EXHIBIT 10.56
EMPLOYMENT AGREEMENT
This AGREEMENT made effective July 24, 2000 between DIANON SYSTEMS, INC. a
Connecticut corporation, and any successor thereto, hereinafter referred to as
the "Company", and JACK SNYDER, M.D., residing at 1653 Lindsay Drive, North
Wales, Pennsylvania 19454.
WITNESSETH:
WHEREAS, the Company wishes to employ Jack Snyder, M.D. and Jack Snyder,
M.D. wishes to accept such employment, in each case on the terms and subject to
the conditions set forth below; and
WHEREAS, the services that Jack Snyder, M.D. should render hereunder to
the Company are unique and valuable; and
WHEREAS, the parties desire to reduce the terms and conditions of Jack
Snyder, M.D.'s employment to writing;
NOW, THEREFORE, in consideration of the terms and conditions and the
mutual covenants contained in this Agreement, the Company and Jack Snyder, M.D.
hereby agree as follows:
1. Employment
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The Company hereby employs Jack Snyder, M.D. as of the first full
day of service he provides to the Company hereunder which shall be no later than
August 1, 2000 and Jack Snyder, M.D. hereby accepts such employment upon the
terms and conditions hereinafter set forth. The parties acknowledge that Jack
Snyder, M.D.'s employment with the Company is at will and terminable by either
party at any time with or without cause.
2. Duties and Responsibilities
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Jack Snyder, M.D., as Chief Medical Officer, shall perform with
continuous diligence those activities assigned to Jack Snyder, M.D. by the
Company's President or, in the absence of a President, its Board of Directors.
Commencing with the first full day of service he provides to the Company
hereunder, Jack Snyder, M.D. will be elected as Chief Medical Officer of the
Company.
3. Term
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This Agreement shall begin on the effective date hereof and continue
until terminated under the terms contained herein.
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4. Salary and Incentive Program
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This Agreement shall compensate Jack Snyder, M.D. for his services
during the term of this Agreement commencing with the first full day of service
he provides to the Company hereunder on a salaried basis paid in installments at
a rate determined by the Company from time to time, and the Company shall
endeavor annually to perform a salary review, provided that the initial base
salary shall be at an annualized rate of $290,000 and the base salary for the
position shall not be at a lower annualized rate at any time during the term of
this Agreement. Commencing with the first full day of service he provides to the
Company hereunder, Jack Snyder, M.D. shall also participate, according to its
terms, in any management incentive compensation program maintained by the
Company for salaried Grade 18 management employees of the Company during the
term of this Agreement. A copy of the Management Incentive Plan currently in
effect is attached as Exhibit A.
5. Fringe Benefits
---------------
During the term of this Agreement, commencing with the first full
day of service he provides to the Company hereunder, the Company shall provide
Jack Snyder, M.D. benefits and emoluments as authorized for all other salaried
Grade 18 management employees of the Company as they may be modified from time
to time by the Company during the term of this Agreement, including at the time
of execution of this Agreement, health and medical insurance, life insurance,
sick leave, vacation, holidays, an automobile allowance, retirement plan
participation and stock purchase plan participation. In addition, the Company
shall provide Jack Snyder, M.D. with other benefits as authorized for all other
salaried, management physician employees of the Company and as such benefits may
be modified from time to time by the Company during the term of this Agreement,
including at the time of execution of this Agreement, malpractice insurance,
disability insurance, professional license costs and Continuing Medical
Education allowance and of professional membership costs up to $1,500 per year,
provided that greater costs may also be paid by the Company if the parties so
agree.
6. Stock Options
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Effective on the date this agreement is signed by Jack Snyder, M.D.,
the Company shall award Jack Snyder, M.D. a Stock Option Grant to purchase
50,000 shares of common stock of the Company at the fair market value on said
date, on term, conditions, vesting schedules and expiration dates set forth in
the stock option award document attached to this Agreement as Exhibit B.
7. Stock Grants
------------
Provided Jack Snyder, M.D.'s employment with the Company continues
through the date below without notice of intent to terminate having been given
by either party, the Company shall issue to Jack Snyder, M.D. 7,500 shares of
common stock of the Company on April 2, 2001. Jack Snyder, M.D. agrees not to
sell any such stock for a period of six months from the date of such grant.
8. Relocation
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The Company shall pay for and reimburse expenses associated with
Jack Snyder, M.D.'s relocation connected with his hire and provide local
representatives from Prudential Relocation to manage the selling and/or buying
process as authorized for other salaried, management employees of the Company
and as such expenses that the Company will pay for or reimburse may be modified
at any time relevant to the relocation of Dr. Snyder in connection with his
hire. Currently, the Company's practice is to pay all costs incurred as part of
selling and buying a new home, excluding personal expenses such as property
taxes, points and interest, but including real estate commissions, filing fees,
moving expenses, attorney fees and reasonable expenses relating to reasonable
house hunting trips.
