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EXHIBIT 10.18
EMPLOYMENT AGREEMENT
THIS IS AN AGREEMENT, made as of this 29th day of September, 1992, by
and between Biosym Technologies, Inc., a California corporation (hereafter
"Biosym") and Xxxx Xxxxxx, presently residing at 0000 Xxxxx Xx Xxxxxx, Xxx
Xxxxx, Xxxxxxxxxx 00000 (hereafter "Employee") .
WITNESSETH:
WHEREAS, Employee has been employed by Biosym in a key executive
capacity and Biosym and Employee now wish to enter into an agreement of
employment that will constitute the sole and exclusive agreement relating to the
employment of Employee by Biosym.
NOW, THEREFORE, in consideration of the foregoing premises, and the
mutual covenants, terms and conditions set forth herein, it is hereby agreed
between Biosym and Employee as follows:
ARTICLE I. Employment
1.1 Biosym shall continue to employ Employee, and Employee shall
continue to accept employment with and work for Biosym, in a full-time capacity
and for the period of time commencing with
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the date of the Merger contemplated by an Agreement and Plan of Merger dated as
of June 3, 1992 between Biosym, Corning Incorporated ("Corning") , and
Biosym/Acquisition Inc., a California corporation (the "Merger"), and ending on
June 30, 1997 (this period is sometimes referred to herein as the "Term"). Such
employment shall be in the capacity of Director- Catalysis or such other senior
executive capacity with Biosym as Biosym, acting through its Board of Directors
may designate, and as is reasonable under the circumstances, and Biosym shall
assign to Employee, and Employee shall accept and diligently perform to the
reasonable satisfaction of Biosym, those executive duties assigned to him by
Biosym.
1.2 During the Term, Employee shall not, directly or indirectly, alone
or as a member of a partnership, or as an officer, director, employee, agent or
shareholder of any other person, firm or business organization, engage in any
other business activity or pursuit for compensation requiring Employee's
personal services during the period of Employee's employment without the prior
written consent of Biosym acting through its Board of Directors; provided
however nothing in this Agreement shall preclude Employee from: (i) engaging in
charitable and community activities or from managing Employee's personal
investments, or (ii) serving as a member of the board of directors of an
unaffiliated company not in competition with Biosym or supplying goods or
services to Biosym or buying goods and services from Biosym, subject however in
each such case of
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board membership, to approval of the Board of Directors of Biosym not to be
unreasonably withheld, so long as in all cases in (i) and (ii) Employee's
activities do not interfere with the performance of Employee's duties or
responsibilities under this Agreement.
ARTICLE II. Compensation
2.1 Employee shall be compensated at an annual base salary of
$95,000.00 during the Term. The Biosym Board of Directors shall review and may,
if appropriate, at its discretion, increase this annual base salary from time to
time during the Term of this Agreement to reflect ordinary salary actions
granted generally to other Biosym employees at the discretion of the Board of
Directors and the management of Biosym.
2.2 Base salary shall be paid periodically in the same manner as it is
paid to other senior executive employees of Biosym. Base salary and other
compensation shall be subject to such withholdings as required by law or
otherwise agreed to by Employee.
2.3 As contemplated by the Agreement and Plan of Merger dated June 3,
1992 (the "Merger Agreement"), Employee and Biosym have entered into an
Assumption Agreement on the date of the Merger concerning unexercised stock
options for Biosym common stock held by Employee under (a) Stock Option
Agreement(s) dated
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11/28/90 granting Employee the right to purchase an aggregate of 24,000 shares
of Biosym common stock and providing for certain rights of acceleration in the
event of an acquisition of Biosym. The Assumption Agreement provides with
respect to certain stock options subject to the acceleration rights ("Biosym
Stock Options") that: (a) any right to exercise a Biosym Stock Option as a
result of the Merger will be waived by Employee and be inoperative, and (b) the
Biosym Stock Options will be converted into certain rights to acquire Corning
common stock evidenced by the Assumption Agreement.
2.4 During the Term of this Agreement, Employee shall be eligible to
receive annual bonuses to be calculated, earned and payable as provided below:
(a) The first portion of Employee's annual bonus will be calculated by
comparing the actual operating margins achieved in each twelve
month period ending June 30 (1993 through 1997), as shown on
unaudited income statements of Biosym for each such period prepared
by Biosym's internal accountants in accordance with United States
generally accepted accounting principles applied in conformity with
Corning's accounting policies (the "Comparative Income Statement"),
with the projections set forth in the Biosym Projected Income
Statement on Exhibit A (the "Biosym Projection") for such period,
and Employee, subject to the provisions of this
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Agreement, shall be entitled to the bonus based on such comparison
of that operating margin to the extent expressly set forth on, or
calculable from and in accordance with, Exhibit A hereto; provided
however that the calculation of such actual operating margins shall
not include excessive charges to Biosym for corporate overheads or
other services provided or assigned to Biosym by Corning or its
affiliates which do not reflect fair value. The second portion of
Employee's annual bonus shall be set by determining the extent to
which Employee has achieved the management objectives for such
annual period set for such Employee by agreement of the Employee
and the Biosym President (and if they fail to agree by the
President). Such determination shall be conclusive in all respects
when made by the President and confirmed by the Board of Directors
of Biosym. The amount of this portion of the bonus shall be
calculated using the percentage by which Employee has achieved such
management objectives as determined by the President and confirmed
by the Board of Directors and such calculation is described and set
forth in Exhibit A hereto.
