EXHIBIT 10.31
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of
December 18, 2001, by and between CARTESIAN ACQUIRING CORPORATION, a Delaware
corporation (the "Company"), and XXXXXX X. XXXXXX, PH.D. (the "Executive").
RECITALS:
A. Pursuant to an Agreement and Plan of Merger dated September 6, 2001,
Cartesian Technologies, Inc., a California corporation ("CTI"), has merged with
and into the Company (the "Merger"), with the Company as the surviving
corporation.
B. Executive was a director, shareholder and officer of CTI.
C. As a condition to the consummation of the Merger, the parties have
agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained in
this Agreement, the parties agree as follows:
1. Employment.
(a) The Company agrees to employ Executive and Executive accepts such
employment in Orange County, California, on the terms and subject to the
conditions set forth below. During the term of Executive's employment hereunder,
Executive shall serve in an executive capacity as Executive Vice President of
the Company and President of Cartesian Acquiring Corporation and shall do and
perform diligently all such services, acts and things as are customarily done
and performed by an executive of a similar business, together with such other
duties as may be requested from time to time by the Company's Chief Executive
Officer or Board of Directors (the "Board").
(b) For his service as an officer and employee of the Company,
Executive shall be entitled to the full protection of the applicable
indemnification provisions of the Company's Certificate of Incorporation and
Bylaws, as they may be amended from time to time. The Company agrees that
Executive will be named as an additional insured under the Company's Directors'
and Officers' Errors and Omissions Insurance during his employment hereunder.
2. Term of Employment.
(a) Subject to the provisions for termination provided below, the term
of Executive's employment under this Agreement shall commence on the date of
this Agreement and shall continue thereafter for a period of two (2) years.
3. Devotion to the Company's Business.
Executive shall devote his entire productive time, ability and
attention to the Company's business during the term of this Agreement; however,
the expenditure of reasonable amounts of time to various charitable and other
community activities, provided the amount of time so devoted does not materially
impair, detract or adversely affect the performance of Executive's duties under
this Agreement, shall not be deemed a breach of this Agreement.
4. Compensation.
(a) During the term of this Agreement, the Company shall pay or
provide, as the case may be, to Executive the compensation and other benefits
and rights set forth in Sections 4, 5 and 6 of this Agreement.
(b) Base Compensation. As compensation for the services to be performed
hereafter, the Company shall pay to Executive, during his employment hereunder,
a base salary (the "Base Salary") payable in accordance with the Company's usual
pay practices (and in any event no less frequently than monthly) at the annual
rate of One Hundred Eighty-Five Thousand Dollars ($185,000).
(c) Annual Salary Increase. Executive's salary shall be reviewed at
least once annually and may be increased upon the recommendation of the
Company's Compensation Committee and the ratification of the Board.
(d) Incentive Compensation. The Board, in its sole and absolute
discretion, may elect to pay Executive one or more discretionary bonuses, at
such times and in such amounts as the Board deems appropriate.
(e) Options. Executive shall be granted thirty thousand (30,000)
options to purchase shares of Genomic Solutions Inc.'s ("Parent") common stock
(the "Options") which Options shall vest in three (3) installments of ten
thousand (10,000) options per year pursuant to Parent's 1998 Employee Stock
Option Plan (the "Plan"). The term of the Options will be ten (10) years, the
exercise price will be the fair market value of the common stock of Parent as of
the Closing of the Merger, the Options shall be nonqualified Options and the
Options will be evidenced by the standard form of Option Agreement used under
the Plan.
5. Benefits.
(a) Insurance. The Company shall provide to Executive life, disability,
medical, hospitalization and dental insurance for himself and eligible family
members on the same basis as provided to other executive employees of Parent.
(b) Benefit Plans. Executive, at his election, may participate, during
his employment hereunder, in all retirement plans, 401(K) plans and other
benefit plans of the Company generally available from time to time to other
executive employees of the Company and for which Executive qualifies under the
terms of the plans (and nothing in this Agreement shall or shall be deemed to in
any way affect Executive's right and benefits under any such plan
2
(c) except as expressly provided in this Agreement). Executive's
participation in and benefits under any plan shall be on the terms and subject
to the conditions specified in the governing document of the particular plan.
