EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of the 18th day of November 1998,
between CN Biosciences, Inc., a Delaware corporation (the "Company") and
Xxxxx X. Xxxxxxx (the "Employee").
WHEREAS, the Company and EM Industries, Inc. ("Parent") and EM
Acquisition Corp. have entered into an Agreement and Plan of Merger ("Merger
Agreement") to acquire 100% of the outstanding stock of the Company;
WHEREAS, the Employee has been employed by the Company or one of its
subsidiaries prior to the date hereof;
WHEREAS, the Employee possesses unique knowledge of the business
and affairs of the Company, its policies, methods, personnel and operations
and the Parent recognizes that the continued service of the Employee is
important to the growth and success of the Company subsequent to the date of
closing of the transactions contemplated by the Merger Agreement ("Closing
Date") and desires to ensure such continued service;
WHEREAS, as an inducement for Parent to enter into the Merger
Agreement, Employee agrees to continue his employment with the Company after
the Closing Date on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and agreements hereinafter set forth, the Company and Employee
agree as follows:
1. Effective Date. This Employment Agreement shall become effective
on the Closing Date of the Merger Agreement (the "Effective Date"). If the
Merger Agreement is terminated, this Agreement shall be null and void.
Notwithstanding the foregoing, Employee agrees to continue to serve until
the Closing Date as an employee of the Company in the same capacity and in
accordance with the same terms and conditions as on the date immediately
preceding the date hereof.
2. Employment. The Company hereby employs the Employee and the
Employee hereby accepts employment all upon the terms and conditions herein
set forth.
3. Duties. The Employee shall perform such management duties for
the Company and its affiliates as may from time to time be assigned and
which are consistent with his titles. During the Term, the Employee shall
have the same titles as he held immediately prior to the date of this
Agreement. The Employee hereby promises to perform and discharge well and
faithfully all duties of his position. If Employee is elected as a director
or officer of any affiliate of the Company, the Employee shall serve in such
capacity or capacities without further compensation.
4. Extent of Services. The Employee shall devote his entire time,
attention and energies to the business of the Company and shall not during
the term of this Employment Agreement be engaged in any other business
activity whether or not such business activity is pursued for gain, profit
or other pecuniary advantage; but this shall not be construed as preventing
the Employee from investing his personal assets in businesses which do not
compete with the Company in such form or manner as will not require any
services on the part of the Employee in the operation of the affairs of the
companies in which such investments are made and in which his participation
is solely that of an investor, nor shall this be construed as preventing the
Employee from purchasing securities in any corporation whose securities are
regularly traded provided that such purchases shall not result in his
collectively owning beneficially at any time one percent (1%) or more of the
equity securities of any corporation engaged in a business competitive to
that of the Company, without the express prior written consent of the
Company.
5. Compensation.
(a) For services rendered under this Employment Agreement,
the Company shall pay the Employee a salary determined annually by the
Compensation Committee of the Board of Directors (the "Base Salary"),
payable (after deduction of applicable payroll taxes) in equal bi-weekly
installments. Employee's Base Salary as of the Effective Date shall be
$195,000. The Employee shall also be eligible for and participate in such
fringe benefits as shall be generally provided to executives of the Company,
including medical insurance and retirement programs which may be adopted
from time to time during the term hereof by the Company. On an annual basis,
the Compensation Committee shall review Employee's salary and make such
adjustment as may be warranted based upon Employee performance, Company
financial performance, economic conditions, etc.
(b) At the conclusion of each Fiscal Year, the Employee
shall be eligible for, and the Compensation Committee, in its sole
discretion, may award an executive bonus up to a maximum of 35% of Base
Salary, based on the achievement of objectives established by the
Compensation Committee.
(c) The Company agrees that, effective as of the Effective
Date, it will establish, or cause to be established, a new long-term
incentive compensation plan (the "New Plan"). The Company further agrees
that the Employee shall be immediately entitled to participate in such New
Plan and the Employee shall receive an allocation of units under the New
Plan effective as of the Effective Date, which allocation shall be
commensurate with his position and consistent in incentive opportunity with
allocations to similarly situated employees of the Company.
6. Paid Time Off. During the term of this Employment Agreement, the
Employee shall be entitled to the same number of paid days off pursuant to
the Company's customary paid time off policy ("CalTime") as he has on the
date of this Agreement.
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7. Expenses. During the term of this Employment Agreement, the
Company shall reimburse the Employee for all reasonable out-of-pocket
expenses incurred by the Employee in connection with the business of the
Company and in performance of his duties under this Employment Agreement
upon the Employee's presentation to the Company of an itemized accounting of
such expenses with reasonable supporting data.
