GENAISSANCE PHARMACEUTICALS INC
EXHIBIT 10.57
<DOCUMENT>
<TYPE>EX-10.57
<SEQUENCE>4
<FILENAME>a2131537zex-10_57.txt
<DESCRIPTION>EXHIBIT 10.57
<TEXT>
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                                                             Exhibit 10.57

                              EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT ("AGREEMENT") made and entered into effective as of
January 1, 2004 (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 KEVIN
RAKIN ("EXECUTIVE"), an individual who resides at 14 Side Hill Road, Westport,
Connecticut 06880.

     The Corporation and Executive desire to enter into this Agreement to set
forth the terms and conditions of their employment relationship, commencing as
of the Effective Date.

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

     1.  EMPLOYMENT. The Corporation shall employ Executive in the capacity of
President and Chief Executive Officer (collectively, the "CEO") of the
Corporation during the Employment Term, 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 Employment Term, Executive shall perform all duties,
consistent with his position as CEO, assigned or delegated to him by the Board
of Directors of the Corporation (the "BOARD"), and normally associated with the
position of CEO, and he shall devote substantially all of his full business time
and best efforts to the advancement of the interests and business of the
Corporation; provided that Executive may pursue passive investments and
interests which in the aggregate do not result in the diversion of a material
amount of Executive's business time. The Corporation will use its best efforts
to cause Executive to be a member of the Board throughout the Employment Term.
Executive shall have complete operating and administrative responsibility and
authority over the Corporation subject to reasonable policies established by the
Board. The Corporation shall provide and maintain an office located in New
Haven, Connecticut, from where Executive may perform his duties.

     3.  TERM. The term of this Agreement shall begin on the Effective Date, and
shall expire at the close of business on the day immediately preceding the fifth
anniversary of the Effective Date, unless earlier terminated as provided in this
Agreement (the "INITIAL TERM"). Upon expiration of the Initial Term and any
subsequent term or extension thereof, this Agreement shall automatically be
extended for an additional term of one (1) year, unless Executive or the
Corporation elect to terminate this Agreement in accordance with the provisions
of Section 12 of this Agreement (the INITIAL TERM, together with any subsequent
terms or extensions, until termination or expiration in accordance with the
provisions of this Agreement, shall be referred to herein as the "EMPLOYMENT
TERM"). If Executive continues in the employ of the Corporation after the end of
the Employment Term when no extension of this Agreement has been effected,

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then Executive's continued employment by the Corporation shall, notwithstanding
anything to the contrary expressed or implied herein, be terminable by the
Corporation, or by the Executive, at will.

     4.  COMPENSATION. As compensation for any and all 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
     payroll practices of the Corporation, but not less often than monthly, at
     an annual rate of $349,400, less such deductions or amounts to be withheld
     as shall be required by applicable law or as may be allowed at the request
     of Executive (the "BASE SALARY"). The Base Salary shall be reviewed
     annually by the Board after the end of each fiscal year of the Corporation
     and shall be adjusted by such amount, if any, as the Board, in its sole
     discretion, shall determine. Any such adjustment of Base Salary shall be
     made effective as of January 1 of the fiscal year to which it applies

            b. BONUS. During the Employment Term and so long as Executive
     remains employed on the date of payment, Executive shall be eligible for a
     discretionary bonus (a "DISCRETIONARY BONUS") for each fiscal year of the
     Corporation in an amount, if any, determined by the Board in its sole
     discretion based upon (i) Executive's achievements in meeting his
     performance goals and (ii) the Corporation's achievements in meeting its
     performance goals, in each case, for the most recently ended fiscal year of
     the Corporation. Executive acknowledges that the Corporation may set the
     same goals for the Corporation and Executive, from time to time. In the
     event Executive's goals differ from the Corporation's goals, then the
     achievement of performance goals by the Executive and by the Corporation
     shall each account for fifty percent (50%) of Executive's maximum target
     bonus. Such performance goals have been established as of the date hereof
     for fiscal year 2003, and after the date hereof shall be established in the
     first quarter of each fiscal year during the Employment Term. Any
     Discretionary Bonus may be payable in any combination of cash, stock
     options, or restricted stock of the Corporation upon such terms and
     conditions as determined by the Board. The Corporation shall pay any
     Discretionary Bonus by the end of the first quarter of the following fiscal
     year. As any bonus paid to Executive is discretionary, the payment of any
     bonus in a year must not be construed as requiring the payment of a bonus
     in any other year.

            c. BENEFITS.

                  (i)    To the extent he is eligible to participate pursuant to
            the terms of the relevant plan, Executive shall be entitled to
            participate in all group insurance programs, health, medical,
            dental, and disability plans, and other employee benefit plans which
            the Corporation may hereafter in its sole and absolute discretion
            make available generally to its employees (other than any incentive
            compensation

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            or equity ownership plans in which Executive shall be entitled to
            participate as set forth in subsection (iii) below), but the
            Corporation shall not be required to establish or maintain any such
            program or plan.

                  (ii)   Executive shall be entitled to four (4) weeks paid
            vacation during each calendar year. Such vacation 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 under this Agreement. Up to two
            weeks of unused vacation time in one year may be carried over and
            used in the subsequent year.

                  (iii)  Executive shall be entitled to participate in the
            Corporation's 2000 Amended and Restated Equity Incentive Plan and
            the Corporation's Employee Stock Purchase Plan and in any other
            similar plan that may be established in the future by the
            Corporation.

