Cmo Employment Agreement

Exhibit 10.3


KASHKIN
EMPLOYMENT AGREEMENT


EMPLOYMENT AGREEMENT (as it may be amended from time to time, "Agreement") made and entered into as of September 21, 2000 (the "Effective Date"), by and between GENAISSANCE PHARMACEUTICALS, INC. (the "Corporation"), a Delaware corporation with its principal office at 5 Science Park, New Haven, Connecticut, 06511, and KENNETH B. KASHKIN, M.D. ("Executive"), an individual who resides at 8 Hemlock Terrace, Sparta, New Jersey 07871.


WHEREAS, the Corporation desires to employ Executive, and Executive desires to accept employment with the Corporation, subject to the terms and conditions hereinafter set forth.


NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:


1. EMPLOYMENT. Executive shall be employed as an officer in the capacity of Executive Vice President ("EVP"), Chief Medical Officer ("CMO") of the Corporation during the term of this Agreement, and Executive hereby accepts such employment, on the terms and conditions hereinafter set forth. Executive represents that his employment by the Corporation pursuant to this Agreement does not violate any agreement, covenant or obligation to which he is a party or by which he is bound.


2. DUTIES. During the term of this Agreement, Executive shall devote his full business time and best efforts to the advancement of the interests and business of the Corporation, and he shall perform all duties, consistent with his position as EVP/CMO in order to advance the Corporation's business efforts, assigned or delegated to him by the Chief Executive Officer of the Corporation or his delegate (the "CEO"), and normally associated with the position of EVP/CMO, including, without limitation:


a. Responsibility and direction for all (i) clinical research conducted by the Corporation and medical affiliates, which shall include each of Clinical Discovery and Clinical Development, as hereinafter defined and (ii) Medical Affairs, as hereinafter defined, including planning and implementing of all the Corporation's Mednostics-TM- programs as well as directing all of the Corporation's HAP2000 member clinical programs and review of and participation in all matters related to Clinical Discovery, Clinical Development and Medical Affairs for all the Corporation's medical affiliates.


b. The creation and oversight of a project management system whereby the Corporation organizes, manages and tracks all of its interdisciplinary or interfunctional clinical projects.


c. Managing all of the Corporation's matters related to the interface between the Corporation and the United States Food and Drug Administration.


d. Review of, and participation in, the Corporation's business development efforts.


e. Serving on the Corporation's executive (or successor management) committee consisting of the Corporation's senior executives.


3. TERM. The Executive's work will be based in the Corporation's headquarters in New Haven, Connecticut. The term of Executive's employment under this Agreement shall begin on the Effective Date and shall expire at the close of business on September 21, 2004, unless earlier terminated as provided in this Agreement (the "Initial Term"). Upon expiration of the Initial Term, and each subsequent term or extension thereof, this Agreement shall automatically be extended for an additional term of one (1) year, unless Executive or the Corporation shall have notified the other of his or its election to terminate this Agreement not later than sixty (60) days prior to the end of such subsequent term or extension thereof (the "Initial Term", together with any extensions, until termination in accordance herewith, shall be referred to herein as the "Employment Term"). If the Executive continues in the full-time employ of the Corporation after the end of the Employment Term (it being expressly understood and agreed that the Corporation does not now, nor hereafter shall have, any obligation to continue the Executive in its employ, whether or not on a full-time basis, after the Employment Term ends), then the Executive's continued employment by the Corporation shall, notwithstanding anything to the contrary expressed or implied herein, be terminable by the Corporation at will.


