**Exhibit 10.1**

 

**EMPLOYMENT AGREEMENT**

 

This employmentagreement (“**Agreement**”) sets forththe terms upon which Daniel Hartman (“**you**”)will be employed by deCODE genetics, Inc. (the “**Company**,” or “**we**”or “**us**”).  

 

**1.****                                      Employment Period**. Subject to the terms and provisions of this Agreement, we agree toemploy you, and you agree to be employed by us commencing on July 15, 2005 (the“**Effective Date**”). You will be anat-will employee of the Company.  Theperiod of your employment under this Agreement is referred to as the “**Employment Period**.”  

 

**2.****                                      Employment Terms and Conditions**.

 

a.                                       Position and Duties; Extent of Services. During the Employment Period, you will serve as Senior Vice President,Product Development and from time to time will serve in such other positions asthe Chief Executive Officer (the “**CEO**”),the Board of Directors of the Company (the “**Board**”)or such other executive officer to whom either the CEO or the Board shalldelegate such authority (an “**Other Officer**”)may from time to time determine.  In sodoing, you will have such powers and duties (including holding officerpositions with one or more Subsidiaries of the Company) as may be assigned fromtime to time by the CEO, the Board or an Other Officer and as are generallyassociated with the position of Senior Vice President, Product Development andsuch Other Officer positions.  During theEmployment Period, you will devote your full business time, energy, and bestefforts to the business and affairs of the Company.  You agree not to engage, directly orindirectly, in any other business, investment, or activity that interferes withyour performance of your duties under this Agreement, is contrary to theinterests of the Company, or requires any portion of your business time.  “**Subsidiary**”means any entity 50% or more owned, directly or indirectly, by the Company.

 

b.                                      Compensation. During the Employment Period, you will: (i) receive an annual base salary (“**Annual Base Salary**”) in an amount of $360,000, payable inaccordance with the customary payroll practices of the Company for executiveofficers.  The Board, in its solediscretion based upon performance targets or otherwise, may at any time adjustthe amount of the Annual Base Salary as it may deem appropriate, and the term “**Annual Base Salary**” will refer to theAnnual Base Salary upwards as it may be so adjusted; (ii) be eligible toreceive an annual bonus, as the Board or the Compensation Committee of theBoard may specify in its sole discretion based upon performance targets orotherwise, subject to any terms or conditions as may be established by theBoard or its Compensation Committee (each an “**AnnualBonus**”), it being understood that for purposes of any Annual Bonuspaid with respect to 2005, you will be deemed to have been employed for all of2005; (iii)  for 2005 and 2006 be eligible to receive annual stock orstock option bonuses, payable in the following year, based upon performancetargets agreed upon between you and the Board or its Compensation Committee,subject to the terms and conditions of the Company’s 2002 Equity Incentive Planand any terms or conditions as may be established by the Board or itsCompensation Committee (each an “**Equity Bonus**”),it being understood that for purposes of any Equity Bonus paid with respect to2005, you will be deemed to have been employed for all of 2005 and it beingfurther agreed that if the Company adopts a comprehensive compensation planapplicable to senior management providing for performance stock or stock optiongrants for 2005 or 2006 in which you are entitled to

 

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participate, the provisions of this Section 2b(iii) willexpire and be superseded by such plan; (iv) be entitled to participate inall incentive, savings, stock option, profit sharing retirement, welfare andother employee benefit plans, practices, policies and programs (includingwithout limitation health club memberships and meals at work) applicablegenerally to other employees of the Company based in the United States, subjectto all of the terms and conditions of such plans, practices, polices andprograms; and (v) be entitled to the greater of four (4) weeks orsuch number of weeks of vacation as may from time to time be awarded inaccordance with our policies for executives based in the United States.

 

c.                                       Sign-on Bonus.  Within ten days after the Effective Date, the Company will pay you aone-time lump sum cash payment in the amount of $100,000 (the “Sign-On Bonus”).  In the event your employment with the Companyterminates as a result of a termination by the Company for Cause (as defined inSection 3(c)) or by you other than pursuant to Section 3(e), at anytime during the 24-month period commencing on the Effective Date, you willreturn a portion of the Sign-On Bonus equal to the net after-tax amount of theSign-On Bonus (after application of all refunds and credits as a result of suchrepayment) multiplied by the difference of one minus a fraction, the numeratorof which is the number of completed calendar months since the Effective Dateand the denominator of which is 24.  Youshall return such amount to the Company no later than 30 days following thedate of such termination of your employment.