                  (iv)   The Corporation shall purchase, and throughout the
            Employment Term pay the premiums for, a $3,000,000 policy of term
            life insurance insuring the life of Executive (subject to his
            meeting the suitability requirements of the insurer). Executive
            shall be the owner of such policy and entitled to all of the rights
            of ownership including designation of the beneficiary thereof.

                  (v)    Throughout the Employment Term, the Corporation, at its
            expense, shall furnish an automobile to Executive (owned or leased
            by the Corporation) commensurate with his position as CEO and shall
            reimburse Executive for reasonable maintenance, operating and
            insurance expenses incurred in the use of such automobile in
            connection with business activities conducted on behalf of the
            Corporation.

                  (vi)   Subject to reasonable guidelines adopted by the Board,
            throughout the Employment Term, the Corporation shall pay (A) the
            costs of dues for membership in professional organizations whose
            activities are reasonably related to the business of the
            Corporation, and (B) the initiation fee and monthly dues for
            Executive's membership in one private club that offers luncheon and
            dinner eating facilities.

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

                  (viii) The Corporation also shall continue to provide to
            Executive all other fringe benefits that are presently being
            provided to Executive or such

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            comparable or additional fringe benefits of the same general type
            and quality as the Corporation may provide in the future to its
            executive employees.

            d. TAXES. All compensation and benefits are subject to applicable
     withholding taxes, federal, state, and local, and any other proper
     deductions.

            e. BENEFIT PLANS. Executive understands that the Corporation may
     amend, change, or cancel its employment policies and benefit plans at any
     time as allowed by law or by any applicable plan documents.

            f. SEVERANCE BENEFITS. Executive shall not receive any severance
     benefit except as described in Section 13 hereof.

     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, provided Executive provides timely and
reasonable documentation thereof in accordance with the rules and regulations of
the Corporation relating thereto.

     6.  COMPLIANCE WITH POLICIES. Executive acknowledges and agrees that,
except as set forth in this Agreement, compliance with the Corporation's
policies, practices and procedures is a term and condition of his employment
under this Agreement.

     7.  INVENTIONS AND IMPROVEMENTS. Executive acknowledges, covenants and
agrees that the Corporation shall be the sole owner of all the fruits and
proceeds of Executive's services to the Corporation, including but not limited
to all writings, inventions, discoveries, designs, systems, processes, software
or other improvements relating to the business or products of the Corporation,
whether or not patentable, registerable, or copyrightable, which Executive may,
alone or with others, conceive, create, develop, produce or make during or as a
result of his employment with the Corporation (collectively, the "INVENTION"),
free and clear of any claims by Executive of any kind or character whatsoever
other than Executive's rights to compensation under this Agreement. Executive
agrees that he shall disclose each of the Inventions promptly and completely to
the Corporation, and shall, at the request of the Board, execute such
assignments, certificates or other instruments as the Board from time to time
deems necessary or desirable to evidence, establish, maintain, perfect, protect,
enforce or defend the Corporation's right, title and interest in or to any or
all of the Inventions. Executive agrees that he is bound by the terms of the
Employee Agreement on Ideas, Inventions and Confidential Information, attached
hereto as Exhibit A (the "INVENTIONS AGREEMENT") and that the Employee Agreement
on Ideas, Inventions, and Confidential Information, dated June 6, 1992 is no
longer of any force or effect and is hereby superseded by the Inventions
Agreement, which shall continue in full force and effect according to its terms.
Nothing in this Agreement shall be interpreted or construed as modifying the
Inventions Agreement. To the extent that there is any conflict between the
provisions of this Section and the provisions of the Inventions Agreement, the
provisions of the Inventions Agreement shall govern.

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     8.  NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.

            a. Executive acknowledges that, in and as a result of his employment
     by the Corporation, he will be making use of, acquiring and/or adding to
     the Corporation's Confidential Information (as hereinafter defined). As a
     material inducement to the Corporation to employ Executive and to pay
     Executive the compensation and benefits set forth in this Agreement,
     Executive covenants and agrees that he shall not, at any time during or
     following the Employment Term, directly or indirectly divulge or disclose
     for any purposes whatsoever, any Confidential Information that has been
     obtained by, or disclosed to, him as a result of his employment with the
     Corporation. For purposes of this Agreement, "Confidential Information"
     means, collectively, all confidential and proprietary matters and materials
     of the Corporation, including without limitation, (i) the Corporation's
     proprietary information, inventions, trade secrets, knowledge, data,
     know-how, intellectual property, systems, procedures, manuals, pricing
     policies, operational methods and information relating to the Corporation's
     products, processes, formulae, business plans, marketing plans and
     strategies, pricing strategies, customer lists, and all other subject
     matters pertaining to the business and/or financial affairs of the
     Corporation; (ii) the Corporation's proprietary information regarding plans
     and strategies for research, development, new products, future business
     plans, budgets and unpublished financial statements, licenses, prices and
     costs; (iii) proprietary information regarding the skills and compensation
     of other employees of the Corporation; and (iv) proprietary information
     disclosed in confidence to the Corporation by a third party with a duty on
     the Corporation to maintain the confidentiality of such information. The
     term "Confidential Information" shall not include any information that (x)
     has been made available generally to the public either by the Corporation
     or by a third party with the Corporation's consent, unless such information
     became available as a result of any action by Executive in violation of
     this Agreement, the Inventions Agreement, or his obligations under law, or
     (y) has been made available as a result of a final award, order, or ruling
     by an arbitration tribunal or a court of competent jurisdiction that has
     determined that such Confidential Information may be disclosed, or (z) is
     otherwise required to be disclosed in accordance with subsection b. below.

            b. If Executive is required by a court, arbitration tribunal, or
     governmental agency (by oral questions, interrogatories, requests for
     information or documents, subpoena, civil investigation demand or similar
     process) to disclose any Confidential Information, Executive may disclose
     such Confidential Information to such court, tribunal, or agency without
     liability hereunder, provided, that Executive first provides the
     Corporation with notice of any such requirement(s) as promptly as
     practicable, but in any case, to the extent possible, with sufficient
     timeliness to enable the Corporation to seek an appropriate protective
     order and/or waive its compliance with the relevant provisions of this
     Agreement.

            c. The term "customer" means any business, company, person, or any
     other entity to whom the Corporation or any of its affiliates has provided
     any product or service, whether or not for compensation, within a period of
     two (2) years prior to the time Executive ceases to be employed by the
     Corporation.

