EXHIBIT 10.43
PARADIGM GENETICS, INC.
EMPLOYMENT AGREEMENT
FOR
XXXXXX XXXXXXXX
This EMPLOYMENT AGREEMENT ("Agreement") is entered into as of the 22nd
day of November, 2002, by and between Xxxxxx Xxxxxxxx ("Executive") and PARADIGM
GENETICS, INC. ("Company").
WHEREAS, the Company desires to compensate Executive for his personal
services to the Company; and
WHEREAS, Executive wishes to be employed by the Company and provide
personal services to the Company in return for certain compensation.
NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties agree to the following:
1. EMPLOYMENT BY THE COMPANY.
1.1 Effective Date and Term. The effective date of this Agreement shall be
November 22, 2002 ("Effective Date"). The employee is employed on an "at
will" basis. Employee's salary and performance will be reviewed at least
annually for compensation changes. This document supercedes the
Employment Agreement dated August 5, 2002 with changes incorporated at
the request of the Paradigm Board of Directors.
1.2 Position. Subject to terms set forth herein, the Company agrees to employ
Executive in the position of Vice President, Healthcare-Research and
Executive hereby accepts such employment. Executive's principal place of
employment during the entire period of this Agreement shall be
Raleigh/Durham, North Carolina. During the term of his employment with
the Company, Executive will devote his best efforts and all of his
business time and attention (except for vacation periods as set forth
herein and reasonable periods of illness or other incapacities permitted
by the Company's general employment policies) to the business of the
Company.
1.3 Duties. Executive shall be proposed to the Board to be an officer of the
Company, and
serve in an executive capacity. He shall have such duties,
responsibilities, and authority as are customarily associated with his
then current title and as assigned to Executive by the Chief Executive
Officer. The Chief Executive Officer has the right to assign and change
Executive's duties at any time.
1.4 Other Employment Policies. The employment relationship between the
parties shall also be governed by the general employment policies and
practices of the Company, including those relating to protection of
confidential information and assignment of inventions.
2. COMPENSATION.
2.1 Salary. Executive shall receive for services an annualized base salary Z
of $215,000 subject to standard federal and state withholding
requirements, payable in accordance with the Company's standard payroll
practices.
2.2 Stock Options. Subject to the approval of the Company's Board of
Directors ("Board"), the Company shall grant Executive an option
("Option") to purchase 100,000 shares of the Company's common stock under
the Company's 2000 Stock Option Plan at a strike price determined on
Executives first day of employment. More information concerning the Stock
Option Plan will be provided to Executive shortly after he begins work.
This grant will consist of incentive stock options. The Option shall vest
according to the vesting schedule set forth in the governing grant
notice, which shall provide that the shares subject to the Option will
vest over a four-year period, with twenty-five percent (25%) of the
shares subject to the Option vesting upon the Executives date of hire,
and another (25%) after Executive successfully completes one year of
continuous service with Paradigm, and one-forty-eighth (1/48thth) of the
shares subject to the Option vesting for each month of Executive's
continuous service thereafter. Executive agrees to execute Paradigm's
standard form of stock option agreement.
2.3 Performance Bonus. Executive shall be eligible to participate in the 2003
Leadership Incentive Plan (LIP) at 35 percent (at target) of his base
salary (subject to standard federal and state withholding requirements)
based on meeting his individual performance goals and Paradigm meeting
its corporate goals. The current terms and conditions of this incentive
opportunity are set forth in the attached 2002 Leadership Incentive Plan
(LIP) [Exhibit B], for his reference. Payment of the bonus shall be
subject to the satisfaction of mutually agreed upon performance goals,
and within a reasonable period of time following the execution of this
Agreement, the parties shall set forth those goals in a separate written
document. The Company's Board of Directors, in its sole discretion, shall
determine the extent to which Executive has achieved the performance
goals upon which Executive's bonus is based. As part of a yearly review
of performance, Executive will be eligible for a change in salary, bonus
and stock options based on performance, as determined by the Company's
Board of Directors.
