EXHIBIT 10.7
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EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made by and between Synbiotics Corporation, a California
corporation ("EMPLOYER"), and Paul A. Rosinack ("EMPLOYEE") as of October 25,
1996.
RECITALS:
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WHEREAS, EMPLOYER and EMPLOYEE wish to set forth in this Agreement the terms and
conditions under which EMPLOYEE is to be employed by EMPLOYER.
NOW, THEREFORE, EMPLOYER and EMPLOYEE, in consideration of the mutual promises
set forth herein, agree as follows:
ARTICLE I
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TERM OF AGREEMENT
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1.1 Term. The term of this Agreement shall commence on the date first written
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above and shall continue until terminated pursuant to Article 6.
ARTICLE 2
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EMPLOYMENT DUTIES
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2.1 Title/Responsibilities. EMPLOYEE shall serve as an employee of EMPLOYER and
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hold the position of Vice President and General Manager, Animal Health of
EMPLOYER, having the powers and responsibilities consistent with such position
and reporting to EMPLOYER's Chief Executive Officer, all subject to ultimate
direction and management of EMPLOYER's Board of Directors. EMPLOYEE shall also
perform all duties which from time to time are assigned to him by EMPLOYER's
Chief Executive Officer and/or Board of Directors, and shall provide the Chief
Executive Officer and/or Board with periodic reports upon request. EMPLOYEE's
job location (subject to change in the discretion of the Board) shall be San
Diego, California.
2.2 Full Time Attention. EMPLOYEE shall perform his duties hereunder in a
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diligent and professional manner and devote substantially all of his business
time and attention, best efforts, energy and skills to EMPLOYER during the time
he is employed hereunder as Vice President and General Manager, Animal Health of
EMPLOYER. During the term of this Agreement EMPLOYEE shall not without the
express consent of EMPLOYER's Board of Directors serve or act as a shareholder
(except passive holdings of less than 1% of the stock), employee, agent,
consultant, officer, director, partner, representative or owner of any other
business entity, nor (if it would require more than an insubstantial amount of
business time or attention) of any non-profit entity.
2.3 Compliance with Rules. EMPLOYEE shall comply with all applicable
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governmental laws, rules and regulations and with all of EMPLOYER's policies,
rules and/or regulations applicable to all employees of EMPLOYER.
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ARTICLE 3
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COMPENSATION
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3.1 Base Salary. EMPLOYER shall pay semi-monthly to EMPLOYEE a salary of
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$160,000 per annum until such time or times as it may discretionarily be raised
(but not lowered) upon annual performance/salary review by EMPLOYER's Chief
Executive Officer (upon recommendation of its Compensation Committee).
3.2 Additional Compensation (Stock Option). In addition to the salary provided
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in Section 3.1, EMPLOYER hereby grants to EMPLOYEE as additional compensation
for EMPLOYEE's Services (but not for any capital-raising purposes or in
connection with any capital-raising activities), a non-qualified stock option to
purchase 25,000 shares of EMPLOYER Common Stock under EMPLOYER's 1996 Stock
Option Plan, with an exercise price equal to the Fair Market Value per share of
EMPLOYER Common Stock on the date first written above, such option to vest in
sixteen equal quarterly installments.
3.3 Bonus. In addition to the salary provided in Section 3.1, EMPLOYEE shall
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participate in any executive incentive bonus plan which EMPLOYER may in its
discretion establish for 1997 and future years.
ARTICLE 4
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OTHER BENEFITS
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4.1 Fringe Benefits. EMPLOYEE shall be entitled during the term of his
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employment under this Agreement to all other fringe benefits made available from
time to time by EMPLOYER to its executives generally and/or its employees
generally, including without limitation participation in EMPLOYER's 401(k) plan
and group health insurance plan.
4.2 Expenses. EMPLOYER shall reimburse EMPLOYEE, not less often than monthly,
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for reasonable out-of-pocket business expenses incurred by EMPLOYEE in the
course of his duties hereunder, upon submission by EMPLOYEE of appropriate
expense account reports and substantiating receipts.