9. Termination
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a) This Agreement shall terminate on any of the following
occurrences:
(i) Jack Snyder, M.D.'s death;
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(ii) Jack Snyder, M.D.'s disability (inability to perform
essential job functions with or without reasonable
accommodation which reasonable accommodation does not
cause undue hardship on Company operations) for a
period of 120 days or more unless waived by the Board
of Directors;
(iii) mutual agreement of the parties reduced to writing
signed by both parties;
(iv) voluntary resignation by Jack Snyder, M.D.;
(v) termination by the Company without Stated Cause;
(vi) termination by the Company with Stated Cause.
b) Cause for termination by the Company shall mean Jack Snyder,
M.D.'s
(i) gross negligence;
(ii) intentional insubordination; -
(iii) intentional misconduct;
c) Good Cause for resignation by Jack Snyder, M.D., shall exist only
if one of the following three (3) circumstances occurs within the first 12
months of Jack Snyder, M.D.'s employment with the Company.
(i) Without Jack Snyder, M.D.'s expires written consent,
any assignment of duties materially inconsistent with
his position or material adverse change in his
reporting responsibilities, titles or offices or any
removal of Jack Snyder, M.D. from or any failure to
reelect him to his then position, except in connection
with his termination as a result of death, disability,
or mutual agreement of the parties, voluntary
resignation by Jack Snyder, M.D. not for Good Reason,
or termination by Jack Snyder, M.D. with Stated Cause;
(ii) A reduction of Jack Snyder, M.D.'s base salary from the
Company or the taking of any action by the Company
which would materially adversely affect Jack Snyder,
M.D.'s participation in or materially reduce his
benefits under any plan established to provide
compensation for the Company's executive level
employees, including but not limited to the Company's
bonus plan, stock incentive plan, or any other stock
award or stock grant opportunity applicable to him;
(iii) The relocation of the office at which Jack Snyder, M.D.
regularly performs his duties for the Company that
requires him to relocate his residence.
d) "Stated Cause" shall mean Cause communicated to Jack Snyder,
M.D. by the Company in a Notice of Termination.
e) "Notice of Termination" shall mean written notice given by either
party to the other of an intention to terminate this Agreement pursuant to
subparagraphs (a) (iv), (v) or (vi) of this Paragraph 9 of this Agreement.
f) Notice of Termination shall be sent by certified mail or
registered mail, return receipt requested, first class postage prepaid, to the
residence in the case of Jack Snyder, M.D., and to its principal office in the
Town of Stratford, Connecticut, to the attention of the President, in the case
of the Company.
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g) The "Termination Date" shall be the date Jack Snyder, M.D.
ceases providing services to the Company as an employee.
10. Compensation after Termination
a) Jack Snyder, M.D. will not receive any compensation from the
Company after the Termination Date other than accrued, unused vacation, except
as described under Paragraph (b) of this Section of this Agreement, if
applicable. Jack Snyder, M.D.'s participation in all fringe benefits offered by
the Company to its employees will cease immediately on the Termination Date
except as described in Paragraph (b) of this section of this Agreement, if
applicable. Nothing in this Agreement, however, is intended to impair any rights
vested under the law in any benefit plan of the Company.
b) If this Agreement and Jack Snyder, M.D.'s employment with the
Company is terminated by the Company without Stated Cause, or through Jack
Snyder's resignation for Good Cause, then during the applicable "Post Notice of
Termination Without Stated Cause Period" described in subparagraph (vi) of this
paragraph.
(i) The Company will pay Jack Snyder, M.D. at his rate of
base pay determined as of the date preceding the Notice
of Termination Without Stated Cause issuance.
(ii) Jack Snyder, M.D. shall act as a consultant to the
Company as requested by the Company for up to six days
per month.
(iii) The Company will continue participation in all
applicable Company benefit plans for Jack Snyder, M.D.
and/or his eligible dependents on the same basis as if
Jack Snyder, M.D. continued to be an active full-time
employee of the Company.
(iv) The Company will pay up to $10,000 for outplacement
services for Jack Snyder, M.D. provided by an
outplacement provider of Jack Snyder, M.D.'s choice.
(v) The Company will continue to honor any option-vesting
schedule in effect for options granted to Jack Snyder,
M.D. as of the date preceding the Notice of Termination
Without Stated Cause Issuance Date.
(vi) If termination occurs within twelve months after the
Company experiences a change in control, the Post
Notice of Without Stated Cause Termination Period shall
be twelve months beginning with the Notice of Without
Stated Cause Termination Issuance Date. Otherwise, the
Post Notice of Without Stated Cause Termination Period
shall be six months beginning with the Notice of
Without Stated Cause Termination Issuance Date or
Resignation for Good Cause Notice.
A. For purposes of this paragraph, "change in
control" shall have the meaning set forth in
Exhibit C attached hereto and incorporated
herein.
