Exhibit 10.14
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT made as of the 30th day of December 1996, by and
between ENSYS ENVIRONMENTAL PRODUCTS, INC., a Delaware corporation whose name
is being changed to STRATEGIC DIAGNOSTICS INC. as of the date hereof (the
"Company," which is also hereinafter referred to as the "Employer"), and
XXXXXXX X. XXXXXXXXX (the "Executive").
WITNESSETH:
WHEREAS, Employer agrees to retain the services of Executive, and
Executive agrees to work for Employer, all pursuant to the terms and
conditions hereinafter set forth;
NOW, THEREFORE, FOR AND IN CONSIDERATION of the premise, the mutual
promise, covenants and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Employment. The Employer agrees to employ the Executive and the
Executive agrees to be employed by the Employer on the terms and conditions
hereinafter set forth.
2. Capacity. The Executive shall serve as the Chief Executive Officer of
Employer. The Executive shall render such services to the Company as are
customary for such position and perform all other services incident thereto.
3. Effective Date and Term. Subject to the provisions of Section 6, the
Executive's employment under this Agreement shall remain in effect for the
period commencing on the date hereof and terminating on December 31, 1997
("Initial Term") and shall be automatically extended for periods of one year
commencing on December 31, 1997 and on each December 31 thereafter, unless
either the Executive or the Employer gives written notice to the other not
less than sixty (60) days prior to the date of any such anniversary, of such
party's election not to extend the term of the Executive's employment
hereunder.
4. Compensation and Benefits. The regular compensation and benefits
payable to the Executive under this Agreement shall be as follows:
(a) Salary. For all services rendered by the Executive under this
Agreement, the Employer shall pay the Executive a salary at the rate, of
$164,000 per year, subject to an annual increase of not less than five
percent (5%) of the then current annual salary, as determined by the Board of
Directors or the Compensation Committee in accordance with the usual practice
of the Employer with respect to review of compensation for its senior
executives. The Executive's salary shall be payable in periodic installments
in accordance with the Employer's usual practice for its senior executives.
(b) Bonus. In addition to salary under Section 4(a), the Executive
shall be entitled to participate in a bonus plan under which he may be
entitled to receive an annual bonus in an amount, up to 75 % of such salary,
as shall be determined by the Compensation Committee of the Employer's Board
of Directors in the beginning of each of the Employer's fiscal years under
this Agreement commencing with fiscal 1997. The Compensation Committee and
the Executive shall establish reasonable performance goals and targets for
such bonus- Upon completion of each year, the Compensation Committee shall
review the actual performance against such performance targets and goals and
notify the Executive of the amount of the award. Initially, the target
annual bonus will be 30% of Executive's salary. The Executive's bonus shall
be paid to him within ninety (90) days after the end of the fiscal year to
which it relates, whether he remains an employee of the Employer at the date
of payment or not.
(c) Regular Benefits. The Executive shall also be entitled to
participate in any and all employee benefit plans, medical insurance plans,
life insurance plans, disability income plans, retirement plans and other
benefit plans from time to time in effect for senior executives of the
Employer. Such participation shall be subject to (i) the terms of the
applicable plan documents, (ii) generally applicable policies of the Employer
and (iii) the discretion of the Board of Directors of the Employer or any
administrative or other committee provided for in or contemplated by such
plan, except that all waiting periods for eligibility to participate in
employee benefit plans shall be waived by the Employer to the extent
permissible. The Employer shall also pay the premiums that come due under
Xxxx Xxxxxx Life insurance Company Disability Income Policies 01024761080 and
01026933250.
(d) Perquisites. The Executive shall be entitled to receive fringe
benefits ordinarily and customarily provided by the Employer to its senior
officers during the term of his employment hereunder. In any event, the
Employer shall provide the Executive with fringe benefits no less favorable
to the Executive than those provided by the Employer to any other employee.
(e) Business Expenses. The Employer shall promptly reimburse the
Executive for all travel and other business expenses, including, without
limitation, cellular phone expenses, incurred by him in the performance of
his duties and responsibilities, subject to such reasonable requirements with
respect to substantiation and documentation as may be specified by the
Employer.