(b) The Board of Directors of Biosym shall have the authority, at its
sole discretion, to reasonably restate the Biosym Projection to
account for or take into consideration: (i) unusual one-time events
which
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constitute material changes in the financial condition or
performance of Biosym or a change in the character or nature of
Biosym business outside the ordinary course of business, including
without limitation material acquisitions but excluding any
acquisition of Hare Inc. made within one year hereof and (ii) any
change in the fiscal year of Biosym including without limitation a
change from the current fiscal year to a calendar year; provided
that the Board of Directors will discuss such restatements with the
President and Chief Executive Officer of Biosym in advance of
effecting any such restatement; and further provided that any such
changes made in restating the Biosym Projection shall also be
reflected in the Comparative Income Statement to the extent
reasonably approved by the Board of Directors of Biosym.
(c) Any amounts payable to Employee pursuant to this Section 2.4 as
provided in subsection (d) will be paid 50% in cash and up to 50%
in Value of restricted common stock of Corning Incorporated subject
to the Divisional Stock Incentive Plan of Corning Incorporated (its
amendments or substitute plans) and subject to approval by the
Board of Directors of Corning ("Restricted Corning Stock") for each
of the twelve month periods in which it is earned. The Biosym Board
of Directors may however substitute a payment of cash for any
Restricted
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Corning Stock that may otherwise be payable hereunder. Value when
used with respect to Restricted Common Stock earned under this
Section 2.4 means the average of the high and low price for a share
of Corning Common Stock listed under the "New York Stock Exchange
Composite Transaction" as reported in The Wall Street Journal
(Eastern Edition) for the last business day of the applicable
twelve month period July 1 to June 30 in which it is earned.
(d) The 50% cash portion of the amounts earned by Employee under this
Section 2.4 shall be payable to Employee promptly after it is
calculable under this Agreement and declared earned by the Board of
Directors and the portion payable in Restricted Common Stock, or
any cash in lieu of such stock, shall be payable to Employee two
years after it is calculable under this Agreement and declared
earned by the Board of Directors subject to the provisions herein,
including Section 7.3, below and unless Employee voluntarily
terminates Employee's employment with Biosym or is otherwise in
violation of this Agreement or has been discharged pursuant to
Section 7.1 hereof. For example, the amount earned by an Employee
for the twelve month period ending June 30, 1993 which is payable
in Restricted Stock (or any cash in lieu thereof) will be payable
within a reasonable period of time after June 30, 1995.
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(e) Employee acknowledges that subject to subsection (h) below, the
shares of Restricted Common Stock (and all shares subsequently
issued or distributed by means of dividends, splits, combinations,
reclassifications, or other capital changes with respect to such
shares) may not be sold, assigned, transferred, pledged or
otherwise encumbered by or on behalf of or for the benefit of
Employee until Employee is entitled to receive physical possession
of the shares pursuant to the terms of this Agreement.
(f) Employee acknowledges that each certificate issued with respect to
the shares shall be registered in the name of the undersigned but
shall be held by Corning Incorporated for safekeeping until
Employee is entitled to receive physical possession of the shares
pursuant to the terms of this Agreement.
(g) Employee acknowledges that any right to receive the shares of
Restricted Common Stock will be terminated in whole or in part and
shall, unless otherwise determined by the Board of Directors and
the Corning Board of Directors in their sole discretion, be
terminated, if Employee shall be discharged for Cause as defined in
Section 7.1 or shall retire or otherwise leave voluntarily the
employ of Biosym (other than for a transfer or assignment to an
entity or corporation of
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which at least 50% of the ownership interest or outstanding capital
stock having ordinary voting power to elect one half or a majority
of the managing committee or Board of Directors of such entity or
corporation is at the time of transfer or assignment directly or
indirectly owned by Corning).
(h) Upon the occurrence of any event set forth in clauses (1) and (2)
below, Biosym shall deliver to Employee or Employee's personal
representative, free of any legend, the possibility of forfeiture
and any restrictions on transfer or alienation, certificates
representing the shares of Restricted Common Stock in such number
as to which Employee may be entitled at the time of such event
pursuant to the provisions of the Agreement.