 

d.                                      Stock Option.  On the first day of the Employment Period, the Company shall grant youtwo incentive stock options (or to the extent that such options do not qualifyas an incentive stock options, non-qualified stock options), pursuant to theCompany’s 2002 Equity Incentive Plan, to purchase 150,000 and 50,000 shares,respectively, of Common Stock of the Company (“Common Stock”) with an exerciseprice equal to the closing price of the Company’s Common Stock on the lasttrading day prior to the first day of the Employment Period as reported on theNasdaq National Market.  Such optionsshall be in the form of, and on such terms and conditions as provided in, theCompany’s standard form of Stock Option Grant Agreement in effect as of thedate of this Agreement and shall include such further terms as are described inthis Agreement. The Stock Option Grant Agreement for the option for 150,000shares of Common Stock shall provide, on condition that the Employment Periodis in effect on the relevant vesting dates, that such option shall vest as to37,500 shares on the first anniversary of the Employment Period and as to 1/48of the shares on the last day of each month thereafter.   Such Stock Option Grant Agreement shall alsoprovide that such option shall become 100% vested immediately upon a Change inControl (as defined in Section 3(e) below), and that, in the eventthat your employment is otherwise terminated other than for “Cause” (as definedin Section 3(c) below), the lesser of (i) 75,000 shares or (ii) theremaining unvested shares, shall become immediately vested.  The Stock Option Grant Agreement for theoption for 50,000 shares of Common Stock shall provide that the option is fullyvested.

 

e.                                       Restricted Stock. On the first day of the Employment Period, you will receive 50,000shares of Restricted Stock pursuant to the Company’s 2002 Equity IncentivePlan, subject to the terms and conditions of such Plan and the Company’sstandard form of Restricted Stock Agreement in effect as of the date of thisAgreement and shall include such further terms as are described in thisAgreement.  The Restricted Stock willvest on the third anniversary of the Effective Date provided that theEmployment Period is then in effect.  TheRestricted Stock

 

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Agreement shall provide that the RestrictedStock shall become 100% vested immediately upon a Change in Control, and that,in the event that your employment is otherwise terminated other than for “Cause,”a portion of the Restricted Stock equal to the product of the total number ofshares of Restricted Stock then subject to the Restricted Stock Agreementmultiplied by a fraction, the numerator of which is the number of monthsthen-elapsed in the Employment Period (rounded up to the next whole month) andthe denominator of which is 36, shall immediately vest

 

f.                                         Location; Travel. Your initial place of employment will be in Washtenaw, Livingston,Genesee or Oakland County, Michigan (“Southeast Michigan”).  The foregoing notwithstanding, youacknowledge and agree that (i) your job duties will require you to travelfrom time to time both in and out of the United States, provided that suchtravel shall not constitute a majority of your working time, and (ii) atany time following the fifth anniversary of the Effective Date, the Company mayrequire that you relocate to the Company’s offices located in Chicago,Illinois.    To the extent that theCompany requires, without your consent, that you relocate to such place or atsuch time not otherwise contemplated by this Section, such relocation shall bean Adverse Change (as defined in Section 3(e) below) and you shallhave the same rights and benefits of termination as set forth in Section 3(e).

 

**3.****                                      Termination of Employment**.  

 

a.                                       Death.  Your employmentand the Employment Period hereunder will terminate automatically upon yourdeath.  In the event of your death duringthe Employment Period, we will continue to pay your Annual Base Salary, as ineffect at the time of your death, to your personal representative or trustee(as designated by you) for twelve (12) months. 

 

b.                                      Disability.  If you become “disabled” (as such term is defined in the Company’sdisability insurance policy in effect from time to time), for a period inexcess of 180 days (whether or not consecutive) or 90 days consecutively, asthe case may be, during a 12-month period during the Employment Period, we maygive you a written notice of termination and your employment and the EmploymentPeriod will terminate effective upon such notice.  

 

c.                                       Termination by Us for Cause. We may terminate your employment and the Employment Period hereunder atany time either for Cause.  “**Cause**” means (i) your continuedfailure to substantially perform your obligations and duties, as determined ingood faith by the Board; (ii) commission of an act of fraud, embezzlement,misappropriation, willful misconduct or breach of fiduciary duty against theCompany or other conduct that causes or is likely to cause material harm to theCompany’s best interest, as determined in good faith by the Board; (iii) materialbreach of the agreement referenced in Section 5 of this Agreement; (iv) conviction,plea of no contest or nolo contendere, deferred adjudication or unadjudicatedprobation for any felony or any crime involving moral turpitude; (v) failureto carry out, or comply with, in any material respect, any lawful directive ofthe CEO, the Board or an Other Officer consistent with the terms of thisAgreement; or (vi) possession of illegal drugs or unlawful use (includingbeing under the influence) of drugs or alcohol on Company premises or at aCompany sponsored function.

 

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d.                                      Termination byUs Without Cause.  We may terminateyour employment and the Employment Period hereunder for any reason upon 10 days’notice.  If we terminate your employmentwithout Cause during the Employment Period, in addition to any compensationearned prior to the date of termination, we will continue to pay you yourAnnual Base Salary, as in effect at on the date of termination of youremployment and the Employment Period, for eighteen (18) months in accordancewith our normal payroll practices, provided, however, that the Company willdefer the payment of any such amounts for six months from the date oftermination to the extent the Company reasonably determines such deferral isnecessary to avoid the imposition of a tax penalty on you pursuant to theAmerican Jobs Creation Act of 2004 or Section 409A of the Internal RevenueCode.

