EMPLOYMENT AGREEMENT
Exhibit 99.1
THIS
EMPLOYMENT AGREEMENT (the “Agreement”) is entered into by and between Strategic
Diagnostics Inc. (the “Company”) and Xxxxxxx X. XxXxxxx (the “Executive”) and
shall be effective as of October 13, 2008 (the “Effective Date”).
WHEREAS,
the Company desires to employ the Executive as its Chief Executive Officer and
the Executive desires to serve in such capacity on behalf of the
Company.
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and
agreements hereinafter set forth, the Company and the Executive hereby agree as
follows:
1. Employment.
(a) Term. The
term of this Agreement (the “Term”) shall begin as of the Effective Date and
shall terminate on October 13, 2011 unless sooner terminated by either party as
hereinafter provided; provided, however, that the Term shall automatically be
extended for successive one-year periods on October 13, 2011 and on each
subsequent anniversary thereof unless, not later than thirty (30) days preceding
any such anniversary date, either party gives the other party written notice (in
accordance with Section 16) of such party’s intention not to further extend the
Term.
(b) Duties. The
Executive shall serve as the President and Chief Executive Officer of the
Company and shall report to the Chairman of the Board of Directors of the
Company (the “Board”). The Executive shall perform all duties and
accept all responsibilities incident to such position as may be reasonably
assigned to him by the Board. For as long as and during such period in
which the Executive is serving as the President and Chief Executive Officer, the
Company shall use its best efforts to cause the Executive to be nominated, and,
if elected by the Company’s shareholders, the Executive shall serve as a member
of the Board.
(c) Best
Efforts. During the Term, the Executive shall devote his best
efforts and full time and attention to promote the business and affairs of the
Company and its affiliated companies, and shall be engaged in other business
activities only to the extent that such activities do not interfere or conflict
with his obligations to the Company hereunder, including, without limitation,
obligations pursuant to Section 14 below. The foregoing shall not be
construed as preventing the Executive from (1) serving on corporate, civic,
educational, philanthropic or charitable boards or committees, (2) delivering
lectures, fulfilling speaking engagements or lecturing at educational
institutions and (3) managing personal investments, so long as such activities
do not significantly interfere with the performance of the Executive’s
responsibilities hereunder. In no event shall the Executive invest in
any business competitive with the Company, except that the Executive shall be
permitted to own passively not more than five percent (5%) of the stock of those
companies whose securities are listed on a national securities
exchange.
2. Base Salary and
Bonus. As compensation for the services to be rendered
hereunder, the Company shall pay to the Executive an annual base salary of
$325,000. This amount may be subject to annual increases, as
determined by the Board, in its sole discretion. The Executive’s base
salary shall be paid in accordance with the Company’s existing payroll policies,
and shall be subject to applicable withholding taxes. The Executive
shall also be eligible for annual bonus payments if certain performance goals
and targets, established by the Compensation Committee of the Board (the
“Compensation Committee”), in its sole discretion, are met. The
performance goals and targets shall be determined by the Compensation Committee,
in its sole discretion, at the beginning of each fiscal year during the term of
this Agreement and shall be based upon the business plan and budget approved by
the Board. At the end of each fiscal year, the Compensation Committee
shall review actual performance against the applicable performance goals and
targets and shall notify the Executive of the amount of his bonus award, if
any. The Executive’s bonus shall be paid to him on or after the first
day of the fiscal year following the fiscal year for which it was earned, at the
same time and under the same terms and conditions as other executives of the
Company, but not later than March 15 of the fiscal year following the fiscal
year for which it was earned. If actual performance is below target
performance, the bonus amount payable to the Executive may be pro rated to
reflect partial satisfaction of the applicable performance goals, as determined
by the Compensation Committee, in its sole discretion. If actual
performance exceeds target performance, the bonus amount payable to the
Executive shall not be capped at the target bonus amount, subject to the
requirements of section 162(m) of the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder (the “Code”), if
applicable.
3. Equity Compensation and
Long-Term Incentive Compensation.
(a) Contemporaneously
with this Agreement, the Company shall grant to the Executive an incentive stock
option (the “Initial Option”) to purchase 250,000 shares of common stock of the
Company (“Company Stock”) with an exercise price equal to the last reported sale
price at which Company Stock is traded on the date of grant or, if no Company
Stock is traded on such date, the most recent date on which Company Stock was
traded. The Initial Option shall become exercisable in equal annual
installments over the four-year period commencing on the
first anniversary of the date of grant; provided, however, that if a Change of
Control occurs (as defined in the Company’s 2000 Stock Incentive Plan (the
“Plan”)), the Initial Option shall automatically accelerate and become fully
exercisable. The terms of the Initial Option shall be governed by the
Incentive Stock Option Agreement attached as Exhibit
A.
(b) In addition
to the foregoing grants, the Executive shall be entitled to participate in any
short-term and long-term equity incentive programs established by the Company
for its senior level executives generally, including the Plan, at levels at
least commensurate with the benefits provided to other senior executives and
with adjustments appropriate for his position as the Chief Executive Officer of
the Company.
4. Retirement and Welfare
Benefits. The Executive shall be entitled to participate in
the Company’s health, life insurance, long and short-term disability, dental,
retirement, and medical programs, if any, pursuant to their respective terms and
conditions. Nothing in this Agreement shall preclude the Company or
any affiliate of the Company from terminating or amending any employee benefit
plan or program from time to time after the effective date of this
Agreement.
5. Vacation. The
Executive shall be entitled to vacation, holiday and sick leave at levels
commensurate with those provided to other senior executive officers of the
Company, in accordance with the Company’s vacation, holiday and other pay for
time not worked policies; provided, however, that the Executive shall be
entitled to not less than four (4) weeks vacation.