(1) death;
(2) retirement from Biosym's employ for reasons of total and
permanent disability or for medical or health reasons which
may not be deemed to constitute total and permanent disability
but which render Employee unable to perform the duties and
responsibilities assigned to Employee by, and owed by Employee
to, Biosym.
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ARTICLE III. Executive Benefits
3.1 During the Term of this Agreement, Employee shall be entitled to
participate in Biosym's group life insurance plans as they may be amended and in
force from time to time during the Term, and shall be entitled to health
insurance coverage for self and dependents upon the same basis as provided to
other senior executive employees of Biosym.
3.2 Biosym shall provide to Employee vacation, insurances (other than
as provided for in Paragraph 3.1) and fringe benefits no less favorable to
Employee than it may from time to time make available to its employees generally
on a pro rata basis or on a basis proportional with Employee's annual salary
hereunder as may be appropriate with respect to the particular plan.
3.3 Employee may incur reasonable business expenses in the course of
employment hereunder for which Employee shall be eligible for reimbursement or
advances for such expenses in accordance with Biosym's policy for business and
business travel expenses therefor for its senior executive employees generally.
3.4 Employee shall not be required without Employee's consent to accept
any: (a) transfer to a place of business that is more than 35 miles from the
present location of Biosym, except in connection with a movement of Biosym's
principal place of business or headquarters to a location within the City of San
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Diego or the County of San Diego, California, or (b) any temporary assignment
which would require Employee to be absent from Employee's home for more than
thirty (30) consecutive days.
ARTICLE IV. Invention Disclosure, Patent Assignment
and Copyright
4.1 Employee shall promptly disclose to Biosym all inventions conceived
or developed by Employee solely or jointly with another during the Term of this
Agreement and for six months thereafter, which are related to the modeling
(including graphical display) of chemical structures, properties, and processes,
the analysis of experimental data relating to such structures, properties, and
processes, and the creation and implementation of computer programs for
accomplishing same (the "Biosym Business") on such form as Biosym may require
from time to time. Such disclosure shall be kept confidential by Biosym during
Biosym's review and if Biosym determines that the invention is not the property
of Biosym. Employee hereby assigns to Biosym all right, title and interest in
and to any such inventions relating to the Biosym Business (including any
actually or demonstratively anticipated research and development of Biosym)
which are conceived or made by Employee solely or jointly with any other person,
during the course of employment with Biosym.
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4.2 All rights in developments (including without limitation software,
source codes, object codes, subroutines, file formats, user interfaces,
algorithms, molecular structures and compositions, business methods and trade
secrets), reports, records and other documents prepared by Employee during the
Term and which relate to the Biosym Business or are within the scope of
employment hereunder shall vest exclusively with Biosym, and Employee upon
Biosym's request will execute any assignments necessary to protect Biosym's (or
its assignees) interests in such intellectual property rights and documents and
shall assist Biosym (or its assignees) in securing patent protection, if
available, or Federal copyright registration for any inventions included in such
property rights or documents. Except as disclosed on Exhibit B hereto, Employee
has not developed or conceived of any invention related to the Biosym Business
as of the date of this Agreement that is not owned by Biosym.
4.3 Employee hereby acknowledges that this provision constitutes
written notification that this Agreement does not require any assignment of any
inventions or rights or interests therein which fully qualify as an invention
under Section 2870(b) of the California Labor Code. A copy of Sections 2870,
2871 and 2872 of the California Labor Code is attached as Exhibit C.
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ARTICLE V. Non-Solicitation
5.1 During the Term of this Agreement, or if the employment provided by
Agreement is terminated by Employee or by Biosym for any reason prior to the
expiration of the Term of this Agreement, Employee shall not, for a period of
two years after the later of: (a) the Term of this Agreement, or (b) such
termination, engage in any activity which is intended directly or indirectly to
solicit, encourage, induce or attract to the employ of Employee or any other
business any person who is then an employee of or consultant (other than
consultants providing general services, such as accountants, which are not
directly related to the development, production or marketing of Biosym products
or technologies) to Biosym or offer any employment, consulting or ownership
interest to any person who is an employee or consultant to Biosym.
ARTICLE VI. Confidentiality
Employee will during the course of employment be privy to information
belonging to Biosym which information is valuable to Biosym and which
information Biosym holds in confidence. Employee undertakes with respect to
information Employee understands, or reasonably should believe to be
confidential to Biosym, or as to which Employee has been specifically advised by
Biosym that it regards to be confidential, not to disclose to third parties or
use such information except in connection with
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the performance of duties as an Employee of Biosym pursuant to this Agreement
during the Term or after the expiration or termination of this Agreement for any
reason. At the expiration of this Agreement or termination of employment
hereunder, Employee will, at Biosym's request, return to Biosym all written
confidential information received from Biosym and destroy any transcriptions or
copies Employee may have of such information, unless an alternative method of
disposition is approved by Biosym in writing. Employee's obligations under this
Article VI shall be in addition to any other confidentiality or nondisclosure
obligations of Employee to Biosym at law or under any other agreements.