(f) Equity Award. The Executive is hereby granted options to purchase
100,000 shares of the Employer's common stock under the Employer's 1995 Stock
Incentive Plan at an exercise price of $2.00 per share (the "Option"). The
Option will be granted pursuant to an Incentive Stock Option Agreement to be
executed contemporaneously herewith in
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substantially the form of Exhibit A attached hereto and incorporated herein
by this reference. The grant of options pursuant to this Section 4(e) shall
be without prejudice to further grants to the Executive in the future under
any plan adopted by the Employer.
5. Extent of Service. During his employment hereunder, the Executive
shall, subject to the direction and supervision of the Board of Directors of
the Employer, devote his full business time, all reasonable efforts and
business judgment, skill and knowledge to the advancement of the Employer's
interests and to the discharge of his duties and responsibilities hereunder,
except for reasonable time spent for service on the boards of directors of
other corporations, vacations, civic and charitable activities, and
management of personal investments.
6. Termination and Termination Benefits. Notwithstanding the provisions
of Section 3, the Executive's employment hereunder shall terminate under the
following circumstances:
(a) Death. In the event of the Executive's death during the
Executive's employment hereunder, the Executive's employment shall terminate
on the date of his death; provided, however, that the Employer shall continue
to pay an amount equal to the Executive's salary to the Executive's
beneficiary designated in writing to the Employer prior to his death (or to
his estate, if he fails to make such designation or such beneficiary
predeceases him) for a period of twelve months after the date of the
Executive's death, at the salary rate in effect on the date of his death,
without an increase for any portion of such twelve (12) month period, said
payments to be made on the same periodic dates as salary payments have been
made to the Executive had he not died.
(b) Termination by the Employer for Cause. The Executive's employment
hereunder may be terminated without further liability on the part of the
Employer effective immediately by a majority vote of all of the members of
the Board of Directors of the Employer (excluding the Executive) for cause by
written notice to the Executive setting forth in reasonable detail the nature
of such cause. Only the following shall constitute "cause" for such
termination:
(i) The Executive commits an act constituting fraud or material
misrepresentation with respect to the Employer;
(ii) The Executive embezzles funds or assets from the Employer;
(iii) Conviction of the Executive of a felony involving moral
turpitude (excluding motor vehicle violations); or
(iv) Gross and willful failure to perform a substantial portion
of his duties and responsibilities hereunder, which failure
continues for more than thirty (30) days after written
notice given to the Executive pursuant to a majority vote of
all of the members of the
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Board of Directors of the Employer, such vote to set forth
in reasonable detail the nature of such failure.
(c) Termination by the Executive. The Executive's employment hereunder
may be terminated effective immediately by the Executive by written notice to
the Board of Directors of the Employer, provided that the Executive shall
receive the benefits specified in Section 6(e) if he terminates his
employment in the event of the following (any of which being referred to
herein as "Good Reason"):
(i) Failure of such Board of Directors to elect the Executive
to the office of Chief Executive Officer of the Employer or
to continue the Executive in such office;
(ii) Failure by the Employer to comply with the provisions of
Section 4(a) or 4(c) or any other material breach by the
Employer of any other provision of this Agreement; or
(iii) Election by the Employer not to extend the term of the
Executive's employment hereunder in accordance with the
provisions of Section 3.
(d) Termination by the Employer Without Cause. The Executive's
employment with the Employer may be terminated without cause by a majority of
all of the members of the Board of Directors of the Employer (excluding the
Executive) on written notice to the Executive.