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     9.  COVENANTS AGAINST COMPETITION.

            a. NON-SOLICITATION OF EMPLOYEES. While employed by the Corporation
     and for a period of twelve (12) months from the date of termination of the
     Employment Term for any reason, Executive shall not directly or indirectly
     solicit, induce or encourage any of the Corporation's employees to
     terminate their employment with the Corporation or to accept employment
     with any competitor, supplier, client, agent or broker of the Corporation,
     nor shall Executive cooperate with any others in doing or attempting to do
     so. As used in this paragraph, the term "solicit, induce or encourage"
     includes, but is not limited to, (i) initiating communications with any
     employee of the Corporation relating to possible employment or independent
     contractor relationship, (ii) offering bonuses or additional compensation
     to encourage any employee of the Corporation to terminate his employment
     with the Corporation and accept employment with a competitor, supplier,
     client, agent or broker of the Corporation, or (iii) referring any employee
     of the Corporation to recruiters, personnel or agents employed by
     competitors, suppliers, clients, agents or brokers of the Corporation.
     Notwithstanding the foregoing, the term "solicit, induce or encourage", as
     used in this paragraph, specifically excludes any action by the Executive
     related to any of the Corporation's employees where it is in the
     Corporation's best interest to terminate any such employees as in the case
     of a planned reduction in force by the Corporation.

            b. NON-COMPETE. While Executive is employed by the Corporation and
     for a period of six (6) months from the date of termination of the
     Employment Term for any reason, Executive shall not directly or indirectly,
     as a principal, agent, contractor, employee, employer, partner,
     shareholder, proprietor, investor, member, director, officer or consultant
     or in any other capacity, engage in or perform any managerial or executive
     services for any corporation, partnership, individual or entity which is
     engaged in a business competitive with the Corporation or any affiliate of
     the Corporation, or to any customer of the Corporation or affiliate of the
     Corporation.

            c. For the purposes of this Agreement:

                  (i)    The term "engaged in a business competitive with the
            Corporation or any affiliate of the Corporation" means directly or
            indirectly engaging in the business of pharmacogenomics or in the
            same or any similar business in which the Corporation or any of its
            affiliates engaged, as of the date of termination of the Employment
            Term, in any manner whatsoever; and

                  (ii)   The term "affiliate" means any legal entity that
            directly or indirectly through one or more intermediaries controls,
            is controlled by, or is under common control with the Corporation;
            and

                  (iii)  The term "customer" means any business, company,
            person, and any other entity to whom the Corporation or any of its
            affiliates has provided any product or service, whether or not for
            compensation, within a period of two (2) years prior to the time
            Executive ceases to be employed by the Corporation.

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            d. EXCLUSION FOR INVESTMENTS. None of the provisions of this Section
     9 shall prohibit Executive from investing in securities (i) listed on a
     national securities exchange or actively traded over-the-counter so long as
     such investments are not greater than five percent (5%) of the outstanding
     securities of any issuer of the same class or issue, or (ii) of entities
     engaged in a business competitive with the Corporation so long as any such
     entity was not engaged in a business competitive with the Corporation at
     the time Executive made such investment.

     10. REASONABLENESS OF RESTRICTIONS.

            a. Executive has carefully read and considered the provisions of
     Section 8 and Section 9, and, having done so, agrees that:

                  (i)    The restrictions set forth in Section 8 and Section 9,
            including but not limited to the character, duration, and
            geographical area of restriction, are fair and reasonable and are
            reasonably required for the protection of the good will and other
            legitimate business interests of the Corporation and its affiliates,
            officers, directors, shareholders, and other employees;

                  (ii)   Executive has received and, pursuant to Section 14,
            will receive adequate consideration for such obligations; and

                  (iii) Such obligations do not prevent Executive from earning a
            livelihood.

            b. If, notwithstanding the foregoing, any of the provisions of
     Section 8 or Section 9 shall be held to be invalid or unenforceable, the
     remaining provisions thereof shall nevertheless continue to be valid and
     enforceable as though the invalid and unenforceable parts had not been
     included therein. If a court of competent jurisdiction determines that the
     character, duration, geographical scope, or related aspects of any
     provision of Section 8 or Section 9 are unreasonable in light of the
     circumstances as they then exist, then it is the intention of the parties
     that Section 8 and/or Section 9 shall be construed by the court in such a
     manner as to impose only those restrictions on the conduct of Executive
     that are reasonable in light of the circumstances as they then exist and as
     are necessary to assure the Corporation, to the extent legally permissible,
     of the intended benefit of this Agreement and such restrictions, as so
     modified, shall become and thereafter be the maximum restriction in such
     regard, and the restriction shall remain enforceable to the fullest extent
     deemed reasonable by such court.