4.3 Vacation. EMPLOYEE shall be entitled to three weeks paid vacation per full
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year of service, in accordance with and subject to EMPLOYER's vacation accrual
plan and policies. EMPLOYEE acknowledges the "cap" on vacation accruals set
forth in such plan and policies.
4.4 Relocation. EMPLOYER shall provide EMPLOYEE a loan in the amount of the
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following actual and reasonable relocation expenses of EMPLOYEE (but in no event
to exceed $50,000): standard brokerage commission and closing costs for selling
EMPLOYEE's Pennsylvania home, EMPLOYEE's house hunting travel expenses, up to
six months of temporary housing in San Diego County, and the expenses of moving
EMPLOYEE's household goods from Pennsylvania to San Diego County, and other
reasonable relocation related expenses that EMPLOYEE may incur. Such loan shall
bear no interest until maturity, and principal shall (to the extent not
previously forgiven) be payable in one lump sum on the day after the earlier of
the cessation of EMPLOYEE's employment with EMPLOYER or the fourth anniversary
of this Agreement. One-quarter of the original amount of the loan shall be
forgiven on each anniversary of this Agreement, provided EMPLOYEE is then
employed by EMPLOYER, and the entire loan shall be forgiven if EMPLOYEE's
employment with EMPLOYER ceases other than for Cause.
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ARTICLE 5
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FORMER EMPLOYMENT
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5.1 No Conflict. EMPLOYEE represents and warrants that the execution and
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delivery by him of this Agreement, his employment by EMPLOYER and his
performance of duties under this Agreement will not conflict with and will not
be constrained by any prior employment or consulting agreement or relationship,
or any other contractual obligation.
5.2 No Use of Prior Confidential Information. EMPLOYEE will not intentionally
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disclose to EMPLOYER or use on its behalf any confidential information belonging
to any of his former employers, but during his employment by EMPLOYER he will
use in the performance of his duties all information (but only such information)
which is generally known and used by persons with training and experience
comparable to his own or is common knowledge in the industry or otherwise
legally in the public domain.
ARTICLE 6
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TERMINATION
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6.1 Term. This Agreement (including EMPLOYEE'S employment) shall continue until
terminated by either EMPLOYER or EMPLOYEE. Such termination (including
termination of EMPLOYEE's employment) shall be effected by written notification
and may be effected at any time, with or without Cause, for any reason or no
reason.
6.2 Severance. If this Agreement and/or EMPLOYEE's employment is terminated as
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a result of Cause, EMPLOYEE shall be entitled to no severance pay. If this
Agreement and/or EMPLOYEE's employment is terminated other than for Cause,
EMPLOYEE shall be entitled to severance pay as follows: one month's salary at
EMPLOYEE's then base salary rate, for each full year of employment completed by
EMPLOYEE, up to a maximum of six months' severance pay. "Service" shall, for
this purpose only, include EMPLOYEE's service at International Canine Genetics,
Inc. since January 1992 as if it were service at EMPLOYER. Fractional severance
pay credit shall be given for a fractional year of service.
Furthermore, if EMPLOYEE is terminated (other than for Cause) in connection with
an acquisition of EMPLOYER, EMPLOYEE shall be entitled to additional severance
pay of six months' salary at EMPLOYEE's then base salary rate (as well as the
severance pay described in the previous paragraph) and all of EMPLOYEE's then
unvested EMPLOYER stock options shall immediately become fully vested.
