EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT between TIMOTHY SULLIVAN, residing at 5809
Highland Drive, Chevy Chase, MD 20815 ("Employee"), and INFORMAX, INC., a
Delaware corporation with offices at 6010 Executive Boulevard, 10th floor, North
Bethesda, Maryland 20852 ("InforMax") is entered into as of 1 April 1999, (the
"Effective Date") and sets forth the terms and conditions of Employee's
continued employment by InforMax.
WITNESSETH
WHEREAS, Employee is presently employed by InforMax and is the Senior
Vice President, Marketing and Sales of InforMax; and
WHEREAS, InforMax believes that it is in the best interest of InforMax
to assure the continued services of Employee on behalf of InforMax under the
terms and conditions set forth herein; and
NOW THEREFORE, in consideration of the premises and of the mutual
covenants and conditions contained in this Agreement, the parties hereto,
intending to be legally bound, agree as follows:
1. EMPLOYMENT. InforMax hereby employs Employee and Employee
hereby accepts continued employment with InforMax upon the terms and conditions
set forth in this Agreement. Employee's principal titles and responsibilities
shall be that of Senior Vice-President, Sales and Marketing, reporting to the
Chief Operating Officer ("COO"), as well as to the Chief Executive Officer
("CEO"). Employee shall perform such reasonable duties consistent with these
titles as shall be assigned to him from time to time by the COO and/or the CEO
of the InforMax, with the CEO having superiority.
2. TERM OF AGREEMENT. The term of this agreement shall commence
on the Effective Date, and, except as otherwise provided herein, shall terminate
on March 31, 2003. The Agreement shall automatically renew for additional terms
of one (1) year unless, not less than ninety (90) days before the next
termination date of the Agreement, either party provides notice in writing to
the other that it does not intend to renew the Agreement.
3. COMPENSATION.
(a) Base Salary. InforMax shall pay, and Employee shall
accept, during the term of this Agreement, as compensation for services rendered
hereunder an annual salary of $150,000 payable in semi-monthly payments plus a
commission of one percent (1%) of software
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license revenue and professional service revenues payable monthly on actual
monies received by InforMax the previous month.
(b) Stock Options. Employee shall be granted an option to
purchase up to 375,000 shares of non-voting common stock at $0.50 per share
("Option") in accordance with InforMax's Equity Incentive Compensation Plan a
copy of which is attached as Exhibit A (the "Plan") which will vest over
forty-eight months. Option vesting shall be accelerated based on sales
performance in excess of the vesting set forth in the Plan as follows:
If cumulative gross sales for InforMax, excluding
government contract sales, are at least $13,000,000
by Dec 31, 1999, then an additional 85,932 shares
subject to the Option shall be deemed vested and may
be exercised by Employee in addition to any other
shares that may have vested by such time.
If cumulative gross sales for the year for InforMax,
excluding government contract sales, are at least
$25,000,000 by Dec 31, 2000, then an additional
85,932 shares subject to the Option shall be deemed
vested and may be exercised by Employee on or after
that time in addition to any other shares that may
have vested by such time.
If cumulative gross sales for the year for InforMax,
excluding government contract sales, are at least
$35,000,000 by Dec 31, 2001, then an additional
85,932 shares subject to the option shall be deemed
vested and may be exercised by Employee in addiiton
to any other shares that may have vested by such
time.
The maximum number of shares purchasable under the Option grant shall be 375,000
shares. Options and vesting shall be governed by the Plan and any amendments
made thereto. Should the Plan permit accelerated vesting at the time of an
Initial Public Offering, then Employee shall have such rights as are described
by the Plan.
(c) Benefit Plans. Employee shall be entitled to
participate in such benefit plan(s) of InforMax now in existence or which may
hereafter during the term of this Agreement become effective for senior
executives of InforMax. Nothing in this Section 3(c) shall be deemed to prevent
InforMax from altering or abolishing any of such plans or benefits provided that
all such senior executives are treated equally.
(d) Vacation. During the term of this Agreement, Employee
shall be entitled to three (3) weeks paid vacation in accordance with the
established policy of InforMax, or such other greater number of days pursuant to
an amended policy in effect at the relevant time. Employee also shall be
entitled to all paid holidays and personal days given by InforMax.
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(e) Expenses. InforMax shall promply pay or reimburse
Employee upon submission of vouchers or receipts for all reasonable
out-of-pocket expenses for entertainment, travel, meals, hotel accommodations
and the like, incurred by him that are reasonably related to the performance of
his duties.