(e) Certain Termination Benefits. Unless otherwise specifically
provided in this Agreement or otherwise required by law or by the terms of
any employee benefit plan and other compensation plans, programs and
structures, or fringe benefit programs in which the Executive is a
participant at the time of the termination of his employment with the
Company, all compensation and benefits payable to the Executive under this
Agreement shall terminate on the date of termination of Executive's
employment hereunder. Notwithstanding the foregoing, in the event of
termination by the Executive for Good Reason pursuant to Section 6(c) or by
the Employer pursuant to Section 6(d), the Executive shall be entitled to the
following benefits:
(i) The Employer shall continue to pay an amount equal to the
Executive's salary to the Executive (or the Executive's
beneficiary designated in writing to the Employer prior
to his death or to his estate, if he fails to make such
designation or such beneficiary predeceases him) during a
period (the "Severance Period") which shall extend for a
period of twelve (12) months after the date of the Executive's
termination, at the salary rate in effect on the date of his
termination, said payments to be made on the same periodic
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dates as salary payments would have been made to the Executive
had his employment not been terminated; provided that in the
event that the Employer shall default in the timely payment of
any amount due to the Executive under this Section 6(e) or in
the performance of any of its other obligations under this
Section 6(e), the Executive, at his option, may accelerate the
remaining payments that would become due to him hereunder and
such amounts thereupon shall be due and payable forthwith.
(ii) During the Severance Period, the Executive shall continue to
receive all benefits described in Sections 4(c) existing on
the date of termination (except for any cash bonus plans which
shall be prorated through the date of termination). For
purposes application of such benefits the Executive shall be
treated as if he had remained in the employ of the Employer,
with a total annual salary at the rate in effect on the date
of termination.
(iii) In addition to, but not in limitation of, the rights which
the Executive otherwise may have and except as expressly
provided in any award subsequent to the grant of the stock
options contemplated by Section 4(f), any restrictions
remaining on any restricted shares issued to the Executive
under the Employer's restricted plans shall immediately lapse,
any performance shares issued to the Executive under the
Employer's incentive stock plans shall immediately vest, and
any stock options and stock appreciation rights granted to the
Executive shall become exercisable immediately, and the
Executive may exercise all such options or stock appreciation
rights within the later of the remainder of their term or
one year after the expiration of the Severance Period.
(iv) If, in spite of the provisions of Section 6(e)(ii)
above, benefits or service credits under any benefit plan
shall not be payable or provided under any such plan to
the Executive, or to the Executive's dependents,
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beneficiaries or estate, because the Executive is no
longer deemed to be an employee of the Employer, the
Employer shall pay or provide for payment of such
benefits and service credits for such benefits to the
Executive, or to the Executive's dependents,
beneficiaries or estate; provided, however, that the
Employer shall have no obligations with respect to the
federal or state income tax treatment of the exercise of
any stock options or other stock rights held by the
Executive under any of the Employer's stock incentive
plans.
(f) No Set-off. The amounts payable to Executive under Section 6(e)
shall be treated as damages but as severance compensation to which the
Executive is entitled by on of termination of his employment, and the
Employer shall not be entitled to any set-off against, or reduction of, such
amounts for any reason whatsoever. Notwithstanding any other provision of
this Agreement, the Executive shall be under no obligation to seek or accept
any employment after termination of employment with the Employer for any
reason.
7. Disability. If, due to physical or mental illness, the Executive shall
be disabled so as to be unable to perform substantially all of his duties and
responsibilities hereunder, the Employer, acting through its Board of
Directors, may designate another executive to act in his place during the
period of such disability. Notwithstanding any such designation, the
Executive shall continue to receive his full salary and benefits under
Section 4 of this Agreement for a minimum of nine (9) months (net of any
amounts paid to the Executive during such nine (9) month period pursuant to
Employer's disability income plan, if any), and shall continue to participate
in the Employer's benefit plans and to receive other benefits as specified in
Section 4 until the expiration of his term of employment hereunder. If any
questions shall arise as to whether during any period the Executive was
disabled so as to be unable to perform substantially all of his duties and
responsibilities hereunder due to physical or mental illness, the Executive
may, and at the request of the Employer will, submit to the Employer a
certification in reasonable detail by a physician selected by the Executive
or his guardian to whom the Employer has no reasonable objection as to
whether the Executive was so disabled and such certification shall for the
purposes of this Agreement be conclusive of the issue. If such question
shall arise and the Executive shall fail to submit such certification, the
Employer's determination of such issue shall be binding on the Executive.
8. Withholding. All payments made by the Employer under this Agreement
shall be net of any tax or other amounts required to be withheld by the
Employer under applicable law.
