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EXHIBIT 10.31
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of December 9, 1997, by and between XENOMETRIX,
INC. a Delaware corporation (the "Corporation"), and XXXX X. XXXXXXXXXX (the
"Employee").
WITNESSETH:
WHEREAS, the Corporation desires to employ the Employee and the Employee desires
to be employed by the Corporation as its Vice President of Legal Affairs and
Secretary of the Corporation, all pursuant to the terms and conditions
hereinafter set forth; and
WHEREAS, the Employee recognizes that the Corporation is at this point in its
development dependent upon his capabilities, that its products during its first
years of operation may be few in number and limited in scope, and that the
imposition of the restriction set forth below upon the Employee and other key
employees and advisors may be essential to the success of the Corporation and
the livelihood of the Employee's associates in the Corporation;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises and
covenants herein contained, it is agreed as follows:
1. EMPLOYMENT; DUTIES.
a) The Corporation engages and employs the Employee, and the Employee
hereby accepts engagement and employment, as the Vice President of
Legal Affairs and Secretary of the Corporation. During the Employment
Period (as hereinafter defined), the Employee shall have
responsibility for legal affairs of the Corporation and performing
such other services and duties, consistent with the office of Vice
President of Legal Affairs and Secretary of the Corporation, as he may
from time to time be reasonably requested to perform by the President
and/or Board of Directors of the Corporation (the "Board"). In
performing his duties hereunder, the Employee shall report directly to
the President of the Corporation. If requested by the Corporation and
duly elected or appointed, the Employee will also serve as a director
of the Corporation without additional compensation.
b) The Employee shall be located within a reasonable distance from
Boulder, Colorado so as to be able to perform his duties hereunder
from the Corporation's executive offices which will be located in
Boulder, Colorado; provided, however, that the Employee acknowledges
and agrees that the performance by the Employee of this duties
hereunder may require significant domestic and international travel by
the Employee.
c) During the Employment Period, the Employee shall devote his full time
and best efforts to the business and affairs of the Corporation.
Notwithstanding the foregoing, the Employee shall be permitted to
serve on the board of directors of commercial and charitable
organization and to make investments which are not related to the
business and affairs of the Corporation for which he may receive
compensation, so long as such activities or investments do not
interfere with the performance of the Employee's duties and
obligations hereunder. Employee and the Board of Directors will
periodically review such outside commitments to insure that such
commitments do not interfere with the Employee's duties with the
Company.
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2. TERM.
The term of employment under this Agreement shall be for a period commencing on
December 9, 1997 and continuing through October 5, 1998. The term of employment
referred to in this Section 2, together with any extensions thereof shall be
referred to herein collectively as the "Employment Period".
3. COMPENSATION AND BENEFITS.
As compensation for the performance of his duties on behalf of the Corporation,
the Employee shall be compensated as follows:
a) During the period under this Agreement commencing on December 9, 1997
and ending on October 5, 1998, the Corporation shall pay or cause to
be paid to the Employee a base salary at an annual rate of $120,000,
payable in substantially equal installments in accordance with the
Corporation's usual practice. The Employee's annual salary for any
subsequent periods contemplated hereunder, shall be reviewed by the
Board of Directors not less often than annually and the Board of
Directors shall grant increases thereof based on the performance of
the Corporation and the Employee's relative contribution to that
performance. The annual base salary payable in any year pursuant to
this Agreement is hereinafter known as the "Annual Salary." Any
increase in Annual Salary or other compensation shall in no way limit
or reduce any other obligation of the Corporation hereunder. The
Corporation shall withhold all applicable federal, state and local
taxes, social security and workers' compensation contributions and
such other amounts as may be required by law or agreed upon by the
parties with respect to the compensation payable to the Employee
pursuant to this Section 3(a).
b) In addition to an Annual Salary, for the fiscal year ending June 30,
1998, the Employee shall be entitled to receive as incentive
compensation a cash bonus pursuant to a bonus plan, the terms and
payment of which shall be mutually agreed upon by the Board of
Directors and the Employee (the "Bonus Plan").
c) The corporation shall reimburse the Employee for all reasonable
expenses incurred by the Employee in furtherance of the business and
affairs of the Corporation, including reasonable travel and
entertainment, against receipt by the Corporation of appropriate
vouchers or other proof of the Employee's expenditures and otherwise
in accordance with such policies and procedures as may from to time be
adopted by the Company.
d) The Employee shall be entitled to the number of paid vacation days in
each calendar year determined by the Corporation from time to time for
its officers, but not less than two weeks in any calendar year. The
Employee shall also be entitled to all paid holidays given to the
Corporation's officers.
e) The Corporation shall make available to the Employee and his
dependents such retirement, life insurance, health insurance and
disability benefits as the Corporation makes available to its other
officers.