8. Term. The Employee's employment under this Employment Agreement
shall commence on the Effective Date and shall expire on the two year
anniversary date thereof. The term of employment shall automatically be
extended for consecutive periods of one (1) year each unless notice of
termination of employment is given by either party hereto at least ninety
(90) days prior to the expiration of the initial or any renewal term, in
which case, this Agreement shall terminate at the end of such initial or
renewal term, as the case may be. In the case of a renewal and unless
otherwise agreed to in writing by both parties, the terms and conditions of
this Employment Agreement shall apply to any renewals or extensions thereto.
Notwithstanding the foregoing, the Company may, at its election, terminate
the Employee's employment hereunder as follows:
(i) Upon thirty (30) days' notice if the Employee
becomes physically or mentally incapacitated or is injured so that
he is unable to perform the services required of him hereunder and
such inability to perform continues for a period in excess of
ninety (90) days and is continuing at the time of such notice; or
(ii) For "Cause" upon notice of such termination
to the Employee. For purposes of this Employment Agreement, the
Company shall have "Cause" to terminate its obligations hereunder
upon (A) the reasonable determination by the Chief Executive
Officer that the Employee has failed substantially to perform his
duties hereunder (other than as a result of his incapacity due to
physical or mental illness or injury), which failure amounts to an
intentional and extended neglect of his duties hereunder, (B)
refusal to carry out any lawful direction of the Chief Executive
Officer or Board of Directors, (C) the Chief Executive Officer's
reasonable determination that the Employee has engaged or is about
to engage in conduct materially injurious to the Company, (D) the
Employee's having been convicted of a felony, (E) a material breach
by the Employee of any of the other covenants or representations
herein or any other agreement between Employee and the Company, or
(F) theft, embezzlement or misappropriation of Company property; or
(iii) Without Cause at any time upon notice of
such termination to the Employee, by paying to the Employee salary
continuation pay equal to the Employee's Base Salary in effect at
the time of termination for the remaining term of this Employment
Agreement but not in any event for less than 12 months from the
date of such termination; provided, however, that the salary
continuation payments shall cease if the Employee shall engage in
any business (whether as an officer, director, owner, employee,
partner or other direct or indirect participant) which is engaged
in the manufacturing, distribution or research and development of
any products being sold by, or under development by, the Company or
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its affiliates as of the date of such termination of employment, in
any geographic area where the Company or such affiliates are then so
manufacturing or distributing such products, or the Employee shall
interfere with, disrupt or attempt to disrupt the relationship,
contractual or otherwise, between the Company and any customer,
supplier, lessor, lessee or employee of the Company. If the Company
shall decide not to renew this Employment Agreement, the ninety (90)
day notification of the Company's intention not to renew prior to
expiration of the initial or any subsequent renewal term shall
serve as adequate termination notice and the Employee hereby agrees
to make a smooth transition of responsibilities during that ninety
(90) day period and the Employee further agrees not to take any
legal action against the Company related to said non-renewal and
termination of employment; or
(iv) Upon the death of the Employee.
In addition, the Employee shall have the right to terminate this Employment
Agreement upon notice to the Company if, without his consent, his
responsibilities and duties on the date hereof are materially reduced (a
"Material Demotion") and such Material Demotion continues for ten (10)
business days after the date of notice to the Company. A Material Demotion
shall be treated as a termination by the Company without Cause and the
Employee shall be entitled to receive salary continuation pay as provided
by, and subject to the terms and conditions of, subparagraph 8 (iii) above.
9. Representations. The Employee hereby represents to the Company
that (a) he is legally entitled to enter into this Employment Agreement and
to perform the services contemplated herein and is not bound under any
employment or consulting agreement to render services to any third party,
(b) he has the full right, power and authority, subject to no rights of
third parties, to grant to the Company the rights contemplated by paragraph
10 hereof, and (c) he does not now have, nor within the last three years has
had, any ownership interest in any business enterprise (other than interest
in publicly traded corporations where his ownership does not exceed one
percent (1%) or more of the equity capital) which is a customer of the
Company, any of its subsidiaries, or from which the Company or any of its
subsidiaries purchases any goods or services or to whom such corporations
owe any financial obligations or are required or directed to make any
payments.
10. Inventions.
(a) The Employee hereby sells, transfers and assigns to
the Company or to any person or entity designated by the Company all of the
entire right, title and interest of the Employee in and to all inventions,
ideas, disclosures and improvements, whether patented or unpatented, and
copyrightable material, made or conceived by the Employee, solely or
jointly, during the term hereof which relate to methods, apparatus, designs,
products, processes or devices, sold, leased, used or under consideration or
development by the Company or any of its affiliates or which otherwise
relate to or pertain to the business, functions or operations of the Company
or any of its affiliates or which
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arise from the efforts of the Employee during the course of his employment for
the Company or any of its affiliates. The Employee shall communicate promptly
and disclose to the Company, in such form as the Company requests, all
information, details and data pertaining to the aforementioned inventions,
ideas, disclosures and improvements; and the Employee shall execute and deliver
to the Company such formal transfers and assignments and such other papers and
documents as may be necessary or required of the Employee to permit the Company
or any person or entity designated by the Company to file and prosecute the
patent applications and, as to copyrightable material, to obtain copyright
thereof. Any invention relating to the business of the Company and its
affiliates and disclosed by the Employee within one year following the
termination of this Agreement shall be deemed to fall within the provisions of
this paragraph unless proved to have been first conceived and made following
such termination.
