Exhibit 10.25
EMPLOYMENT AGREEMENT
This AGREEMENT made effective November 18, 1996 between DIANON SYSTEMS,
INC., a Connecticut corporation, and any successor thereto, hereinafter referred
to as the "Company," and STEVEN CLAYTON, residing in Naperville, Illinois.
WITNESSETH:
WHEREAS, the Company wishes to employ STEVEN CLAYTON as Vice President
Information Services of the Company and STEVEN CLAYTON wishes to accept such
employment, in each case on the terms and subject to the conditions set forth
below; and
WHEREAS, the services that STEVEN CLAYTON should render hereunder to
the Company are unique and valuable; and
WHEREAS, the parties desire to reduce the terms and conditions of
STEVEN CLAYTON's employment to writing;
NOW, THEREFORE, in consideration of the terms and conditions and the
mutual covenants contained in this Agreement, the Company and STEVEN CLAYTON
hereby agree as follows:
1. Employment
The Company hereby employs STEVEN CLAYTON and STEVEN CLAYTON hereby
accepts such employment upon the terms and conditions hereinafter set forth. The
parties acknowledge that STEVEN CLAYTON's employment with the Company is at will
and terminable by either party at any time for any reason.
2. Duties and Responsibilities
STEVEN CLAYTON shall perform with continuous diligence those activities
assigned to STEVEN CLAYTON by the Company's Senior Vice President Finance and
Chief Financial Officer, President and Chief Operating Officer, Chief Executive
Officer and/or Board of Directors from time to time, initially including
responsibility for Information Services; keeping full and complete records of
all business and/or research activities in which STEVEN CLAYTON engages and
surrendering all such records and materials on request; improving strategies for
achieving the Company's goals; motivating co-worker performance; keeping abreast
of all new developments in STEVEN CLAYTON's area of expertise; participating
actively in research and business meetings; and abiding by all Company policies.
3. Salary and Incentive Compensation
The Company shall compensate STEVEN CLAYTON for his services during the
term of this Agreement on a salaried basis paid in installments at a rate
determined by the Company from time to time, provided that the initial base
salary shall be at an annualized rate of $120,000. STEVEN CLAYTON shall also
participate, according to its terms, in any management incentive compensation
program maintained by the Company for salaried Grade 17 management employees of
the Company during the term of this Agreement.
4. Relocation, Travel Expenses and Temporary Housing
The Company shall provide STEVEN CLAYTON relocation expenses in
accordance with the terms of its established relocation policy for his
relocation from Illinois to Connecticut in connection with the commencement of
his employment with the Company. The Company shall pay STEVEN CLAYTON reasonable
costs associated with temporary housing, including car rental, for up to three
months in connection with such relocation. The Company shall also pay air fare
for up to twelve round-trips between Connecticut and Chicago in connection with
such relocation.
5. Signing Bonus
The Company shall pay STEVEN CLAYTON a signing bonus of $14,000 less
applicable tax deductions within a reasonable time after he commences his
employment with the Company.
6. Fringe Benefits
During the term of this Agreement, the Company shall provide STEVEN
CLAYTON benefits and emoluments as authorized for all other salaried Grade 17
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, retirement plan participation and stock purchase plan
participation..
7. Stock Options
On the first day of STEVEN CLAYTON's active employment under this
Agreement, the Company shall award him options to purchase 15,000 shares of
common stock of the Company at the fair market value on said date, subject to
the terms, conditions, vesting schedules and expiration dates described in the
incentive stock option award document attached to this Agreement as Exhibit A.
8. Company Property
At the time his employment with the Company terminates, or at any
earlier point in time when a request is made by the Company for same, STEVEN
CLAYTON 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 STEVEN CLAYTON's possession or
under his control, whether prepared by him or others, related to the Company or
relating to the business of the Company.
9. Proprietary Information
STEVEN CLAYTON hereby agrees to all the terms and conditions of the
Company's Employee Proprietary Information Agreement attached hereto as Exhibit
B and incorporated herein and has executed a copy thereof concurrently with this
Agreement.
10. Non Competition
STEVEN CLAYTON agrees that, to the fullest extent permitted by law, for
the period of one (1) year after his termination date STEVEN CLAYTON (a) will
not solicit business on behalf of any entity in the clinical chemistry business,
which is performing or marketing anatomical pathology services ("Competing
Entity"), (b) will not solicit business from customers of the Company, (c) will
not solicit the employment or services 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 other than California, Washington and Oregon, provided that
nothing in this Paragraph shall prevent investment ownership of less than 5% of
the shares of any publicly traded Competing Entity.
11. Remedy for Breach
STEVEN CLAYTON acknowledges:
(a) that he may be a director and 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;
(b) that his compliance with the covenants and agreements
in this Agreement is necessary to protect the
goodwill and other proprietary interest 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 the parties recognize that the services to be rendered under this
Agreement by STEVEN CLAYTON are special and unique and of an extraordinary
character, and that in the event there is a breach by STEVEN CLAYTON 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 STEVEN CLAYTON, or to enjoin STEVEN CLAYTON from performing services
for any Competing Entity.