2.4 Standard Company Benefits. Executive shall be entitled to all rights and
benefits for which he is eligible under the terms and conditions of the
standard Company benefits and compensation practices which may be in
effect from time to time and provided by the Company to its employees
generally.
2.5 Expense Reimbursement. The Company will reimburse Executive for
reasonable business expenses in accordance with the Company's standard
travel and expense reimbursement policy.
3. PROPRIETARY INFORMATION, INVENTIONS AND NON-COMPETITION OBLIGATIONS.
3.1 Agreement. Executive agrees to execute and abide by the Proprietary
Information, Inventions, Non-Competition, and Non-Solicitation Agreement
attached hereto as Exhibit D.
4. OUTSIDE ACTIVITIES.
4.1 Other Employment/Enterprise. Except with the prior written consent of the
Board, Executive will not, while employed by the Company, undertake or
engage in any other employment, occupation or business enterprise, other
than ones in which Executive is a passive investor. Executive may engage
in civic and not-for-profit activities so long as such activities do not
materially interfere with the performance of his duties hereunder.
4.2 Conflicting Interests. Except as permitted by Section 4.3, while employed
by the Company, Executive agrees not to acquire, assume or participate
in, directly or indirectly, any position, investment or interest known by
him to be adverse or antagonistic to the Company, its business or
prospects, financial or otherwise.
4.3 Competing Enterprises. While employed by the Company, except on behalf of
the Company, Executive will not directly or indirectly, whether as an
employee, officer, director, stockholder, partner, proprietor, associate,
representative, consultant, or in any capacity whatsoever engage in,
become financially interested in, be employed by or have any business
connection with any other person, corporation, firm, partnership or other
entity whatsoever which compete directly with the Company, throughout the
world, in any line of business engaged in (or planned to be engaged in)
by the Company; provided, however, that anything above to the contrary
notwithstanding, he may own, as a passive
investor, securities of any competitor corporation, so long as his direct
holdings in any one such entity shall not in the aggregate constitute
more than 1% of the voting stock of such corporation.
5. FORMER EMPLOYMENT.
5.1 No Conflict With Existing Obligations. Executive represents that his
performance of all the terms of this Agreement and as an employee of
Paradigm does not and will not breach any agreement or obligation of any
kind made prior to his employment by Paradigm, including agreements or
obligations he may have with prior employers or entities for which he has
provided services. Executive has not entered into, and agrees he will not
enter into, any agreement or obligation either written or oral in
conflict herewith.
5.2 No Disclosure of Confidential Information. If, in spite of the second
sentence in Section 5.1, Executive should find that confidential
information belonging to any former employer might be usable in
connection with Paradigm's business, Executive will not intentionally
disclose to Paradigm or use on behalf of Paradigm any confidential
information belonging to any of Executive's former employers (except in
accordance with agreements between Paradigm and any such former
employer); but during Executive's employment by Paradigm, he will use in
the performance of his duties all information which is generally known
and used by persons with training and experience comparable to his own
and all information which is common knowledge in the industry or
otherwise legally in the public domain.
6. TERMINATION OF EMPLOYMENT. The parties acknowledge that Executive's
employment with Paradigm is at-will. The provisions of Sections 6.1
through 6.6 govern the amount of compensation, if any, to be provided to
Executive upon termination of employment and do not alter this at-will
status.
6.1 Termination Without Cause. The Chief Executive Officer and Compensation
Committee of the Board shall have the right to terminate Executive's
employment with the Company at any time without Cause by giving notice as
described in Section 6.6 of this Agreement.