ARTICLE VII. Termination and Termination
of Responsibilities
7.1 Employee shall be subject to termination of Employee's
employment during the Term by Biosym only for Cause as defined below, or
disability which prevents Employee from working for longer than six (6) months
or relieved of responsibilities as provided in Section 7.3 below.
Notwithstanding any dispute over whether a termination was properly for Cause,
Biosym may bar Employee from access to Biosym's offices, facilities and business
records after giving Employee notice of termination for Cause provided that in
the event of a dispute concerning Biosym's finding of Cause which is the subject
matter of a proceeding under Section 8.7, Employee and Employee's legal
representative
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shall have access to business records relevant to such a finding of Cause to the
extent provided in Section 8.7. "Cause" shall mean: (i) Employee's material
breach of this Agreement (other than for reasons related only to the business
performance of Biosym or business results achieved by Employee) which continues
uncured for more than five (5) days after oral or written notice by Biosym, (ii)
persistent refusal by Employee to perform assigned executive employment duties
consistent with Employee's executive position, (iii) unexcused absence for more
than two consecutive weeks (other than for reasons relating to Employee's
illness or vacation), (iv) Employee's gross negligence or willful misconduct,
(v) Employee's substance abuse for which treatment is refused, (vi) conviction
of Employee of a felony or misdemeanor (other than traffic offenses). For
purposes of subsection (iv), no act or failure to act on Employee's part shall
be considered to be reason for termination for Cause if done, or omitted to be
done, by Employee in good faith and with the reasonable belief that the action
or omission was in the best interest of Biosym and not unlawful.
7.2 Except as may be otherwise provided in applicable Biosym benefit
plans, Biosym shall not be liable to Employee for any salary or benefits
continuation beyond the date of Employee's death (except as expressly provided
herein), termination for disability (except as expressly provided herein),
voluntary termination of employment with Biosym or upon Biosym's rightful
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termination of Employee for Cause, except as may be required by law.
7.3 Employee may be relieved of responsibilities by Biosym without
Cause or Employee's consent if Biosym's Board of Directors, upon assessment of
the general business performance of Biosym and the specific performance of
Employee determines that the business needs of Biosym require the replacement of
Employee, by furnishing Employee with written notice ("Notice") of that fact
setting forth the effective date that Employee is to be so relieved of
responsibilities and provided that in such event:
(a) If the effective date of the Notice is a date prior to June 30,
1993, Employee will be entitled to Employee's base salary at the
then effective rate until June 30, 1995, together with any bonus
amounts Employee would otherwise have earned, under Section 2.4
pursuant to the Incentive Plan prior to June 30, 1995, even if
payable after June 30, 1995; provided that in any event Employee's
employment with Biosym shall be terminated effective July 1, 1995.
(b) If Employee is relieved of responsibility effective on a date prior
to June 30, 1995, but any time after June 30, 1993, Employee will
be entitled to Employee's base salary at the then
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effective rate until the second anniversary of the effective date
of such relief or June 30, 1997, whichever is earlier, together
with any bonus amounts Employee would otherwise have earned, under
Section 2.4 pursuant to the Incentive Plan prior to June 30, 1995,
even if payable later than such date; provided that Employee's
employment with Biosym shall terminate on the earlier of the day
after such second anniversary or July 1, 1997.
(c) If Employee is relieved of responsibility on or after June 30,
1995, Employee will be entitled to Employee's base salary at the
then effective rate until the end of the Term, together with any
bonus amounts Employee would otherwise have earned under Section
2.4 pursuant to the Incentive Plan prior to the effective date of
such relief.
(d) Employee shall be allowed to continue participation in Biosym
health and life insurance plans through the period in which
Employee is receiving Employee's base salary under clause (a) or
(b) above or until Employee is covered by a successor employee's
comparable benefit plans.
In the event Employee is relieved of responsibilities under this Section 7.3,
Employee shall no longer be eligible to earn any
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amounts under Section 2.4 based on Biosym financial performance subsequent to
the effective date of such change, except as expressly provided in Sections (a),
(b) and (c) above, and shall not receive any other Employee benefits described
in Article III except as expressly set forth in clause (d) above. If Employee is
to be relieved of responsibilities under this Section 7.3, Biosym will use its
best efforts to provide Employee with the opportunity to resign immediately
before the effective date of the Notice described in the first paragraph of this
Section 7.3, but Employee's resignation under those circumstances will have the
same effect under this Agreement as if Employee were relieved of
responsibilities under this Section 7.3; provided any such resignation must be
in writing and acknowledge that this Section 7.3 is applicable in accordance
with its terms. If Employee's employment responsibilities are changed or limited
under this Section 7.3, Biosym may bar Employee from access to Biosym's offices,
facilities and business records.