 

e.                                       Termination following Change in Control.   If following the occurrence of a Change in Control of the Company (asdefined below), (i) (A) you cease to serve in a senior executiveposition with the Company, (B) your compensation (including the materialbenefits of your employment) is decreased, or (C) your duties areinconsistent with those customarily performed by a company’s senior executiveofficer (each an “**Adverse Change**”),other than as a result of your voluntary action, and (ii) within sixty(60) days of such Change in Control, you terminate your employment and theEmployment Period hereunder by giving the Company 10 days’ notice, then we willpay you, in addition to any compensation earned prior to the date of termination,a lump sum cash payment in an amount equal to eighteen (18) months of yourAnnual Base Salary at the time of your termination, plus one and one-half (1 1⁄2)times the average Annual Bonus paid to you during the last two (2) yearsof your employment.   Such payment will be made within thirty (30)days of termination.  A Change in Controlof the Company shall be deemed to occur if (i) the Company is merged withor into or consolidated with another corporation or other entity undercircumstances where the stockholders of the Company immediately prior to suchmerger or consolidation do not own after such merger or consolidation sharesrepresenting at least fifty percent (50%) of the voting power of the Company orthe surviving or resulting corporation or other entity, as the case may be, or (ii) ifthe Company is liquidated or sells or otherwise disposes of substantially allof its assets to another corporation or entity, or (iii) if any person (assuch term is used in Sections 13(d) and 14(d)(2) of the SecuritiesExchange Act of 1934) shall become the beneficial owner (within the meaning of Rule 13d-3under such Act) of forty (40%) percent or more of the Common Stock of theCompany, in all cases other than pursuant to a plan or arrangement entered intoby such person and the Company or otherwise approved by the Board of Directorsof the Company. 

 

**4.****                                      Other Provisions Relating to Termination**

 

a.                                       Effect of Termination. Except as expressly provided in this Agreement or in any other agreemententered into pursuant hereto, upon termination of your employment hereunder, wewill have no further liability or obligation to you from and after the date ofsuch termination (other than liabilities or obligations accrued but unsatisfiedon date of such termination).

 

b.                                      FullSettlement; Mitigation.  In no eventwill you be obligated to seek other employment or take any other action by wayof mitigation of the amounts payable to you under this Agreement.  Such amounts will not be reduced whether ornot you obtain other employment.   

 

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c.                                       Release and Other Agreements. Notwithstanding any other provision in this Agreement to the contrary,as a condition to receiving the benefits described in Sections 3(a), (d) and(e) of this Agreement and in any other agreement entered into pursuanthereto, you hereby agree to execute (and not revoke) a release in substantiallythe form attached hereto as Exhibit A (the “**Release**”) and such other documents andagreements as required by the Company, in the form and pursuant to theprocedures reasonably established by the Company.  

 

**5.****                                      Ownership and Protection of Ideas,Information and Copyrights**.  In furtherconsideration of this Agreement, contemporaneously with the execution of thisAgreement you shall execute the Confidentiality, Invention Assignment andNon-Compete Agreement attached hereto as Exhibit B (“**Noncompetition Agreement**”).  Any material breach by you of theNoncompetition Agreement after your employment has terminated shall, inaddition to all remedies provided therein, entitle the Company to terminate anyfurther payment obligations it may have to you under this Agreement.

 

**6.****                                      Successors; Binding Agreement**. This Agreement may not be assigned by you.  This Agreement may be assigned by the Companywithout your consent to any of its Subsidiaries or affiliates and will inure tothe benefit of and be binding upon the Company and its successors andassigns.  To the extent such assignmentresults in a Change in Control, you will have the rights and benefits as setforth in Section 3(e).

 

**7.****                                      Miscellaneous**.  

 

a.                                       Construction. This Agreement will be deemed drafted equally by both the parties.  Any presumption or principle that thelanguage is to be construed against any party will not apply.  

 

b.                                      Notices. For purposes of this Agreement, notices and all other communicationsprovided for in this Agreement will be in writing and will be deemed to havebeen duly given when (i) delivered personally; (ii) sent by facsimileor similar electronic device and confirmed; (iii) delivered by overnightexpress; or (iv) if sent by any other means, upon receipt. 

 

c.                                       Severability. If any provision of this Agreement is held to be illegal, invalid orunenforceable, such provision will be fully severable; this Agreement will beconstrued and enforced as if such illegal, invalid or unenforceable provisionhad never comprised a portion of this Agreement; and the remaining provisionsof this Agreement will remain in full force and effect and will not be affectedby the illegal, invalid or unenforceable provision or by its severance fromthis Agreement.  Furthermore, in lieu ofsuch illegal, invalid or unenforceable provision there will be addedautomatically as part of this Agreement a provision as similar in terms to suchillegal, invalid or unenforceable provision as may be possible and be legal,valid and enforceable.