12. STEVEN CLAYTON'S Representation
STEVEN CLAYTON 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.
13. Assignments
The rights and obligations of STEVEN CLAYTON 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.
14. 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 supersedes any verbal, written or other
agreement(s) or understanding(s) existing between STEVEN CLAYTON and the Company
relating to his employment or the other matters covered herein.
15. 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.
16. 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.
12/8/96 BY: /s/David R. Schreiber
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Date David R. Schreiber
Chief Financial Officer and
Senior Vice President, Finance
12/11/96 BY: /s/Steven Clayton
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Date Steven Clayton
Exhibit A
DIANON SYSTEMS, INC.
200 Watson Boulevard
Stratford, Connecticut 06497
SO Grant No.
STOCK OPTION GRANT
Optionee: Steve Clayton Date of Grant: November 18, 1996
Termination Date: November 17, 2006 Total No. of Shares: 15,000
Exercise Price Per Share $7.875
We are pleased to inform you that the Compensation Committee of the Board of
Directors of DIANON Systems, Inc. (the "Company"), has today granted you an
option pursuant to the Company's 1991 Stock Incentive Plan (the "Plan") to
purchase an aggregate number of shares shown above of the Common Stock of the
Company on the following terms and conditions:
1. The purchase price per share of the shares of Common Stock subject
to this option is $6.625 per share.
2. This option shall expire at the close of business on November 17,
2006. Subject to acceleration in the event of a Change of Control (as defined in
the Plan), you must remain in the employ of the Company or a Related Company (as
defined in the Plan) for two years from the date hereof before you can exercise
any part of this option. Thereafter this option will become exercisable in
installments as follows:
Percentage of Shares Date of Earliest Exercise(Vesting)
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40% 11/18/98
20% 11/18/99
20% 11/18/00
20% 11/18/01
In the event of a Change of Control this option shall become fully
exercisable and vested.
3. This option is intended to qualify as an "Incentive Stock Option"
within the provisions of Section 422 of the Internal Revenue Code.
4. The option price shall be payable by you at the time this option is
exercised, (i) in cash or (ii) by delivering shares of Common Stock of the
Company which you have owned for at least six months prior to such exercise, or
a combination of cash and such shares, having an aggregate value equal to the
aggregate option price of the shares as to which this option is exercised
(basing the value of any such shares of Common Stock on the fair market value of
the Common Stock on the date of exercise). No shares of Common Stock shall be
issued pursuant to exercise of this option until full payment therefor has been
made.
5. This option may be exercised only by you and may not be transferred
except by will or the laws of descent and distribution. In the event of your
death, your legal representatives may exercise this option as to the shares of
Common Stock which were immediately purchasable by you at the date of death,
within ninety (90) days following the date of death (but in no event later than
November 17, 2006).
6. If your employment with the Company terminates after reaching your
normal retirement date under the Company's retirement plan or for any reason
beyond your control other than your death, your option privileges shall be
limited to the shares of Common Stock which were immediately purchasable by you
at the date of such termination and such option privileges shall expire unless
exercised within ninety (90 days) days after the date of such termination and
prior to the close of business on November 17, 2006. If your employment is
terminated for reasons within your control, including without limitation, cause
and voluntary resignation, all rights under this option shall expire on the date
of such termination.
7. Your option is granted in tandem with a Limited Stock Appreciation
Right ("LSAR") which may be exercised only within the 60-day period following a
Change of Control (as defined in the Plan). This means that with respect to each
share under option, you may exercise either the option or the Limited Stock
Appreciation Right, but not both. Upon exercise of the Limited Stock
Appreciation Right, you shall receive, for each share with respect to which the
Limited Stock Appreciation Right is exercised, an amount equal in value to (I)
the fair market value of a share of Common Stock on the date of exercise over
(ii) the exercise price of the related option. The Limited Stock Appreciation
Right shall be payable solely in cash. Such amount shall be paid within 30 days
of the exercise of the Limited Stock Appreciation Right.
8. The Company has the right to delay the exercise of your option if
listing registration or qualification of the Common Stock is required under any
federal or state securities law or stock exchange or similar rule and has not
been obtained.
9. Nothing herein shall restrict the right of the Company or any
Related Company to terminate your employment at any time, with or without cause,
or to withhold required amounts upon the exercise of your option or LSAR. The
Company shall have the right to require you to pay, or make other arrangements
satisfactory to the Committee to satisfy, all tax withholding obligations in
connection with the exercise of your option or LSAR.
10. This option is subject to all of the other terms, provisions and
conditions of the Plan, a copy of which has been furnished to you and other
copies of which may be obtained by you from the Company.
Very truly yours,
DIANON Systems, Inc.
By: /s/Kevin C. Johnson
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Kevin C. Johnson
President
Date: 12/11/96
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/s/Steven Clayton
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(Signature)
1439 Keats Ave.
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(Address)
Naperville, IL 60564
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Exhibit B
AGREEMENT
THIS AGREEMENT, made this 12/11/96 by and between DIANON SYSTEMS, INC.,
its affiliates, subsidiaries, successors and assigns (collectively called
hereinafter "DIANON") and Steven Clayton, an individual residing at 1439 Keats
Avenue, Naperville, Illinois 60564 (hereinafter called "Employee").