ARTICLE VIII. Miscellaneous
8.1 This Agreement shall be governed by and subject to the
internal laws of the State of California.
8.2 The failure of Biosym or Employee to insist in any one or more
instances upon performance of any of terms, covenants and conditions of this
Agreement, shall not be construed as a waiver
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or relinquishing of any rights granted hereunder or of the future performance of
any such terms, covenants or conditions.
8.3 All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered or
mailed, registered or certified mail, postage prepaid;
If to Biosym: Biosym Technologies, Inc.
0000 Xxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: President
------------------
with a copy to: Corning Incorporated
Xxxxxxxx Xxxx X-0-0
Xxxxxxx, Xxx Xxxx 00000
Attn: Secretary
If to Employee: Xxxx Xxxxxx
0000 Xxxxx Xx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
with a copy to:
------------------------------
------------------------------
------------------------------
Attn:
------------------------
or at such other address or addresses as any such party may have furnished to
the other party in writing.
8.4 This Agreement is for personal services and is therefore not
assignable by Employee and is assignable by Biosym only to a successor of
substantially the entire business of Biosym.
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8.5 This Agreement, including the Exhibits attached hereto and the
documents referred to herein, shall constitute the entire agreement between the
parties hereto with respect to the subject matter hereof (except as otherwise
expressly provided herein). This Agreement may not be changed, modified or any
right under it waived in any manner except by written instrument signed by both
parties expressing the plan and intention to modify this Agreement. No principle
of construction or interpretation shall be applied to construe this Agreement or
any part of it against the party which drafted the Agreement.
8.6 Any provision of this Agreement which is prohibited or
unenforceable shall be ineffective in a jurisdiction where such enforcement is
sought but only to the extent of such prohibition on unenforceability without
invalidity of the remaining provisions hereof and without affecting the validity
or enforceability of such provision in any other jurisdiction.
8.7 Any dispute with respect to any aspect hereof which cannot be
settled by the parties shall be settled by arbitration in the City of San Diego,
California and judgment upon the award rendered may be entered in any court
having jurisdiction thereof. Except as specifically provided herein, the
arbitration shall proceed in accordance with the laws of the State of
California. The party requesting arbitration shall give a written demand for
arbitration to the other party by registered or certified mail. The demand shall
set forth a statement of the nature of the
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dispute, the amount involved and the remedies sought. No later than twenty (20)
calendar days after the demand for arbitration is served, the parties shall
jointly select and appoint a retired judge of the San Diego County Superior
Court to act as the arbitrator. In the event the parties do not agree on the
selection of an arbitrator, the party seeking arbitration shall apply to the San
Diego County Superior Court for the appointment of a retired judge of that court
to serve as arbitrator. As rules for the arbitration the arbitrator shall apply
the provisions of Sections 1282 through 1284.2 of the California Code of Civil
Procedure, and the parties may pursue discovery in accordance with California
Code of Civil Procedure Section 1283.05 which shall however be limited to no
more than two depositions taken by each party and the production of only those
documents directly relevant to the dispute. No later than ten (10) calendar days
after the arbitrator is appointed, the arbitrator shall schedule the arbitration
for a hearing to commence on a mutually convenient date. The hearing shall
commence no later than one hundred twenty (120) calendar days after the
arbitrator is appointed and shall continue from day to day until completed. All
discovery shall be completed no later than the commencement of the arbitration
hearing or one hundred twenty (120) calendar days after the date that a proper
demand for arbitration is served, whichever occurs earlier unless upon a showing
of good cause the arbitrator extends or shortens that period. The arbitrator
shall issue his or her award in writing no later than twenty (20) calendar days
after the conclusion of
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the hearing. The arbitration award shall be final and binding regardless of
whether one of the parties fails or refuses to participate in the arbitration.
The arbitrator is empowered to hear all disputes between the parties concerning
the subject matter hereof, and the arbitrator may award monetary damages,
specific performance, injunctive relief, rescission, restitution, costs and
attorneys fees. The arbitrator shall have no authority to award exemplary or
punitive damages under any circumstance. Either party may request that the
arbitrator submit written findings of fact and conclusions of law.
ARTICLE IX. Condition Subsequent
This Agreement shall be null and void and of no effect if the Merger is
not consummated.
IN WITNESS WHEREOF, Biosym has executed this Agreement by its duly
authorized officer and has caused its corporate seal to
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be affixed, and Employee has individually executed this Agreement intending to
be legally bound, as of the date hereof.