a) In the event Executive's employment is terminated by the Company
without Cause or for a reason other than Executive's death,
disability or cessation of the Company's business pursuant to
Section 6.5 below, Paradigm will continue to pay Executive his
salary at the date of termination (less applicable deductions and
withholdings), and provide his healthcare benefits in effect on
the date of his termination through reimbursement of COBRA expense
(less applicable employee premium sharing amounts) for a maximum
time period of up to twelve (12) months following the Executive's
final date of employment. These payments will only be made if: 1)
Executive executes a
general release of all claims against Paradigm, including but not
limited to language waiving any all claims Executive has or has
had against Paradigm or relating to any event or claim occurring
prior to the date of the release, any state law claims and claims
under federal employment law statutes, or any claims relating to
his employment by or separation from Paradigm and language
including a confidentiality and non-disparagement provision with
language acceptable to the Company no later than twenty-one (21)
days after the date of termination (or within 45 days of the date
of termination if the separation is subject to the Older Workers
Benefit Protection Act; the parties agree that the determination
of whether this Act applies will be made solely by Paradigm), and
2) Executive must use diligent documented efforts to obtain other
employment, which must be documented in detail monthly in writing
to the Company's VP, Human Resources. Executive will only receive
the salary and benefits as set forth above during this maximum
twelve (12) month-period as long as he is unable to secure
comparable regular, full time employment or a consulting
engagement lasting for more than six (6) months. Executive shall
have an obligation to notify the Company of any positions he
accepts in any capacity during the applicable severance period.
Executive must submit written resignation of any committee seat,
regular or ex-officio. The parties agree that Paradigm's Vice
President of Human Resources will determine and make the final
decision on whether Executive has made diligent efforts to obtain
other employment, and receive benefits, under this paragraph.
Unless Executive's employment is terminated by death, disability
or cessation of business under Section 6.5, or for cause,
Executive will receive an additional 25% for a total of 50%
vesting of his stock options under Section 2.2 above if terminated
other than for cause in less than one year from the date of hire.
b) Executive shall not receive severance pay or continuation of
benefits unless and until the above-referenced release of all
claims becomes effective, and can no longer be revoked under its
terms.
c) If the Company is acquired or a change of control of ownership
with respect to the Company (as defined below) occurs at anytime
during the twelve (12) month severance period, described above,
all amounts of salary and the cash equivalent of the cost of COBRA
expense for the remainder of the twelve (12) month period shall be
due and payable to Executive in full.
d) If Paradigm is acquired or a change of control of ownership with
respect to Paradigm (as defined below) occurs, Paradigm will
increase two-fold the amount
of stock options otherwise vested up to 100%. If redundancy occurs
within twelve (12) months of a change of control, Executive is
entitled to a full twelve (12) months of severance pay on a
non-contingent basis.
"Change of Control" means the occurrence of any of the following
events: (a) Ownership. Any "Person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended) becomes the "Beneficial Owner" (as defined in Rule
13d-3 under said Act), directly or indirectly, of securities of
Paradigm representing 50% or more of the total voting power
represented by Paradigm's then outstanding voting securities
(excluding for this purpose Paradigm or its Affiliates or any
employee benefit plan of Paradigm) pursuant to a transaction or a
series of related transactions which the Board of Directors does
not approve; or (b) Merger/Sale of Assets. A merger or
consolidation of Paradigm whether or not approved by the Board of
Directors, other than a merger or consolidation which would result
in the voting securities of Paradigm outstanding immediately prior
thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving
entity or the parent of such corporation) at least 80% of the
total voting power represented by the voting securities of
Paradigm or such surviving entity or parent of such corporation
outstanding immediately after such merger or consolidation, or the
stockholders of Paradigm approve an agreement for the sale or
disposition by Paradigm of all or substantially all of Paradigm's
assets.
6.2 Termination for Cause.
(a) The Chief Executive Officer and the Compensation Committee of the
Board shall have the right to terminate Executive's employment
with the Company at any time for Cause by giving notice as
described in Section 6.6 of this Agreement.