(d) Annual Vacation. Effective as of January 1 of each year hereunder,
Executive shall be entitled to three (3) weeks of paid vacation time for such
year. If Executive is unable for any reason to take the total amount of vacation
time authorized herein during any year, the vacation time expires and shall not
be applied to a subsequent year. Upon any termination of this Agreement for any
reason whatsoever, unused paid vacation time to which Executive is entitled to
in that year shall be paid on a pro rata basis to Executive within ten (10) days
of such termination based on the Base Salary in effect on the effective date of
such termination.
6. Reimbursement of Business Expenses.
The Company shall reimburse Executive during the term of this Agreement
for travel and other expenses reasonably and necessarily incurred by Executive
in connection with the Company's business. Executive shall furnish such
documentation with respect to reimbursement to be paid hereunder as the Company
shall reasonably request.
7. Termination of Employment.
(a) Executive's employment under this Agreement shall terminate upon
Executive's death and may be terminated as follows:
(i) by Executive at any time for any reason or for no reason
upon not less than three months (3) months written notice; and
(ii) by the Company at any time for any reason, without
"cause", or for "cause" as defined below, without prior notice. For the purposes
of this Agreement, any material reduction in the position, title or duties of
Executive, or if Executive is required to perform Executive's services at a
location outside of Orange County, California (except for reasonable periods of
time in connection with the performance of such services), shall be deemed to be
termination of Executive without "cause."
(b) For purposes hereof, for "cause" means the material breach of any
provision of this Agreement by Executive, or any action of Executive (or
Executive's failure to act), which, in the Board's reasonable determination,
involves malfeasance, fraud, or moral turpitude, which, if generally known,
would have a material adverse effect on the Company.
8. Compensation Upon Termination.
(a) If the Company terminates Executive's employment under this
Agreement without "cause" pursuant to Section 7(a)(ii) above, Executive shall be
entitled to any unpaid Base Salary, any declared but unpaid bonus and benefits
accrued and earned by him under this Agreement through the effective date of
such termination, which shall be paid by the Company to Executive immediately
upon the effective date of such termination, and the Company shall pay Executive
monthly an amount equal to one-twelfth (1/12) of the Base Salary for a period of
3
six (b) (6) months (the "Severance Payment"), payable in accordance with the
Company's usual pay practices. Notwithstanding the foregoing, the Company, in
its sole discretion, may elect to make the Severance Payment to Executive in one
lump sum due within thirty (30) days after Executive's termination of
employment.
(b) If the Company terminates Executive's employment under this
Agreement for "cause" pursuant to Section 7(a)(ii) above, or if Executive
voluntarily terminates his employment hereunder, Executive shall be entitled to
no further compensation or other benefits under this Agreement, except only as
to any unpaid Base Salary, any declared but unpaid bonus and benefits accrued
and earned by him hereunder through the effective date of such termination which
shall be paid by the Company to Executive immediately upon the effective date of
such termination.
(c) If the Executive terminates his employment under this Agreement,
any unpaid Base Salary, any declared but unpaid bonus and benefits accrued and
earned by him hereunder through the effective date of such termination shall be
paid by the Company to Executive within seventy-two (72) hours of the effective
date of such termination.
(d) If Executive dies, Executive's successors and assigns shall be
entitled to a portion of any unpaid Base Salary, any declared but unpaid bonus
and benefits accrued and earned by him under this Agreement through the
effective date of such termination.
(e) Notwithstanding anything to the contrary in this Section 8, the
Company's obligation to pay, and Executive's right to receive, any compensation
under this Section 8 shall terminate upon Executive's breach of any provision of
Section 11 below. In addition, Executive shall promptly forfeit the Severance
Payment from the Company under this Section 8 upon Executive's breach of any
provision of Section 11 below.
9. Treatment of Stock Options Upon Termination of Employment or Death.
If the Company terminates Executive's employment under this Agreement
for "cause", any options to purchase the Company's stock, vested or unvested,
shall be treated in accordance with the Company's stock option plan, as amended.
If the Company terminates Executive's employment under this Agreement without
"cause", any option to purchase the Company's stock may be exercised, but only
to the extent it was otherwise exercisable on the termination date, within
ninety (90) days after the date Executive's employment was terminated. If
Executive dies, all unexpired options to purchase the Company's stock shall
accelerate and immediately vest and shall accrue as of the date of death and
Executive's successors and assigns shall be entitled to exercise the unexpired
options at any time within one year after the date of Executive's death.
Notwithstanding anything to the contrary, such options to purchase the Company's
stock shall be automatically forfeited upon Executive's breach of any of the
provisions of Section 11 below. Any stock option agreements between the Company
and Executive shall be amended to conform to the provisions of this Section 9.