6. Expenses. The
Company shall reimburse the Executive for all necessary and reasonable travel
and other business expenses incurred by the Executive in the performance of his
duties hereunder in accordance with such reasonable accounting procedures as the
Company may adopt generally from time to time for executives.
7. Perquisites. The
Executive shall be provided with such other executive perquisites as may be
provided to other senior executive officers of the Company.
8. Indemnification. The
Company shall indemnify and hold the Executive harmless to the fullest extent
permitted under the by-laws of the Company against and in respect of any and all
actions, suits, proceedings, claims, demands, judgments, costs, expenses
(including reasonable attorney’s fees), losses and damages which are based on
(a) the actions of the Company prior to or following the Effective Date, or (b)
the Executive’s good faith performance of his assigned duties and obligations
with the Company. The Company shall cover the Executive under its
directors and officers liability insurance policy both during and after the Term
to the same amount and to the same extent as the Company covers its other
officers and directors.
9. Termination Without Cause;
Resignation for Good Reason; Non-Renewal.
(a) The Company
may terminate the Executive’s employment with the Company at any time without
Cause (as defined in Section 13) from the position in which the Executive is
employed hereunder upon not less than thirty (30) days’ prior written notice to
the Executive; provided, however, that, that in the event that such notice is
given, the Executive shall be under no obligation to render any additional
services to the Company and shall be allowed to seek other
employment. In addition, the Executive may initiate a termination of
employment by resigning under this Section 9 for Good Reason (as defined in
Section 13). In the event of any such termination or resignation or
in the event the Company fails to renew the Agreement in accordance with Section
1 and the Executive is otherwise willing and able to execute a new contract
providing terms and conditions substantially similar to those in this Agreement
and to continue providing services to the Company (“Non-Renewal”), the Company’s
obligations to the Executive shall be the same as set forth in this Section 9,
before or after a Change of Control (as defined in the Plan), as
applicable.
(b) Upon any
termination, resignation or Non-Renewal described in Section 9(a) above, the
Executive shall be entitled to receive only the amount due to the Executive
under the Company’s then current severance pay plan for employees, if
any. No other payments or benefits shall be due under this Agreement
to the Executive, but the Executive shall be entitled to any benefits accrued
and earned in accordance with the terms of any applicable benefit plans and
programs of the Company.
(c) Notwithstanding the
provisions of Section 9(b), if the Executive executes and does not revoke a
written release upon any termination, resignation or Non-Renewal described in
Section 9(a) above, substantially in the form attached hereto as Exhibit B (the
“Release”), of any and all claims against the Company and all related parties
with respect to all matters arising out of the Executive’s employment by the
Company, or the termination thereof (other than claims for any entitlements
under the terms of this Agreement or under any plans or programs of the Company
under which the Executive has accrued and is due a benefit), the Executive shall
be entitled to receive, in lieu of the payment described in Section 9(b), the
following:
(1) Continuation
of the Executive’s monthly base salary (at the rate in effect immediately before
the Executive’s termination) for the eleven month period following the date of
the Executive’s termination of employment (the “Severance Period”), with
payments commencing within thirty (30) days following the date of the
Executive’s termination and made in accordance with the Company’s normal payroll
practices.
(2) Provided that
the Executive timely elects COBRA continuation coverage under the Company’s
group health plan, the Executive shall receive continued coverage under the
Company’s group health plan until the last day of the month in which the
Severance Period ends, at the level in effect on the date of the Executive’s
termination of employment (or generally comparable coverage) for the Executive
and the Executive’s spouse and dependents, as the same may be changed by the
Company from time to time for employees generally, as if the Executive had
continued in employment during such period (including any required Executive
contribution toward the cost of coverage). Thereafter, the Executive
understands that the Executive may continue COBRA coverage through the remainder
of the COBRA continuation period at the Executive’s sole expense. The
COBRA health care continuation coverage period under section 4980B of the Code,
shall run concurrently with the Severance Period.
(3) The Initial
Option shall become fully exercisable on the date of termination and the
post-termination exercise period of the Initial Option shall expire on the last
day of the three-month period commencing with the expiration of the Severance
Period or, if shorter, the period ending with the expiration of the Initial
Option’s original term. All other stock options and other equity
incentive awards granted on or after the Effective Date and held by the
Executive as of the date of the Executive’s termination of employment shall
continue to vest during the Severance Period as if the Executive had remained
employed during such period and, with respect to stock options, the
post-termination exercise period shall expire on the last day of the three-month
period commencing with the expiration of the Severance Period. The
Initial Option and all other stock options and equity incentive awards shall
otherwise be governed by the terms and conditions of the applicable grant
instrument pursuant to which they were granted.
(4) Any other
amounts earned, accrued and owing but not yet paid under Section 2 above (these
amounts are not subject to execution and non-revocation of the
Release).
10. Voluntary
Termination. The Executive may voluntarily terminate his
employment for any reason upon sixty (60) days’ prior written
notice. In such event, after the effective date of such termination,
no further payments shall be due under this Agreement, except that the Executive
shall be entitled to any benefits accrued and due in accordance with the terms
of any applicable benefit plans and programs of the Company.
11. Disability. If
the Executive incurs a Disability (as defined below) during the Term, the
Company may terminate the Executive’s employment on account of Disability,
subject to the requirements of applicable law. If the Company
terminates the Executive’s employment on account of his Disability, the
Executive shall be entitled to receive any amounts earned, accrued and owing but
not yet paid under Section 2 above and any benefits accrued and due under the
Company’s benefit plans and programs. For purposes of this Agreement,
the term “Disability” shall have the same meaning as under the Company’s
long-term disability plan.