     11. REMEDIES FOR BREACH OF EXECUTIVE'S COVENANTS OF NON-DISCLOSURE AND
NON-COMPETITION. Executive recognizes and agrees that the Corporation's remedy
at law for any breach of Section 8 or Section 9 would be inadequate as such a
breach would cause irreparable harm to the Corporation, and he agrees that, for
any actual or threatened breach of such provisions, the Corporation shall, in
addition to such other remedies as may be available to it at law or in equity,
be entitled to injunctive relief and to enforce its rights by an action for
specific performance. All of the Corporation's remedies for any breach of this
Agreement shall be

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cumulative and the pursuit of any one remedy shall not exclude the Corporation's
pursuit of any other remedies.

     12. TERMINATION.

            a. DEATH. In the event that Executive dies during the Employment
     Term, this Agreement shall terminate automatically upon his death, upon
     which event Executive's legal representatives shall be entitled to receive,
     and the Corporation shall pay or cause to be paid to Executive's legal
     representatives, any Base Salary, and other compensation or benefits
     accrued but as yet unpaid on the date of Executive's death.

            b. INCAPACITY OR DISABILITY. If during the Employment Term,
     Executive is prevented from performing the duties or fulfilling the
     responsibilities of his employment under this Agreement by reason of any
     incapacity or disability for a continuous period of six (6) months, as
     determined by an independent qualified physician selected by the
     Corporation and reasonably acceptable to Executive (or his representative),
     then the Corporation may, upon thirty (30) days prior written notice to
     Executive, terminate Executive's employment hereunder, but Executive shall
     continue to be eligible to receive any benefits to which he may be entitled
     under the terms of any long-term disability plan or insurance policy
     maintained by the Corporation for its employees generally or for Executive
     specifically. In the event of such incapacity or disability, the
     Corporation shall continue to pay full compensation to Executive in
     accordance with the terms of this Agreement until the date of such
     termination.

            c. BY CORPORATION FOR CAUSE. The Corporation may, acting by majority
     action of the Board, upon written notice to Executive, terminate
     Executive's employment hereunder For Cause (as defined hereafter); provided
     that the Corporation shall first provide the Executive with an opportunity
     to be heard by the Board on any proposed termination For Cause by the
     Board. For purposes of this Agreement, the term "For Cause" shall mean (i)
     Executive's willful and material breach of this Agreement, which Executive
     fails to cure within thirty (30) days after receipt of written notice
     thereof; (ii) Executive's willful and material failure to adhere to any
     policy of the Corporation generally applicable to employees of the
     Corporation, which Executive fails to cure within thirty (30) days after
     receipt of written notice thereof; (iii) Executive's misappropriation (or
     attempted misappropriation) of a material business opportunity of the
     Corporation, including attempting to secure or securing any personal profit
     in connection with any transaction entered into on behalf of the
     Corporation; (iv) Executive's misappropriation (or attempted
     misappropriation) of any of the Corporation's funds or property; (v)
     Executive's conviction of, or the entering of a guilty plea or plea of no
     contest with respect to, a felony, the equivalent thereof, or of a lesser
     crime having as its predicate element fraud, dishonesty or misappropriation
     of property of the Corporation; (vi) Executive's willful misconduct or
     intentional insubordination; (vii) Executive's physical or mental
     disability or other inability to perform the essential functions of his
     position for a consecutive six (6) month period, with or without reasonable
     accommodation (as contemplated by the federal Americans with Disabilities
     Act) as determined by an independent qualified physician selected by the
     Corporation and

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     reasonably acceptable to Executive (or his representative), if Executive is
     not eligible for benefits under the terms of any long-term disability
     policy or insurance policy maintained by the Corporation for its employees
     generally or for Executive specifically; (viii) Executive's engaging in bad
     faith or gross negligence in the performance of his duties under this
     Agreement as determined in good faith by the Board or (ix) any other
     conduct of Executive sufficiently detrimental to the Corporation so as to
     warrant immediate termination of Executive's employment with the
     Corporation.

            In the event of termination For Cause of Executive's employment,
     Executive's right to receive compensation and other benefits hereunder
     (other than any Base Salary and any vacation accrued but as yet unpaid on
     the effective date of such termination) shall terminate on the effective
     date of such termination, and Executive shall not be entitled to any
     severance payments or benefits pursuant to Section 13.

            d. BY CORPORATION WITHOUT CAUSE; NON-RENEWAL. The Corporation may,
     at any time, for any reason other than For Cause, elect, by majority vote
     of the Board, to terminate Executive's employment or not to renew or extend
     the Employment Term upon thirty (30) days prior written notice to
     Executive. In the event of such termination other than For Cause, or
     non-renewal or non-extension, Executive shall be entitled to receive any
     Base Salary, and other compensation or benefits accrued but as yet unpaid
     on the date of Executive's termination other than For Cause or non-renewal
     or non-extension, but Executive shall not be entitled to receive any
     severance payments or benefits pursuant to Section 13 unless a Change of
     Control (as hereinafter defined) (i) has occurred within the 12 months
     preceding any such termination other than For Cause, or non-renewal or
     non-extension or (ii) occurs within the 90 day period following any such
     termination other than For Cause, or non-renewal or non-extension, in
     either of which cases, the Corporation shall be obligated to pay to
     Executive the amounts specified in Section 13b.

            e. BY EXECUTIVE FOR GOOD REASON. Executive may, at his option, upon
     thirty (30) days prior written notice to the Corporation, terminate his
     employment hereunder for Good Reason (as hereinafter defined), upon which
     termination, Executive shall be entitled to receive any Base Salary, and
     other compensation or benefits accrued but as yet unpaid on the date of
     Executive's termination, for Good Reason, but Executive shall not be
     entitled to receive any severance payments or benefits pursuant to Section
     13 unless a Change of Control (as hereinafter defined) (i) has occurred
     within the 12 months preceding any such termination for Good Reason or (ii)
     occurs within the 90 day period following any such termination for Good
     Reason, in either of which cases, the Corporation shall be obligated to pay
     to Executive the amounts specified in Section 13b.