"Cause" shall be defined to mean:
(a) Death;
(b) Voluntary resignation (other than because of a material breach by
EMPLOYER of its obligations under this Agreement or reassignment of
EMPLOYEE, to a location outside San Diego County);
(c) EMPLOYEE's repudiation of this Agreement;
(d) permanent disability (defined as EMPLOYEE's inability to perform, with
or without reasonable accommodation, the essential functions of his position
for any 50 business days -- exclusive of vacation days taken -- within any
continuous period of 200 days by reason of physical or mental illness or
incapacity);
(e) EMPLOYEE- being formally charged with the commission of a felony, or
being convicted of a misdemeanor involving moral turpitude;
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(f) EMPLOYEE's demonstrable fraud or dishonesty;
(g) EMPLOYEE's use of alcohol, drugs or any illegal substance in such a
manner as to interfere with the performance of his duties under this
Agreement;
(h) EMPLOYEE's intentional, reckless or grossly negligent action materially
detrimental to the best interest of the EMPLOYER, including any
misappropriation or unauthorized use of EMPLOYER's property or improper use
or disclosure of confidential information (but excluding any good faith
exercise of business judgment);
(i) EMPLOYEE's intentional failure to perform material duties under this
Agreement if such failure has continued for 15 days after EMPLOYEE has been
notified in writing by EMPLOYER of the nature of EMPLOYEE's failure to
perform;
(j) EMPLOYEE's chronic absence from work for reasons other than illness or
permitted vacation; or
(k) EMPLOYEE's violation of policies in EMPLOYER's official Employee
Handbook, as it may be amended from time to time.
Termination for Cause shall be without prejudice to any other right or remedy to
which EMPLOYER may be entitled at law, in equity, or under this Agreement.
ARTICLE 7
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ARBITRATION
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7.1 Final and Binding Arbitration. Any controversy, claim or dispute between
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(a) a party to this Agreement on the one hand, and (b) the other party to this
Agreement and/or such second party's parents, subsidiaries or affiliates and/or
any of their directors, officers, employees, agents, successors, assigns, heirs,
executors, administrators, or legal representatives, on the other hand, arising
out of, in connection with, or in relation to (t) the interpretation, validity,
performance or breach of this Agreement, (u) EMPLOYEE's stock options and the
underlying shares, (v) EMPLOYEE's employment by EMPLOYER, (w) any termination of
such employment, (x) any actions during or with respect to EMPLOYEE's work for
EMPLOYER, (y) any claims for breach of contract, tort or breach of the covenant
of good faith and fair dealing, or (z) any claims of discrimination or other
claims under any federal, state or local law or regulation now in existence or
hereinafter enacted and as amended from time to time concerning in any way the
subject of EMPLOYEE's employment with EMPLOYER or its termination, shall, at the
request of either party, be resolved to the exclusion of a court of law by
binding arbitration in San Diego, California, in accordance with Exhibit A
hereto. Each of EMPLOYEE and EMPLOYER understands and agrees that the
arbitration shall be instead of any civil litigation and that the arbitrator's
decision shall be final and binding to the fullest extent permitted by law and
enforceable, by any court having jurisdiction thereof. The only claims not
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covered by this Section 7.1 are claims for benefits under the workers'
compensation laws, claims for unemployment insurance benefits, and matters
within the jurisdiction of the California Labor Commissioner, which will be
resolved pursuant to those laws.
ARTICLE 8
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GENERAL PROVISIONS
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8.1 Governing Law. This Agreement and the rights of the parties thereunder
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shall be governed by and interpreted under California law.
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8.2 Assignment. EMPLOYEE may not delegate, assign pledge or encumber his rights
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or obligations under this Agreement or any part thereof.
8.3 Notice. Any notice required or permitted to be given under this Agreement
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shall be sufficient if it is in writing and is sent by registered or certified
mail, postage prepaid, or personally delivered to the following addresses, or to
such other addresses as either party shall specify by giving notice under this
section:
TO EMPLOYER: Chief Executive Officer, Synbiotics Corporation
11011 Via Frontera
San Diego, CA 92127
Copy to: Hayden 1. Trubitt
Brobeck, Phleger & Harrison LLP
550 West C Street, Suite 1300
San Diego, CA 92101
TO EMPLOYEE: Paul A. Rosinack
17 Fariston Road
Wayne, PA 19087
8.4 Amendment. This Agreement may be waived, amended or supplemented only by an
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express writing signed by both of the parties hereto. To be valid, EMPLOYER's
signature must be by a person specially authorized by EMPLOYER's Board of
Directors to sign such particular document.
8.5 Waiver. No waiver of any provision of this Agreement shall be binding
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unless and until set forth expressly in writing and signed by the waiving party.