(b) "Cause" for termination shall mean: (1) conviction of, or pleading
guilty or nolo contendere to, a felony or other crime involving
theft, fraud or moral turpitude; (2) drug or alcohol abuse; (3)
Executive's material breach of this Agreement, including
unsatisfactory job performance linked to employees' goals; (4)
Executive's refusal to abide by or comply with the appropriate
directives of the Board tied to reasonable allowance; (5)
Executive's dishonesty, fraud, or misconduct with respect to the
business affairs of the Company, including, without limitation,
fraud, misappropriation or embezzlement; (6) intentional damage of
any property worth in excess of $1,000 of the Company; (7) conduct
by Executive which demonstrates gross unfitness to serve or (8)
any violation of Paradigm rules or policies for which termination
is the normal discipline based on policy or past practice
(c) If the Chief Executive Officer and Compensation Committee of
the Board of
Paradigm believe Executive is guilty of poor job performance
referenced above in Section 6.2 (b)(3) that could lead to
termination, Executive shall be provided sixty (60) days notice of
possible termination and the opportunity to cure the stated
deficiencies. This 60-day period will only apply to poor job
performance under Section 6.2 (b) (3).
(d) In the event Executive's employment is terminated at any time with
Cause, he will not receive severance pay, accelerated vesting of
stock options, or any other compensation or benefits as the result
of his termination.
6.3 Voluntary or Mutual Termination.
(a) Executive may voluntarily terminate his employment with the
Company at any time by giving notice as described in Section 6.6.
(b) In the event Executive voluntarily terminates his employment, he
will not receive severance pay, further accelerated vesting of
stock options, or any other compensation or benefits as the result
of his termination.
6.4 Termination for Inability to Regularly Perform Duties.
(a) The Company's Chief Executive Officer may terminate Executive in
the event of any illness, disability or other physical or mental
incapacity in such a manner that Executive is physically rendered
unable regularly to perform the essential functions of his job
duties hereunder, with or without reasonable accommodation, as
validated by certified physician.
(b) The Company's Chief Executive Officer shall make the determination
regarding whether Executive is unable regularly to perform his
duties as described in subsection (a) above.
(c) In the event Executive's employment is terminated at any time for
inability to regularly perform duties as described in subsection
(a) above, he will not receive severance pay, accelerated vesting
of stock options, or any other compensation or benefits as the
result of his termination.
6.5 Dissolution, Liquidation or Insolvency of the Company. Notwithstanding
the above, in the event Executive's employment is terminated by the
Company in connection with or as a result of the liquidation,
dissolution, insolvency or other winding up of the affairs of the Company
without the establishment of a successor entity to the Company, the
Company shall have no obligation to provide severance or further
financial consideration to Executive, including a performance bonus,
except for any reasonable expense reimbursements or base salary that
Executive has accrued and earned at the time of such termination.
6.6 Notice: Effective Date of Termination. Termination of Executive's
employment pursuant to this Agreement shall be effective on the earliest
of:
(a) immediately after Executive, for any reason, gives written notice
to the Company's Chief Executive Officer of his termination.
(b) immediately upon the Company's Chief Executive Officer giving
written notice to Executive of his termination for Cause, without
Cause or as a result of an event listed in Section 6.4 or 6.5
above;
6.7 Non-Compete Provision. In consideration of his employment with Paradigm,
Executive agrees that for the longer of twelve (12) months after the
separation of his employment with the Company for any reason, whether
Executive's resignation or termination by Paradigm, or any period for
which he is receiving severance payments from Paradigm under the terms of
Section 6.1 (a) of this Agreement, he will not become engaged in any
"Competitive Activity" (as defined below).