 

d.                                      Withholding. The Company may withhold from any amounts payable under this Agreementsuch Federal, state or local taxes as are required to be withheld pursuant toany applicable law or regulation.

 

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e.                                       No Waiver. No waiver by either party at any time of any breach by the other partyof, or compliance with, any condition or provision of this Agreement to beperformed by the other party will be deemed a waiver of similar or dissimilarprovisions or conditions at any time.

 

f.                                         Entire Agreement.** **The provisions of this Agreement,including the Release and the Noncompetition Agreement, constitute the entireand complete understanding and agreement between the parties with respect tothe subject matter hereof.  

g.                                      Arbitration. In the event any claim, demand, cause of action, dispute, controversy orother matter in question (“**Claim**”)arises out of this Agreement (or its termination) or your employment (ortermination of employment) by the Company or its Subsidiaries, then, upon thewritten request of you or us, such dispute or controversy will be submitted tobinding arbitration.  Any arbitrationwill be conducted in accordance with the National Rules for the Resolutionof Employment Disputes of the American Arbitration Association (the “**AAA**”) or other rules of the AAA asapplicable to the claims asserted.  Theresults of arbitration will be binding and conclusive on the partieshereto.  All parties agree that venue forarbitration will be in Chicago, Illinois.  The costs of the arbitration process, exclusive of legal fees, witnessfees and expenses, will be shared equally unless otherwise ordered by theArbitrator.  All proceedings conductedpursuant to this Section 7(g) will be kept confidential by allparties.  **THE ARBITRATOR SHALL HAVE NO AUTHORITY TO AWARD PUNITIVE DAMAGES UNDERANY CIRCUMSTANCES (WHETHER IT BE EXEMPLARY DAMAGES, TREBLE DAMAGES, OR ANYOTHER PENALTY OR PUNITIVE TYPE OF DAMAGES).**  **YOUACKNOWLEDGE THAT BY SIGNING THIS AGREEMENT YOU ARE WAIVING ANY RIGHT THAT YOU MAY HAVETO A JURY TRIAL OR A TRIAL BEFORE A JUDGE IN CONNECTION WITH, OR RELATING TO, ACLAIM**. 

 

h.                                      Survival. Sections 3, 4, 5 and 7 of this Agreement will survive the termination ofthis Agreement, as shall the Noncompetition Agreement, according to the termsthereof.

 

i.                                          Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THELAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OFLAWS OF DELAWARE OR ANY OTHER JURISDICTION, AND, WHERE APPLICABLE, THE LAWS OFTHE UNITED STATES.

 

j.                                          Amendments. This Agreement may not be amended or modified at any time except by awritten instrument approved by the Board and executed by the Company and you.

 

k.                                       Acknowledgement. You acknowledge that you have read and understand this Agreement(including its legal effect), have had an opportunity to consult legal counselregarding it, have not acted in reliance upon any representations or promisesmade by the Company not contained herein, and have entered into this Agreementfreely.  

 

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l.                                          Counterparts. This Agreement may be executed (including by facsimile transmission) inany number of counterparts.  

 

By signing andcountersigning this Agreement in the appropriate space set forth below, we andyou have agreed to be bound by the terms and conditions set forth herein,effective as of the Effective Date.

 

 
|   | **DECODE  GENETICS, INC.** |
|--------|----------------------------|
|   | a Delaware corporation     |
|   |                       |
|   | By:                        | /s/ Kari Stefansson |   |
|   | Name:                      |   |   |
|   | Title:                     |   |   |
|   | Dated:                     |   |   |

 

 

**ACKNOWLEDGEDAND AGREED BY:**

 
| /s/ Daniel Hartman |   |   |   |   |   |
|--------------------|--------|--------|--------|--------|--------|

 
| Name:  |   Daniel  Hartman |   |   |   |   |   |
|--------|-----------------------------|--------|--------|--------|--------|--------|
| Dated: | July 15, 2005               |   |   |   |   |   |
|        |                             |        |        |        |        |        |  |

 
| Address:   |   |   |   |   |   |   |
|------------|--------|--------|--------|--------|--------|--------|
|       |   |   |   |   |   |
|       |   |   |   |   |   |
|       |   |   |   |   |   |
| Telephone: |   |   |   |   |   |   |
| Fax:       |   |   |   |   |   |   |
|            |        |        |        |        |        |        |  |  |  |

 

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**EXHIBIT A**

 

**WAIVER ANDRELEASE**

 

THIS Waiver andRelease agreement (“**Waiver**”) isentered into between deCODE genetics, Inc. (the “**Company**”) and Daniel Hartman (“**Employee**”).