In consideration of the commencement of Employee's employment with
DIANON, the payment of compensation and benefits for such employment, and access
to sensitive information, Employee and DIANON acknowledge, represent and agree
to the terms and conditions set forth in this Agreement.
1. Employee's employment with DIANON creates a relationship of trust
and confidence between the parties. Employee agrees that, during and after
his/her employment with DIANON, Employee will not use or disclose, or allow
anyone else to use or disclose, any confidential information relating to the
products, sales and/or business affairs of DIANON or of any customer or supplier
of DIANON, or any information created, discovered, or developed by or for
DIANON, or acquired by DIANON, that has commercial value in DIANON's present or
future business ("Confidential Information"), except as may be necessary in the
performance of Employee's employment with DIANON or as may be authorized in
advance by appropriate officials of DIANON. By way of illustration, but not
limitation, Confidential Information includes processes, formulas, data,
know-how, inventions, improvements, techniques, marketing plans, product plan,
strategies, forecasts, customer lists and any other information Employee has
reason to know DIANON would like to treat as confidential for any purpose.
Employee agrees to keep Confidential Information secret whether or not any
document containing such information is marked confidential.
2. All rights, title and interest in all records, documents, or files
concerning the business of DIANON, including, but not limited to biomaterials,
processes, letters, trade secrets, laboratory notebooks or other written or
electronically recorded material, whether or not produced by the Employee, shall
be and remain the property of DIANON. Upon termination of employment, the
Employee shall not have the right to remove any such records from the offices of
DIANON. In addition, Employee agrees to promptly return to DIANON all things of
whatsoever nature that belong to DIANON, and all records (in whatsoever form,
format or medium) contained or related to Confidential Information of DIANON.
3. Employee agrees to assign, and does hereby assign to DIANON, all of
his/her right, title and interest in and to all inventions, improvements,
discoveries or technical developments, whether or not patentable, which he/she
solely or jointly with others, may conceive or reduce to practice during the
term of his/her employment (a) which are related in whole or in part, directly
or indirectly, to DIANON's product line, research and development, or field of
technological or industrial specialization, or (b) in the course of utilization
by DIANON of Employee's services in a technical or professional capacity in the
areas of research, development, marketing, management, engineering or
manufacturing, or (c) pursuant to any project of which Employee is or was a
participant or member that is or was either financed or directed by DIANON, or
(d) at DIANON's expense, in whole or in part.
4. Employee agrees to disclose promptly to DIANON's President or his
designee, all ideas, discoveries, and improvements conceived by Employee alone
or in collaboration with others, and to cooperate fully with DIANON, both during
and after employment, with respect to the procurement of patents for the
establishment and maintenance of DIANON's or its designee's rights and interests
in said invention, improvement, discoveries or developments, and to sign all
papers which DIANON may deem necessary or desirable for the purpose of vesting
DIANON or its designees with such rights, the expenses thereof to be paid by
DIANON.
5. The Employee shall, while employed by DIANON, devote his/her best
efforts and his/her full time to the business of DIANON.
6. In the event of a breach or threatened breach of the provisions in
this Agreement, DIANON shall be entitled to an injunction restraining such
breach, it being recognized that any injury arising from a breach would be
irreparable and could have no adequate remedy at law; but nothing herein shall
be construed as prohibiting DIANON from pursuing any other remedy available for
such breach or threatened breach. In the event that Employee breaches or
threatens a breach of this Agreement, DIANON shall be entitled to have its
reasonable legal fees and costs paid by the Employee for any legal services
relating to the breach or threatened breach.
7. This Agreement is not intended, and should not be construed in any
way, as a contract of employment for a definite period of time or to limit or
restrain DIANON's or the Employee's right to terminate the employment
relationship at any time.
8. In the event any provision or paragraph of this Agreement is
declared to be invalid or unenfoceable, then the balance of this Agreement shall
remain in full force and effect.
9. This Agreement shall be construed and enforced in accordance with
the laws of the State of Connecticut.
10. The foregoing contains the entire Agreement between the parties
pertaining to confidential DIANON documents and information. No modification
thereof shall be binding upon the parties unless the same is in a writing signed
by the respective parties. This Agreement and all of the terms and conditions
contained herein shall remain in full force during the period of employment
notwithstanding any changes in compensation.
11. Employee represents and warrants that he/she has no other
agreements or commitments that would hinder or prevent performance of his/her
job responsibilities with DIANON. Unless authorized to do so, Employee agrees
not to disclose to DIANON or use in his/her employment with DIANON any invention
or confidential information belonging to any former employer or to any other
person other than DIANON.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the date set forth below.
Employee: DIANON SYSTEMS, INC.
/s/Steven Clayton By: /s/David R. Schreiber
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Steven Clayton David R. Schreiber
Dated: 12/11/96
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