**EXHIBIT 10.12**
**EMPLOYMENT AGREEMENT**
     **THIS EMPLOYMENT AGREEMENT**is entered into on the 7th day of June, 2001(the “Effective Date”), by and between Gene Logic Inc., a Delaware corporation(the “Company”), and Michael J. Brennan (the “Executive”).
     **WHEREAS**, there currently exists an employment agreement dated December 1,1995 by and between the Executive and the Company; and
     **WHEREAS**, the Executive and the Company wish to terminate the existingemployment agreement dated December 1, 1995; and
     **WHEREAS**, the Company desires to secure the services of the Executive, andthe Executive desires to work for the Company, all pursuant to the terms andconditions set forth in this Agreement; and
     **WHEREAS**, the Company is engaged in the “Business” of research,development, commercialization and sales of genomics information andbioinformatics products related to gene activity in human disease and toxicity.
     **NOW, THEREFORE**, in consideration of the mutual promises made below, theparties agree as follows:
     1.     ***Employment, Duties and Acceptance***.
             1.1     ***Employment***. (a) Effective upon the Effective Date, the Companyshall employ the Executive as its Director of Strategic Initiatives. In suchcapacity, the Executive shall perform such duties and assume such otherresponsibilities as may be assigned by the Chairman of the Board of Directorsof the Company from time to time, provided such duties are commensurate withExecutive’s position with the Company. If nominated and elected, the Executiveshall also serve on the Board of Directors of the Company, without anyadditional compensation. The Executive accepts such employment and shallperform his duties faithfully and to the best of his abilities.
             (b) The Executive shall devote his time and creative energies to theperformance of his duties hereunder and will at all times devote suchadditional time and efforts as are reasonably sufficient for fulfilling thesignificant responsibilities entrusted to him.
 

 

          1.2     ***Place of Employment***. The Executive’s principal place of employmentshall be in the Baltimore-Washington, D.C. metropolitan area, subject to suchtravel as may be reasonably required by his employment pursuant to the termshereof. The Executive shall not be required to relocate outside of theBaltimore-Washington, D.C. metropolitan area during the Term unless the Companyprovides relocation benefits acceptable to the Executive in his solediscretion.
     2.     ***Term of Employment***.
             2.1     ***Employment Period.***Unless terminated earlier in accordance with theprovisions of this Agreement, the Executive’s employment hereunder shallcontinue until the later to occur of (i) December 31, 2002, or (ii) theapplicable anniversary date of any extension of this Agreement as provided in**Section 2.2**(the “Term”).
             2.2     ***Extension.***On December 31, 2002, and on an annual basis thereafter,the Term shall be extended for an additional one-year period unless the Companyor the Executive notifies the other in writing at least ninety (90) days priorto such anniversary date of its or his election, in its or his sole discretion,not to extend the term of this Agreement.
     3.     ***Compensation***.
             3.1     ***Salary***. As compensation for all services to be rendered pursuant tothis Agreement, the Company shall pay to the Executive during the Term a salaryof $50,000 per annum (the “Base Salary”) less such deductions as shall berequired to be withheld by applicable laws and regulations or as otherwiseauthorized by the Executive. The Base Salary shall accrue from and after theEffective Date, and shall be payable during the Term, in arrears in equalperiodic installments, not less frequently than monthly. The Executive’s BaseSalary shall be reviewed at least annually and may be increased (but notdecreased) based upon the evaluation of the Executive’s performance and thecompensation policies of the Company in effect at the time of each such review.
             3.2     ***Participation in Executive Benefit Plans***. The Executive shall bepermitted during the Term, if and to the extent eligible, to participate in anygroup life, hospitalization or disability insurance plan, health program,pension plan, or similar benefit plan of the Company which may be available toother comparable executives of the Company generally on the same terms as suchother executives.
             3.3     ***Paid Time Off***. The Executive shall not be eligible to receive PaidTime Off (“PTO”).
             3.4     ***Expenses***. Subject to such policies as may from time to time beestablished by the Board of Directors, the Company shall pay or reimburse theExecutive for all ordinary, necessary and reasonable expenses (including,without limitation, travel, meetings, dues, subscriptions, fees, educationalexpenses, computer equipment, mobile
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telephones, and the like) actually incurred or paid by the Executive during theTerm in the performance of the Executive’s services under this Agreement, uponpresentation of expense statements or vouchers or such other supportinginformation as the Board of Directors may require.
             3.5.     ***Withholding***. The Company is authorized to withhold from the amountof any Salary and bonuses and any other things of value paid to or for thebenefit of the Executive, all sums authorized by the Executive or required tobe withheld by law, court decree, or executive order, including (but notlimited to) such things as income taxes, employment taxes, and employeecontributions to fringe benefit plans sponsored by the Company.
     4.     ***Termination***.