4
10. Effect of the Company's Merger, Sale or Transfer of Assets.
In the event of any acquisition of the Company by means of merger or
other form of corporate reorganization in which outstanding shares of the
Company are exchanged for securities or other consideration issued by the
acquiring corporation or its subsidiary (other than a mere reincorporation
transaction), a sale, conveyance or disposition of all or substantially all of
the assets of the Company, or the effectuation by the Company of a transaction
or series of related transactions in which more than 50% of the voting power is
disposed of (other than the Company's sale of its common stock pursuant to a
registration statement filed under the Securities Act of 1933, as amended), the
Company shall pay to Executive an amount equal to the sum of (a) the portion of
any unpaid Base Salary, any declared but unpaid bonus and benefits accrued and
earned by Executive under this Agreement through the effective date of such
change in control; and (b) an amount equal to six (6) months of Executive's Base
Salary. In addition, all unexpired stock options granted to Executive at least
six (6) months prior to the change of control shall immediately vest and become
fully exercisable. Notwithstanding the foregoing, if Executive remains employed
by the Company or is retained by the acquiring company, Executive shall not
receive the benefits provided in subsections (a) and (b) of this Section 10, but
shall receive an amount equal to three (3) months of Executive's Base Salary and
all unexpired stock options granted at least six (6) months prior to the change
of control shall immediately vest and become fully exercisable. Any stock option
agreements between the Company and Executive shall be amended to conform to the
provisions of this Section 10.
11. Confidentiality. Executive acknowledges the Company's reliance on
and expectation of Executive's continued commitment to the performance of his
duties and responsibilities under this Agreement. In light of such reliance and
expectation on the Company's part, Executive agrees that:
(a) Executive executed a separate Confidentiality Agreement upon
commencing employment with the Company and hereby incorporates the duties and
obligations of Executive under such Confidentiality Agreement hereto.
(b) Executive agrees and understands that upon breach of Section 11(a),
any Severance Payment or payment of benefits due to Executive shall terminate
immediately.
(c) Executive agrees and understands that the remedy at law for any
breach by him of this Section 11 will be inadequate and that the damages flowing
from such breach are not readily susceptible to being measured in monetary
terms. Accordingly, it is acknowledged that, upon adequate proof of Executive's
violation of any legally enforceable provision of this Section 11, the Company
shall be entitled to immediate injunctive relief and may obtain a temporary
order restraining any threatened or further breach. Nothing in this Section 11
shall be deemed to limit the Company's remedies at law or in equity for any
breach by Executive of any of the provisions of this Section 11 that may be
pursued or availed of by the Company.
12. No Conflicting Agreements.
Executive represents and warrants that he is not a party to any
agreements, contracts, understandings or arrangements, whether written or oral,
in effect which would prevent him from rendering exclusive services to the
Company during the term hereof, and that he has not made and will not make any
commitment to do any act in conflict with this Agreement.
5
13. Arbitration.
In the event of any dispute or controversy arising out of, or relating
to, this Agreement, the parties agree to submit such dispute or controversy to
binding arbitration. The sole arbitrator shall be selected from the list (the
"List") of arbitrators supplied by the American Arbitration Association ("AAA")
following written request by any party. If the parties to such dispute cannot
agree upon an arbitrator within thirty (30) days following receipt of the List
by all parties to such arbitration, then any party to the dispute may request,
in writing, that AAA appoint an arbitrator within ten (10) days following
receipt of such request (the "Arbitrator"). The arbitration shall take place in
Orange County, California, if the defendant is the Executive, or Ann Arbor,
Michigan, if the defendant is the Company, at a place mutually agreeable to the
parties or if no such agreement is reached within ten (10) days following notice
from the Arbitrator, at a place determined by the Arbitrator. Such arbitration
shall be conducted in accordance with the Commercial Arbitration Rules of AAA
then in effect. The parties agree that all actions or proceedings arising in
connection with this Agreement shall be arbitrated exclusively in Orange County,
California, if the defendant is the Executive, or Ann Arbor, Michigan, if the
defendant is the Company. The aforementioned choice of venue is intended by the
parties to be mandatory and not permissive in nature, thereby precluding the
possibility of litigation between the parties with respect to or arising out of
this Agreement in any jurisdiction other than that specified in his Section.
