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Exhibit 10(ix)
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December 18, 1996
Xx. Xxxx Xxxxxx
x/x Xxxxx & Xxxxxxx XXX
0000 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx X. Xxxxxx, Esq.
Dear Xxxx:
This letter sets forth our agreement with respect to your provision of services
as an independent contractor to BioClin AG and any subsidiary or affiliate
thereof (collectively referred to herein as the "Company" and individually
referred to herein as a "Protected Party") and special separation benefits
relating to the termination thereof, as follows:
1. POSITION, DUTIES AND PLACES OF PERFORMANCE: Your provision of services
will commence effective as of the closing of the acquisition of BioClin (Europe)
AG by DNX Corporation (the "Effective Date"). During the term of this agreement
(unless earlier terminated as provided below), you will devote such time and
attention to the operations and affairs of the Company and have such duties and
responsibilities as the Chief Executive Officer of DNX Corporation may
reasonably determine; provided, however, that such duties and responsibilities
shall be consistent with being a Senior Consultant; and provided, further, that
if the duties and responsibilities are changed so they are not consistent with
being a Senior Consultant, such duties and responsibilities as you and the Chief
Executive Officer of DNX Corporation may mutually agree within 30 days, and if
no mutual agreement is reached, you may treat such change of duties and
responsibilities as a termination of your services by the Company pursuant to
paragraph 4 below. You will perform your duties and responsibilities at the
Company's facilities in Cham and Zug, Switzerland, except for travel required
for Company business. During the term of this agreement, the Company will not
change the primary place of performance of your duties and responsibilities
without your consent.
2. COMPENSATION: During the term of this agreement (unless earlier
terminated as provided below), you will be paid in Switzerland at the annualized
rate of U.S. $120,000, or such greater amount as may be authorized by the
Compensation Committee (the "Compensation Committee") of the Board of Directors
of DNX Corporation (the "Board"). Such compensation shall be paid in accordance
with the normal procedures of the Company and the Compensation Committee for
compensating consultants who are independent contractors to the Company and
shall be subject to withholding for applicable taxes and governmental charges.
As soon as practicable after the Effective Date, you will provide to the Company
a withholding certificate and such other written representations regarding your
status under United States and Swiss tax law as the Company may
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require, and the Company will be entitled to rely in good faith on such
certificate and representations.
3. Benefits:
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(a) IN GENERAL: During the term of this agreement (unless earlier
terminated as provided below), you will be eligible beginning in 1997
to participate in the DNX Corporation Executive Compensation Plan at
the same levels as other senior consultants to the Company, as
authorized by the Compensation Committee.
(b) SPECIAL RETIREMENT BENEFITS: During the term of this agreement (unless
earlier terminated as provided below), the Company will pay on your
behalf to the Swiss social security system the lesser of (i) the
annual amount, if any, necessary to maintain your retirement coverage
as currently in effect under such system and (ii) the maximum annual
amount of tax that the Company would be required to pay under section
3111(a) of the Internal Revenue Code (or any successor provision
thereto) with respect to your covered wages under section 3121(a) of
the Internal Revenue Code and section 230 of the Social Security Act
(or any successor provisions thereto) if your compensation hereunder
were subject to such tax.
4. SEVERANCE OBLIGATIONS: If your services are terminated by the Company
(or are treated as terminated by the Company under section 1) during the term of
this agreement for any reason other than Cause, then, subject to sections 5, 6
and 7 below, the Company will provide to you regular severance payments at the
rate of your annualized compensation for consulting services at the time of
termination until 12, 24 or 36 months after your termination date, as elected in
writing by the Company at the time of such termination. The period of severance
elected by the Company for purposes of this agreement will be coextensive with
any period of severance elected for purposes of your agreement to provide
services as an employee to DNX Corporation. Any payments made will be reduced by
applicable taxes and other required withholdings.
For the purposes of this agreement, the term "Cause" means your (a) commission
of an act that is determined by the Board to be fraudulent or dishonest conduct
or a material breach of any of the Company's policies, (b) conviction of a
felony or knowing violation of any federal, state, or local law applicable to
the Company or (c) intentional refusal, without proper cause, to substantially
perform your duties after a demand for substantial performance has been
delivered to you in writing by your supervisor(s). Upon termination for Cause,
the Company shall have no further liability or obligation to you, except for
compensation earned but not paid and other obligations mandated by law.
5. RELEASE: In consideration for the special separation benefits set
forth in section 4 above, you shall agree to the conditions outlined on the
attached Release. The Company's severance
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December 18, 1996
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obligations under section 4 above are expressly conditioned upon your (a)
execution and delivery of the Release at the time of your termination of
services and (b) not revoking the Release within any revocation period described
therein.
6. COMPETITIVE ACTIVITY: In consideration for the special separation
benefits set forth in section 4 above, you agree that (a) if your services are
terminated by the Company (or are treated as terminated by the Company under
section 1) during the term of this agreement for any reason other than Cause,
then you will not, without the prior written consent of the Board in its sole
discretion, engage in any Competitive Activity during the period of your
severance payments under section 4 above and (b) if your services are terminated
by you for any reason other than as provided in section 1 or by the Company for
Cause, then you will not, without the prior written consent of the Board in its
sole discretion, engage in any Competitive Activity until the later of (1) five
years after the date of this agreement or (2) two years after your termination
date. The Company's severance obligations under section 4 above are expressly
conditioned upon your satisfaction of your obligations under this section 6.
For the purposes of this agreement, the term "Competitive Activity" means your
participation in the management, clinical or preclinical operations of any
business enterprise if (a) such enterprise engages in substantial and direct
competition with any Protected Party in North America or Europe, (b) such
enterprise's sales of any product or service competitive with any product or
service of a Protected Party amounted to at least 10% of such enterprise's net
sales for its most recently completely fiscal year, and (c) such Protected
Party's sales of said product or service amounted to at least 10% of its net
sales for its most recently completely fiscal year. Competitive Activity will
not include the mere ownership of less than 5.0% of any class of the outstanding
securities of any such enterprise and the exercise of rights appurtenant
thereto.
7. NO SOLICITATION OR HIRING: In consideration for the special separation
benefits set forth in section 4 above, you agree that (a) for a period of three
years after your termination date, you will not, without the prior written
consent of the Board in its sole discretion, directly or indirectly induce or
attempt to induce any employee of any Protected Party to leave the employment of
such Protected Party or to accept any other employment or position and (b) for a
period of two years after your termination date, you will not, without the prior
written consent of the Board in its sole discretion, directly or indirectly hire
or cause to be hired any employee of any Protected Party. The Company's
severance obligations under section 4 above are expressly conditioned upon your
satisfaction of your obligations under this section 7.
8. TERM OF AGREEMENT: This agreement shall have a two-year term commencing
on the Effective Date, provided that thereafter the term will automatically be
extended for successive one-year periods unless either party gives written
notice, not less than 90 days prior to the otherwise scheduled expiration of the
term, that it or he does not want the term to so extend.
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9. GOVERNING LAW: This agreement shall be governed by and construed in
accordance with the internal laws of Switzerland without regard to conflicts of
law principles.
10. ENTIRE AGREEMENT; MODIFICATION: This agreement and the attached Release
constitute the entire agreement between you and the Company relating to your
consulting services with the Company and the termination thereof and supersede
all other prior understandings or agreements relating to your services with the
Company and the termination thereof. This agreement may not be modified or
amended except by a writing signed by you and the Company.
Sincerely,
/s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Chairman
/s/ Xxxx Xxxxxx December 18, 1996
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Xxxx Xxxxxx Date
Enclosure