             4.1     ***General.***The employment of the Executive hereunder shall terminate asprovided in **Section 2**, unless earlier terminated in accordance with theprovisions of this **Section 4**.
             4.2     ***Termination Upon Mutual Agreement.***The Company and the Executive may,by mutual written agreement, terminate this Agreement and/or the employment ofthe Executive at any time.
             4.3     ***Death or Disability of Executive*****.**
             (a)     The employment of the Executive hereunder shall terminate upon (i) thedeath of the Executive, and (ii) at the option of the Company upon not lessthan thirty (30) days’ prior written notice to the Executive or his personalrepresentative or guardian, if the Executive suffers a Total Disability (asdefined in **Section 4.3(b)**below).
             (b)     For purposes of this Agreement, “Total Disability” shall mean (i) ifthe Executive is subject to a legal decree of incompetency (the date of suchdecree being deemed the date on which such disability occurred), or (ii) thewritten determination by a physician selected by the Company that, because of amedically determinable disease, injury or other physical or mental disability,the Executive is unable substantially to perform each of the material duties ofthe Executive required hereby, and that such disability has lasted for theimmediately preceding ninety (90) days and is, as of the date of determination,reasonably expected to last an additional ninety (90) days or longer after thedate of determination, in each case based upon medically available reliableinformation, and the provision of clear and convincing evidence by the Companyof the Executive’s inability substantially to perform each material dutyhereunder in support of such determination by the physician.
             (c)     Any leave on account of illness or temporary disability which is shortof “Total Disability” shall not constitute a breach of this Agreement by theExecutive and in no event shall any party be entitled to terminate thisAgreement “for good cause”
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due to any such leave. All physicians selected hereunder shall be Boardcertified in the specialty most closely related to the nature of the disabilityalleged to exist.
             4.4     ***Termination For Good Cause*****.**The Company may, upon action of theBoard, and upon written notice to the Executive specifying in reasonable detailthe reason therefor, terminate the employment of the Executive at any time for“good cause” (as defined below), provided, however, that if the reason fortermination for “good cause” is susceptible of cure, the Executive shall have aperiod of thirty (30) days after such written notice to effect a cure. “Goodcause” means (i) the material failure of the Executive to perform his dutiesunder this Agreement which failure materially adversely affects the Company orits business after notice and a reasonable opportunity to cure; (ii) willfulmalfeasance by the Executive in connection with the performance of his dutiesunder this Agreement that could in the good faith judgment of the Board (x)have a material adverse impact on the Company’s business, (y) subject theCompany to criminal penalties in excess of $50,000, or (z) result in theincarceration of any officer, director or employee of the Company; (iii) theExecutive being convicted of, or pleading guilty or nolo contendere to, orbeing indicted for a felony or other crime involving theft, fraud or moralturpitude; (iv) fraud or embezzlement against the Company; (v) the failure ofthe Executive to obey in all material respects any proper written direction ofthe Board that is not inconsistent with this Agreement and which has a materialadverse effect on the Company; or (vi) the violation by the Executive of thenon-competition provisions of **Section 5**of this Agreement.
             4.5     ***Termination For Good Reason*****.**The Executive may resign (and therebyterminate his employment under this Agreement) at any time for “good reason”(as defined below), upon not less than thirty (30) days’ prior written noticeto the Company specifying in reasonable detail the reason therefor, provided,however, that if the reason for resignation for “good reason” is susceptible ofcure, the Company shall have a period of thirty (30) days after such writtennotice to effect a cure. For purposes of this Agreement, “good reason” shallmean (i) any material failure by the Company to comply with any materialobligation imposed by this Agreement; (ii) a substantial reduction in theExecutive’s title, position, duties or responsibilities; (iii) the Company’srequiring the Executive to be based at any office or location outside theBaltimore-Washington D.C. metropolitan area; (iv) the Company’s creation ofworking conditions that a reasonable person in the Executive’s position wouldconsider unreasonable or intolerable; or (v) a failure by a successor to theCompany to assume all of the obligations of this Agreement.
             4.6     ***Payments Upon Termination*****.**
             (a)     In the event the Executive’s employment is terminated by the Companywithout “good cause,” or by the Executive for “good reason,” then the followingprovisions shall apply; provided, however, if the Executive is eligible forChange of Control Severance Benefits set forth on Exhibit A attached hereto andincorporated by reference herein, then the provisions set forth on Exhibit Ashall apply in lieu of the following: the Company shall pay the Executive theBase Salary to which the Executive
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would have been entitled pursuant to **Section 3.1**of this Agreement had theExecutive remained in the employ of the Company for a period of six (6) monthsfrom the date of termination (the “Termination Payment Period”). Such paymentsshall be paid in a lump sum. The Company shall have no further liability tothe Executive pursuant to this Section 4.6(a), including, without limitation,any liability to pay the Executive any severance, bonus or any othercompensation.
