREFORE, in consideration of these premises and the
mutual promises and conditions contained in this Agreement, the parties
hereto hereby agree as follows:
1. Employment and Duties. Subject to the terms and conditions of
this Agreement, the Company shall employ Xxxxxxx as President and Chief
Executive Officer of the Company and shall elect Xxxxxxx as a director of the
Company and Xxxxxxx hereby accepts such employment and such positions.
Xxxxxxx shall devote his full time, ability, attention, knowledge and skill
to performing all duties as President and Chief Executive Officer of the
Company as set forth in the Bylaws of the Company and as lawfully assigned or
delegated to him by the directors of the Company.
2. Base Salary. In consideration for Xxxxxxx'x services to the
Company during the term of his employment under this Agreement, Xxxxxxx shall
receive an annual base salary of $200,000 during 1996 and $210,000 during
1997, and thereafter in such amounts as may be mutually agreed by the Company
and Xxxxxxx, but not less than $210,000 per calendar year. Base salary shall
be paid in equal bi-weekly installments from which the Company shall withhold
and deduct all applicable federal and state income, social security,
disability and other taxes as required by applicable laws.
3. Incentive Stock. In addition to the salary specified above, the
Company shall provide Xxxxxxx with stock incentives as follows:
3.1 Founders' Stock. Upon the date of signing of this
Agreement, the Company shall sell to Xxxxxxx and Xxxxxxx shall purchase
100,000 shares of the Company's common stock at a purchase price of $0.01 per
share. Unrestricted ownership of such shares shall vest according to the
following schedule: twenty-five percent (25%) upon the date of signing of
this Agreement and thereafter at a rate of 1/36th each month for 36 months
beginning upon the first anniversary of such date. The Company shall deliver
to Xxxxxxx the certificates representing vested shares within 30 days of the
date upon which vesting occurs; certificates representing unvested shares
shall be held in escrow by the Secretary of the Company. Any unvested stock
shall automatically become fully vested upon the date upon which a
registration statement for the sale of securities of the Company to the
public becomes effective, or upon any merger of the Company or sale of the
Company or all or substantially all of its assets.
3.2 Incentive Stock Options. Upon the date of
signing of this Agreement, the Company shall grant to Xxxxxxx incentive stock
options under the Company's Incentive Stock Option Plan to purchase 40,000
shares of the Company's common stock at a purchase
price of $0.01 per share. The incentive stock options shall become
exercisable according to the following schedule: twenty-five percent (25%)
upon the date of signing of this Agreement and thereafter at a rate of 1/36th
each month for 36 months beginning upon the first anniversary of such date.
The Company will grant further incentive stock options to Xxxxxxx in each
year during which this Agreement remains in force, in numbers consistent with
Xxxxxxx'x position as President and CEO of the Company. Any unexercisable
options held by Xxxxxxx pursuant to this Subsection 3.2 shall automatically
become exercisable upon the date upon which a registration statement for the
sale of securities of the Company to the public becomes effective, or upon
any merger of the Company or sale of the Company or all or substantially all
of its assets.
3.3 Effect of Termination by Xxxxxxx. In the event
Xxxxxxx terminates this Agreement prior to its first anniversary, except in
consequence of a breach of this Agreement by the Company, all vested stock
shall become unvested and the Company shall have the right to repurchase any
shares of the Company's stock acquired by Xxxxxxx under either Subsection 3.1
or 3.2 above, such repurchase to occur at a purchase price equal to Xxxxxxx'x
original purchase price for such shares.