4. NON-COMPETITION.
a) The Employee understands and recognizes that his services to the
Corporation are special and unique and agrees that, during the term of
this Agreement and for a period of two (2) years from the date of
termination of his employment hereunder, he shall not in any manner,
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directly or indirectly, on behalf of himself or any person, firm,
partnership, joint venture, corporation or other business entity (a
"Person"), enter into or engage in any business competitive with the
Corporation's business, proposed business or research activities,
either as an individual for his own account, or as a partner, joint
venture, executive, agent, consultant, sales or marketing person,
officer, director of shareholder (other than passive investment of not
more than five percent (5%) of the outstanding shares of, or any other
equity interest in, any company or entity listed or traded on a
national securities exchange or an interest in a partnership for which
the Employee does not exercise control over investment decisions of
such partnership) of a Person operating or selling or intending to
operate or sell in the areas of business and within the product
markets listed in Schedule 1 attached hereto, within the geographic
area of the Corporation's business. Schedule I hereto shall be amended
from time to time upon agreement by the parties hereto to take into
account additional areas of business and product markets in which the
Corporation may become engaged.
b) During the term of this Agreement and for two (2) years thereafter,
the Employee shall not, directly or indirectly, without the prior
written consent of the corporation interfere with the business of the
Company by soliciting, attempting to solicit, inducing, or otherwise
causing any employee of the Company to terminate his or her employment
in order to become an employee, consultant or independent contractor
to or for any competitor of the Company.
c) In the event that the Employee breaches any provisions of this Section
4 or there is a threatened breach, then, in addition to any other
rights which the Corporation may have, the Corporation shall be
entitled, without the posting of a bond or other security, to
injunctive relief to enforce the restrictions contained herein. In the
event that an actual proceeding is brought in equity to enforce the
provisions of this Section 4, the Employee shall not urge as a defense
that there is an adequate remedy at law nor shall the Corporation be
prevented from seeking any other remedies which may be available.
5. TERMINATION.
a) DEATH OR RETIREMENT. The Employee's employment hereunder shall
terminate upon his death or retirement.
b) DISABILITY. If, as a result of the Employee's incapacity due to
physical or mental illness ("Disability"), the Employee shall have
been absent from his duties hereunder for ninety (90) consecutive
business days, and within thirty (30) days after written Notice of
Termination (as hereinafter defined) is given shall not have returned
to the performance of his duties hereunder on a full-time basis, the
Corporation may terminate the Employee's employment hereunder.
c) CAUSE. The Corporation may terminate the Employee's employment
hereunder for "Cause". For purposes of this Agreement, "Cause" shall
mean (i) the willful engaging by the Employee in gross misconduct
materially injurious to the Corporation, (ii) the willful and material
violation by the Employee of the provisions of Section 4 hereof or of
the Proprietary Agreement, or (iii) the willful and material violation
by the Employee of any provision of this Agreement, other than Section
4 hereof or of the Proprietary Agreement, which is not cured by the
Employee within fifteen (15) days after written notice thereof from
the Corporation. For purposes of this paragraph, no act, or failure to
act, on the Employee's part shall be considered "willful" unless done,
or omitted to be done, by him not in good faith and without reasonable
belief that his action or omission was in the best interest of the
corporation. Notwithstanding the foregoing, the Employee shall not be
deemed to have been
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terminated for Cause unless and until there shall have been delivered
to the Employee a copy of a resolution, duly adopted by the Board of
Directors at a meeting of the Board of Directors called and held
(after five (5) days notice to the Employee of such meeting and an
opportunity for him, together with his counsel, to be heard before the
Board of Director at such meeting) for the purposes of finding that in
the good faith opinion of the Board of Directors, the Employee was
guilty of conduct set forth above in clauses (i), (ii) or (iii) of
this Section 5(c).