            f. VOLUNTARY TERMINATION BY EXECUTIVE. Executive may, at his option,
     upon thirty (30) days prior written notice to the Corporation, terminate
     his employment hereunder other than for Good Reason. In the event of a
     voluntary termination of his employment other than for Good Reason by the
     Executive pursuant to this Paragraph, Executive's rights to receive
     compensation and other benefits (other than any Base Salary accrued but as
     yet unpaid on the effective date of such termination) shall terminate on
     the effective

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     date of such termination, and Executive shall not be entitled to any
     severance payments or benefits pursuant to Section 13.

            g. GOOD REASON DEFINED. For purposes of this Agreement, the term
     "Good Reason" means:

                  (i)    the Corporation, without Executive's express written
                         consent, demotes him to a position and/or assigns him
                         duties inconsistent with the position and/or duties
                         described in Sections 1 or 2;

                  (ii)   the Corporation's material breach of this Agreement,
                         which the Corporation fails to cure within thirty (30)
                         days after receipt of written notice thereof;

                  (iii)  the relocation of the Corporation's operations, in
                         their entirety, to a location that is more than fifty
                         (50) miles away from New Haven, Connecticut without
                         Executive's prior consent; or

                  (iv)   a reduction without Executive's consent, other than a
                         de minimis reduction, by the Corporation in Executive's
                         annual Base Salary as in effect on the date of this
                         Agreement, as the same may be increased from time to
                         time;

                  (v)    without Executive's express written consent, the
                         substantial adverse alteration in the nature or status
                         of his position or responsibilities or the conditions
                         of his employment from those in effect on the date of
                         this Agreement;

                  (vi)   without Executive's express written consent, the
                         failure by the Corporation to continue in effect any
                         material compensation or benefit plan in which
                         Executive participates on or after the date of this
                         Agreement, unless an equitable arrangement (embodied in
                         an ongoing substitute or alternative plan) has been
                         made with respect to such plan, or the failure by the
                         Corporation to continue Executive's participation
                         therein (or in such substitute or alternative plan) on
                         a basis not materially less favorable, both in terms of
                         the amount of benefits provided and the level of his
                         participation relative to other participants, than
                         existed on or after the date of this Agreement.

            h. CHANGE OF CONTROL DEFINED. For purposes of this Agreement, a
     "Change of Control" shall be deemed to have occurred if the Corporation
     engages in a transaction that would be required to be reported in response
     to Item l(a) of the Current Report on Form 8-K, as in effect on January 1,
     2003, pursuant to Section 13 or 15(d) of the Securities Exchange Act of
     1934 (the "EXCHANGE ACT"); provided that, without limitation, such a
     "Change of Control" shall be deemed to have occurred if: (i) a third

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     Person, including a "group" as such term is used in Section 13(d)(3) of the
     Exchange Act, other than the trustee of any employee benefit plan of the
     Corporation, becomes the beneficial owner, directly or indirectly, of 35%
     or more of the combined voting power of the Corporation's outstanding
     voting securities ordinarily having the right to vote for the election of
     directors of the Corporation; (ii) during any period of twenty-four (24)
     consecutive months individuals who, at the beginning of such consecutive
     twenty-four (24) month period, constitute the Board of Directors of the
     Corporation (the "BOARD") cease for any reason (other than retirement upon
     reaching normal retirement age, disability, or death) to constitute at
     least a majority of the Board; provided that any person becoming a director
     subsequent to the date hereof whose election, or nomination for election by
     the Corporation's shareholders, was approved by a vote of at least three
     quarters of the directors comprising the Incumbent Board shall be, for
     purposes of this Agreement, considered as though such person were a member
     of the Incumbent Board; or (iii) the Corporation shall cease to be a
     publicly owned corporation having its outstanding Common Stock listed on
     the New York Stock Exchange or quoted in the NASDAQ National or Small Cap
     Market System, except where the delisting is related to a private purchase
     of the Corporation's stock by a group consisting of the Corporation's
     current officers. For these purposes, Incumbent Board means the Board as in
     existence twenty-four (24) months prior to the date the action is being
     considered. Notwithstanding the foregoing, if the Incumbent Board
     specifically determines in good faith that any transaction does not
     constitute a Change of Control for purposes of this Agreement such
     determination shall be conclusive and binding.

            i. PERSON DEFINED. For purposes of this Agreement, the term "Person"
     means any individual, corporation, association, partnership, limited
     partnership, limited liability company, limited liability partnership,
     organization, business, joint venture, sole proprietorship, governmental
     agency, entity or subdivision or other entity of any kind or nature.

            j. RESIGNATION FROM POSITIONS. In the event of termination or
     expiration of Executive's employment other than for death, Executive shall
     resign from all positions held in the Corporation, including without
     limitation any position as a director, officer, agent, trustee or
     consultant of the Corporation or any affiliate of the Corporation.

     13. SEVERANCE PAYMENTS.

            a. LIMITATION ON SEVERANCE. The parties recognize and agree that
     Executive shall not be entitled to receive any severance payments except as
     set forth in this Section 13, and Executive's right to receive compensation
     (other than any Base Salary and any vacation accrued but as yet unpaid on
     the effective date of termination) shall terminate on the effective date of
     termination of the Employment Term.

            b. SEVERANCE UPON CHANGE OF CONTROL.