(b) The Employee has been notified and understands that
the provisions of this Section 10 do not apply to any of the aforementioned
inventions, ideas, disclosures and improvements that qualify fully under the
provisions of Section 2870 of the California Labor Code, which states as
follows:
(i) Any provision in an employment agreement
which provides that an employee shall assign, or offer to assign,
any of his or her rights in an invention to his or her employer
shall not apply to an invention that the employee developed
entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except
for those inventions that either:
(a) Relate at the time of conception
or reduction to practice of the invention to the employer's business,
or actual or demonstrably anticipated research or development of the
employer.
(b) Result from any work performed by
the employee for the employer.
(ii) To the extent a provision in an employment
agreement purports to require an employee to assign an invention
otherwise excluded from being required to be assigned under
subsection (i), the provision is against the public policy of this
state and is unenforceable.
11. Disclosure of Information. The Employee recognizes and
acknowledges that the trade secrets, know-how and proprietary processes of
the Company and its affiliates as they may exist from time to time are
valuable, special and unique assets of the business of the Company and its
affiliates, access to and knowledge of which are essential to the
performance of the Employee's duties hereunder. The Employee will not,
during or after the term of his employment by the Company or any of its
affiliates, in whole or in part, disclose such secrets, know-how or
processes to any person, firm, corporation, association or other entity for
any reason or purpose whatsoever, nor shall the
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Employee make use of any such property for his own purposes or for the benefit
of any person, firm, corporation or other entity (except the Company and its
affiliates) under any circumstances during or after the term of his employment,
provided that after the term of his employment these restrictions shall not
apply to such secrets, know-how and processes which are then in the public
domain (provided that the Employee was not responsible, directly or indirectly,
for such secrets, know-how or processes entering the public domain without the
Company's consent).
12. Injunctive Relief. If there is a breach or threatened breach of
the provisions of paragraph 10 or 11 of this Employment Agreement, the
Company shall be entitled to an injunction restraining the Employee from
such breach. Nothing herein shall be construed as prohibiting the Company
from pursuing any other remedies for such breach or threatened breach.
13. Insurance. The Company may, at its election and for its
benefit, insure the Employee against accidental loss or death, and the
Employee shall submit to such physical examination and supply such
information as may be required in connection therewith.
14. Notices. Any notice required or permitted to be given under
this Employment Agreement shall be sufficient if in writing and if sent by
registered mail to the Employee at his home address as reflected on the
records of the Company, in the case of the Employee, or Xx. Xxxxxxx X.
Xxxxxxxxxxxx, Chief Executive Officer, CN Biosciences, Inc., 00000 Xxxxxxx
Xxxxxx Xxxxx, Xxx Xxxxx, XX 00000, in the case of the Company.
15. Waiver of Breach. A waiver by the Company or the Employee of a
breach of any provision of this Employment Agreement by the other party
shall not operate or be construed as a waiver of any subsequent breach by
the other party.
16. Governing Law. This Employment Agreement shall be governed by
and construed and enforce in accordance with the laws of the State of
California without giving effect to the choice of law or conflict of laws
provisions thereof.
17. Assignment. This Employment Agreement may be assigned, without
the consent of the Employee, by the Company to any of its affiliates, or to
any other person, partnership, corporation, or other entity which has
purchased substantially all the assets of the Company, provided such
assignee assumes all the liabilities of the Company hereunder.
18. Prior Agreement. Effective as of the Effective Date, the
Severance Agreement between the Company and the Employee dated February 27,
1997 is hereby terminated and superseded in its entirety by this Employment
Agreement and Employee hereby waives any right which he may have under such
agreement to resign following the effective date of a "Change in Control" of
the Company (as defined in such agreement) and any and all other rights or
claims to severance benefits or other compensation or benefits under such
agreement following his termination of employment.
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19. Entire Agreement. This Employment Agreement contains the entire
agreement of the parties and supersedes any and all agreements, letter of
intent or understandings between the Employee and (a) the Company, (b) the
Parent or (c) any of the Company's and the Parent's principal shareholders,
affiliates or subsidiaries regarding employment. This Employment Agreement
may be changed only by an agreement in writing signed by a party against
whom enforcement of any waiver, change, modification, extension or discharge
is sought.
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the day first herein above written.
CN BIOSCIENCES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxxxxxx
Chief Executive officer
EM INDUSTRIES, INC.
By: /s/ Xxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxx
Title: Group Vice President & CFO
EMPLOYEE
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Xxxxx X. Xxxxxxx
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