d) CHANGE OF DUTIES. Any assignment to the Employee of duties which are
inconsistent with the Employee's status as a Vice President of Legal
Affairs and Secretary of the Corporation or are a substantial
reduction in the nature or the status of the Employee's
responsibilities may be treated by him as a termination pursuant to
Section 5(f) hereof.
e) SALE OF ASSETS. In the event of the sale of all or substantially all
of the Corporation, or a sale of all or substantially all of the
assets of the Corporation, the Employee may treat his employment as
having been terminated pursuant to Section 5(f) herein.
f) OTHER TERMINATION BY THE CORPORATION. Notwithstanding the foregoing
provisions, the Corporation may terminate the Employee's employment
hereunder at any time, subject to the provisions of Section 6(d)
hereof.
g) VOLUNTARY TERMINATION BY THE EMPLOYEE. Notwithstanding the foregoing
provisions, the Employee may terminate his employment hereunder at any
time upon three month's written notice to the Corporation, subject to
the provisions of Section 6(c) hereof.
h) NOTICE OF TERMINATION. Any termination by the Corporation pursuant to
paragraphs (b), (c), or (d) above or by the Employee pursuant to
paragraph (e) above shall be communicated by a written Notice of
Termination. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination
provisions in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Employee's employment under the provision
so indicated.
i) DATE OF TERMINATION. "Date of Termination" shall mean (i) if the
Employee's employment is terminated as a result of the Employee's
incapacity due to physical or mental illness, thirty (30) days after
Notice of Termination is duly given (provided that the Employee shall
not have returned to the performance of his duties on a full-time
basis during such thirty (30) day period), (ii) the date of the
Employee's death or retirement, or (iii) if the Employee terminates
his employment or his employment is terminated for any other reason,
the date on which a Notice of Termination is duly given.
6. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
a) If the Employee's employment shall be terminated due to death, the
Employee's estate or other legal representative shall be entitled to
receive any accrued but unpaid Annual Salary installments and any
accrued reimbursable expenses (to the extent provided in Section 3(c)
hereof). In addition, the Employee's estate shall be entitled to
receive a payment for (i) any accrued but unused vacation days and
(ii) a pro rata portion of any cash bonus due pursuant to Section 3(b)
hereof. In the event of Employee's death, rights and benefits of the
Employee under employee benefit and fringe benefit plans and programs
of the Corporation will be determined in accordance with the terms and
provision so such plans and programs.
b) During any period that the Employee fails to perform his duties
hereunder due to Disability, the Employee shall continue to receive
his full Annual Salary until the Employee's
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employment is terminated pursuant to Section 5(b) hereof. After
termination due to Disability, the Employee shall be paid disability
benefits in accordance with any long term disability plan of the
Corporation then in effect. In the event of the Employee's disability
as determined above, rights and benefits of the Employee under
employee benefit and fringe benefit plans and programs of the
corporation will be determined in accordance with the terms and
provisions of such plans and programs.
c) If the Employee's employment shall be terminated for Cause or if the
Employee shall terminate his employment pursuant to Section 5(g)
hereof, the Corporation shall pay the Employee any accrued but unpaid
Annual Salary installments and any accrued reimbursable expenses (to
the extent provided in Section 3(c) hereof) only through the Date of
Termination and the Corporation shall have no further obligations to
the Employee under this Agreement. Any rights and benefits the
Employee may have under employee benefit and fringe benefit plans and
programs of the corporation will be determined in accordance with the
terms of such plans and programs.