4. COMPENSATION. As compensation for the services to be rendered by Executive to the Corporation pursuant to this Agreement, the Corporation shall pay Executive and provide Executive with the following compensation and benefits which Executive agrees to accept in full satisfaction for his services:


a. BASE SALARY. The Corporation shall pay Executive a base salary, payable in equal installments at such payment intervals as are the usual custom of the Corporation, but not less often than monthly, at an annual rate of $250,000, less such deductions or amounts to be withheld as shall be required by applicable law (the "Base Salary"). The Base Salary shall be reviewed annually by the CEO and shall be increased, if at all, (effective as of each successive anniversary of the Effective Date) by such amount, if any, as the CEO, in his sole discretion, shall determine.


b. BONUSES. Beginning in the year 2001, during the first quarter of each of the Corporation's fiscal years during the Employment Term, the Corporation shall pay Executive a bonus (an "Incentive Bonus") equal to up to 50% of his Base Salary, which amount shall be determined by the CEO in his sole discretion based upon Executive's achievements in meeting his performance goals and those of the Corporation for its most recently ended fiscal year. For the fiscal year ending December 31, 2000, such goals shall be established as of the Effective Date and any Incentive Bonus payable thereafter for said fiscal year 2000 shall be prorated from September


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13, 2000 through December 31, 2000. Thereafter, such goals shall be established in the first quarter of each fiscal year after the commencement of the Employment Term.


c. BENEFITS.


(i) Executive shall be entitled to participate, to
the extent he is eligible, in all group insurance programs,
health, medical, dental, and disability plans, and other
employee benefit programs and plans (including, without
limitation, the Corporation's 401(k) plan) which the
Corporation may hereafter in its sole and absolute discretion
make available generally to its senior management (including
any incentive compensation or equity ownership plan, PROVIDED,
the terms of his participation therein shall be at the
discretion of the Corporation's compensation committee of the
board of directors), but the Corporation shall not be required
to establish or maintain any such program or plan.


(ii) Executive shall be entitled to three (3) weeks
paid vacation during each calendar year. Such vacation shall
accrue ratably throughout each year and may be taken at such
time or times as is reasonably consistent with the
Corporation's vacation policies and the performance by
Executive of his duties and responsibilities hereunder. During
the balance of the calendar year 2000, Executive shall be
entitled to one week paid vacation.


(iii) Executive shall be entitled to participate in
the Corporation's Stock Option Plan and any successor plan
(the "Plan") with respect to his future performance as a
senior executive of the Corporation.


(iv) The Corporation shall, during the Employment
Term, pay the premiums for a $1,000,000 policy of term life
insurance insuring the life of Executive (subject to his
meeting the insurability requirements of the insurer). The
Corporation shall pay the premiums for such insurance policy
up to the cost charged by the insurer to insure a healthy male
non-smoker of Executive's then current age. Executive shall be
the owner of such policy and entitled to all of the rights of
ownership including designation of the beneficiary thereof.


(v) The Corporation shall provide Executive with a
policy of long-term disability insurance with reasonable
coverages, which shall include the payment of benefits equal
to at least 60% of Executive's Base Salary during the
disability coverage period, and the Corporation shall pay the
premiums for such disability insurance policy up to the cost
charged by the insurer to insure a healthy male non-smoker of
Executive's then current age.


(vi) Subject to reasonable guidelines adopted by the
board of directors, throughout the Employment Term, the
Corporation shall pay the costs of dues for Executive's
membership in at least one professional organization whose
activities are related to the business of the Corporation.


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(vii) The Corporation, at its expense, shall pay or
reimburse Executive for all reasonable moving expenses
attributable to the relocation of the Executive from Sparta,
New Jersey to Connecticut or surrounding locale including, but
not limited to the costs of movers, brokers fees, legal fees
associated with a sale or purchase of a residence, bank
charges, origination fees, title insurance fees and charges,
recording costs and similar expenses of such move. At or about
the commencement of the Employment Term, the Corporation, at
its expense, shall provide Executive with a furnished
apartment or executive suite in the New Haven area until the
Executive and his family relocate.


5. BUSINESS EXPENSES. The Corporation shall pay or reimburse Executive for the reasonable and necessary business expenses of Executive incurred in the performance of his duties hereunder, subject to reasonable documentation thereof and the reasonable rules and regulations of the Corporation relating thereto.

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