To be valid, EMPLOYER's signature must be by a person specially authorized by
EMPLOYER's Board of Directors to sign such particular document. The waiver by
either party of a breach of any provision of this Agreement shall not operate or
be construed as a waiver of any preceding or succeeding breach of the same or
any other term or provision or a waiver of any contemporaneous breach of any
other term or provision or a continuing waiver of the same or any other term or
provision. No failure or delay by a party in exercising any right, power, or
privilege hereunder or other conduct by a party shall operate as a waiver
thereof, in the particular case or in any past or future case, and no single or
partial exercise thereof shall preclude the full exercise or further exercise of
any right, power, or privilege. No action taken pursuant to this Agreement
shall be deemed to constitute a waiver by the party taking such action of
compliance with any representations, warranties, covenants or agreements
contained herein.
8.6 Severability. All provisions contained herein are severable and in the
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event that any of them shall be held to be to any extent invalid or otherwise
unenforceable by any court of competent jurisdiction, such provision shall be
construed as if it were written so as to effectuate to the greatest possible
extent the parties' expressed intent; and in every case the remainder of this
Agreement shall not be affected thereby and shall remain valid and enforceable,
as if such affected provision were not contained herein.
8.7 Headings. Article and section headings are inserted herein for convenience
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of reference only and in no way are to be construed to define, limit or affect
the construction or interpretation of the terms of this Agreement.
8.8 Drafting Party. The provisions of this Agreement have been prepared,
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examined, negotiated and revised by each party hereto, and no implication shall
be drawn and no provision shall be construed against either party by virtue of
the purported identity of the drafter of this Agreement, or any portion thereof.
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8.9 No Outside Representations. No representation, warranty, condition,
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promise, understanding or agreement of any kind with respect to the subject
matter hereof has been made by either party, nor shall any such be relied upon
by either party, except those contained herein. There were no inducements to
enter into this Agreement, except for what is expressly set forth in this
Agreement.
8.10 Entire Agreement. This Agreement together with EMPLOYER's standard
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Proprietary Information and Inventions Agreement, constitutes the entire
agreement between the parties pertaining to the subject matter hereof and
completely supersedes all prior or contemporaneous agreements, understandings,
arrangements, commitments, negotiations and discussions of the parties, whether
oral or written (all of which shall have no substantive significance or
evidentiary effect). Each party acknowledges, represents and warrants that he
or it has not relied on any representation, agreement, understanding,
arrangement or commitment which has not been expressly set forth in this
Agreement. Each party acknowledges, represents and warrants that this Agreement
is fully integrated and not in need of parol evidence in order to reflect the
intentions of the parties. The parties specifically intend that the literal
words of this Agreement shall, alone, conclusively determine all questions
concerning the parties' intent.
IN WITNESS WHEREOF, the parties have executed and delivered this Employment
Agreement in San Diego, California as of the date first written above.
SYNBIOTICS CORPORATION
By: /s/ Kenneth M. Cohen
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Kenneth M. Cohen, Chief Executive Officer
/s/ Paul A. Rosinack
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PAUL A. ROSINACK
Attachment: Exhibit A (Arbitration Procedures)
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EXHIBIT A
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ARBITRATION PROCEDURES
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1. Agreement to Arbitrate
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In the event that there is any dispute relating to, regarding or arising in
connection with EMPLOYEE's employment with EMPLOYER which cannot be resolved
through direct discussion or mediation, regardless of the kind or type of
dispute (excluding claims for workers' compensation, unemployment insurance or
any matters within the jurisdiction of the California Labor Commissioner), all
such disputes shall be submitted exclusively to final and binding arbitration
pursuant to the provisions of the Federal Arbitration Act or, if inapplicable,
the Uniform Arbitration Act (California Code of Civil Procedure (S)1280 et
seq.), upon request submitted in writing to the President within one year from
the date the dispute first arose, or within one year of the date of termination
of employment, whichever occurs first. This procedure shall be the exclusive
method for resolving all claims relating to the termination of EMPLOYEE's
employment, including but not limited to any alleged violations of federal,
state and/or local statutes; all claims based upon any purported breach of duty
arising in contract or tort, including but not limited to breach of contract,
breach of the covenant of good faith and fair dealing, or violation of public
policy; and any other alleged violation of an employee's statutory, contractual
or common law rights.