d) If the Employee's employment shall be terminated by the Corporation
pursuant to Section 5(d), (e) or (f) hereof then the corporation shall
continue to pay the Employee his regular salary through the date which
is six (6) months after the Date of Termination; provided, however,
that the Corporation's obligation to pay such salary shall terminate
at such time as the Employee commences any alternative full-time
employment. Notwithstanding the foregoing, the Corporation will only
be obligated to reimburse the Employee for reimbursable expenses ( to
the extent provided in Section (c) hereof) accrued through the Date of
Termination. The Employee shall also be entitled to receive a payment
for (i) any accrued but unused vacation days and (ii) a pro rata
portion of any cash bonus due pursuant to Section 3(b) hereof. If the
Employee's employment shall be terminated by the Corporation pursuant
to Section 5(d), (e) or (f) hereof, and if the Employee shall be
ineligible to participate in any of the Corporation's fringe benefit
plans or arrangements as a result of his ceasing to be an employee of
the Corporation, then the Corporation shall arrange to provide the
Employee with substantially equivalent benefits as if he remained
employed by the Corporation until the earlier of (i) six (6) months or
(ii) the end of the term of employment referred to in Section 2 hereof
at no additional expense to the Employee.
e) If the Employee's employment is terminated due to retirement, the
Employee shall be entitled to receive accrued but unpaid Annual Salary
installments and any accrued reimbursable expenses (to the extent
provided in Section 3(c) hereof).
7. NOTICES.
Any notice or other communication under this Agreement shall be in writing
and shall be deemed to have been given: (a) when delivered personally
against receipt therefore; (b) one day after being sent by Federal Express
or similar overnight delivery; or (c) three days after being mailed
registered or certified mail, postage prepaid, return receipt requested,
to the Employee at such address as the Employee shall provide to the
Corporation or to the Corporation at the following address:
Xenometrix, Inc.
0000 X. 00xx Xxxxxx
Xxxxxxx, Xx 00000
Attn: Chief Executive Officer
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or to such other address or person as either party may have furnished to
the other in writing in accordance herewith.
8. RENEWAL OF AGREEMENT.
Upon expiration of the term of this Agreement, this Agreement may be
renewed for additional one (1) year periods by the mutual written
agreement of the parties hereto.
9. SEVERABILITY OF PROVISIONS.
If any provision of this Agreement shall be declared by a court of
competent jurisdiction to be invalid, illegal or incapable of being
enforced in whole or in part, such provision shall be interpreted so as to
remain enforceable to the maximum extent permissible consistent with
applicable law and the remaining conditions and provisions or portions
thereof shall nevertheless remain in full force and effect and enforceable
to the extent they are valid, legal and enforceable, and no provision
shall be deemed dependent upon any other covenant or provision unless so
expressed herein.
10. ENTIRE AGREEMENT; MODIFICATION.
This Agreement contains the entire agreement of the parties relating to
the subject matter hereof, and the parties hereto have made no agreements,
representations or warranties relating to the subject matter of this
Agreement which are not set forth herein. No modification of this
Agreement shall be valid unless made in writing and signed by the parties
hereto. This Agreement supersedes any previous terms of employment between
the Corporation and Employee and any previous employment contractual terms
are terminated as of the date hereof.
11. BINDING EFFECT.
The rights, benefits, duties and obligations under this Agreement shall
inure to, and be binding upon, the Corporation, its successors and
assigns, and upon the Employee and his legal representatives. This
Agreement constitutes a personal service agreement, and the performance of
the Employee's obligations hereunder may not be transferred or assigned by
the Employee.
12. NON-WAIVER.
The failure of either party to insist upon the strict performance of any
of the terms, conditions and provisions of this Agreement shall not be
construed as a waiver or relinquishment of future compliance therewith,
and said terms, conditions and provisions shall remain in full force and
effect. No waiver of any term or condition of this Agreement on the part
of either party shall be effective for any purpose whatsoever unless such
waiver is in writing and signed by such party.
13. GOVERNING LAW.
This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Colorado without regard to
principles of conflict of laws.
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14. HEADINGS.
The headings of paragraphs are inserted for convenience and shall not
affect any interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
Xenometrix, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Its: PRESIDENT AND CEO
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XXXX X. XXXXXXXXXX
/s/ XXXX X. XXXXXXXXXX
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SCHEDULE I
Development, manufacture or sale of gene activity profiling assays, products or
systems, and in vitro and in vivo toxicity, mutagenicity or carcinogenicity
assays, products or systems marketed to the pharmaceutical, biotechnology,
chemical, consumer products and/or environmental companies that test new
chemical entities or test for environmental contaminants.