9. Non-Disclosure, Non-Competition and Non-Solicitation Covenants.
(a) Definitions. For purposes of this Section 9, the following terms
shall have the following respective meanings:
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(i) "Competitive Position" shall mean (i) the direct or indirect
equity ownership or control of all or any portion
of a "Competitor" (as hereinafter defined), or (ii) any
employment, consulting, partnership, advisory, directorship,
agency, promotional or independent contractor arrangement
between Executive and any Competitor whereby Executive is
required to perform services substantially similar to those
that he is to perform for Employer hereunder.
(ii) "Competitor" shall refer to any person or entity engaged,
wholly or partly, in the business of distributing,
manufacturing, marketing, selling,servicing, repairing
environmental testing devices.
(iii) "Confidential Information" shall mean any and all proprietary
and confidential data or information of Employer or any of
its affiliates, other than "Trade Secrets" (as hereinafter
defined), which is of tangible or intangible value to
Employer or any of its affiliates and is not public
information or is not generally known or available to
Employer's competitors but is known only to Employer or its
affiliates and their employees, independent contractors or
agents to whom it must be confided in order to apply it to
the uses intended.
(iv) "Restricted Territory" shall mean the United States of
America.
(v) "Trade Secrets" shall mean all knowledge, data and
information of Employer or any of its affiliates which is
defined as a "trade secret" under applicable law.
(vi) "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
Executive in connection with the performance of his services
hereunder.
(b) Acknowledgments. Executive hereby acknowledges and agrees that
during the term of this Agreement (i) Executive will frequently be exposed to
certain Trade Secrets and Confidential Information; (ii) Executive's
responsibilities on behalf of Employer will extend to all geographical areas
of the Restricted Territory; and (iii) any competitive activity on
Executive's part during the term of this Agreement, or any competitive
activity on Executive's part in the Restricted Territory for a reasonable
period thereafter, would necessarily involve Executive's use of Employer's
Trade Secrets and Confidential Information and would unfairly threaten
Employer's legitimate business interests, including its substantial
investment in the proprietary aspects of its business and the goodwill
associated with its customer base. Moreover, Executive acknowledges that, in
the event of the termination of this Agreement, 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 9. Therefore, Executive acknowledges and agrees that it is reasonable
for Employer to require Executive to abide by the covenants set forth in this
Section 9. The parties acknowledge and agree that if the nature of
Executive's responsibilities for or on behalf of Employer or the geographical
areas in which Executive must fulfill such responsibilities materially
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change, the parties will execute appropriate amendments to the scope of the
covenants in this Section 9.
(c) Nondisclosure: Ownership of Proprietary Property.
(i) In recognition of Employer's need to protect its
legitimate business interests, Executive hereby covenants
and agrees that: (A) with regard to each item
constituting a Trade Secret, at all times during which
such item shall constitute a Trade Secret (before or
after termination of this Agreement); and (B) with regard
to any Confidential information, at all times during the
term of this Agreement and for a period of three (3)
years following the expiration or termination of this
Agreement for any reason, Executive shall regard and
treat each item constituting a Trade Secret and all
Confidential Information as strictly confidential and
wholly owned by Employer 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.
(ii) Executive shall immediately notify Employer of any
intended or unintended, unauthorized disclosure or use of
any Trade Secrets or Confidential Information by
Executive or any other person or entity of which
Executive becomes aware. Executive shall cooperate fully
with Employer in the procurement of any protection of
Employer's rights to or in any of the Trade Secrets or
Confidential Information.
(iii) Immediately upon expiration or termination of this Agreement
for any reason, or if notice of termination is required
hereunder, upon receipt of such notice, or at any time after
such termination or notice upon the specific request of
Employer, Executive shall return to Employer all written
or descriptive materials of any kind in Executive's
possession or to which Executive has access that
constitute or contain any Confidential information or
Trade Secrets, and the confidentiality obligations
described in this Agreement shall continue until their
expiration under the terms of this Agreement.