"Biosym":
Biosym Technologies, Inc.,
a California corporation
By /s/ Xxxxx X. Xxxxxxx
--------------------------
Xxxxx X. Xxxxxxx, CEO
--------------------------
[Printed Name and Title]
"Employee":
/s/ Xxxx X Xxxxxx 9/22/92
--------------------------
Xxxx X. Xxxxxx
--------------------------
[Printed Name]
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COVENANT
THIS AGREEMENT is made as of this 29th day of September, 1992, by and among
Corning Incorporated, a New York corporation (hereafter "Corning"), Biosym
Technologies, Inc., a California corporation (hereafter "Biosym") and Xxxx
Xxxxxx (hereafter "Selling Holder").
RECITALS
A. In connection with entering into this Agreement, Corning is
acquiring all of the outstanding capital stock and all of the options and rights
to acquire capital stock of Biosym from Selling Holder and from the other
stockholders and option holders of Biosym and thereby is acquiring all of the
goodwill and going-concern value of Biosym.
X. Xxxxxxx intends to continue to operate Biosym, as a wholly owned
subsidiary.
C. Subsequent to the sale of Biosym, Selling Holder will be employed by
Biosym or its successors or assigns.
D. As a key employee, Selling Holder has experience and knowledge
concerning the business of Biosym, including the trade secrets of Biosym, which,
if used in any way other than
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in the proper conduct of his employment duties to Biosym or its successors or
assigns could result in substantial determinant to Biosym and to Corning; and
X. Xxxxxxx would not purchase Selling Holder's Biosym stock and options
if Biosym and Corning were exposed to such detriment.
NOW, THEREFORE, in consideration of the foregoing premises, and the
mutual covenants, terms and conditions set forth herein, the parties agree as
follows:
1. Competition. In consideration of the acquisition of all of Selling
Holder's common stock and options and rights to acquire common stock of Biosym,
Selling Holder hereby covenants to Corning and to Biosym that:
1..1 During the period of Selling Holder's employment with Biosym
(including during any leave of absence) and for two (2) years from and after the
date of cessation of employment for any reason (the "Cessation Date"), Selling
Holder shall not (i) engage in the Territory in any business competitive with
the business being carried on by Biosym; or (ii) engage in the Territory in any
business competitive with any business with respect to which Biosym has made
significant plans or expenditures.
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1..2 For purposes of this Agreement, "engage" includes without
limitation, (a) indirect and direct activities, assistance or interest, either
individually, or as a principal, partner, agent, representative, employee,
employer, consultant, independent contractor, distributor, jobber,
representative, stockholder, joint venturer, or investor, or as a director or
officer of any corporation or association, or in any other manner or capacity
whatsoever, and/or (b) record or beneficial holding, direct or indirect, of more
than 1% of the outstanding equity interests in any proprietorship, partnership,
corporation, joint venture, association or other entity.
1..3 For purposes of this Agreement, "Territory" means any one or
more of the following: (i) any city, county, or other political subdivision of
the State of California, or (ii) any city, county or other political subdivision
of any other state in the United States or (iii) any city, county or political
subdivision of any country or territory in the world, where Biosym either (x) is
selling or delivering any of its products or services or is otherwise carrying
on its business or selling activities, (y) or within the 12 months immediately
preceding the Cessation Date, has sold or delivered the Biosym products or
services or otherwise carried on its business or selling activities.
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2. Representations and Warranties. Selling Holder represents and
warrants to Corning and to Biosym as follows:
2..1 Selling Holder is familiar with the business and affairs of
Biosym, the scope and nature of business activities of Biosym and the factors
that have contributed to, and that are significant to the continuation of, the
goodwill and going-concern value of Biosym.
2..2 Selling Holder has reviewed, understands and accepts the
covenants set forth in this Agreement, including the geographic scope, the scope
of competitive activities and the term of each of the covenants set forth in
Section 1 of this Agreement.
2..3 Selling Holder acknowledges that the geographic scope
(including the definition of "Territory"), the scope of competitive activities
(including the definition of "engage") and the term of each of the covenants set
forth in Section 1 of this Agreement:
(i) were determined on the basis of evaluation of, among
other things, the markets in which Biosym currently conducts its business
activities and the time required to develop and market Biosym's products and
services.
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(ii) are reasonably directed to the protection of the
goodwill and going-concern value of Biosym acquired by Corning, and
(iii) are reasonable in light of Corning's acquisition
of all of the capital stock of Biosym and Biosym's goodwill and going-concern
value.
2..4 Selling Holder acknowledges that each of the covenants
set forth in Section 1 of this Agreement are reasonably necessary and proper to
preserve and protect Biosym's trade secrets and that Biosym's trade secrets are
a material to the going-concern value of Biosym.