12. Death. If
the Executive dies while employed by the Company, the Executive’s employment
shall terminate on the date of death and the Company shall pay to the
Executive’s executor, legal representative, administrator or designated
beneficiary, as applicable, any amounts earned, accrued and owing but not yet
paid under Section 2 above and any benefits accrued and earned under the
Company’s benefit plans and programs. Otherwise, the Company shall
have no further liability or obligation under this Agreement to the Executive’s
executors, legal representatives, administrators, heirs or assigns or any other
person claiming under or through the Executive.
13. Definitions.
(a) Cause. The
Company may terminate the Executive’s employment at any time for Cause (as
defined below) upon written notice to the Executive, in which event all payments
under this Agreement shall cease, except for salary to the extent already
accrued. The Executive shall be entitled to any benefits accrued and
earned before his termination in accordance with the terms of any applicable
benefit plans and programs of the Company. For purposes of this
Agreement, “Cause” shall mean any
of the following grounds for termination of the Executive’s
employment:
(1) The
Executive’s commission of a crime constituting a felony,
(2) Misconduct by
the Executive which continues for a period of at least 30 days after a written
notice to the Executive, signed by a duly authorized member of the Board, has
been delivered to the Executive specifying the misconduct in question; provided,
however, that notice to the Executive and an opportunity to cure shall not apply
to misconduct that is fraudulent or unlawful or misconduct that is or may not be
of a continuing nature, including, but not limited to, embezzling funds or
assets of the Company.
(3) The Executive
breaches Section 14 of this Agreement.
(b) Good Reason shall
mean the occurrence of any of the following events or conditions, unless the
Executive has expressly consented in writing thereto or unless the event is
remedied by the Company within thirty (30) days after receipt of notice thereof
given by the Executive in accordance with the notice requirements set forth
below:
(1) A demotion of
the Executive such that he ceases to be the chief executive officer of the
Company or any material adverse change in the scope of the Executive’s position
or responsibilities that results in an adverse change in the nature and/or scope
of the Executive’s status with the Company;
(2) A diminution
of more than twenty (20%) in the dollar amount of the Executive’s base salary,
other than as part of an across the board reduction in salaries of management
personnel (including all Vice Presidents and above);
(3) The
relocation of the Executive’s principal executive office to a location more than
fifty (50) miles from the principal executive office immediately prior to such
relocation; or
(4) The failure
of any successor of the Company or assignee of all or substantially all of its
assets to assume and agree to be bound by the terms of this
Agreement.
Notwithstanding the
foregoing, for
any of the foregoing acts (or failure to act) to constitute “Good Reason,” the
Executive must object in writing to the Company within ninety
(90) days following initial notification of the occurrence or proposed
occurrence of the act (or failure to act), and which act (or failure to act) is
not then rescinded or otherwise remedied by the Company within thirty (30) days
after delivery of such notice and the Executive actually resigns from employment
within thirty (30) days after the expiration of the foregoing thirty (30)-day
cure period. If the Executive’s resignation occurs after such time,
the resignation shall be treated as a voluntary resignation other than for Good
Reason and the Executive shall not be entitled to severance benefits under this
Agreement.
14. Restrictive
Covenants.
(a) Definitions. For
purposes of this Section 14, the following terms shall have the following
respective meanings:
(1) “Competitive Position” shall
mean (A) the direct or indirect equity ownership or control of all or any
portion of a “Competitor” (as hereinafter defined), or (B) any employment,
consulting, partnership, advisory, directorship, agency, promotional or
independent contractor arrangement between the Executive and any
Competitor.
(2) “Competitor” shall refer to
any person or entity engaged, directly or indirectly, in business activities
that are substantially comparable to any business activities conducted by the
Company, its subsidiaries or affiliates or any business activities in which the
Company, its subsidiaries or affiliates is planning or preparing to engage in as
of the date of the Executive’s termination of employment hereunder.
(3) “Confidential Information”
shall mean any and all proprietary and confidential data or information of the
Company or any of its affiliates, other than “Trade Secrets” (as hereinafter
defined), which is of tangible or intangible value to the Company, its
subsidiaries or any of its affiliates and is not public information or is not
generally known or available to the Company’s competitors but is known only to
the Company, its subsidiaries or its affiliates and their Executives,
independent contractors or agents to whom it must be confided in order to apply
it to the uses intended.
(4) “Restricted Territory” shall
mean (A) the United States of America, (B) any geographical area in which the
Company, its subsidiaries or affiliates was engaged in business as of the date
of the Executive’s termination of employment hereunder, and (C) any geographical
area in which the Company, its subsidiaries or affiliates was planning to become
engaged in business as of the date of the Executive’s termination of employment
hereunder.
(5) “Trade Secrets” shall mean
all knowledge, data and information of the Company, its subsidiaries or any of
its affiliates, which is defined as a “trade secret” under applicable
law.
(6) “Work Product” shall mean all
work product, property, data, documentation, “know-how”, concepts, plans,
inventions, improvements, techniques, processes or information of any kind,
prepared, conceived, discovered, developed or created by the Executive in
connection with the performance of his services hereunder.
(b) Acknowledgements. The
Executive hereby acknowledges and agrees that during the term of the
Agreement:
(1) The Executive
will frequently be exposed to certain Trade Secrets and Confidential
Information;
(2) The
Executive’s responsibilities on behalf of the Company will extend to all
geographical areas of the Restricted Territory; and
(3) Any
competitive activity on the Executive’s part during the term of this Agreement,
or any competitive activity on the Executive’s part in the Restricted Territory
for a reasonable period thereafter, would necessarily involve the Executive’s
use of the Company’s Trade Secrets and Confidential Information and would
unfairly threaten the Company’s legitimate business interests, including its
substantial investments in the proprietary aspects of its business and the
goodwill associated with its customer base. Moreover, the Executive
acknowledges that, in the event of the termination of this Agreement, the
Executive would have sufficient skills to find alternative, commensurate work in
his field of expertise that would not involve a violation of any of the
provisions of this Section 14. Therefore, the Executive acknowledges
and agrees that it is reasonable for the Company to require the Executive to
abide by the covenants set forth in this Section 14. The parties
acknowledge and agree that if the nature of the Executive’s responsibilities for
or on behalf of the Company or the geographical areas in which the Executive
must fulfill such responsibilities materially change, the parties will execute
appropriate amendments to the scope of the covenants in this Section
14.