(f) Withholding. Employee acknowledges that InforMax may
withhold from amounts payable to Employee under this Agreement with respect to
certain income, unemployment and social security taxes required to be withheld
from the wages of employees under applicable Federal, State, and local law. No
other taxes, fees, impositions, duties or other charges of any kind shall be
deducted or withheld from amounts payable hereunder, unless otherwise required
by law or agreed to by Employee.
4. TERMINATION OF EMPLOYMENT. Nothwithstanding any provisions
herein to the contrary, Employee's employment with InforMax may be terminated
prior to the completion of the term described in Section 2 of this Agreement,
subject to the following terms and conditions:
(a) Termination for Cause. InforMax may terminate
Employee's employment at any time for Cause. For the purpose of this Agreement,
the term "Cause" shall mean Employee's (1) willful misconduct; (2) gross
negligence or incompetence in the performance of his duties for more than five
(5) days after receiving written notice from InforMax on the grounds of
purported failure to perform and corresponding failure by Employee to cure such
failure to perform within such notice period; (3) willful violation of any law,
rule or regulation (other than traffic violations or similar offenses) or final
cease-and-desist order in performance of his duties; or (4) material breach of
any provision of this Agreement.
(b) Termination Without Cause upon a Change of Control.
InforMax shall pay Employee a sum equal to his annual base salary plus earned
commissions for the previous twelve (12) months at the time of a "Change in
Control" upon termination by InforMax of Employee's employment without Cause
within 180 days of a "Change in Control". For the purposes of this Section a
"Change of Control" of the Company shall be deemed to have occurred if (i) any
person or entity other than a person currently a beneficial owner of the
Company's securities becomes, after the date hereof, the beneficial owner of
securities of the Company representing 50% of more of the combined voting power
of the Company's then outstanding securities, or (ii) the Company sells all or
substantially all of the assets of the Company.
(c) Termination Without Cause other than upon a Change of
Control. InforMax shall pay Employee a lump-sum cash payment in an amount equal
to fifty percent (50%) of his annual salary plus fifty percent (50%) of his
earned commissions for the previous twelve (12) months upon termination by
InforMax of Employee's employment without Cause other than as provided in
Section 4(b) above. The severance payment shall be paid to Employee in cash as
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promptly as practicable, but in no event later than thirty (30) days following
the termination of his employment. Employee's Options will continue to vest
until the end of the sixth month after termination without Cause. Employee
acknowledges that any options exercised after ninety (90) days from termination
will not be considered qualified options.
(d) Termination by Employee for Breach by InforMax. In
the event that InforMax breaches this Agreement in any material respect and
fails to cure the breach within thirty (30) days of written notice, Employee may
terminate his employment. In the event of such termination, InforMax shall pay
Employee a lump-sum cash payment in an amount equal to fifty percent (50%) of
his annual salary plus fifty percent (50%) of his earned commissions for the
previous twelve (12) months. The severance payment shall be paid to Employee in
cash as promptly as practicable, but in no event later than thirty (30) days
following such termination.
(e) Voluntary Termination by Employee without Cause. Any
termination of Employee's employment by resignation, retirement or any other
action of Employee for any reason other than as set forth in section 4(d) shall
be deemed to be a "Voluntary Termination." Employee shall give InforMax thirty
(30) days notice of a Voluntary Termination.
(f) Payment Upon Termination For Cause or Voluntary
Termination. InforMax's obligation to pay Employee any and all compensation and
benefits shall cease in the event of a Termination for Cause or a Voluntary
Termination, and InforMax shall not be liable for any further payments to
Employee hereunder except for accrued salary, accrued vacation days,
reimbursement of appropriate expense vouchers, applicable indemnification
obligations and other benefit continuation obligations imposed by law.
5. DEVOTION OF TIME. Except for vacations as provided herein and
absences due to temporary illness or family emergencies, Employee agrees to
devote his business time, best efforts and undivided attention and energies
during the term of this Agreement to the performance of his duties and to
advance InforMax's interests. During the term of this Agreement, Employee shall
not, without the prior written approval of the Board of Directors, or its
designee, be engaged in any other business activity which, in the reasonable
judgment of the Board of Directors, conflicts with the duties of Employee,
whether or not such business activity is pursued for gain, profit or other
pecuniary advantage, but this restriction shall not be construed as preventing
Employee from investing his assets in such form or manner as will not require
the performance of services of Employee in the operations of the affairs of the
enterprises or companies in which said investments are made. Notwithstanding the
foregoing, services which are neither substantial nor significant, individually
or in the aggregate, shall be permitted with respect to investments of Employee
provided that they shall not have an adverse effect on Employee's duties
hereunder.