             (b)     In the event the Executive’s employment is terminated (i) pursuant to**Section 2**, (ii) by the Company for “good cause,” or (iii) by the Executivewithout “good reason,” then the Company shall have no duty to make any paymentsor provide any benefits to the Executive pursuant to this Agreement other thanpayment of the amount of the Executive’s Base Salary accrued through the dateof termination of his employment.
             (c)     In the event the Executive’s employment is terminated (i) by theCompany without “good cause,” or (ii) by the Executive for “good reason,” thenthe Company waives, releases and remises (i) any obligation or duty underapplicable law on the part of the Executive to seek or obtain other engagementsor employment or to otherwise mitigate any damages to which the Executive maybe entitled to by reason of any termination of this Agreement; and (ii) anyright in or claim to any remuneration or compensation received by Executivepursuant to any engagements or employment subsequent to the termination of thisAgreement.
             (d)     Upon termination of Executive’s employment for death or TotalDisability, the Company shall pay to the Executive, guardian or personalrepresentative, as the case may be, in addition to any insurance or disabilitybenefits to which he may be entitled hereunder, all amounts accrued or vestedprior to such termination (including a pro rata amount with respect to anyIncentive Bonus under **Section 3.2**for the portion of the year during whichdeath or Total Disability occurred); provided, however, if the Executive’semployment is terminated due to death or Total Disability on or within thirteen(13) months following the effective date of a Change of Control, then theprovisions set forth on Exhibit A shall apply in lieu of the foregoing. TheCompany shall have no further liability to the Executive, guardian or personalrepresentative pursuant to this Section 4.6(d), including, without limitation,any liability to pay the Executive, guardian or personal representative anyseverance, bonus or any other compensation
             4.7     ***No Disparaging Comments Upon Termination*****.**
             Upon termination of this Agreement, the Company will refrain from makingany disparaging remarks about the Executive. Similarly, the Executive shallrefrain from making any disparaging remarks about the businesses, services,products, stockholders, officers, directors or other personnel of the Companyor any of its affiliates.
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     5.     ***Certain Covenants of the Executive***.
             5.1     ***Necessity for Covenants.***The Executive acknowledges that (i) theCompany is engaged and will in the future be engaged in the Business asdescribed in this Agreement; (ii) his employment pursuant to this Agreementwill give him access to customers and suppliers of the Company; and (iii) theagreements and covenants contained in this **Section 5**are essential to protectthe business and goodwill of the Company. In order to induce the Company toenter into this Agreement and pay the compensation and other benefits at thelevels requested by the Executive, the Executive enters into the followingcovenants:
             5.2     ***Definitions***.
             (a)     “Company” for purposes of this Article 5 shall include the Company andall of the Company’s majority owned subsidiaries and affiliates.
             (b)     “Business Contact” shall mean any (i) customer which has purchasedgoods or services provided by the Company during the Term, (ii) prospectivecustomer whom the Executive or persons working for or directly with theExecutive has contacted during the Term for the purpose of endeavoring to sellthe goods or services of the Company to the prospective customer, or (iii)provider of goods or services to the Company.
             (c)     “Service Area” means the geographic area in which the Company marketsand sells its goods and services.
             5.3     ***Restrictions***. During the Term and for a period of one (1) year afterthe date (the “Termination Date”) the Executive’s employment hereunder isterminated (the “Restricted Period”), the Executive shall not, directly orindirectly, for himself or on behalf of any other person, firm, corporation orother entity, whether as a principal, agent, employee, stockholder, partner,officer, member, director, sole proprietor, or otherwise:
             (a)     call upon or solicit any Business Contact for the purpose ofpersuading the Business Contact to engage the Executive or any other person,firm, corporation or other entity to provide goods or services which are thesame or similar to those the Company provided to the Business Contact or toengage the Business Contact to provide goods or services which are the same orsimilar to those the Business Contact provided to the Company to any otherperson, firm, corporation or other entity;
             (b)     solicit, participate in or promote the solicitation of any person whowas employed by the Company at any time during the twelve (12) months precedingthe Termination Date to leave the employ of the Company, or hire or engage anyof those persons;
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             (c)     make any disparaging remarks about the Company’s business, services orpersonnel;
             (d)     interfere in any way with the Company’s business, prospects orpersonnel; or
             (e)     become affiliated with or render services to any person engaged in anybusiness that competes with the Business within the Service Area, directly orindirectly, in any capacity, including, without limitation, as an individual,partner, shareholder, officer, director, principal, agent, employee, trustee orconsultant; provided, however, that the Executive may own, directly orindirectly, solely as an investment, securities which are publicly traded ifthe Executive (a) is not a controlling person of, or a member of a group whichcontrols, the issuer and (b) does not, directly or indirectly, own 5% or moreof any class of securities of the issuer.