(c) Non-Disclosure; Ownership of
Proprietary Property.
(1) In
recognition of the Company’s need to protect its legitimate business interests,
the Executive hereby covenants and agrees that: (A) with regard to each item
constituting a Trade Secret, at all times during which such item shall continue
a Trade Secret (before or after termination of this Agreement); and (B) with
regard to any Confidential Information, at all times (before or after
termination of this Agreement), the Executive shall regard and treat each item
constituting a Trade Secret and all Confidential Information as strictly
confidential and wholly owned by the Company and will not, for any reason, in
any fashion, either directly or indirectly, use, sell, lend, lease, distribute,
license, give, transfer, assign, show, disclose, disseminate, reproduce, copy,
misappropriate or otherwise communicate any such item or information to any
third party for any purpose other than in accordance with this Agreement or as
required by applicable law. Notwithstanding anything to the contrary
herein, each of the parties hereto (and each employee, representative, or other
agent of such parties) may disclose to any person, without limitation of any
kind, the federal income tax treatment and federal income tax structure of the
transactions contemplated hereby and all materials (including opinions or other
tax analyses) that are provided to such party relating to such tax treatment and
tax structure.
(2) The Executive
shall immediately notify the Company of any intended or unintended, unauthorized
disclosure or use of any Trade Secret or Confidential Information by the
Executive or any other person or entity of which the Executive becomes
aware. The Executive shall cooperate fully with the Company in the
procurement of any protection of the Company’s rights to or in any of the Trade
Secrets or Confidential Information.
(3) Immediately
upon expiration or termination of this Agreement of any reason, or if notice or
termination is required hereunder, upon receipt of such notice, or at any time
after such termination or notice upon the specific request of the Company, the
Executive shall return to the Company all written or descriptive materials of
any kind in the Executive’s possession or to which the Executive has access that
constitutes or contain any Confidential Information or Trade Secret, and the
confidential obligations described in this Agreement shall continue until their
expiration under the terms of this Agreement.
(4) To the
greatest extent possible, any Work Product shall be deemed to be “work made for
hire” (as defined in the Copyright Act, 17 U.S.C.A. section 101 et seq., as amended) and
owned exclusively by the Company. The Executive hereby
unconditionally and irrevocably transfers and assigns to the Company all rights,
title and interest the Executive currently has or in the future may have, by
operation of law or otherwise, in or to any Work Product, including without
limitation, all patents, copyrights, trademarks, service marks and other
intellectual property rights. The Executive agrees to execute and
deliver to the Company any transfers, assignments, documents or other
instruments which the Company may deem necessary or appropriate to vest complete
title and ownership of any Work Product, and all rights therein, exclusively in
the Company.
(d) Non-Competition. In
recognition of the Company’s need to protect its legitimate business interests,
the Executive hereby covenants and agrees that during the term of this
Agreement, the Executive will not, either directly or indirectly, alone or in
conjunction with any other party, accept, enter into or take any action in
furtherance of a Competitive Position. The Executive further agrees
that for twelve (12) months following expiration or
termination of this Agreement for any reason, the Executive will not, either
directly or indirectly, alone or in conjunction with any other party, accept,
enter into or take any action in furtherance of a Competitive Position within
the Restricted Territory (other than action to reject an offer of a Competitive
Position.
(e) Non-Solicitation of
Customers. The Executive hereby covenants and agrees that (A)
during the term of this Agreement, the Executive will not, either directly or
indirectly, alone or in conjunction with any other party, solicit, divert or
appropriate, or attempt to solicit, divert or appropriate any customer or
actively sought prospective customer of the Company for the purpose of providing
such customer or actively sought prospective customer with services or products
competitive with those offered by the Company during the term of this Agreement;
and (B) for a period of two (2) years following expiration or
termination of the term of this Agreement for any reason, the Executive will
not, either directly or indirectly, alone or in conjunction with any other party
solicit, divert or appropriate or attempt to solicit, divert or appropriate any
customer or actively sought prospective customer of the Company for the purpose
of providing such customer or actively sought prospective customer with services
or products competitive with those offered by the Company during the term of
this Agreement. For purposes of this subsection (e), “actively sought
prospective customer” shall mean any actively sought prospective customer with
call activity during the ninety (90) day period immediately preceding the date
of the Executive’s termination.
(f) Non-Solicitation of Company
Personnel. The Executive hereby agrees that during the term of
this Agreement, except to the extent that he is required to do so in connection
with his responsibilities hereunder, the Executive will not either directly or
indirectly, alone or in conjunction with any other party solicit or attempt to
solicit any employee, consultant, contractor or other personnel of the Company
to terminate, alter or lessen such party’s affiliation with the
Company. The Executive further agrees that during the two (2) years
period following expiration or termination of this Agreement for any reason, the
Executive will not, either directly or indirectly, alone or in conjunction with
any other party solicit any “key” (as that term is hereinafter defined)
employee, consultant, contractor or other personnel of the Company to terminate,
alter or lessen such party’s affiliation with the Company or to violate the
terms of any agreement or understanding between such party and the
Company. For purposes of the preceding sentence “key” employee,
consultant, contractor or other personnel of the Company are those with
knowledge of or access to the Company’s Trade Secrets or Confidential
Information.