(iv) To the greatest extent possible, any Work Product
shall be deemed to be "work made for hire" (as defined in
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the Copyright Act, 17 U.S.C.A. Section 101 et seq., as
amended) and owned exclusively by Employer. Executive
hereby unconditionally ad irrevocably transfers and
assigns to Employer all rights, title and interest
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. Executive agrees to execute and deliver to
Employer any transfers, assignments, documents or other
instruments which Employer may deem necessary or
appropriate to vest complete title and ownership of any
Work Product, and all rights therein, exclusively in
Employer.
(d) Non-competition. In recognition of Employer's need to protect its
legitimate business interests, Executive hereby covenants and agrees that
during the term of this Agreement, 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. Executive
further agrees that for three (3) years following expiration or termination
of this Agreement for any reason, 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 or to notify Employer of the offer pursuant to the requirements of
the next sentence of this Section 9(d)).
(e) Non-solicitation of Customers. Executive hereby covenants and agrees
that (i) during the term of this Agreement, 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 Employer for the
purpose of providing such customer or actively sought prospective customer
with services or products competitive with those offered by Employer during
the term of this Agreement; and (ii) for a period of three (3) years
following expiration or termination of the term of this Agreement for any
reason, 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 Employer for the purpose of providing such customer or actively
sought prospective customer with services or products competitive with those
offered by Employer during the term of this Agreement.
(f) Nonsolicitation of Employer Personnel. 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, 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 Employer to terminate, alter or lessen such party's
affiliation with Employer or to violate the terms of any agreement or
understanding between such party and Employer. Executive further agrees that
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during the three (3) year period following expiration or termination of this
Agreement for any reason, Executive will not, either directly or indirectly,
alone or in conjunction with any other party, solicit or attempt to solicit
any "key" (as that term is hereinafter defined) employee, consultant,
contractor or other personnel of Employer to terminate, alter or lessen that
party's affiliation with Employer or to violate the terms of any agreement or
understanding between such party and Employer. For purposes of the preceding
sentence "key" employees, consultants, contractors or other personnel of
Employer are those with knowledge of or access to Employer's Trade Secrets or
Confidential Information.
(g) Remedies. Executive agrees that damages at law for Executive's
violation of any of the covenants in this Section 9 would not be an adequate
or proper remedy and that, should Executive violate or threaten to violate
any of the provisions of such covenants, Employer or its successors or
assigns shall be entitled to seek a temporary or permanent injunction against
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 Employer has an adequate remedy at law.
(h) Partial Enforcement. Employer has attempted to limit the rights of
Executive to compete only to the extent necessary to protect Employer from
unfair competition. Employer, however, agrees that, if the scope of
enforceability of any of these restrictive covenants is in any way disputed
at any time, a court or 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 time.
(i) Survival. Notwithstanding any expiration or termination of this
Agreement, the provisions of this Section 9 shall survive and remain in full
force and effect, as shall any other provision hereof that, by its terms or
reasonable interpretation thereof, sets forth obligations that extend beyond
the termination of this Agreement.
10. Assignment; Successors and Assigns, etc. Neither the Employer nor the
Executive may make any assignment of this Agreement or any interest herein,
by operation of law or otherwise, without the prior written consent or the
other party and without such consent any attempted transfer or assignment
shall be null and of no effect; provided, however, that the Employer may
assign its rights under this Agreement without the consent of the Executive
in the event the Employer shall hereafter effect a reorganization,
consolidate with or merge into any other Person, or transfer all or
substantially all of its properties or assets to any other Person. This
Agreement shall inure to the benefit of and be binding upon the Employer and
the Executive, their respective successors, executors, administrators, heirs
and permitted assigns. In the event of the Executive's death prior to the
completion by the Employer of all payments due him under this Agreement, the
Employer shall continue such payments to the Executive's beneficiary
designated in writing to the Employer prior to his death (or to his estate,
if he fails to make such designation or such beneficiary predeceases him).
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11. Payments to the Executive. The Employer shall pay the reasonable
attorneys' fees and disbursements incurred by the Executive in connection
with the preparation and negotiation of this Agreement. If litigation shall
be instituted to enforce or interpret any provision hereof and the Executive
shall prevail, the Employer will reimburse the Executive for his reasonable
attorneys' fees and disbursements incurred in such proceeding and will pay
prejudgment interest at the legal rate then in effect on any money judgment
or award obtained by the Executive in such proceeding.