6. NON-COMPETITION. Employee agrees that during the period of
Employee's employment by InforMax and for a period of either (i) one (1) year
after termination of this
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Agreement for any reason other than those set forth in Section 4(c) and 4(d)
above or (ii) for a period of six months after termination of this Agreement
pursuant to section 4(c) and 4(d) above:
(i) Employee will not solicit business from or perform work
for any of InforMax's past or present clients, or any of InforMax's
prospective clients to whom InforMax has made a written proposal within
six (6) months prior to any termination of Employee's employment with
InforMax, either directly or indirectly, for the benefit of anyone
other than InforMax, or participate or assist in any way in the
solicitation of business from or performance of work for any such
clients, as an independent contractor or consultant to any other entity
unless the business being solicited or the work being performed is not
the Same Business as that in which InforMax is engaged. As used in this
Agreement, the term "Same Business" means any business in which the
InforMax is currently engaged at the time of termination or any
business in which the Board of Directors has approved, in its minutes,
plans to enter.
(ii) Employee will not divert, solicit, or pirate on
Employee's behalf, or on the behalf of any other employer, person,
entity, any employee of InforMax, or directly or indirectly induce
attempt to influence any such employee to leave InforMax's employment.
(iii) Employee will not, directly or indirectly, on Employee's
behalf or in the service or on behalf of others, render or be retained
to render services whether as an officer, partner, trustee, consultant,
or employee, for any business engaged in the Same Business as InforMax
including but not limited to any customer of InforMax for whom Employee
has provided services during Employee's employment with InforMax,
unless the same is provided solely to that portion or unit of any such
business that is not engaged in the Same Business.
(iv) The business of InforMax is international in scope and
the restrictions of this paragraph shall accordingly apply worldwide.
7. NONDISCLOSURE OF PROPRIETARY INFORMATION. Both during and after the
term of this Agreement, Employee agrees to preserve and protect the
confidentiality of Proprietary Information as defined in Section 8 below. In
addition, Employee will not (i) disclose or disseminate Proprietary Information
to any third party, including employees of InforMax without a need to know, or
(ii) use Proprietary Information for his own benefit or for the benefit of any
third party. If Employee receives information with uncertain confidentiality, he
agrees to treat the information as Proprietary Information until management has
verified to him that such information is neither confidential nor proprietary.
8. DEFINITION OF PROPRIETARY INFORMATION. Proprietary Information is
defined as information regarding InforMax's current and planned business
activities, including (i) information
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which relates to InforMax's actual or anticipated products, software, research
inventions, processes, techniques, designs or other technical data; (ii)
information regarding administrative, financial or marketing activities of
InforMax; (iii) information received from InforMax clients and other third
parties; and (iv) any materials or documents containing any of the above
information. Proprietary Information does not include information which is or
becomes publicly available without a breach of this Agreement by Employee or any
information that Employee is obligated to disclose to third parties by law.
9. RETURN OF PROPRIETARY INFORMATION. Upon termination of his
employment with InforMax, Employee agrees to deliver to InforMax all documents
and other tangibles including diskettes and other electronic or other storage
media containing Proprietary Information.
10. TRADE SECRETS. Employee understands and agrees that the
covenants, restrictions and prohibitions against disclosure of Proprietary
Information set forth in this Agreement are in addition to, and not in lieu of,
any rights or remedies which InforMax may have available pursuant to the laws of
any jurisdiction or at common law to prevent disclosure of trade secrets or
proprietary information, and the enforcement by InforMax of its rights and
remedies pursuant to this Agreement shall not be construed as a waiver of any
other rights or available remedies which it may possess in law or equity absent
this Agreement.
11. OWNERSHIP OF WORKS. During the time Employee is employed by
InforMax, InforMax shall own all rights, including all trade secrets and
copyrights, in and to the following works created by Employee whether created on
InforMax's premises or at some other location: (i) works which relate to or are
derived from the actual or anticipated business of InforMax and (ii) works which
result from or are derived from any task assigned to Employee or work performed
by Employee for InforMax (collectively, the "Works"). InforMax shall own such
Works even if created outside normal working hours and regardles of whether
Employee's own equipment or InforMax's equipment was used to create the Works.
Such Works shall include program codes and documentation. To the extent that any
such Works do not qualify as works made for hire under U.S. copyright law, this
Agreement will constitute an irrevocable assignment by Employee to InforMax of
the ownership of, and all rights of copyright in, such Works. Employee agrees to
give InforMax or its designees all assistance reasonably required to perfect
such rights provided that following termination of this Agreement, InforMax
shall reimburse Employee for his reasonable time and expense in assisting with
such matters.