(g) Remedies. The
Executive agrees that damages at law for the Executive’s violation of any of the
covenants in this Section 14 would not be an adequate or proper remedy and that,
should the Executive violate or threaten to violate any of the provisions of
such covenants, the Company or its successors or assigns shall be entitled to
seek a temporary or permanent injunction against the Executive in any court
having jurisdiction prohibiting any further violation of any such covenants, in
addition to any award or damages (compensatory, exemplary or otherwise) for such
violation. The Executive agrees not to raise as a defense to such
action that the Company has an adequate remedy at law.
(h) Partial
Enforcement. The Company has attempted to limit the rights of
the Executive to compete only to the extent necessary to protect the Company
from unfair competition. The Company, however, agrees that, if the
scope of enforcement of any of these restrictive covenants is in any way
disputed at any time, a court of other trier of fact may modify and enforce such
covenant to the extent that it believes to be reasonable under the circumstances
existing at the t time.
(i) Survival. Notwithstanding
any expiration or termination of this Agreement, the provisions of this Section
14 shall survive and remain in full force and effect, as shall any other
provision hereof that, by its terms and reasonable interpretation thereof, sets
forth obligations that extend beyond the termination of this
Agreement.
15. No Mitigation or Set
Off. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and such
amounts shall not be reduced, regardless of whether the Executive obtains other
employment. The Company’s obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any circumstances, including, without limitation, any
set-off, counterclaim, recoupment, defense or other right which the Company may
have against the Executive or others.
16. Notices. All
notices and other communications required or permitted under this Agreement or
necessary or convenient in connection herewith shall be in writing and shall be
deemed to have been given when hand delivered or mailed by registered or
certified mail, as follows (provided that notice of change of address shall be
deemed given only when received):
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If
to the Company, to:
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Strategic
Diagnostics Inc.
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000
Xxxxxxxx Xxxxx
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Xxxxxx,
Xxxxxxxx 00000
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Attention:
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With
a required copy to:
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Xxxxxx,
Xxxxx & Xxxxxxx LLP
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0000
Xxxxxx Xxxxxx
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Xxxxxxxxxxxx,
XX 00000-0000
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Attention: Xxx
Xxxxxx Xxxxx, Esquire
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If
to the Executive, to:
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Xxxxxxx
X. XxXxxxx
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[Address]
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With
a required copy to:
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or to
such other names or addresses as the Company or the Executive, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.
17. Withholding. All
payments under this Agreement shall be made subject to applicable tax
withholding, and the Company shall withhold from any payments under this
Agreement all federal, state and local taxes as the Company is required to
withhold pursuant to any law or governmental rule or
regulation. Except as specifically provided otherwise in this
Agreement, the Executive shall bear all expense of, and be solely responsible
for, all federal, state and local taxes due with respect to any payment received
under this Agreement.
18. Remedies Cumulative; No
Waiver. No remedy conferred upon a party by this Agreement is
intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to any other remedy given under
this Agreement or now or hereafter existing at law or in equity. No
delay or omission by a party in exercising any right, remedy or power under this
Agreement or existing at law or in equity shall be construed as a waiver
thereof, and any such right, remedy or power may be exercised by such party from
time to time and as often as may be deemed expedient or necessary by such party
in its sole discretion.
19. Assignment. All
of the terms and provisions of this Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respective heirs, executors,
administrators, legal representatives, successors and assigns of the parties
hereto, except that the duties and responsibilities of the Executive under this
Agreement are of a personal nature and shall not be assignable or delegable in
whole or in part by the Executive. The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company, within 15 days of such succession, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent as
the Company would be required to perform if no such succession had taken
place.
20. Entire
Agreement. This Agreement sets forth the entire agreement of
the parties hereto and supersedes any and all prior agreements and
understandings concerning the Executive’s employment by the
Company. This Agreement may be changed only by a written document
signed by the Executive and the Company.
21. Severability. If
any provision of this Agreement or application thereof to anyone or under any
circumstances is adjudicated to be invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall not affect any other provision or
application of this Agreement which can be given effect without the invalid or
unenforceable provision or application and shall not invalidate or render
unenforceable such provision or application in any other
jurisdiction. If any provision is held void, invalid or unenforceable
with respect to particular circumstances, it shall nevertheless remain in full
force and effect in all other circumstances.
22. Governing
Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the substantive and procedural laws of the State of
Delaware without regard to rules governing conflicts of law.
23. Consent to
Jurisdiction. The Executive irrevocably and unconditionally
(a) agrees that any legal proceeding arising out of or in connection with this
Agreement shall be brought in the United States District Court for the District
of Delaware, or if such court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in Newark, Delaware (b)
consents to the non-exclusive jurisdiction of such court in any such proceeding,
and (c) waives any objection to the laying of venue of any such proceeding in
any such court. The Executive also irrevocably and unconditionally
consents to the service of any process, pleadings, notices or other papers in
connection with any such proceeding.
24. Waiver of Jury
Trial.
(a) Each party
acknowledges and agrees that any controversy that may arise under this Agreement
is likely to involve complicated and difficult issues, and therefore each party
hereby irrevocably and unconditionally waives any right that such party may have
to a trial by jury in respect of any litigation directly or indirectly arising
out of or relating to this Agreement or the employment relationship contemplated
hereby.
(b) Each party
certifies and acknowledges that (1) no representative, agent or attorney of the
other party has represented, expressly or otherwise, that such other party would
not, in the event of litigation, seek to enforce the foregoing waiver, (2) such
party understands and has considered the implications of such waiver, (3) such
party makes such waiver voluntarily and (d) such party has been induced to enter
into this Agreement by, among other things, the mutual waiver and certifications
in this Section 24.
25. Application of Section 409A
of the Code.
(a) This
Agreement is intended to comply with the requirements of section 409A of the
Code, and specifically, with the “short-term deferral exception” under Treas.