11. Company Property
----------------
On the Termination date, or at any earlier point in time after a
Notice of Termination is received when a request is made by the Company for
same, Jack Snyder, M.D. will turn over to the Company all notes, reports,
memoranda, books, records, chemicals, devices and documents, whether in written,
typewritten, computerized or any other form, which are in Jack Snyder, M.D.'s
possession or under his control, whether prepared by him or others, related to
the Company or related to the business of the Company provided such material was
acquired by Jack Snyder, M.D. during the course of his employment with the
Company and is not in the public domain. At the conclusion of the period
described in paragraph (b) of Section 10 of this Agreement, or at any earlier
point in time when a request is made by the Company for same, Jack Snyder, M.D.
shall also return to the Company any keys, parking card, credit card, business
cards or other materials related to this employment with the Company or the
operation of the Company.
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12. Proprietary Information
-----------------------
Jack Snyder, M.D. hereby agrees to all the terms and conditions of
the Agreement regarding confidential Company information attached hereto as
Exhibit D and incorporated herein.
13. Non-Competition
---------------
Jack Snyder, M.D. agrees that, to the fullest extent permitted by
law, for the period of one (1) year after his Termination Date, Jack Snyder,
M.D. (a) will not solicit business on behalf of any for-profit entity in the
clinical chemistry business, which is performing or marketing anatomic pathology
services other than PAP tests ("Competing Entity"), (b) will not solicit
competing business from customers of the Company, (c) will not solicit the
employment or services (except through the Company) of any of the employees of
the Company, and (d) will not, directly or indirectly, participate in the
ownership, management, operation or control of any Competing Entity in the
continental United States provided that nothing in this Paragraph shall prevent
investment ownership of less than 5% of the shares of a publicly traded
Competing Entity.
14. Remedy for Breach
-----------------
Jack Snyder, M.D. acknowledges:
a) that he may be an officer of the Company and as such he would
be conversant with, and have access to, the business affairs,
records, trade secrets, customers and customer lists,
suppliers, supplier lists, patents, technical know-how,
chemicals, devices, sales or distribution agents and
representatives, sales or distribution agents and
representatives' lists and other confidential and proprietary
information of the Company; and other confidential and
proprietary information of the Company; and
b) that his compliance with the covenants and agreements in this
Agreement is necessary to protect the goodwill and other
proprietary interests of the Company; and
c) that a breach of his covenants and agreements in this
Agreement will result in continuing and irreparable damage to
the Company for which there will be no adequate remedy at law.
Both parties recognize that the services to be rendered under this
Agreement by Jack Snyder, M.D. are special and unique and of an extraordinary
character, and that in the event there is a breach by Jack Snyder, M.D. of the
terms and conditions of this Agreement to be performed by him, then the Company
shall be entitled, if it so elects, to institute and prosecute proceedings in
any court of competent jurisdiction either in law or in equity, to obtain
damages for any breach of this Agreement, or to enforce the specific performance
thereof by Jack Snyder, M.D., or to enjoin Jack Snyder, M.D. from performing
services for any Competing Entity. The parties further recognize and agree that
breach by Jack Snyder, M.D. of his obligations under Sections 11, 12 or 13 of
this Agreement shall relieve the Company of its obligations under paragraph (b)
of Section 10 of this Agreement but that such relief shall not be an adequate
remedy at law.
The parties agree that any dispute arising under this Agreement
(other than those arising under Sections 11, 12, 13 or 14 of this Agreement)
shall be subject to arbitration in the State of Connecticut according to the
rules of the American Arbitration Association for employment dispute
arbitration.
15. Jack Snyder, M.D.'s Representation
----------------------------------
Jack Snyder, M.D. warrants and represents that neither the execution
and delivery nor the performance of this Agreement by him will in any way
violate, or conflict with, any other agreement by which he may be bound or any
duty or obligation to which he may be subject and that he will take all steps
necessary to comply with the representation.
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16. Assignments
-----------
The rights and obligations of Jack Snyder, M.D. under this Agreement
shall be assignable to and binding upon the successors and assigns of the
Company including any corporation organized by the Company to carry on the
business of the Company.
17. Entire Agreement
----------------
This instrument contains the entire Agreement of the parties. It may
not be changed orally, but only by agreement in writing signed by the party
against whom enforcement of any waiver, change, modification extension or
discharge is sought. This Agreement supercedes any verbal, written or other
agreement(s) or understanding(s) existing between Jack Snyder, M.D. and the
Company relating to his employment or the other matters covered herein.
18. Severability
------------
If any provision of this Agreement shall be held invalid, such
invalidity shall not affect any other provisions of this Agreement not held so
invalid, and only such provisions shall to the full extent consistent with the
law remain in full force and effect.
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19. Applicable Law
--------------
This Agreement shall be governed by the laws of the State of
Connecticut.
IN WITNESS WHEREOF, the parties have executed or caused to be
executed this Agreement.
DIANON SYSTEMS, INC.
28 June 2000 By: /s/ Kevin C. Johnson
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Date Kevin C. Johnson
26 June 2000 By: /s/ Jack W. Snyder
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Date Jack Snyder, M.D.
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