12. INVENTIONS. If Employee individually or jointly makes or
conceives of any invention, technique, process, or other know-how, whether
patentable or not, in the course of performing services for InforMax, which
relates in any manner to the actual or anticipated business of InforMax or
results from any task assigned to Employee or work performed by Employee for
InforMax (collectively, "Inventions"), Employee will and hereby does assign to
InforMax his entire right, title and interest in such Inventions. Employee will
disclose any such Inventions to an officer of InforMax and will, upon request,
promptly sign a specific assignment
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of title to InforMax, and do anything else reasonably necessary to enable
InforMax to secure patents, trade secret or any other proprietary rights in the
United States or foreign countries, provided that following termination of this
Agreement, InforMax shall reimburse Employee for his reasonable time and expense
in assisting with such matters. Any Inventions Employee has made or conceived
before the effective date of this Agreement are listed and described on Schedule
A attached hereto. These items are excluded from this Agreement.
13. INDEMNIFICTION. InforMax shall indemnify and hold harmless
Employee in his capacity as an officer as provided in the certificate of
incorporation and by-laws of InforMax, as amended from time to time. This
provision shall in no manner limit InforMax's right to amend its certificate of
incorporation or by-laws.
14. ASSIGNABILITY. This Agreement and all rights hereunder are
personal to Employee and shall not be assignable except in accordance with the
laws of descent and distribution, and any purported assignment in violation
thereof shall not be valid or binding on InforMax. This Agreement, however,
shall inure to the benefit of, and be binding upon each successor of InforMax,
whether resulting from a merger or consolidation or to the recipient of all or
substantially all of the assets of InforMax (and such successor shall thereafter
be deemed the same as InforMax for purposes of this Agreement). This Agreement
shall in no way restrict InforMax's right to merge, consolidate, sell all or
substantially all of its assets or engage in any business combination or other
transaction of any nature.
15. ENTIRE AGREEMENT. This Agreement, including Exhibit A and any
Schedule A, supersedes and replaces any and all present, written or oral,
agreements of employment between the parties hereto, and all such agreements are
hereby deemed canceled, revoked, and of no further force or effect.
16. ACKNOWLEDGMENT. The restrictions contained in Section 6 of this
Agreement are considered reasonable by Employee and InforMax, and it is the
desire of both parties that such restrictions and other provisions of this
Agreement be enforced to the fullest extent permissible under the laws and the
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, in the event that any such restriction or provision shall be found
to be void or invalid but would be valid if some part thereof were deleted or
the period or area of application reduced, such restriction or provisions shall
apply with such modification as shall be necessary to make it valid and
effective. A deletion resulting from any adjudication shall occur only with
respect to the operation of the provision or a portion thereof affected in the
particular jurisdiction in which such adjudication is made, and each court or
other body having jurisdiction with respect to the enforcement of the provisions
of Section 6 of this Agreement are hereby empowered to modify by reduction,
rather than deletion, the time periods or other restrictions referred to
therein.
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17. MODIFICATION. This Agreement constitutes the whole agreement
of employment of Employee by InforMax and there are no terms other than those
stated herein. No variation hereof shall be deemed valid unless in writing and
signed by the parties hereto, and no discharge of the terms hereof shall be
deemed valid unless by full performance by the parties hereto and by a writing
signed by the parties hereto. No waiver by either party of any provision or
condition of this Agreement by him or it to be performed shall be deemed a
waiver of similar or dissimilar provisions and conditions at the same time or
any prior or subsequent time.
18. NOTICES. Any notice, statement, report, request or demand
required or permitted to be given by this Agreement shall be in writing, and
shall be sufficient if addressed and sent by certified mail, return receipt
requested, to the parties at the addresses set forth above or at such other
place that either party may designate by notice to the other.
19. EQUITABLE RELIEF/PAYMENT OF FEES. The parties to this
Agreement agree that each of them shall be entitled, in addition to any other
remedies they may have under this Agreement, at law, or otherwise, to immediate
injunctive and other equitable relief to prevent or curtail any breach of this
Agreement. Each party agrees to indemnify the other party for all reasonable
costs and attorneys' fees incurred in enforcing this Agreement should the first
such party prevail in any litigation over a breach of any provision of this
Agreement.
20. GOVERNING LAW. This Agreement shall be governed by the laws of
the State of Maryland (regardless of the laws that might otherwise govern under
applicable principles or conflicts of law) as to all matters, including but not
limited to matters of validity, construction, effect, performance and remedies.
21. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but which together shall constitute
one and the same instrument.
22. LIMITED AGREEMENT. This Agreement is intended by the parties to
govern only those rights and obligations described herein, and it is not the
parties' intent to abrogate any other rights in favor of Employee or InforMax
provided under Federal or State Law.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
InforMax, Inc.
By: /s/ Alex Titomirov
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Alex Titomirov
Chairman, CEO
Employee:
/s/ Timothy Sullivan
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Timothy Sullivan
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