 

WHEREAS, Employee’semployment with the Company will terminate on                                   (the “**Termination Date**”); and

 

WHEREAS, the termsof the Employment Agreement (“**Agreement**”)between the Company and Employee provide for certain severance payments to theEmployee, conditioned on Employee’s execution of this Waiver and Release; 

 

NOW, THEREFORE, inconsideration of the mutual promises set forth herein and in the Agreement towhich this Waiver is ancillary, the parties agree as follows:

 

1.                                       Provided there has been no breach byEmployee of any of the terms of the Agreement to which this Waiver isancillary, the Company agrees to provide Employee with the severance asdescribed in Section 3(d) of the Agreement.  Employee acknowledges that he or she willhave no right to the foregoing severance benefits until the execution of thisWaiver has become final and irrevocable. Employee further agrees that the Company may withhold from the severancepayments any amounts owed by Employee to the Company.

 

2.                                       Employee, on behalf of Employee andEmployee’s heirs, executors, successors, and assigns, releases the Company andits respective agents, employees, representatives, officers, trustees,affiliates, subsidiaries, parents, and attorneys, and the successors andassigns of each (collectively referred to as the “Released Parties”) from anyclaim, counterclaim or other action, whether known or unknown, against theReleased Parties, that Employee has or may have including, without limitation,any dispute relating to Employee’s employment with the Company or thetermination thereof, any dispute relating to the Company’s performance of itsobligations under the Agreement to which this Waiver is ancillary, and anydispute arising under the Civil Rights Act of 1964 (as amended), the AgeDiscrimination in Employment Act, the Americans with Disabilities Act, and anycomparable state or local law, regulation or ordinance arising prior to thedate of execution of this Waiver.

 

3.**                                      **In the event of any breach by Employee ofthe terms of this Waiver or of the Agreement to which it is ancillary, Employee’sright to receive any further payments or benefits under the Waiver andAgreement shall immediately end.  Suchbreach shall not relieve Employee of any of Employee’s obligations under theWaiver and Agreement, however, and the cessation of any benefits on account ofa breach shall not limit the Company’s right to any other relief it may have asa matter of law or equity.

 

4.                                       This Waiver shall not in any way beconstrued as an admission by the Company or any other Released Party that ithas acted wrongfully with respect to Employee or any other

 

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person, entity or agency, or that Employee hasany rights whatsoever against the Company or any other Released Party.  The Company further specifically disclaimsand denies any liability to or wrongful acts against Employee or any otherperson, entity or agency, on the part of itself, its employees, and its agents.

 

5.**                                      **This Agreement shall be binding uponEmployee’s heirs, administrators, representatives, successors and assigns, andshall inure to the benefit of the Company and the other Released Parties, andto their successors and assigns.

 

6.                                       Employee agrees to indemnify and holdeach and all of the Released Parties harmless from and against any loss, cost,damage or expense (including, without limitation, attorneys’ fees) incurred bythe Released Parties as a result of any breach of this Waiver or the Agreementto which it is ancillary by Employee.

 

7.                                       Employee and the Company agree that ifany portion of this Waiver is found to be unenforceable, then both Employee andthe Company desire that all other portions that can be separated from it orappropriately limited in scope shall remain fully valid and enforceable.  Each party also agrees that, withoutreceiving further consideration, it will sign and deliver such documents and doanything else necessary in the future to make the provisions of this Waivereffective.

 

8.**                                      **Employee agrees that Employee’semployment with the Company has ended as of the Termination Date and will notresume at any point in the future. Employee accordingly agrees not to apply for re-employment with theCompany or any affiliate of the Company at any time following the TerminationDate.

 

9.                                       Employee, in executing this Waiver, isnot relying on any oral representation or statement by any employee, officer,agent or representative of the Company regarding the subject matter, basis, oreffect of this Waiver, but rather, Employee acknowledges that this Waiver andthe Agreement to which it is ancillary contain the entire agreement between theparties.

 

10.                                 Employee acknowledges that he or she**has carefully read this Waiver, fully understandsits provisions and its final and binding effect, and that he or she is signingthis Waiver voluntarily.  Employeefurther acknowledges that he or she****hasbeen advised to consult with an attorney prior to executing this Waiver.

 

11.                                 Employee acknowledges that he or she hashad, or has had the opportunity to have, this Waiver in his or her**possession for at least twenty-one (21)days and has had this same period to consider whether to sign it.

 

Pursuant to theterms of the Agreement, to be effective, this Waiver must be executed byEmployee after the Termination Date. This Waiver can be revoked only within the seven (7) day periodfollowing the date of its execution. After the expiration of the seven (7) day revocation period, thisWaiver will become effective and legally binding in all respects.

 

Executed on this         day of                       ,20      .