12. Enforceability. The unenforceability or invalidity of any provision
of this Agreement shall not affect the validity or enforceability of the
remaining provisions hereof, but such remaining provisions shall be construed
and interpreted in such a manner as to carry out fully the intent of the
parties hereto; provided, however, that should any judicial body interpreting
this Agreement deem any provision hereof to be unreasonably broad in time,
territory, scope or otherwise, it is the intent and desire of the parties
hereto that such judicial body, to the greatest extent possible, reduce the
breadth of such provision to the maximum legally allowable parameters rather
than deeming such provision totally unenforceable or invalid.
13. Waiver. No waiver, termination or discharge of this Agreement, or any
of the terms or provisions hereof, shall be binding upon either party hereto
unless confirmed in writing. No waiver by either party hereto of any term or
provision of this Agreement or of any default hereunder shall affect such
party's right thereafter to enforce such term or provision or to exercise any
right or remedy in the event of any other default, whether or not similar.
14. Notices.
(a) All notices, consents, requests and other communications hereunder
shall be in writing and shall be sent by hand delivery, by certified or
registered mail (return-receipt requested), by facsimile or by a recognized
national overnight courier service as set forth below.
If to Employer: Strategic Diagnostics Inc.
000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attn: Chairman of the Board
with a copy to: Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxxxxx Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
If to Executive: Xxxxxxx X. Xxxxxxxxx
c/o Strategic Diagnostics Inc.
000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000-0000
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(b) Notices delivered pursuant to this Section 14 hereof shall be
deemed given: at the time delivered, if personally delivered, three (3)
business days after being deposited in the mail, if mailed; and one (1)
business day after timely delivery to the courier, if by overnight courier
service.
(c) Either party hereto may change the address to which notice is to be
sent by written notice to the other party hereto in accordance with this
Section 14.
15. Headings. The titles, captions and headings contained in this
Agreement are inserted by convenience of reference only and are not intended
to be part of or to affect in any way the meaning or interpretation of this
Agreement.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
17. Amendment. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by a duly authorized
representative of the Employer.
18. Governing Law. This is a Delaware contract and shall be construed
under and be governed in all respects by the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the date first written above.
"Employer"
ATTEST: ENSYS ENVIRONMENTAL PRODUCTS, INC.
/s/ XXX XXXXXXX By: /s/ XXXXXX X. XXXXX
---------------------- -----------------------
Title: PRESIDENT & CEO
-----------------------
"Executive"
WITNESS: XXXXXXX X. XXXXXXXXX
---------------------- ---------------------------------
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the date first written above.
"Employer"
ATTEST: ENSYS ENVIRONMENTAL PRODUCTS, INC.
---------------------- By:------------------------------
Title:---------------------------
"Executive"
WITNESS: XXXXXXX X. XXXXXXXXX
/s/ XXXX XXXXXXXXX /s/ XXXXXXX X. XXXXXXXXX
---------------------- --------------------------------
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Exhibit A
Form of Incentive Stock Option Agreement
AMENDED AND RESTATED
ENSYS ENVIRONMENTAL PRODUCTS, INC.
1995 STOCK INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT
100,000 December 30, 1996
No. of Shares Date of Grant
Pursuant to the Amended and Restated EnSys Environmental Products, Inc.
1995 Stock Incentive Plan (the "Plan"), EnSys Environmental Products, Inc.
(the "Company") hereby grants to Xxxxxxx X. Xxxxxxxxx (the "Optionee") an
option (the "Option") to purchase on or prior to December 30 , 2006 (the
"Expiration Date') all or any part of One Hundred Thousand (100,000) shares
(the "Option Shares") of "Stock" (as defined in Section 2 of the Plan) at a
price of $ 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" (as defined in Section 1 of the Plan) 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:
Number of Shares of Stock Cumulative Number of
Vested and Becoming Shares of Stock Available
Date Available for Exercise for Exercise
---- ---------------------- ------------
December 30, 1996 25,000 25,000
December 30, 1996 25,000 50,000
December 30, 1996 25,000 75,000
December 30, 1996 25,000 100,000
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 his
election to purchase some or all of the vested Option Shares purchasable at
the time of such notice as determined in accordance with the cumulative
number of shares of Stock available for exercise specified in the third
column of the 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
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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 so 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 or his legal representative.