3.4 Right to Participate in Offerings of Securities.
The Company shall further permit Xxxxxxx to invest on a pro rata basis in any
future offerings of the Company's securities, for which purposes "pro rata
basis" shall mean the right to acquire that number of the to-be-issued
securities represented by the ratio, calculated immediately prior to the
offering, of stock held by Xxxxxxx (whether vested or not) to the Company's
outstanding stock both on a fully-diluted, as-if-converted basis multiplied
by the total number of shares or other securities proposed to be issued in
the offering, or such lesser number as Xxxxxxx may elect. This right shall
not apply to securities issued (a) upon conversion of any convertible
preferred shares, (b) as a common stock dividend or upon any subdivision of
shares of common stock, (c) pursuant to a firm commitment underwritten public
offering, or (d) pursuant to the exercise of options to purchase common stock
granted to employees, directors, officers, consultants or advisers of the
Company or members of the Company's Scientific Advisory Board.
4. Additional Compensation and Benefits.
4.1 Signing Bonus. Upon the execution of this
Agreement, the Company shall pay to Xxxxxxx a cash signing bonus in the
amount of $50,000. In addition, the Company shall issue to Xxxxxxx, without
receiving monetary consideration therefore, 50,000 shares of preferred stock
at the time of closing of the next private round of venture financing
(presently proposed to be the Series B round, closing on or before May 31,
1996). Such shares shall be fully-paid and non-assessable and shall have all
the rights and preferences of the securities issued to the other investors in
such financing and Xxxxxxx shall be accorded all such rights as are accorded
to other investors under the terms of any Convertible Preferred Stock
Purchase Agreement which may be executed by and between the Company and
subscribers to the offering.
4.2 Annual Performance Bonus. During each calendar
year during the term of this Agreement commencing with 1996, Xxxxxxx shall
receive, in addition to the base salary specified in Section 2 above, a
performance bonus based upon achievement of goals with respect to financing
of the Company, establishment of a corporate base for the Company and
progress in building the Company, such goals for 1996 to be mutually agreed
by Xxxxxxx and the Company and set forth promptly following execution of this
Agreement in a side letter which shall thereafter become Exhibit A to this
Agreement and, with respect to each year during the term of this Agreement
after 1996, to be mutually agreed upon by Xxxxxxx and the Company not
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later than sixty (60) days prior to the commencement of such year. The amount of
such bonuses shall be $30,000 for 1996, $50,000 for 1997, and thereafter in such
amounts as may be mutually agreed by the Company and Xxxxxxx, but not less than
$50,000 per calendar year.
4.3 Relocation Expenses. In the event that Xxxxxxx
relocates his family, the Company shall pay all reasonable moving expenses
and other costs related to such relocation, including without limitation the
closing costs on the sale of Xxxxxxx'x existing house and the purchase of a
new home of similar value, including without limitation up to three (3)
points on the new mortgage for such purchase.
4.4 Medical Benefits, Vacation and Sick Leave.
Commencing on January 1, 1996, Xxxxxxx shall be entitled to participate in
such medical, health and life insurance plans as the Company may from time to
time implement, and to receive paid vacation and sick leave on the same basis
as the Company's other senior executives.
4.5 Pension Plan. Xxxxxxx shall be entitled to
participate as a beneficiary under such pension plan(s) as the Company may
from time to time adopt, on the same basis as the Company's other senior
executives.
5. Confidentiality and Proprietary Inventions Agreement. Upon
the commencement of the term of this Agreement, Xxxxxxx shall enter into the
Company's standard form of agreement relating to the treatment of the
Company's confidential information and ownership of proprietary inventions.
6. Term of Employment. Subject to the provisions of Section 7, the
term of the employment engaged by this Agreement shall be a period of five
(5) years commencing on December 1, 1995 and ending on December 31, 2000,
whereupon the term shall automatically renew for successive one (1) year
periods unless one of the parties to the Agreement shall have given notice of
its intention to terminate the Agreement not later than ninety (90) days
prior to the end of such initial term or any such renewal term.
7. Termination of Employment.
7.1 For Cause. The Company may terminate this Agreement,
effective immediately upon written notice to Xxxxxxx, if at any time, in the
reasonable opinion of the Company's Board of Directors, (a) Xxxxxxx commits
any material act of dishonesty, fraud or embezzlement with respect to the
Company or any subsidiary or affiliate thereof, (b) is convicted of a crime
of moral turpitude, or (c) breaches any material obligation under this
Agreement. The Company's total liability to Xxxxxxx in the event of
termination of Xxxxxxx'x employment under this Subsection 7.1 shall be
limited to the payment of Xxxxxxx'x salary and benefits through the effective
date of termination.