                  (i)    If the Corporation terminates Executive's employment or
                         fails to renew or extend the Employment Term pursuant
                         to Section 12d,

                                     - 11 -
<Page>

                         and such termination, non-renewal or non-extension
                         occurs within the twelve (12) months following or 90
                         days preceding a Change of Control, as set forth in
                         Section 12d, or

                  (ii)   If Executive terminates his employment pursuant to
                         Section 12e and such termination occurs within twelve
                         (12) months following a Change of Control, as set forth
                         in Section 12e,

     then the parties recognize and agree that actual damages to Executive would
     be difficult if not impossible to ascertain and agree that, in lieu of any
     other rights to which Executive may be entitled, the Corporation shall pay
     Executive, as severance pay or as liquidated damages, or both, a lump sum
     equal to one hundred fifty percent (150%) of Executive's annual Base Salary
     as in effect at the time of such termination or expiration. Such payment
     shall be made within thirty (30) days after such termination or expiration
     date.

                  (iii)  Notwithstanding any other provision of this Agreement,
                         in the event that any payment or benefit received or to
                         be received by the Executive (A) is deemed to be in
                         connection with a Change of Control (whether payable
                         pursuant to the terms of this Agreement or any other
                         plan, arrangement or agreement with the Corporation,
                         its successors, any person whose actions result in a
                         Change of Control or any corporation ("Affiliates")
                         affiliated (or which, as a result of the completion of
                         the transactions causing a Change of Control will
                         become affiliated) with the Corporation within the
                         meaning of Section 1504 of the Internal Revenue Code of
                         1986, as amended (the "Code") (collectively with the
                         payments and benefits pursuant to this Agreement if
                         deemed to be paid pursuant to a Change of Control,
                         "Total Payments")) and (B) it is determined by the
                         Corporation's independent certified accounting firm
                         (the "Tax Advisor") that the Total Payments exceed 2.99
                         times the base amount (as such term is defined under
                         Section 280G(b)(3) of the Code) but equal less than 4
                         times such base amount and that an excise tax is
                         payable by Executive under Section 4999 of the Code,
                         then the amount of payments to the Executive shall be
                         reduced so that the payments do not exceed the limits
                         then set forth in Section 280G of the Code.

                  (iv)   Notwithstanding any other provisions of this Agreement
                         or the provisions of subsection (iii) above, in the
                         event that the Tax Advisor determines that the Total
                         Payments would be subject (in whole or part), to an
                         excise tax pursuant to Section 4999 of the Code (such
                         tax hereinafter referred to as the "Excise Tax") and
                         the Tax Advisor determines that the Total Payments
                         equal or exceed four (4) times the base amount (as such
                         term is defined under Section 280G(b)(3) of the Code),
                         then the Total Payments shall be

                                     - 12 -
<Page>

                         grossed up to the extent necessary to reflect any
                         Excise Taxes due by Executive (and the income taxes
                         attributable to the additional payment) so that the
                         Executive will be entitled to a net amount equal to the
                         Total Payments (the "Grossed-Up Payment"). For purposes
                         of determining whether and the extent to which the
                         Total Payments will be subject to the Excise Tax, (A)
                         no portion of the Total Payments the receipt or
                         enjoyment of which Executive shall have effectively
                         waived in writing prior to the date of this termination
                         of employment shall be taken into account, (B) no
                         portion of the Total Payments shall be taken into
                         account which in the opinion of Tax Advisor does not
                         constitute a "parachute payment" within the meaning of
                         Section 280G(b)(2) of the Code, (including by reason of
                         Section 280(b)(4)(A) of the Code) and, in calculating
                         the Excise Tax, no portion of such Total Payment shall
                         be taken into account which constitutes reasonable
                         compensation for services actually rendered, within the
                         meaning of Section 280G(b)(4)(B) of the Code, in excess
                         of the base amount as defined in Section 280G(b)(3) of
                         the Code allocable to such reasonable compensation, and
                         (C) the value of any non-cash benefit or any deferred
                         payment or benefit included in the Total Payments shall
                         be determined by Corporation in accordance with the
                         principles of Sections 280G(d)(3) and (4) of the Code.
                         Prior to the thirtieth day following the date of
                         Executive's termination of employment, Corporation
                         shall provide Executive with its calculation of the
                         amounts referred to in this Section and such supporting
                         materials as are reasonably necessary for Executive to
                         evaluate Corporation's calculations but the Tax
                         Advisor's calculations shall be used for purposes of
                         any payments pursuant to this Section.

                  (v)    If the Corporation's Tax Advisor determines that the
                         Total Payments received or to be received by Executive
                         fall under subparagraph (iii) above and upon audit by
                         the Internal Revenue Service (the "IRS"), the IRS
                         determines that an Excise Tax is due and payable due to
                         the amount of the Total Payments received by Executive,
                         notwithstanding the reductions in payments made under
                         subparagraph (iii), then in lieu of any further
                         reduction the Corporation agrees to make a Grossed-Up
                         Payment calculated in the same manner as provided in
                         subparagraph (iv) above.