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, any Option held by the Optionee may be exercised, to the
extent exercisable at the date of death, by the Optionee's legal
representative or legatee for a period of 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), any
15
Option held by the optionee may be exercised, to the extent exercisable on
the date of termination, for a period of twelve months from the date of
termination or until the Expiration Date, if earlier.
(c) Termination for Cause. If the Optionee's employment terminates for
Cause (as defined in Section 1 of the Plan), any Option held by the Optionee
shall terminate immediately and be of no further force and effect.
(d) Other Termination. If the Optionee's employment terminates for any
reason other than death, Disability or Cause, and unless otherwise determined
by the Board, any Option held by the Optionee may be exercised, to the extent
exercisable on the date of termination for a period of one year from the date
of termination or until the Expiration Date, if earlier.
(e) Termination without Cause or for Good Reason. Notwithstanding
anything herein to the contrary, in the event the Company terminates
Optionee's employment without Cause or Optionee terminates his employment for
Good Reason' (as hereinafter defined), all of the Options granted pursuant
to Section 1 hereof shall immediately become vested and exercisable in
accordance with the terms hereof. For purposes of this Agreement, each of
the following events shall constitute Good Reason' for Optionee to terminate
his employment with the Company:
(i) Failure of the Board to elect Optionee to the
office of Chief Executive Officer of the Company or to
continue the Optionee in such office;
(ii) Any material breach by the Company of any provision of
any Employment Agreement then in effect with Optionee; or
(iii) Election by the Company not to extend the term of
Optionee's employment under any Employment Agreement then
in effect with Optionee.
5. Change of Control. In the event of a "Change of Control" (as defined
in Section 12 of the Plan), each Option will automatically become exercisable
to the extent provided in Section 12 of the Plan, as in effect on the date of
grant of this Option.
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
Optionee's employer to terminate the Optionee's employment at any time.
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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 Employee 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-year period beginning on the day after the day of the
transfer of such shares of Stock to him, nor within the two-year period
beginning on the day after the grant of the Option. If the Employee intends
to dispose or does dispose (whether by sale, gift, transfer or otherwise) of
any such shares of Stock within said periods, he will notify the Company
within thirty (30) days after such disposition. In addition, no more than
$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 Agreement and the Plan, the terms and conditions of the Plan shall
control, provided that, it is understood and acknowledged that in the event
of any termination of Optionee's employment other than due to death,
disability or for cause, the provisions of Sections 4(d) and 4(e) of this
Agreement shall control.
12. Counterparts. This Agreement 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.
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.
17
ENSYS ENVIRONMENTAL PRODUCTS, INC.
By: /s/ XXXXXX X. XXXXXXXX
------------------------------------------
Member of the Compensation Committee of the Board of
Directors of EnSys Environmental Products, Inc.
Receipt of the foregoing Option is acknowledged and its terms and
conditions are hereby agreed to:
------------------------------------------
Xxxxxxx X. Xxxxxxxxx (Optionee)
Date:------------------ Address:----------------------------------
------------------------------------------
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12. Counterparts. This Agreement 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.
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 optioned 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.
ENSYS ENVIRONMENTAL PRODUCTS, INC.
By: ------------------------------------------
Member of the Compensation Committee of
the Board of Directors of EnSys Environmental
Products, Inc.
Receipt of the foregoing Option is acknowledged and its terms and
conditions are hereby agreed to:
/s/ XXXXXXX X. XXXXXXXXX
------------------------------------------
Xxxxxxx X. Xxxxxxxxx (Optionee)
Date: December 30, 1996 Address: 00 Xxxxx Xx.
------------------ ----------------------------
Xxxxxx, XX 00000
-------------------------------------
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