3. No Solicitation. From the date hereof until two years after the
Cessation Date, Selling Holder shall not, directly or indirectly, whether as a
principal, partner, agent, employee, employer, consultant, independent
contractor, distributor, jobber, representative, stockholder, joint venturer, or
investor, or as a director or officer of any corporation or association, or in
any other manner or capacity whatsoever, (i) divert or attempt to divert from
Biosym any business with any customer or account (a) with which Selling Holder
had any contact or association, (b) which was under the supervision of Selling
Holder, or (c) the identity of which was learned by Selling Holder as a result
of employment or any other affiliate with Biosym, or (ii) induce any salesman,
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distributor, manufacturer, representative, agent, jobber, customer, or other
person transacting or who has transacted business with Biosym to terminate the
relationship or association with Biosym or represent, distribute, market,
promote or sell products or services in competition with the products and/or
services of Biosym. Selling Holder acknowledges that Biosym has trade secret
rights in its list of customers and maintains such list in confidence. For
purposes of this Agreement, "customer" includes, without limitation, any for
profit or non-profit corporation, partnership, association, joint venture,
university, government or governmental agency or other person or entity to which
Biosym has sold or furnished any of its products or services, or that has
purchased or licensed products or services in a transaction in which Biosym
acted as a sales agent, representative, distributor, jobber, value added
reseller or sublicensor, or with which Biosym had a substantial promotional
contact with a view to selling or furnishing any of its products or services, or
any other products or services with respect to which Biosym regularly acts as a
sales representative, distributor, jobber, value added reseller or sublicensor.
4. Severability. Any provision of this Agreement which is unenforceable
in any jurisdiction, shall as to such jurisdiction, be ineffective to the extent
of such unenforceability and shall to that extent be separable from all other
provisions of this Agreement, without invalidating the
30
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remaining provisions thereof or affecting the validity or enforceability of such
provision in any other jurisdiction. If a court of competent jurisdiction holds
that any provision of this Agreement is overly broad (e.g., in time or
geographic area), the breadth of such provision, as to such jurisdiction, shall
be deemed reduced to the extent necessary to make it enforceable. Furthermore,
Biosym and Selling Holder intend that each of the covenants contained in Section
1 of this Agreement shall be construed as a series of separate covenants, (1)
one for each city, county or other political subdivision of each state, country
or territory included in the definition of Territory and for each competitive
activity prohibited by Section 1, and (2) each separate covenant being for a
series of one-year periods within the time described in Section 1, so that if
the geographic, temporal or other scope of any covenant shall be determined by a
court of competent jurisdiction to be excessive, invalid or unenforceable, then
the unenforceable covenant shall be severed and the remaining covenants not also
so severed shall be deemed enforceable and remain in full force and effect. The
parties intend, and to the extent permitted by law, instruct any court of
competent jurisdiction interpreting this Agreement, that the covenants set forth
in Section 1 of this Agreement be broadly construed so as to effect the purpose
of securing to Corning and Biosym the entire goodwill and going-concern value of
Biosym.
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5. Equitable Remedies. The parties acknowledge and agree that, if
Selling Holder breaches any of the covenants contained in this Agreement, the
extent of damages to Biosym or Corning, or any successor of either of them,
would be impossible to ascertain and there is not and will not be available to
Biosym, Corning or any such successor adequate remedy at law to compensate it if
any such breach occurs. Consequently, Selling Holder agrees that if a breach of
any of such covenants occurs, in addition to any other relief to which it may be
entitled to enforce any or all of such covenants by injunctive or other
equitable relief ordered by any court of competent jurisdiction, without the
necessity of posting a bond or proving any damages.
6. Territory List. Upon the written request of Selling Holder, Biosym
shall compile and shall provide, within ninety (90) days after the Cessation
Date, to Selling Holder a list of each city, county or political subdivision
included in the definition of "Territory" as of the Cessation Date.
7. Waiver of Breach. The waiver by any party of a breach of any
provision hereof by another party shall not operate as, or be construed as, a
waiver of any subsequent similar or dissimilar breach by any party.
8. Entire Agreement. This Agreement constitutes the entire agreement
between the parties relating to the
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subject matter of this Agreement. All other contracts and agreements between the
parties which relate thereto are hereby terminated.
9. Modification. This Agreement may be amended or modified only by a
writing signed by all parties hereto.
10. Binding Effect. This Agreement shall all be binding upon the
personal representatives of the Selling Holder and shall be binding upon and
inure to the benefit of the successors and the assigns of Corning and Biosym.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without regard to
conflicts or choice of law.
12. No Assignment. Selling Holder may not assign his rights or
obligations under this Agreement.
13. Construction. This Agreement and the provisions contained herein
shall not be construed or interpreted for or against any party hereto because
that party drafted or caused that party's legal representative to draft any of
its provisions.