                  (vi)   In the event of any IRS audit concerning the Total
                         Payments payable or paid to Executive, the Corporation
                         may in its sole discretion choose to respond to the
                         audit. If the Corporation chooses not to respond, then
                         it shall be the sole responsibility of

                                     - 13 -
<Page>

                         Executive to respond to the audit. Each party shall
                         reasonably cooperate with the other in any such
                         proceedings.

            c. ACCELERATED VESTING. Notwithstanding any contrary vesting
provisions of any restricted stock grant, stock option agreement or certificate
granting Executive stock options or restricted stock of the Corporation during
the Employment Term, upon a Change of Control, Executive's unvested stock
options and restricted stock of the Corporation shall vest completely as of the
date of termination or expiration of Executive's employment, and thereafter,
Executive shall be permitted to exercise any and all vested options which he
holds for a period of up to twelve (12) months following the date of termination
or expiration of his employment to the extent permitted by applicable law.

            d. SEVERANCE BENEFITS. Except as set forth in this Section 13 or as
otherwise required by law, Executive shall not be entitled to any severance
payments or employee benefits under this Agreement after termination or
expiration of Executive's employment, except that if Executive is entitled to
severance payments under Section 13b, or if Executive's employment is terminated
as a result of incapacity or disability, during the eighteen (18) month period
(or such longer period which does not exceed twenty-four (24) months as may be
provided by applicable law) following any termination or expiration of
Executive's employment hereunder, the Corporation shall reimburse Executive for
the cost of health insurance premiums for himself and his spouse and children,
if any, incurred by Executive for any benefits continued pursuant to COBRA
(Consolidated Omnibus Budget Reconciliation Act of 1986). If Executive elects
not to maintain health insurance pursuant to COBRA, the Corporation is under no
obligation to reimburse Executive for his otherwise elected coverage. Executive
shall give the Corporation prompt notice of his re-employment and eligibility
for benefits through his new employer., and Executive acknowledges that his
eligibility for COBRA benefits shall expire upon such event. Thereafter, the
Corporation shall not be required to reimburse Executive for the cost of the
health insurance premiums described above.

            e. ELIGIBILITY FOR SEVERANCE; REQUIREMENT OF RELEASE. No severance
due Executive hereunder shall be paid under this Agreement unless Executive
first executes and agrees to be bound by a release of all claims, on a form
provided by the Corporation, which releases any and all claims that Executive
might have against the Corporation and contains terms reasonable and customary
in such agreements.

     14. ADDITIONAL COVENANT AGAINST COMPETITION. If this Agreement is not
renewed or extended, or is terminated for any reason or no reason, except
Executive's death, whether by action of the Board or by the action of Executive,
Executive hereby agrees to and is hereby bound by, and the Corporation shall
compensate Executive for, a six (6) month extension of his covenants against
competition set forth in Section 9 hereof. Accordingly, immediately upon any
such non-renewal, or non-extension or termination of Executive's employment
hereunder for any reason or no reason (other than Executive's death), in
addition to any and all other amounts due from the Corporation to Executive
hereunder, the Corporation shall make a lump sum payment to Executive equal to
150% of his Base Salary in consideration of said six (6) month extension of such
above-described covenants. Provided, however, that such lump sum payment shall
not be paid unless Executive first executes and agrees to be bound by a release
of all claims, on a form

                                     - 14 -
<Page>

provided by the Corporation, which releases any and all claims that Executive
might have against the Corporation and contains terms reasonable and customary
in such agreements.

     15. WAIVER. A party's failure to insist on compliance or enforcement of any
provision of this Agreement shall not affect the validity or enforceability or
constitute a waiver of future enforcement of that provision or of any other
provision of this Agreement by that party or any other party.

     16. GOVERNING LAW. This Agreement shall in all respects be subject to, and
governed by, the laws of the State of Connecticut without reference to its
conflict of laws rules.

     17. SEVERABILITY. The invalidity or unenforceability of any provision in
the Agreement shall not in any way affect the validity or enforceability of any
other provision, and this Agreement shall be construed in all respects as if
such invalid or unenforceable provision had never been in the Agreement.

     18. NOTICE. Any and all notices required or permitted herein shall be in
writing and shall be deemed to have been duly given (a) when delivered if
delivered personally, (b) on the fifth day following the date of deposit in the
United States mail if sent first class, postage prepaid, or by certified mail,
or (c) one day after delivery to a nationally recognized overnight courier
service. The parties' respective addresses for such notices shall be those set
forth below, or such other address or addresses as either party may hereafter
designate in writing to the other.

     If to the Corporation: Genaissance Pharmaceuticals, Inc.
                            Five Science Park, Suite 2103
                            New Haven, CT 06511-1966
                            Attention: Chairman of the Board
                            Facsimile No.: (203) 492-4473

     With a copy to:        Robinson & Cole LLP
                            280 Trumbull Street
                            Hartford, CT 06103-3597
                            Attention: Felicia DeDominicis, Esq.
                            Facsimile No.: (860) 275-8299

     If to Employee:        Kevin Rakin
                            14 Side Hill Road
                            Westport, CT 06880

     With a copy to:        Bingham McCutchen LLP
                            150 Federal Street
                            Boston, MA 02110
                            Attention: Victor Paci, Esq.
                            Facsimile No.: (617) 951-8736

                                     - 15 -
<Page>

     19. ASSIGNMENT. This Agreement shall inure to the benefit of, and shall be
binding upon, the parties hereto and their respective successors, assigns, and
legal representatives, which, in the case of the Corporation, shall mean only an
entity with which the Corporation, may merge or consolidate or to which all or
substantially all of its assets may be transferred. The duties and covenants of
Executive under this Agreement, being personal, may not be delegated by the
Executive.

     20. AMENDMENTS. This Agreement may be amended at any time by mutual consent
of the parties hereto, with any such amendment to be invalid unless in writing
and signed by the Corporation and Executive and expressly referring to this
Agreement.