Reg. section 1.409A-1(b)(4) and the “separation pay exception” under Treas. Reg.
section 1.409A-1(b)(9)(iii), and shall in all respects be administered in
accordance with section 409A of the Code. If any payment or benefit
hereunder cannot be provided or made at the time specified herein without
incurring sanctions on the Executive under section 409A of the Code, then such
payment or benefit shall be provided in full at the earliest time thereafter
when such sanctions will not be imposed. For purposes of section 409A
of the Code, all payments to be made upon a termination of employment under this
Agreement may only be made upon a “separation from service” (within the meaning
of such term under section 409A of the Code), each payment made under this
Agreement shall be treated as a separate payment, the right to a series of
installment payments under this Agreement is to be treated as a right to a
series of separate payments, and if a payment is not made by the designated
payment date under this Agreement, the payment shall be made by December 31 of
the calendar year in which the designated date occurs. To the extent
that any payment provided for hereunder would be subject to additional tax under
section 409A of the Code, or would cause the administration of this Agreement to
fail to satisfy the requirements of section 409A of the Code, such provision
shall be deemed null and void to the extent permitted by applicable law, and any
such amount shall be payable in accordance with 6(b) below. In no
event shall the Executive, directly or indirectly, designate the calendar year
of payment.
(b) Notwithstanding
anything herein to the contrary, if it is necessary to postpone the commencement
of any payments or benefits otherwise payable under this Agreement as a result
of the Executive’s separation from service with the Company to prevent any
accelerated or additional tax under section 409A of the Code, then the Company
will postpone the commencement of the payment of any such payments or benefits
hereunder (without any reduction in such payments or benefits ultimately paid or
provided to the Executive) that are not otherwise paid within the “short-term
deferral exception” under Treas. Reg. section 1.409A-1(b)(4) and the “separation
pay exception” under Treas. Reg. section 1.409A-1(b)(9)(iii), until the first
payroll date that occurs after the date that is six months following the
Executive’s separation of service with the Company. If any payments
are postponed due to such requirements, such postponed amounts will be paid to
the Executive in a lump sum on the first payroll date that occurs after the date
that is six months following the Executive’s separation of service with the
Company. If the Executive dies during the postponement period prior
to the payment of postponed amount, the amounts withheld on account of section
409A of the Code shall be paid to the personal representative of the Executive’s
estate within sixty (60) days after the date of the Executive’s
death.
(c) All
reimbursements provided under this Agreement shall be made or provided in
accordance with the requirements of section 409A of the Code, including, where
applicable, the requirement that (i) any reimbursement shall be for expenses
incurred during the Executive’s lifetime (or during a shorter period of time
specified in this Separation Agreement), (ii) the amount of expenses eligible
for reimbursement during a calendar year may not affect the expenses eligible
for reimbursement in any other calendar year, (iii) the reimbursement of an
eligible expense will be made on or before the last day of the calendar year
following the year in which the expense is incurred and (iv) the right to
reimbursement is not subject to liquidation or exchange for another
benefit.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
and year first above written.
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STRATEGIC
DIAGNOSTICS INC.
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By:
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/s/ Xxxxxxx Xxxxxxxxxxxx
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Name:
Xxxxxxx Xxxxxxxxxxxx
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Title:
Chief Financial Officer
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EXECUTIVE
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| /s/ Xxxxxxx X. XxXxxxx | |||
| Xxxxxxx X. XxXxxxx | |||
EXHIBIT
A
INCENTIVE STOCK OPTION
AGREEMENT
STRATEGIC
DIAGNOSTICS INC.
2000
STOCK INCENTIVE PLAN
INCENTIVE
STOCK OPTION AGREEMENT
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No.
of Shares: 250,000
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October
13, 2008
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In accordance with the Strategic
Diagnostics Inc. 2000 Stock Incentive Plan (the “Plan”), Strategic Diagnostics
Inc. (the “Company”) hereby grants to Xxxxxxx XxXxxxx (the “Optionee”) an option
(the “Option”) to purchase on or prior to October 13, 2018 (the “Expiration
Date”) all or any part of Two Hundred Fifty Thousand (250,000) shares (the
“Option Shares”) of “Stock” (as defined in Section 2 of the Plan) at
a price of $1.50 per share of Stock in accordance with the schedule set forth in
Section 1 hereof and subject to the terms and conditions set forth hereinafter
and in the Plan. This Option shall be construed in a manner to
qualify it as an incentive stock option under Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”), to the maximum extent
permitted.
1. Vesting of
Option. Subject to the provisions of Sections 4 and 5 hereof
and the discretion of the board of directors of the Company (the “Board”) to
accelerate the vesting schedule hereunder, this Option shall become vested and
exercisable with respect to the following number of Option Shares according to
the timetable set forth below:
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Cumulative
Number of Option
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Date
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Shares Available for
Exercise
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10/13/09
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62,500
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10/13/10
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62,500
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10/13/11
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62,500
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10/13/12
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62,500
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2. Manner of
Exercise. The Optionee may exercise this Option only in the
following manner: from time to time on or prior to the Expiration Date of this
Option, the Optionee may give written notice to the Board of Optionee's election
to purchase some or all of the vested Option Shares purchasable at the time of
such notice as determined in accordance with the vesting schedule set forth in
Section 1 hereof. Said notice shall specify the number of shares of
Stock to be purchased.
(a) Payment of
the purchase price for the Option Shares may be made by one or more of the
following methods: (i) in cash, by certified or bank check or other instrument
acceptable to the Board; or (ii) in the form of shares of Stock that are not
then subject to restrictions under any Company plan (subject to the Board's
discretion); or (iii) by the Optionee delivering to the Company a properly
executed exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Company cash or a check payable and acceptable to the
Company to pay the option purchase price; provided that in the event the
Optionee chooses to pay the option purchase price as to provided, the Optionee
and the broker shall comply with such procedures and enter into such agreements
of indemnity and other agreements as the Board shall prescribe as a condition of
such payment procedure. Payment instruments will be received subject
to collection.