 

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|                                                                                                                                                                                                                                                      | Employee                      |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------|
|                                                                                                                                                                                                                                                      |                          |
|                                                                                                                                                                                                                                                      |                          |
|                                                                                                                                                                                                                                                      |                          |   |
|                                                                                                                                                                                                                                                      |                          |
|                                                                                                                                                                                                                                                      | Printed Name: Daniel  Hartman |
|                                                                                                                                                                                                                                                      |                          |
|                                                                                                                                                                                                                                                      |                          |
| Executed on this           day of                        ,  20      . |
|                                                                                                                                                                                                                                                      |                          |
|                                                                                                                                                                                                                                                      |                          |
|                                                                                                                                                                                                                                                      | deCODE genetics, Inc.    |
|                                                                                                                                                                                                                                                      |                          |
|                                                                                                                                                                                                                                                      |                          |
|                                                                                                                                                                                                                                                      | By:                           |   |   |
|                                                                                                                                                                                                                                                      | Name:                         |   |   |
|                                                                                                                                                                                                                                                      | Its:                          |   |   |
|                                                                                                                                                                                                                                                           |                               |  |  |  |

 

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**EXHIBIT B**

 

**EMPLOYEECONFIDENTIALITY, INVENTION ASSIGNMENT**

**ANDNON-COMPETE AGREEMENT**

 

THIS EMPLOYEECONFIDENTIALITY, INVENTION ASSIGNMENT AND NON-COMPETE AGREEMENT (“Agreement”)is made as                       ,20    , between deCODE genetics, Inc. (the “Company”),and Daniel Hartman.

 

In consideration ofthe Employee’s employment or continued employment by the Company, with theintention that this Agreement shall apply to the entire period of Employee’semployment with the Company (including the period prior to the date of thisAgreement), the Employee hereby agrees as follows:

 

1.                                       CONFIDENTIAL INFORMATION DEFINED.  “Confidential Information” means tradesecrets, proprietary information, and confidential knowledge and informationwhich includes, but is not limited to, matters of a technical nature (such asdiscoveries, ideas, concepts, designs, drawings, specifications, techniques,models, diagrams, test data, scientific methods and know-how), and matters of abusiness nature (such as the identity of customers and prospective customers,the nature of work being done for or discussed with customers or prospectivecustomers, suppliers, marketing techniques and materials, marketing anddevelopment plans, pricing or pricing policies, financial information, plansfor further development, and any other information of a similar nature notavailable to the public).

 

2.                                       NON-DISCLOSURE OF CONFIDENTIALINFORMATION OF THE COMPANY.  Employeeacknowledges that, during the period of Employee’s employment with the Company,Employee has had or will have access to Confidential Information of theCompany.  Therefore, Employee agrees thatboth during and after the period of Employee’s employment with the Company,Employee shall not, without the prior written approval of the Company, directlyor indirectly (a) reveal, report, publish, disclose or transfer anyConfidential Information the Company to any person or entity, or (b) useany Confidential Information of the Company for any purpose or for the benefitof any person or entity, except as may be necessary in the performance ofEmployee’s work for the Company.

 

3.                                       NON-DISCLOSURE OF CONFIDENTIALINFORMATION OF PREVIOUS EMPLOYER AND OTHERS. 

 

(a)                                  Employee acknowledges that, during theperiod of Employee’s employment with the Company, Employee may have had or willhave access to Confidential Information of third parties who have given theCompany the right to use such Confidential Information, subject to anon-disclosure agreement between the Company and such third party.  Therefore, Employee agrees that both duringand after the period of Employee’s employment with the Company, Employee shallnot, without the prior written approval of the Company, directly or indirectly (i) reveal,report, publish, disclose or transfer any Confidential Information of suchthird parties to any person or entity, or (ii) use any ConfidentialInformation of such third parties for any purpose or for the benefit of anyperson or entity, except as may be necessary in the performance of Employee’swork for the Company.

 

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(b)                                 Employeeagrees that, during the period ofEmployee’s employment with the Company, Employee shall not useimproperly or disclose any Confidential Information of any former employer orany other party to whom Employee has an obligation of confidentially, nor bringunto the premises of the Company any unpublished document or any propertybelonging to any former employer or any other party to whom Employee has anobligation of confidentiality, unless consented to in writing by such employeror party.  Employee represents thatEmployee has the right to enter into this Agreement, and that Employee’sperformance of all the terms of this Agreement and Employee’s duties as anemployee of the Company will not breach any confidential information agreement,non-competition agreement or other agreement with any former employer ofEmployee’s services, either as an employee, consultant, contractor orindependent contractor, or with any other party.  Employee represents that all materialsfurnished or work performed by Employee will be wholly original and not copied,in whole or in part, from any other work, and such materials or work will notviolate, conflict or infringe upon the rights, of any other person or entity.