     21. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding by and between Executive and the Corporation with respect to the
employment of Executive and supersedes all existing agreements between the
Corporation and Executive with respect to such subject matter. No
representations, promises, agreements, or understandings, written or oral,
relating to the employment of Executive by the Corporation, or any of its
officers, directors, employees, or agents, not contained herein shall be of any
force or effect, provided that, Sections 4, 5, 6, 7, 8, and 9 shall be
supplemental to any other agreement of Executive with the Corporation related to
the matters identified therein. Without limiting the generality of the
foregoing, that certain Employment Agreement, dated as of August 24, 1998,
between the Corporation and Executive (as heretofore amended) is hereby
terminated and shall be of no further force or effect.

     22. NO UNDUE INFLUENCE; CONSTRUCTION. This Agreement is executed
voluntarily and without any duress or undue influence. Executive acknowledges
that he has read this Agreement and executed it with his full and free consent.
No provision of this Agreement shall be construed against any party by virtue of
the fact that such party or its counsel drafted such provision or the entirety
of this Agreement.

     23. REFERENCES TO GENDER AND NUMBER TERMS. In construing this Agreement,
feminine pronouns shall be substituted for those masculine in form and vice
versa, and plural terms shall be substituted for singular and singular for
plural in any place in which the context so requires.

     24. COUNTERPARTS; HEADINGS; SECTIONS. This Agreement may be executed in
multiple counterparts, each of which shall be considered to have the force and
effect of any original but all of which taken together shall constitute but one
and the same instrument. The various headings in this Agreement are inserted for
convenience only and are not part of the Agreement. All references to "Sections"
and "Paragraphs" in this Agreement refer to the various corresponding sections
and paragraphs of this Agreement.

     25. SURVIVAL. The covenants and agreements contained in Sections 7 through
9 shall survive any termination of Executive's employment with the Corporation
to the extent set forth in such Sections 7 through 9.

     26. ARBITRATION. Executive and the Corporation shall submit any disputes
arising under this Agreement to an arbitration panel conducting a binding
arbitration in Hartford, Connecticut

                                     - 16 -
<Page>

or at such other location as may be agreeable to the parties, in accordance with
the National Rules for the Resolution of Employment Disputes of the American
Arbitration Association in effect on the date of such arbitration (the "RULES"),
and judgment upon the award rendered by the arbitrator or arbitrators may be
entered in any court having jurisdiction thereof; provided, however, that
nothing herein shall impair the Corporation's right to seek equitable relief for
any breach or threatened breach of Section 8 or Section 9. The award of the
arbitrators shall be final and shall be the sole and exclusive remedy between
the parties regarding any claims, counterclaims, issues or accountings presented
to the arbitration panel. The parties hereto further agree that the arbitration
panel shall consist of one (1) person mutually acceptable to the Corporation and
Executive, provided that if the parties cannot agree on an arbitrator within
thirty (30) days of filing a notice of arbitration, the arbitrator shall be
selected by the manager of the principal office of the American Arbitration
Association serving Hartford County in the State of Connecticut. Each party will
pay for the fees and expenses of its own attorneys, experts, witnesses, and
preparation and presentation of proofs and post-hearing briefs (unless (i) the
party prevails on a claim for which attorney's fees and expenses are recoverable
under the Rules and those amounts are included as part of the award or (ii)
Executive prevails on a claim for breach of this Agreement after the Corporation
has terminated Executive pursuant to Section 12c(ix) hereof, in which case, the
Corporation will pay for Executive's above-described fees and expenses related
to such claim). Any action to enforce or vacate the arbitrator's award shall be
governed by the federal Arbitration Act, if applicable, and otherwise by
applicable state law. If either the Corporation or Executive pursues any claim,
dispute or controversy against the other in a proceeding other than the
arbitration provided for in this Paragraph, the responding party shall be
entitled to dismissal or injunctive relief regarding such action and recovery of
all costs, losses and attorneys' fees related to such action. EACH OF EXECUTIVE
AND THE CORPORATION ACKNOWLEDGES AND EXPRESSLY AGREES THAT THIS ARBITRATION
PROVISION CONSTITUTES A VOLUNTARY WAIVER OF TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO WHICH EXECUTIVE AND THE CORPORATION MAY BE PARTIES ARISING OUT OF
OR PERTAINING TO THIS AGREEMENT.

                       THE NEXT PAGE IS THE SIGNATURE PAGE

                                     - 17 -
<Page>

     IN WITNESS WHEREOF, the Corporation and Executive have duly executed this
Agreement on the dates set forth below.

                         CORPORATION:

                         GENAISSANCE PHARMACEUTICALS, INC.


                         By: /s/ Ben D. Kaplan
                             --------------------------------------
                            Name: Ben D. Kaplan
                            Its: SVP and Chief Financial Officer

                         Date:   2/23/04
                               --------------------------------------


                         EXECUTIVE:


                         /s/ Kevin Rakin
                         --------------------------------------
                         Name: Kevin Rakin


                         Date:   2/23/04
                               --------------------------------------

     Personally appeared, Ben D. Kaplan, SVP and Chief Financial Officer of
Genaissance Pharmaceuticals, Inc., who acknowledged that the execution of this
Agreement was his free act and deed, and the free act and deed of the
Corporation, before me, this 23rd day of February, 2004.


/s/ Marcia Passavant
-------------------------------
Notary Public
My Commission Expires: 12/31/06

     Personally appeared, Kevin Rakin, who acknowledged that the execution of
this Agreement was his free act and deed, before me, this 23rd day of
February, 2004.


/s/ Marcia Passavant
-------------------------------
Notary Public
My Commission Expires: 12/31/06

                                     - 18 -

</TEXT>
</DOCUMENT>