Any failure to request arbitration in accordance with the foregoing provisions
shall constitute a waiver of all rights to raise or present any claims in any
form, in any forum, arising out of any dispute that was subject to arbitration.
2. Selection of Arbitrator
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All disputes subject to arbitration will be resolved by a single arbitrator
selected from a list provided by the California Mediation and Conciliation
Service from its Employment Arbitration Panel. The parties shall select the
arbitrator by alternately striking names from the list, and the last name
remaining on the list shall be the arbitrator selected to resolve the dispute.
The arbitrator must be selected within thirty (30) days of receipt of the
written request for arbitration. The arbitration hearing shall be held in San
Diego, California, at a neutral location selected by the parties or, in the
event the parties are unable to agree, at a location designated by the
arbitrator.
3. Authority of Arbitrator
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The arbitrator shall only be authorized to exercise the powers specifically
enumerated by this procedure and to decide the dispute in accordance with
governing principles of law and equity. The arbitrator shall have no authority
to modify the powers granted by the terms of this procedure or to modify the
terms of the employee handbook, except as required by law. The arbitrator shall
have the authority to rule on motions by the parties, to issue protective orders
upon motion of any party or third parties, and to determine only the disputes
submitted by the parties based upon the grounds presented. Any dispute or
argument not presented by the parties is outside the scope of the arbitrator's
jurisdiction and any award invoking such disputes or arguments is subject to a
motion to vacate; provided, however, the arbitrator shall have exclusive
authority to resolve any dispute relating to the validity, interpretation and
enforcement of these arbitration procedures.
4. Discovery
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The arbitrator shall have the power, in addition to determining the merits of
the dispute submitted, to permit discovery regarding the subject matter of
arbitration and to enforce the rights, remedies, procedures, duties, liabilities
and obligations of discovery by the imposition of the same terms, conditions,
consequences, liabilities, sanctions and penalties as may be imposed in the
circumstances by a Superior Court under the California Code of Civil Procedure.
All discovery must be completed thirty (30) days prior to the date set for the
arbitration hearing.
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5. Hearing
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The issue(s) submitted to the arbitrator must be set forth in the request for
arbitration. The arbitrator shall have no authority to frame the statement of
the issue(s). Unless otherwise agreed by the parties, the arbitration hearing,
shall be governed by the formal rules of evidence contained in the California
Evidence Code. The parties shall mutually agree on the number of days required
for hearing. The hearing shall be recorded and transcribed verbatim by a
certified shorthand reporter. Each party shall bear its own costs with respect
to a copy of the transcript of the hearing; however, the parties shall each be
responsible for one-half the cost of the court reporter's fee and the
arbitrator's copy of the hearing transcript.
6. Post Hearing Procedure
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Each party shall have the right to present closing argument at the conclusion of
all sworn testimony and, in addition to or in lieu of closing argument, either
party shall have the right to submit post-hearing briefs. The due date and
procedure for exchanging post-hearing briefs shall be mutually agreed upon by
the parties or as directed by the arbitrator.
7. Opinion and Award
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The arbitrator shall issue a written opinion and award within sixty (60) days of
closing arguments or the receipt of post-hearing briefs, whichever is later.
The arbitration award and opinion shall be signed and dated by the arbitrator
and shall decide all issues submitted and set forth the legal principles
supporting each aspect of the opinion and award. The arbitrator shall only be
permitted to award those remedies in law or equity which are requested by the
parties and which are supported by the credible, relevant evidence. The
arbitrator shall have no authority to award punitive or exemplary damages under
any circumstances or for any reason.
8. Fees and Costs
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Each party shall be responsible for its own attorney's fees, except as provided
by law, and for all costs associated with discovery unless otherwise ordered by
the arbitrator. Each party shall also be responsible for one-half of the
arbitrator's fee and one-half of any costs associated with the facilities for
the arbitration hearing.
9. Severability
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In the event that any provision of this procedure is determined by the
arbitrator or by a court of competent jurisdiction to be illegal, invalid, or
unenforceable to any extent, such term or provision shall be enforced to the
extent permissible under law and all remaining terms and provisions hereof shall
continue in full force and effect.
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