 

4.                                       PROPERTY OF THE COMPANY.  Employee acknowledges and agrees that allConfidential Information of the Company and all reports, drawings, blueprints,data, notes, and other documents and records, whether printed, typed, handwritten,videotaped, transmitted or transcribed on data files or on any other type ofmedia, made or compiled by Employee, or made available to Employee, during theperiod of Employee’s employment with the Company (including the period prior tothe date of this Agreement) concerning the Company’s Confidential Informationare and shall remain the Company’s property and shall be delivered to theCompany within five (5) business days after the termination of suchemployment with the Company or at any earlier time on request of theCompany.  Employee shall not retaincopies of such Confidential Information, documents and records.

 

5.                                       PROPRIETARY NOTICES.  Employee shall not, and shall not permit anyother person to, remove any proprietary or other legends or restrictive noticescontained in or included in any Confidential Information.

 

6.                                       INVENTIONS.

 

(a)                                  Employee shall promptly, from time totime, fully inform and disclose to the Company in writing all inventions,copyrightable material, designs, improvements and discoveries of any kind whichEmployee now has made, conceived or developed (including prior to the date ofthis Agreement), or which Employee may later make, conceive or develop, duringthe period of Employee’s employment with the Company, which pertain to orrelate to the Company’s business or any of the work or businesses carried on bythe Company (“Inventions”).  Thiscovenant applies to all such Inventions, whether or not they are eligible forpatent, copyright, trademark, trade secret or other legal protection; andwhether or not they are conceived and/or developed by Employee alone or withothers; and whether or not they are conceived and/or developed during regularworking hours; and whether or not they are conceived and/or developed at theCompany’s facility or not.

 

(b)                                 All Inventions shall be the sole andexclusive property of the Company, and shall be deemed part of the ConfidentialInformation of the Company for purposes of this Agreement,

 

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whether or notfixed in a tangible medium of expression. Employee hereby assigns all Employee’s rights in all Inventions and inall related patents, copyrights and trademarks, trade secrets and otherproprietary rights therein to the Company. Without limiting the foregoing, Employee agrees that any copyrightablematerial shall be deemed to be “works made for hire” and that the Company shallbe deemed the author of such works under the United States Copyright Act,provided that in the event and to the extent such works are determined not toconstitute “works made for hire”, Employee hereby irrevocably assigns andtransfers to the Company all right, title and interest in such works.

 

(c)                                  Employee shall assist and cooperate withthe Company, both during and after the period of Employee’s employment with theCompany, at the Company’s sole expense, to allow the Company to obtain,maintain and enforce patent, copyright, trademark, trade secret and other legalprotection for the Inventions.  Employeeshall sign such documents, and do such things necessary, to obtain suchprotection and to vest the Company with full and exclusive title in allInventions against infringement by others. Employee hereby appoints the Secretary of the Company as Employee’sattorney-in-fact to execute documents on Employee’s behalf for this purpose.

 

(d)                                 Employee shall not be entitled to anyadditional compensation for any and all Inventions made during the period ofEmployee’s employment with the Company.

 

7.                                       COVENANT NOT TO COMPETE.  Employee and the Company agree that theservices rendered by the Employee are unique and irreplaceable, and thatcompetitive use and knowledge of any Confidential Information wouldsubstantially and irreparably injure the Company’s business, prospects and goodwill.  Employee and the Company alsoagree that the Company’s business is global in nature due to the type ofproducts and/or services being provided. Therefore, Employee agrees that during the period of Employee’semployment with the Company and for a period of twelve (12) months thereafter,Employee shall not, directly or indirectly, through any other person, firm,corporation or other entity (whether as an officer, director, employee,partner, consultant, holder of equity or debt investment, lender or in anyother manner or capacity):

 

(a)                                  develop, sell, market, offer to sellproducts and/or services anywhere in the world where the company focus is basedon population pharmacogenetics to select targets or identify a targetpopulation for clinical study; or

 

(b)                                 engage in or participate in any businessconducted under any name that shall be the same as or similar to the name ofthe Company or any trade name used by the Company.

 

Employeeacknowledges that the foregoing geographic, activity and time limitationscontained in this Section 7 are reasonable and properly required for theadequate protection of the Company’s business. In the event that any such geographic, activity or time limitation isdeemed to be unreasonable by a court, Employee shall submit to the reduction ofeither said activity or time limitation to such activity or period as the courtshall deem reasonable.  In the event thatEmployee is in violation of the aforementioned restrictive covenant, then thetime limitation thereof shall be extended for a period of time equal to thependency of such proceedings, including appeals.

 

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8.                                       COVENANT NOT TO SOLICIT.  Employee agrees that, during the period ofEmployee’s employment with the Company and for a period of two (2) yearsthereafter, that Employee shall not, directly or indirectly, through any otherperson, firm, corporation or other entity (whether as an officer, director,employee, partner, consultant, holder of equity or debt investment, lender orin any other manner or capacity):

 

(a)                                  solicit, induce, encourage or attempt toinduce or encourage any employee or consultant of the Company to terminate hisor her employment or consulting relationship with the Company, or to breach anyother obligation to the Company; or

 

(b)                                 solicit, interfere with, disrupt, alteror attempt to disrupt or alter the relationship, contractual or otherwise,between the Company and any other person including, without limitation, anyconsultant, contractor, customer, potential customer, or supplier of theCompany.

