Exhibit 10.33
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT is made as
of the 1 st day of January, 1997, by and
between STRATEGIC DIAGNOSTICS INC. (the
“Employer”), and JAMES W. STAVE (the
“Employee”).
W I T N E S
S E T H :
WHEREAS, Employer agrees to retain
the services of Employee, and Employee 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 promises, 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 Employee and the Employee agrees to
be employed by the Employer on the terms and conditions hereinafter
set forth.
2. Capacity . The
Employee shall serve as the Vice President - Research and
Development of Employer. The Employee 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 Employee’s
employment under this Agreement shall remain in effect for the
period commencing on the date hereof and terminating on January 1,
1998 (“Initial Term”) and shall be automatically
extended for periods of one year commencing on January 1, 1998 and
on each January 1 thereafter, unless either the Employee 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
Employee’s employment hereunder.
4. Compensation and
Benefits . The regular compensation and benefits payable to
the Employee under this Agreement shall be as follows:
(a) Salary . For all
services rendered by the Employee under this Agreement, the
Employer shall pay the Employee a salary at the rate of $99,600 per
year, subject to an annual adjustment of the then current annual
salary, as determined by the Board of Directors in accordance with
the usual practice of the Employer with respect to review of
compensation for its senior executives. The Employee’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 Employee shall be
entitled to participate in a bonus plan under which he may be
entitled to receive an annual bonus
in an amount as shall be determined
by the Employer’s Board of Directors in the beginning of each
of the Employer’s fiscal years under this Agreement
commencing with fiscal year 1997. The Board of Directors and the
Employee shall establish reasonable performance goals and targets
for such bonus. Upon completion of each year, the Board of
Directors shall review the actual performance against such
performance targets and goals and notify the Employee of the amount
of the award. Initially, the target annual bonus will be 20% of
Employee’s salary for 1997. The Employee’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 Employee 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 acceptable 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.
(d) Perquisites . The
Employee 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.
(e) Equity Award .
Promptly after execution of this Agreement, the Employee shall be
granted options to purchase 60,000 shares of the Employer’s
common stock under the Employer’s 1995 Stock Incentive Plan
at an exercise price equal to the fair market value of the shares
at the time of the grant (the “Option”). The Option
will be granted pursuant to an Incentive Stock Option Agreement to
be executed contemporaneously herewith in substantially the form of
Exhibit A attached hereto and incorporated herein by this
reference and such Option shall be subject to a four (4) year
vesting schedule. The grant of options pursuant to this Section
4(e) shall be without prejudice to further grants to the Employee
in the future under any plan adopted by the Employer.
5. Extent of Service .
During his employment hereunder, the Employee 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 judgement, 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.
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6. Termination .
Notwithstanding the provisions of Section 3, the Employee’s
employment hereunder shall terminate under the following
circumstances:
(a) Death . In the
event of the Employee’s death during the Employee’s
employment hereunder, the Employee’s employment shall
terminate on the date of his death.
(b) Termination by the
Employer for Cause . The Employee’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 Employee) for cause by written notice to the Employee setting
forth in reasonable detail the nature of such cause. Only the
following shall constitute “cause” for such
termination:
(i) The Employee commits an act
constituting fraud or material misrepresentation with respect to
Employer;
(ii) The Employee embezzles funds or
assets from the Employer;
(iii) Conviction of the Employee 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 Employee pursuant to a majority
vote of all such members of the Board of Directors of the Employer,
such vote to set forth in reasonable detail the nature of such
failure.
(c) Termination by the
Employee . The Employee’s employment hereunder may be
terminated effective immediately by the Employee by written notice
to the Board of Directors of the Employer, provided that the
Employee 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 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
(ii) Election by the Employer not to
extend the term of the Executive’s employment hereunder on
substantially the same terms, in accordance with the provisions of
Section 3.
(d) Termination by the
Employer Without Cause . The Employee’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 on
written notice to the Employee.
(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
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other compensation plans, programs
and structures, or fringe benefits programs in which the Employee
is a participant at the time of the termination of his employment
with the Company, all compensation and benefits payable to the
Employee under this Agreement shall terminate on the date of
termination of Employee’s employment hereunder.
Notwithstanding the foregoing, in the event of termination by the
Employee for Good Reason pursuant to Section 6(c) or by the
Employer pursuant to Section 6(d), the Employee shall be entitled
to the following benefits:
(i) The Employer shall continue to
pay an amount equal to the Employee’s salary to the Employee
(or the Employee’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 which shall extend for a period of nine (9) months after the
date of the Employee’s termination (the “Severance
Period”), at the salary rate in effect on the date of his
termination, said payments to be made on the same periodic dates as
salary payments would have been made to the Employee 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 Employee under this Section 6(e) or in the performance of any
of its other obligations under this Section 6(e), the Employee, 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 Employee 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 of application of such benefits the
Employee 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 Employee otherwise may have and
except as expressly provided in any award subsequent to the grant
of the stock options contemplated by Section 4(e), any restrictions
remaining on any restricted shares issued to the Employee under the
Employer’s restricted plans shall immediately lapse, any
performance shares issued to the Employee under the
Employer’s incentive stock plans shall immediately vest, and
any stock options and stock appreciation rights granted to the
Employee shall become exercisable immediately, and the Employee may
exercise all such options or stock appreciation rights within the
later of the remainder of their term or 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 Employee, or the Employee’s dependents, beneficiaries
or estate, because the Employee 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 Employee, or to the Employee’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
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stock options or other stock rights
held by the Employee under any of the Employer’s stock
incentive plans.
(f) No Set-off . The
amounts payable to Employee under Section 6(e) shall not be treated
as damages but as severance compensati