(b) The delivery of
certificates representing the Option Shares will be contingent upon the
Company's receipt from the Optionee of full payment therefor, as set forth
above, and any agreement, statement or other evidence as the Company may require
to satisfy itself that the issuance of Option Shares to be purchased pursuant to
the exercise of Options under this Agreement and any subsequent resale of the
shares of Stock will be in compliance with applicable laws and
regulations.
(c) If requested upon the
exercise of this Option, certificates for shares may be issued in the name of
the Optionee jointly with another person or in the name of the executor or
administrator of the Optionee's estate.
(d) Notwithstanding any
other provision hereof or of the Plan, no portion of this Option shall be
exercisable after the Expiration Date hereof.
3. Non-transferability of
Option. This Option shall not be transferable by the Optionee otherwise
than by will or by the laws of descent and distribution and this Option shall be
exercisable, during the Optionee's lifetime, only by the Optionee.
4. Termination of
Employment. If the Optionee's employment by the Company or a
Subsidiary (as defined in Section 1 of the Plan) is terminated, the period
within which to exercise the Option shall be subject to the provisions set forth
below. For this purpose, an approved leave of absence or a transfer
of employment from the Company to a Subsidiary, from a Subsidiary to the Company
or from a Subsidiary to another Subsidiary shall not be deemed a “termination of
Optionee's employment.”
(a) Termination Due to
Death. If the Optionee’s employment terminates by reason of
death, this Option may be exercised, to the extent exercisable at the date of
death, by the Optionee’s legal representative or legatee for a period of one
hundred eighty (180) days from the date of death or until the Expiration Date,
if earlier.
(b) Termination Due to
Disability. If the Optionee's employment terminates by reason
of Disability (as defined in Section 1 of the Plan), this Option may be
exercised, to the extent exercisable on the date of termination, for a period of
twelve (12) months from the date of termination or until the Expiration Date, if
earlier.
(c) Termination for
Cause. If the Optionee’s employment by the Company and its
Subsidiaries has been terminated for Cause (as defined in Section 1 of the
Plan), this Option shall immediately terminate and be of no further force and
effect.
(d) Other
Termination. Unless otherwise determined by the Board, if the
Optionee’s employment by the Company and its Subsidiaries terminates for any
reason other than death, Disability, or for Cause, this Option may thereafter be
exercised, to the extent it was exercisable on the date of termination of
employment, for three (3) months (or such longer period as the Board shall
specify at any time) from the date of termination of employment or until the
expiration of the stated term of this Option, if earlier.
5. Change of
Control. In the event of a “Change of Control” (as defined in
Section 12 of the Plan) while the Optionee is employed by the Company and its
Subsidiaries, all of the Option Shares granted pursuant to Section 1 hereof
shall immediately become vested and exercisable in accordance with the terms
hereof.
6. Option
Shares. The Option Shares are shares of Stock of the Company
as constituted on the date of this Option, which are subject to adjustment as
provided in Section 3(b) of the Plan.
7. No Special Employment
Rights. This Option will not confer upon the Optionee any
right with respect to continuance of employment by the Company or a Subsidiary,
nor will it interfere in any way with right of the Company or any Subsidiary to
terminate the Optionee's employment at any time.
8. Rights as a
Shareholder. The Optionee shall have no rights as a
shareholder with respect to any shares of Stock which may be purchased by
exercise of this Option unless and until a certificate or certificates
representing such shares are duly issued and delivered to the
Optionee. Except as otherwise expressly provided in the Plan, no
adjustment shall be made for dividends or other rights for which the record date
is prior to the date such stock certificate is issued.
9. Qualification under Section
422. It is understood and intended that the Option granted
hereunder shall qualify as an “incentive stock option” as defined in Section 422
of the Code to the maximum extent permitted by law. Accordingly, the
Optionee understands that the loss of the benefits of an incentive stock option
under Section 422 of the Code may result from a sale or other disposition of any
shares of Stock acquired upon exercise of the Option within the one-(1) year
period beginning on the day after the day of the transfer of such shares of
Stock to the Optionee, or within the two-(2) year period beginning on the day
after the grant of the Option. If the Optionee intends to dispose or
does dispose (whether by sale, gift, transfer or otherwise) of any such shares
of Stock within said periods, the Optionee will notify the Company within thirty
(30) days after such disposition. In addition, no more than One
Hundred Thousand Dollars ($100,000) of the aggregate fair market value (as
defined in the Plan) of Stock Options (as defined in Section 1 of the Plan)
granted under the Plan may become exercisable for the first time by the Optionee
during any calendar year and be treated as incentive stock options under Section
422 of the Code.
10. Tax
Withholding. No later than the date as of which part or all of
the value of any of the Option Shares first becomes includable in the Optionee's
gross income for Federal tax purposes, the Optionee shall make arrangements with
the Company in accordance with Section 8 of the Plan regarding the payment of
any Federal, state or local taxes required to be withheld with respect to the
income.
11. The
Plan. In the event of any discrepancy or inconsistency between
this Option and the Plan, the terms and conditions of the Plan shall control,
provided that, it is
understood and acknowledged that in the event of a Change of Control, the
provisions of Section 5 of this Option shall control.
12. Modification, Extension and
Renewal of Option. Subject to the terms and conditions of the
Plan, the Board may modify, extend or renew an Option, or accept the surrender
of an Option (to the extent not theretofore exercised), provided that no such
modification of an Option which adversely affects the Optionee shall be made
without the consent of the Optionee.