7.2 Without Cause. The Company may terminate this
Agreement without cause upon sixty (60) days' written notice to Xxxxxxx. Upon
any termination of this Agreement without cause by the Company, the Company
shall pay to Xxxxxxx as xxxxxxxxx pay an amount equal to Xxxxxxx'x total
combined base salary and performance bonus for that calendar year during
which the termination becomes effective, in addition to such other
compensation to which Xxxxxxx may be entitled prior to the date of
termination.
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7.3 By Xxxxxxx. Xxxxxxx reserves the right to terminate his
employment hereunder for any reason upon ninety (90) days' written notice to
the Company. The Company's total liability to Xxxxxxx in the event of
termination of Xxxxxxx'x employment under this Subsection 7.3 shall be
limited to the payment of Xxxxxxx'x salary and benefits through the effective
date of termination and the provisions of Subsection 7.2 shall not apply.
8. Confirmation of Equity Structure. The Company represents and
warrants that the equity table attached to this Agreement as Exhibit B
accurately describes the current capital structure of the Company on a
fully-diluted basis and that there are no shares, options, warrants,
commitments, conversion rights or agreements for the purchase of any shares
of the Company's capital stock or other securities of the Company not shown
on Exhibit B.
9. Miscellaneous.
9.1 Modification. Any modification of this Agreement
shall be effective only if reduced to writing and signed by the parties to be
bound thereby.
9.2 Entire Agreement. This Agreement constitutes the
entire agreement between the Company and Xxxxxxx pertaining to the subject
matter hereof and supersedes all prior or contemporaneous written or verbal
agreements and understandings between the parties in connection with the
subject matter hereof.
9.3 Severability. If any provision of this Agreement is
held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions shall, nevertheless, continue in full
force and effect without being impaired or invalidated in any way.
9.4 Waiver. The parties hereto shall not be deemed to
have waived any of their respective rights under this Agreement unless the
waiver is in writing and signed by the waiving party. No delay in exercising
any right shall be a waiver of such right nor shall a waiver of any right on
one occasion operate as a waiver of such right on a future occasion.
9.5 Costs of Enforcement. If any action or proceeding
shall be commenced to enforce this Agreement or any right arising in
connection with this Agreement, each party shall initially bear its own costs
and legal fees associated with such action or proceeding. The prevailing
party in any such action or proceeding shall be entitled to recover from the
other party the reasonable attorneys' fees, costs and expenses incurred by
such prevailing party in connection with such action or proceeding.
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9.6 Notices. All notices provided for herein shall be
in writing and delivered personally or sent by United States mail, registered
or certified, postage paid, addressed as follows:
To the Company: Gene Logic, Inc.
Xxxx Xxxxxxx Xxxx
Xxx Xxxxx, XX 00000
To Xxxxxxx; Xxxxxxx X. Xxxxxxx
0000 Xxxxxxxxx Xxx
Xxxxxxx, XX 00000
or to such other addresses as either of such parties may from time to time
designate in writing. Any notice given under this Agreement shall be deemed
to have been given on the date of actual receipt, or, if not received during
normal business hours, on the next business day.
IN WITNESS WHEREOF, the parties have executed this
Agreement by their duly authorized officers or agents as of the date first
written above.
"Company" "Employee"
GENE LOGIC INC. /s/ Xxxxxxx X. Xxxxxxx
a Delaware corporation ----------------------
Xx. Xxxxxxx X. Xxxxxxx
By: /s/ Xxxx X. Xxxxxx
--------------------------
Name: Xx. Xxxx X. Xxxxxx
-------------------------
Title: Chairman, Board of Directors
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