"Competitive Activity" means: (A) Directly or indirectly, engaging,
assisting or participating in, whether as a President, CEO, Vice
President, director, officer, employee, agent, manager, consultant,
partner, owner or independent contractor or other participant, any
business, firm, corporation, partnership, enterprise or organization
located in Durham and Wake Counties, North Carolina, the State of North
Carolina or the United States of America or the countries of Western
Europe that competes with the business engaged or hereafter engaged in by
Paradigm; (B) the sale, trade, service or production or attempted sale,
trade, service or production of genomics in Durham and Wake Counties,
North Carolina, the State of North Carolina or the United States of
America or the countries of Western Europe. (C) the sale, trade, service
or production or attempted sale, trade, service or production of products
in Durham and Wake Counties, North Carolina, the State of North Carolina
or the United States of America or the countries of Western Europe which
are competitor products to the products produced, sold or designed by the
Paradigm facility in Research Triangle Park, North Carolina during his
employment with Paradigm; and (D) employment, whether direct or as
independent contractor, with Metabolon, Beyond Genomics, SurroMed,
Phenomenome, Metabometrix, or Cantata, and any of their successor
businesses or businesses which acquire these companies after the date of
this Agreement in Durham and Wake Counties, North Carolina, the State of
North Carolina or the United States of America or the countries of
Western Europe.
In further consideration of his employment with Paradigm, Executive for
the duration of his employment with Paradigm and for the longer of twelve
(12) months after the separation of his employment with the Company for
any reason, whether Executive's resignation or termination by Paradigm,
or any period for which he is receiving severance payments from Paradigm
under the terms of Section 6.1 (a) of this Agreement, he shall not
recruit or encourage employees of Paradigm to leave Paradigm or to be
hired by any company or business with which he affiliated or allow any
such company or business, to the extent it is in his control, to engage
in any activity which, were it done by him, would violate any provision
of this Section 6.7; provided, however, that Paradigm acknowledges and
agrees that a company or business with which Executive is affiliated may
employee or engage Paradigm employees that have left Paradigm, so long as
the company or business did not recruit or encourage the Paradigm
employee to leave Paradigm. It is understood that discussions, whether
occurring before or after the date of this Agreement, resulting from
general employment advertisements or initiated by Paradigm employees, do
not constitute recruitment or encouragement to leave.
7. GENERAL PROVISIONS.
7.1. Notices. Any notices provided hereunder must be in writing and shall be
deemed effective upon the earlier of personal delivery (including
personal delivery by hand, telecopier, or telex) or the third day after
mailing by first class mail, to the Company at its primary office
location and to Executive at his address as listed on the Company
payroll.
7.2 Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule
in any jurisdiction, such invalidity, illegality or unenforceability will
not affect any other provision or any other jurisdiction, but this
Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provisions had never been
contained herein.
7.3 Waiver. If either party should waive any breach of any provisions of this
Agreement, he or it shall not thereby be deemed to have waived any
preceding or succeeding breach of the same or any other provision of this
Agreement.
7.4 Complete Agreement. This Agreement and its Exhibits A - E constitute the
entire agreement between Executive and the Company. This Agreement is the
complete, final and exclusive embodiment of their agreement with regard
to this subject matter and supercedes any prior oral discussions or
written communications and agreements. This Agreement is entered into
without reliance on any promise or representation other than those
expressly contained herein, and it cannot be modified or amended except
in writing
signed by the President and Chief Executive Officer of the Company.
7.5 Counterparts. This Agreement may be executed in separate counterparts,
any one of which need not contain signatures of more than one party, but
all of which taken together will constitute one and the same Agreement.
7.6 Headings. The headings of the sections hereof are inserted for
convenience only and shall not be deemed to constitute a part hereof nor
to affect the meaning thereof.
7.7 Successors and Assigns. This Agreement is intended to bind and inure to
the benefit of and be enforceable by Executive and the Company, and their
respective successors, assigns, heirs, executors and administrators,
except that Executive may not assign any of his duties hereunder and he
may not assign any of his rights hereunder without the written consent of
the Company, which shall not be withheld unreasonably.
7.8 Choice of Law. All questions concerning the construction, validity and
interpretation of this Agreement will be governed by the law of the State
of North Carolina. Executive expressly consents to the jurisdiction of
the state and federal courts for Durham County, North Carolina, for all
actions arising out of or relating to this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first below written.
Paradigm Genetics, Inc.
By:
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For Paradigm Genetics, Inc.
Title:
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Date:
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Accepted and agreed this ______ day of November, 2002.
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Xxxxxx Xxxxxxxx