13. Miscellaneous. Notices
hereunder shall be mailed or delivered to the Company at its principal place of
business and shall be mailed or delivered to Optionee at the address set forth
below or, in either case, at such other address as one party may subsequently
furnish to the other party in writing.
[Signature
page follows]
14. Counterparts. This
Option may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which together constitute one and the same
instrument.
| STRATEGIC DIAGNOSTICS INC. | |||
|
By:
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/s/ Xxxxxxx X. Xxxxxxxxxxxx
|
||
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Strategic
Diagnostics Inc.
|
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Receipt of the foregoing Option is
acknowledged and its terms and conditions are hereby agreed to:
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/s/ Xxxxxxx X. XxXxxxx
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Optionee:
Xxxxxxx XxXxxxx
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Date:
10/13/2008
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Address:
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EXHIBIT
B
GENERAL
RELEASE
1. I, Xxxxxxx X.
XxXxxxx, the Executive, for and in consideration of certain payments to be made
and the benefits to be provided to me under the Employment Agreement, dated as
of October 13, 2008 (the “Agreement”) with Strategic Diagnostics Inc. (the
“Company”), and conditioned upon such payments and provisions, do hereby REMISE,
RELEASE, AND FOREVER DISCHARGE the Company and each of its past or present
subsidiaries and affiliates, its and their past or present officers, directors,
shareholders, employees and agents, their respective successors and assigns,
heirs, executors and administrators, the pension and employee benefit plans of
the Company, or of its past or present subsidiaries or affiliates, and the past
or present trustees, administrators, agents, or employees of the pension and
employee benefit plans (hereinafter collectively included within the term the
“Company”), acting in any capacity whatsoever, of and from any and all manner of
actions and causes of actions, suits, debts, claims and demands whatsoever in
law or in equity, which I ever had, now have, or hereafter may have, or which my
heirs, executors or administrators hereafter may have, by reason of any matter,
cause or thing whatsoever from the beginning of my employment with the Company
to the date of these presents and particularly, but without limitation of the
foregoing general terms, any claims arising from or relating in any way to my
employment relationship and the termination of my employment relationship with
the Company, including but not limited to, any claims which have been asserted,
could have been asserted, or could be asserted now or in the future under any
federal, state or local laws, including any claims under the Age Discrimination
in Employment Act (“ADEA”), 29 U.S.C. §621 et seq., Title VII of
the Civil Rights Act of 1964, 42 U.S.C. §2000e et seq., the Delaware
Fair Employment Practices Act, any contracts between the Company and me and any
common law claims now or hereafter recognized and all claims for counsel fees
and costs; provided, however, that this Release shall not apply to any
entitlements under the terms of the Agreement or under any other plans or
programs of the Company in which I participated and under which I have accrued
and become entitled to a benefit other than under any Company separation or
severance plan or programs. Notwithstanding the foregoing, I
understand that I shall be indemnified by the Company as to any liability, cost
or expense for which I would have been indemnified during employment, in
accordance with the Company’s certificate of incorporation or insurance
coverages to the extent in force for employees of the Company serving in
executive capacities generally and for actions taken on behalf of the Company
within the scope of my employment by the Company.
2. Subject to the
limitations of paragraph 1 above, I expressly waive all rights afforded by any
statute which expressly limits the effect of a release with respect to unknown
claims. I understand the significance of this release of unknown
claims and the waiver of statutory protection against a release of unknown
claims.
3. I hereby agree and
recognize that my employment by the Company was permanently and irrevocably
severed on ___________________, 20__ and the Company has no obligation,
contractual or otherwise to me to hire, rehire or reemploy me in the
future. I acknowledge that the terms of the Agreement provide me with
payments and benefits which are in addition to any amounts to which I otherwise
would have been entitled.
4. I hereby agree and
acknowledge that the payments and benefits provided by the Company are to bring
about an amicable resolution of my employment arrangements and are not to be
construed as an admission of any violation of any federal, state or local
statute or regulation, or of any duty owed by the Company and that the Agreement
was, and this Release is, executed voluntarily to provide an amicable resolution
of my employment relationship with the Company.
5. I hereby acknowledge
that nothing in this Release shall prohibit or restrict me from: (i) making any
disclosure of information required by law; (ii) providing information to, or
testifying or otherwise assisting in any investigation or proceeding brought by,
any federal regulatory or law enforcement agency or legislative body, any
self-regulatory organization, or the Company’s designated legal, compliance or
human resources officers; or (iii) filing, testifying, participating in or
otherwise assisting in a proceeding relating to an alleged violation of any
federal, state or municipal law relating to fraud, or any rule or regulation of
the Securities and Exchange Commission or any self-regulatory organization.
6. I hereby certify that
I have read the terms of this Release, that I have been advised by the Company
to discuss it with my attorney, that I have received the advice of counsel and
that I understand its terms and effects. I acknowledge, further, that
I am executing this Release of my own volition with a full understanding of its
terms and effects and with the intention of releasing all claims recited herein
in exchange for the consideration described in the Agreement, which I
acknowledge is adequate and satisfactory to me. None of the above
named parties, nor their agents, representatives, or attorneys have made any
representations to me concerning the terms or effects of this Release other than
those contained herein.
7. I hereby acknowledge
that I have been informed that I have the right to consider this Release for a
period of 21 days prior to execution. I also understand that I have
the right to revoke this Release for a period of seven days following execution
by giving written notice to the Company at 000 Xxxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxx 00000, Attention: _________________.
8. I hereby further
acknowledge that the terms of Section 14 of the Agreement continue to apply for
the balance of the time periods provided therein and that I will abide by and
fully perform such obligations.
Intending to be legally bound hereby, I
execute the foregoing Release this ___ day of _____________, 20
___.
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Witness
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Executive
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