             5.4     ***Rights and Remedies Upon Breach***. If the Executive breaches, orthreatens to commit a breach of, any of the provisions of **Sections 5.1**through**5.3**(the “Restrictive Covenants”), the Company shall, in addition to its rightimmediately to terminate this Agreement, have the right and remedy (which rightand remedy shall be independent of others and severally enforceable, and whichshall be in addition to, and not in lieu of, any other rights and remediesavailable to the Company under law or in equity) to have the RestrictiveCovenants specifically enforced by any court having equity jurisdiction, itbeing acknowledged and agreed that any such breach or threatened breach couldcause irreparable injury to the Company or its Affiliates and that moneydamages may not provide adequate remedy to the Company.
             5.5     ***Covenants Currently Binding Executive***. The Executive warrants thathis employment by the Company will not (a) violate any non-disclosureagreements, covenants against competition, or other restrictive covenants madeby the Executive to or for the benefit of any previous employer or partner, or(b) violate or constitute a breach or default under, any statute, law,judgment, order, decree, writ, injunction, deed, instrument, contract, lease,license or permit to which the Executive is a party or by which the Executiveis bound.
             5.6     ***Litigation.***There is no litigation, proceeding or investigation ofany nature (either civil or criminal) which is pending or, to the best of theExecutive’s knowledge, threatened against or affecting the Executive or whichwould adversely affect his ability to substantially perform the duties herein.
             5.7     ***Review.***The Executive has received or been given the opportunity toreview the provisions of this Agreement, and the meaning and effect of eachprovision, with independent legal counsel of the Executive’s choosing.
             5.8     ***Severability of Covenants***. The Executive acknowledges and agrees thatthe Restrictive Covenants are reasonable and valid in geographical and temporalscope
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and in all respects. If any court determines that any of the RestrictiveCovenants, or any part thereof, is invalid or unenforceable, the remainder ofthe Restrictive Covenants shall not thereby be affected and shall be given fulleffect, without regard to the invalid portions.
             5.9     ***Blue-Penciling***. If any court determines that any of the RestrictiveCovenants, or any part thereof, is unenforceable because of the duration orgeographic scope of such provision, such court shall have the power to reducethe duration or scope of such provision, as the case may be, and, in itsreduced form, such provision shall then be enforceable and shall be enforced.If any such court declines to so revise such covenant, the parties agree tonegotiate in good faith a modification that will make such duration or scopeenforceable.
     6.     ***Dispute Resolution***.
             6.1     ***Costs of Arbitration***. If either party brings an arbitrationproceeding to enforce its rights under this Agreement, the prevailing partyshall be entitled to recover from the other party all expenses incurred by itin preparing for and in trying the case, including, but not limited to,investigative costs, court costs and reasonable attorneys’ fees.
             6.2     ***No Jury Trial***. NEITHER PARTY SHALL ELECT A TRIAL BY JURY IN ANYACTION, SUIT, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY CONNECTEDWITH THIS AGREEMENT.
             6.3     ***Personal Jurisdiction***. Both parties agree to submit to thejurisdiction and venue of the state courts in the State of Maryland as tomatters involving enforcement of this Agreement including any award under anarbitration proceeding.
             6.4     ***Arbitration.***SUBJECT TO THE COMPANY’S RIGHT TO SEEK INJUNCTIVE RELIEFAS SPECIFIED IN THIS AGREEMENT, ANY DISPUTE BETWEEN THE PARTIES HERETO ARISINGUNDER OR RELATING TO THIS AGREEMENT (INCLUDING, BUT NOT LIMITED TO, THE AMOUNTOF DAMAGES, THE NATURE OF THE EXECUTIVE’S TERMINATION OR THE CALCULATION OF ANYBONUS OR OTHER AMOUNT OR BENEFIT DUE) SHALL BE RESOLVED IN ACCORDANCE WITH THEPROCEDURES OF THE AMERICAN ARBITRATION ASSOCIATION. ANY RESULTING HEARINGSHALL BE HELD IN THE STATE OF MARYLAND. THE RESOLUTION OF ANY DISPUTE ACHIEVEDTHROUGH SUCH ARBITRATION SHALL BE BINDING AND ENFORCEABLE BY A COURT OFCOMPETENT JURISDICTION.
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     7.     ***Other Provisions***.
             7.1     ***Notices***. Any notice or other communication required or which may begiven hereunder shall be in writing and shall be delivered personally,telegraphed, telexed, sent by facsimile transmission or sent by certified,registered or express mail, postage paid, and shall be deemed given when sodelivered personally, telegraphed, telexed or sent by facsimile transmissionor, if mailed, four days after the date of mailing, as follows:
 (i) if to the Company, to:
 Gene Logic Inc.