Exhibit 10.3

 

AMENDMENT TO CHANGE IN CONTROL SEVERANCE AGREEMENT

 

This Amendment to Change in Control Severance Agreement (“Amendment”), is made
and entered into this the 4th day of September, 2003, by and between Embrex,
Inc. (“Company”), a North Carolina corporation, and Joseph P. O’Dowd
(“Employee”).

 

WHEREAS the Company and Employee are parties to a Change in Control Severance
Agreement dated April 12, 2002, a copy of which is attached hereto as Exhibit A
(the “Severance Agreement”) whereby the Company agrees to provide Employee with
certain payments and benefits in the event that Employee’s employment with the
Company is terminated as a result of, or in connection with, a Change in
Control; and

 

WHEREAS, the Company and Employee desire to amend the Severance Agreement;

 

NOW, THEREFORE, in consideration of the mutual agreements herein set forth, the
legal sufficiency and adequacy of which are hereby acknowledged, the parties
agree to amend the Severance Agreement as follows:

 

1. The Severance Agreement is amended by adding the following paragraphs:

 

16. Covenant Not to Compete. Employee acknowledges that by virtue of his
employment with the Company, he shall have access to and control of confidential
and proprietary information concerning the Company’s business and that the
Company’s business depends, to a considerable extent, on the individual skills,
efforts, and leadership of Employee. Accordingly, and in consideration of the
Company’s commitments to Employee under this Agreement, Employee expressly
covenants and agrees that for the two (2) year period following the termination
of his employment with the Company (regardless of circumstances of such
termination) Employee will not, without the prior consent of the Company:

 

(a) on Employee’s own or another’s behalf, whether as an officer, director,
stockholder, partner, associate, owner, employee, consultant, or otherwise,
directly or indirectly:

 

  (i) within the geographical areas set forth below, solicit or do business
which is

--------------------------------------------------------------------------------

the same, similar to, or otherwise in competition with the business engaged in
by the Company from or with persons or entities who are customers of the
Company, who were customers of the Company at any time during the last year of
Employee’s employment with the Company or to whom the Company had made proposals
for business at any time during the last year of Employee’s employment with the
Company; or

 

  (ii) offer employment to, or otherwise solicit for employment, any employee or
other person who had been employed by the Company during the last year of
Employee’s employment with the Company.

 

(b) within the geographical area set forth below, be employed (or otherwise
engaged) in a management capacity, other capacity providing the same or similar
services which Employee provided to the Company, or any capacity connected with
competitive business activities by any person or entity that engages in the
same, similar, or otherwise competitive business as the Company;

 

(c) directly or indirectly take action which is primarily intended to be
materially detrimental to the Company’s goodwill, name, business relations,
prospects, and operations.

 

(d) the restrictions set forth in this Paragraph 16 apply to the following
geographical areas:

 

  (i) Research Triangle Park, North Carolina;

 

  (ii) any city, metropolitan area, county (or similar political subdivisions in
foreign countries) in which the Company is located, or does, or during
Employee’s employment with the Company, did business;

 

  (iii) any city, metropolitan area, county (or similar political subdivisions
in foreign countries) in which Employee’s substantial services were provided, or
for which Employee had substantial responsibility, or in which Employee
performed substantial work on the Company’s projects while employed by the
Company.

 

2

--------------------------------------------------------------------------------

Employee acknowledges that the covenants contained in this Paragraph 16 are
reasonably necessary to protect the legitimate business interests of the Company
and are reasonable with respect to scope, time, and territory and are described
with sufficient accuracy and definiteness to enable him to understand the scope
of the restrictions imposed upon him. If any of the provisions, clauses, or
phrases in this Paragraph 16 are held unenforceable by a court of competent
jurisdiction, then the parties desire that any such provision, clause or phrase
be “blue-penciled” or rewritten by the court to the extent necessary to render
it enforceable.

 

17. Income Tax Payment. In the event Employee receives payments or benefits
pursuant to Paragraph 5 of this Agreement and incurs state or federal personal
income tax liability as a result of the receipt of such payments or benefits,
then Employee is entitled to receive an additional payment (the “Income Tax
Payment”) in an amount equal to the state and federal personal income tax
assessed on such payments or benefits. Said Income Tax Payment shall be made
prior to any calculation of the Excise Tax Payment required by Paragraph 9 of
this Agreement. Said Income Tax Payment shall be paid to Employee by the Company
by April 15 of the year following each year in which such tax liability occurs.

 

2. Except as herein set forth, the Severance Agreement is not modified or
amended and the parties hereto reaffirm and agree to all of the terms and
provisions of the Severance Agreement, as amended, in all other respects.

 

IN WITNESS WHEREOF, the parties have executed this Amendment to Change in
Control Severance Agreement as of the day and year first written above.

 

EMBREX, INC. By:  

/s/    Randall L. Marcuson        

 

--------------------------------------------------------------------------------

Title:

  President & CEO

 

ATTEST:

/s/    Don T. Seaquist        

--------------------------------------------------------------------------------

Corporate Secretary

 

/s/    Joseph P. O’Dowd        

--------------------------------------------------------------------------------

Joseph P. O’Dowd

 

3