 

Employeeacknowledges that the foregoing limitations contained in this Section 8are reasonable and properly required for the adequate protection of the Company’sbusiness.  In the event that any suchlimitation is deemed to be unreasonable by a court, Employee shall submit tothe reduction of either said activity or time limitation to such activity orperiod as the court shall deem reasonable. In the event that Employee is in violation of the aforementionedrestrictive covenant, then the time limitation thereof shall be extended for aperiod of time equal to the pendency of such proceedings, including appeals.

 

9.                                       REPRESENTATIONS.  Employee represents that Employee has theright to enter into this Agreement, and that Employee’s performance of all theterms of this Agreement and his duties as an employee of the Company will notbreach any confidential information agreement, non-competition agreement orother agreement with any former employer of his services, either as anemployee, consultant, contractor or independent contractor, or with any otherparty.  Employee represents that Employeewill not disclose to the Company any trade secrets or confidential orproprietary information of any third party that are not generally available tothe public.

 

10.                                 DISCLOSURE OF THIS AGREEMENT.  Employee hereby authorizes the Company tonotify others, including but not limited to customers of the Company and any ofEmployee’s future employers, of the terms of this Agreement and Employee’sresponsibilities under this Agreement.

 

11.                                 SPECIFIC PERFORMANCE.  Employee acknowledges that money damagesalone would not adequately compensate the Company in the event of a breach orthreatened breach by Employee of this Agreement, and that, in addition to allother remedies available to the Company at law or in equity, the Company shallbe entitled to injunctive relief for the enforcement of its rights and to anaccounting of profits made during the period of such breach.

 

12.                                 NO RIGHTS GRANTED.  Employee understands that nothing in thisAgreement shall be deemed to constitute, by implication or otherwise, the grantby the Company to the employee of any license or other right under any patent,patent application or other intellectual property right or interest belongingto the Company.

 

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13.                                 SEVERABILITY.

 

(a)                                  Each of the covenants provided in thisAgreement are separate and independent covenants.  If any provision of this Agreement shall bedetermined to be invalid or unenforceable, the remainder of this Agreementshall not be affected thereby and any such invalid or unenforceable provisionshall be reformed so as to be valid and enforceable to the fullest extentpermitted by law.

 

(b)                                 It is not a defense to the enforcement ofany provision of this Agreement that the Company has breached or failed toperform any obligation or covenant hereunder or under any other agreement orunderstanding between Employee and the Company.

 

14.                                 GOVERNING LAW.  This Agreement shall be governed by andconstrued in accordance with the laws of the State of Delaware without regardto conflict of law rules. 

 

15.                                 SUPERSEDES OTHER AGREEMENTS.  This Agreement contains the entire agreementof the parties with respect to subject matter hereof and supersedes allprevious agreements and understandings between the parties with respect to itssubject matter.

 

16.                                 AMENDMENTS.  This Agreement may not be changed, modified,released, discharged, abandoned or otherwise terminated in whole or in partexcept by an instrument in writing, agreed to and signed by the Employee and aduly authorized officer of the Company.

 

17.                                 ACKNOWLEDGEMENTS.  THE EMPLOYEE ACKNOWLEDGES THAT (i) THEEMPLOYEE HAS READ AND FULLY UNDERSTANDS THIS AGREEMENT; (ii) THE EMPLOYEEHAS BEEN GIVEN THE OPPORTUNITY TO ASK QUESTIONS; (iii) THE EMPLOYEE HASRECEIVED A COPY OF THIS AGREEMENT, THE ORIGINAL OF WHICH WILL BE RETAINED INTHE EMPLOYEE’S PERSONNEL FILE; AND (iv) THE EMPLOYEE’S OBLIGATIONS UNDERTHIS AGREEMENT SURVIVE THE TERMINATION OF THE EMPLOYEE’S EMPLOYMENT WITH THECOMPANY FOR ANY REASON.

 

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IN WITNESS WHEREOF,the parties have executed this Agreement as of the date first written above.

 

 
|   | deCODE genetics, Inc. |
|--------|----------------------------|
|   |                       |
|   | By (sign):                 |   |   |
|   |                       |
|   | Name:                      |
|   |                       |
|   | Title:                     |

 

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| WITNESS OR ATTEST: | EMPLOYEE (sign):     |   |   |
|--------------------|----------------------|--------|--------|
|               |                 |
|               | Name: Daniel Hartman |
|               |                 |
|               | Address:             |   |   |
|                    |                      |        |        |  |

 

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