Each party hereby waives any right it may have to asset the doctrine of forum
non conveniens or similar doctrine or to object to venue with respect to any
proceeding brought in accordance with this Section, and stipulates that the
Arbitrator shall have in personam jurisdiction and venue over each of them for
the purpose of litigating any dispute, controversy or proceeding arising out of
or related to this Agreement. Each party hereby authorizes and accepts service
of process sufficient for personal jurisdiction in any action against it as
contemplated by this Section by registered or certified mail, return receipt
requested, postage prepaid, to its address for the giving of notices as set
forth in this Agreement. The decision of the Arbitrator shall be final and
binding on all of the parties to the arbitration, shall be non-appealable and
may be enforced by a court of competent jurisdiction. In addition to attorneys'
fees as provided herein, the prevailing party shall be entitled to recover from
the non-prevailing party reasonable costs and expenses. The costs and fees of
the arbitration shall be paid by the non-prevailing party. The Arbitrator may
grant any remedy appropriate including, without limitation, injunctive relief or
specific performance. Prior to the appointment of an Arbitrator, any party may
seek a temporary restraining order or a preliminary injunction from the Orange
County Superior Court, if the defendant is the Executive, or the appropriate
court in Ann Arbor, Michigan, if the defendant is the Company, which shall be
effective until a final decision is rendered by the Arbitrator.
14. Notice.
All notices, requests, consents and other communications, required or
permitted to be given hereunder to be given under this Agreement shall be
personally delivered in writing or shall have been deemed duly given when
received after it is posted in the United States mail, postage prepaid,
registered or certified, return receipt requested addressed as follows:
6
If to the Company:
Cartesian Acquiring Corporation
C/o Genomic Solutions Inc.
0000 Xxxxxxx Xxxxx, Xxxxx X
Xxx Xxxxx, Xxxxxxxx 00000
Attn: Chief Executive Officer
If to Executive:
Xxxxxx Xxxxxx
00000 Xxx Xxxx Xxxxxx, Xxxxx X
Xxxxxx, Xxxxxxxxxx 00000
In all events, with a copy to:
Jaffe, Raitt, Heuer & Xxxxx,
Professional Corporation
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Sugar
15. Miscellaneous.
(a) The provisions of this Agreement are severable and if any one or
more provisions may be determined to be illegal or otherwise unenforceable, in
whole or in part, the remaining provisions and any partially unenforceable
provision to the extent enforceable in any jurisdiction nevertheless shall be
binding and enforceable.
(b) The Company's rights and obligations under this Agreement shall
inure to the benefit of, and shall be binding on, the Company and its successors
and assigns, and Executive's rights and obligations (other than obligations to
perform services) under this Agreement shall inure to the benefit of, and shall
be binding upon, Executive and his heirs, personal representatives and assigns.
This Agreement is personal to Executive and he may not assign his obligations
under this Agreement in any manner whatsoever.
(c) The failure of any party to enforce any provision or protections of
this Agreement shall not in any way be construed as a waiver of any such
provision or provisions as to any future violations thereof, nor prevent that
party thereafter from enforcing each and every other provision of this
Agreement. The rights granted the parties herein are cumulative and the waiver
of any single remedy shall not constitute a waiver of such party's right to
assert all other legal remedies available to it under the circumstances.
(d) This Agreement supersedes all agreements and understandings between
the parties and may not be modified or terminated orally. No modification,
termination or attempted
7
waiver shall be valid unless in writing and signed by the party against whom the
same is sought to be enforced.
(e)This Agreement shall be governed by and construed according to the
laws of the State of Michigan.
(f) Captions and section headings used herein are for convenience and
are not a part of this Agreement and shall not be used in construing it.
(g) In the event of any arbitration or proceeding arising out of or
related to this Agreement, the prevailing party shall be entitled to recover
from the losing party all of its costs and expenses incurred in connection with
such arbitration or proceeding, including court costs and reasonable attorneys'
fees, whether or not such arbitration or proceeding is prosecuted to judgment.
(h) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
8
IN WITNESS WHEREOF, the parties have executed this Employment Agreement
on the date first written above.
EXECUTIVE: The Company:
CARTESIAN ACQUIRING CORPORATION,
a Delaware corporation
/s/ Xxxxxx X. Xxxxxx /s Xxxxxxx X. Xxxxxxxx
---------------------------------- -----------------------------------
Xxxxxx X. Xxxxxx, Ph.D. Xxxxxxx X. Xxxxxxxx, President
9