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14. Headings. Paragraph and section headings herein are for reference
only and shall not constitute a part of, or affect the construction or
interpretation of, this Agreement.
IN WITNESS WHEREOF, the parties hereto executed this Agreement as of
the date first above written.
"Corning":
Corning Incorporated,
a New York corporation
By /s/ C. Xxxxx Xxxxxxx
----------------------------
Its Director Corporate Development
----------------------------
[Printed Name and Title]
"Biosym":
Biosym Technologies, Inc.,
a California corporation
By /s/ Xxxxx X. Xxxxxxx
----------------------------
Its CEO
-----------------------------
[Printed Name and Title]
"Selling Holder":
Xxxx Xxxxxx
------------------------------
------------------------------
[Printed Name]
34
MEMORANDUM
DATE: June 27, 1995
TO: C. Xxxxx Xxxxxxx
FROM: Xxxx X. Xxxxxx
SUBJECT: Proposed Bonus Plan
================================================================================
I very much appreciated receiving on June 14, 1995 your memo dated June 1, 1995
relating to my employment contract.
Although I am personally unskilled in contractual legalese, I have read my full
employment contract several times and find it unambiguous as to the bonuses to
which I am eligible based on attainment of my MBO's:-
- The Notes to Exhibit A clearly state "The Total Incentive Bonus
segments outlined in (A) and (B) above are calculated independently"
(my italics)
- The Notes to Exhibit A clearly state "for example, it is possible
that for a year no amount is awardable under (a) the portion based
upon Biosym's actual OM performance, but an amount is awardable under
(B), the portion for achieving MBO objectives"
- Contract law apparently stipulates essentially that every provision
is to be interpreted such as to give it effect; the description of
the two portions of the annual bonus specified in paragraph 2.4 would
in this sense be redundant if the second, MBO-related portion were
tied to the company financial objectives as per the first portion of
the bonus awardable.
The terms detailed in my employment contract with Biosym/Corning were the sole
basis upon which I chose to execute my employment agreement with
Biosym/Corning. There was no other verbal non-documented discussions with me in
connection with the terms of this agreement. My understanding then and now was
that the annual bonus awardable based on MBO achievement was as detailed in
Exhibit A. There is nothing in my contract to indicate that the MBO-related
portions of my bonus as detailed in Exhibit A are simply "an example".
35
From the moment I signed this employment contract, 09/22/92, until July 1994,
nearly 2 years later, I was given no indication whatsoever that there was any
issue at all with it. To the contrary, the bonus paid to me promptly after the
end of June 1993, $15k, was exactly that stipulated in Exhibit A of my
employment contract based on 0% attainment of the operating plan objectives and
100% attainment of my MBO's; this bonus amount was $5k greater than that to
which I would previously have been eligible based on my earlier employment
agreement with Biosym.
I became aware that there might conceivably be a dispute over the terms of my
employment contract only in, I believe, late 1994 when I gently expressed
concern that my contract provisions were not being met in that my bonus payment
for the period ending in June 1994 had clearly not been made "promptly after it
is calculable" (section 2.4).
I have consistently, since joining Biosym, placed the priorities of the company
before my own personal priorities and those of my family. I did not negotiate
the terms of my employment with Biosym/Corning, either at the time of execution
of my employment contract or at any point since.
As I have stated previously, albeit in a different context, I had been
uncomfortable discussing compensation issues with you, as I felt that any such
discussion would inevitably prejudice the interactions that I have with you as
my direct supervisor and employer; these I value highly and, indeed, I consider
that enjoying a close and dynamic working relationship with you is a key
element of success in our collective business endeavor.
The change to my contract terms that you have proposed entails a significant
reduction in my total compensation package, >$30k through the period ending
June 30, 1997, even despite the fact that my employment agreement was
structured around a director-level position, two levels junior to my current
capacity in the organization, at the time the contract was executed. The figure
you have proposed for the period July 1 to December 31, 1994 is computed based
on a total bonus target for the fiscal year ending June 30, 1995 of $50k, $20k
less than that shown for 1995 in the Exhibit A schedule.
36
Nevertheless, I will agree to the terms you have proposed in your memo appended
here, although I would like to request one modification. My employment contract
stipulates that bonuses will be accrued according to our original fiscal year
schedule, with, accordingly, my being eligible for a bonus payment immediately
following the end of June 1995. I would like to propose then that one half of
the total bonus to which I am eligible for the calendar year 1995, namely 15%
of my salary, be computed based on half-attainment of my MBO's and, if
so-determined, paid immediately following the end of June 1995. I would then be
eligible for the remainder, namely 15% of my salary, immediately after the end
of December 1995 based on the degree to which I have then achieved 100% of my
calendar year 1995 MBO's.
Signed:
Name:
Date:
