EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of this
29th day of March, 2000, between SFBC/Pharmaceutical Development Associates,
Inc., a Florida corporation (the "Company"), a wholly-owned subsidiary of SFBC
International, Inc. (the "Parent") and ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (the "Employee").
WHEREAS, the Company desires to employ the Employee and to ensure the
continued availability to the Company of the Employee's services, and the
Employee is willing to accept such employment and render such services, all upon
and subject to the terms and conditions contained in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth in this Agreement, and intending to be legally bound, the
Company and the Employee agree as follows:
1. Term of Employment.
(c) Term. The Company hereby employs the Employee, and the
Employee hereby accepts employment with the Company for a period
commencing on the date of this Agreement and ending three (3) years
from the date of this Agreement (the "Term"). Prior to, or
contemporaneously with, the execution of this Agreement, the Employee
shall terminate the employment agreement and the confidentiality and
non-complete agreement between Pharmaceutical Development Associates,
Inc. and the Employee dated November 1, 1996.
(d) Continuing Effect. Notwithstanding any termination of this
Agreement at the end of the Term or otherwise, the provisions of
Sections 6, 7, 9 and 14 shall remain in full force and effect and the
provisions of Section 7 shall be binding upon the legal
representatives, successors and assigns of the Employee.
2. Duties.
(g) General Duties. The Employee shall serve as the president
and chief executive officer of the Company, with duties and
responsibilities that are customary for such employees. The Employee
shall report to the Company's board of directors (the "Board"). The
Employee shall not be a director of the Company, but the Board will
allow him to attend and participate in all meetings of the Board. The
Employee shall use his best efforts to perform his duties and discharge
his responsibilities pursuant to this Agreement competently, carefully
and faithfully.
(h) Devotion of Time. The Employee shall during normal
business hours (exclusive of periods of sickness and disability and of
such normal holiday and vacation periods as have been established by
the
Company) devote his full productive time and attention to the best
efforts performance of his duties as requested of him by the Company to
the exclusion of any other business activities which conflict with his
services to the Company.
(i) Location of Office. The Employee's principal business
office shall be at the Company's offices in North Carolina throughout
the Term. However, the Employee's job responsibilities shall include
all business travel necessary to the performance of his job.
(j) Adherence to Inside Information Policies. The Employee
acknowledges that the Parent currently intends to effect a public
offering of its securities in the future and become publicly-held and,
as a result, has implemented or will implement inside information
policies designed to preclude its employees and those of its
subsidiaries from violating the federal securities laws by trading on
material, non-public information or passing such information on to
others in breach of any duty owed to the Parent. The Employee shall
promptly execute any agreements generally distributed by the Parent to
its employees requiring such employees to abide by its inside
information policies.
3. Compensation and Expenses.
(e) Salary. For the services of the Employee to be rendered
under this Agreement, the Company shall pay the Employee an annual
salary of $102,000 during the first year of the Term and an annual
salary of $112,000 during the second and third years of the Term. Such
salary shall not be reduced and shall be paid in accordance with the
Company's usual payroll practices.
(f) Bonus.
(i) The Company shall pay an annual bonus to the
Employee equal to 71/2% of the Company's
Adjusted Net Income in excess of $133,000
each calendar year during the Term. The
phrase "Adjusted Net Income" shall be
defined as contained in the Asset Purchase
Agreement dated March 29, 2000 by and among
the Parent, the Company, Pharmaceutical
Development Associates, Inc., and Clinical
Site Services Corp. (the "Separate
Agreement"). This bonus shall be paid on
April 1st of each year.
(ii) The Company shall pay an additional annual
bonus to the Employee in the amount of 15%
of the Earn-Out payment made under the terms
of the Separate Agreement during the Term.
This bonus shall be paid in either cash or
common stock of the Company at the
Employee's discretion.
(iii) All annual bonuses shall be pro-rated if the
Employee is not employed by the Company for
the entire year. However, in the event the
Employee is terminated for Cause, as defined
in Section 5(a) or resigns for any reason
other than a material breach of this
Agreement
by the Company, no bonus whether earned or
unearned shall be paid to him.
(g) Stock Options. In consideration for the services of the
Employee hereunder as one of the Company's executive level employees,
the Parent shall grant to the Employee 100,000 stock options, of which
33,334 options shall vest immediately and the remaining options shall
vest in equal installments of 33,333 options each, one year and two
years from the date of this Agreement, subject to the Employee's
continued employment on each such vesting date and the terms and
conditions of the Parent's standard Stock Option Agreement, a copy of
which is annexed as Schedule 3(c).
(h) Expenses. In addition to any compensation received
pursuant to Section 3(a), and (b), the Company shall reimburse or
advance funds to the Employee for all reasonable travel, entertainment
and miscellaneous expenses incurred in connection with the performance
of his duties under this Agreement, provided that the Employee properly
provides a written accounting of such expenses to the Company in
accordance with the Company's practices. Such reimbursement or advances
shall be made in accordance with policies and procedures of the Company
in effect from time to time relating to reimbursement of or advances to
employees.
4. Benefits.
(a) Vacation. The Employee shall be entitled to four weeks of
vacation annually without loss of compensation or other benefits to
which he is entitled under this Agreement, to be taken at such times as
the Employee may select and the affairs of the Company may permit.
(b) Employee Benefit Programs. The Employee is entitled to
participate in any pension, 401(k), insurance or other employee benefit
plan that is maintained by the Company for its employees, including
programs of life and medical insurance and reimbursement of membership
fees in professional organizations.
(c) Insurance.
(i) Health. The Company shall pay premiums on
the Company's medical insurance policy
covering the Employee and shall reimburse to
the Employee any amount incurred by the
Employee to preserve coverage under COBRA
during any waiting period prior to becoming
eligible for coverage under the Company's
medical policy.
(ii) Life. The Company shall transfer the life
insurance policy on the Employee currently
in force with Northwestern Mutual (Policy #
11063661) to Employee. The Employee shall
cooperate with the Company in all respects,
if the Company desires to procure additional
insurance on the life of the Employee at the
Company's expense; provided, that any new
policy on the Employee's life shall be
transferred to
the Employee, at his option, upon
termination. Additionally the Company shall
pay the interest on the present balance of
the insurance loan to the Employee . If the
Employee increases the loan balance on the
life insurance policy , the Employee is
solely responsible for payment of the
interest attributable to the increased
amount of the loan. The Company shall have
no obligation to continue payments on the
Employee's life insurance should the
Employee's employment terminate for any
reason.
(iii) Long Term Disability. The Company shall
maintain in place (▇▇▇▇ ▇▇▇▇▇▇▇ #9733684 and
New England Life #191D258690) at its expense
the long term disability policies currently
in effect on Employee.
5. Termination.
(a) Termination for Cause. The Company may terminate the
Employee's employment pursuant to the terms of this Agreement at any
time for Cause (as defined below) by giving written notice of
termination. Such termination shall become effective upon the giving of
such notice, unless given pursuant to provisions (v) and (ix) below. In
such case, the Employee shall have ten (10) days to cure the
deficiency. If the Employee fails to cure the deficiency, as determined
by the Board, the Employee's termination is immediately effective
retroactive to the giving of notice. Upon any such termination for
Cause, the Employee shall have no right to compensation, or
reimbursement under Section 3, or to participate in any employee
benefit programs under Section 4, except as provided by law, for any
period subsequent to the effective date of termination. For purposes of
this Section 5(a), "Cause" shall mean: (i) the Employee is convicted of
a felony, commits a felonious act or is convicted of a misdemeanor
involving, or found after an internal investigation to have engaged in,
sexual misconduct which is related to the Employee's employment or the
business of the Company; (ii) the Employee, in carrying out his duties
hereunder, has acted with gross negligence or intentional misconduct
resulting, in either case, in harm to the Company; (iii) the Employee
misappropriates Company funds or otherwise defrauds the Company; (iv)
the Employee breaches his fiduciary duty to the Company resulting in
profit to him, directly or indirectly; (v) the Employee materially
breaches any written agreement with the Company; (vi) it is later
determined that the Employee fraudulently concealed facts or made
intentional misrepresentations concerning the Parent's acquisition of
the Company; (vii) the Employee has been found to have committed act or
failed to any act which results in the Parent's common stock being
delisted or not listed for trading on The Nasdaq Stock Market or a
national securities exchange; (viii) the Employee is convicted of a
illegal use of a controlled substance; (ix) the Employee's chronic
absenteeism or failure or refusal to cooperate in any official
investigation conducted by or on behalf of the Company or Parent; (x)
the Employee materially breaches any provision of Sections 6, 7 or 8.
(b) Death or Disability. Except as otherwise provided in this
Agreement, it shall terminate upon the death, or disability of the
Employee. For purposes of this Section 5(b), "disability" shall mean
that for period of ninety (90) consecutive days in any twelve (12)
month period, the Employee is incapable of substantially fulfilling the
duties set forth in Section 2 because of physical, mental or emotional
incapacity resulting from injury, sickness or disease. The Employee
agrees to cooperate fully in any physical or mental examinations or
tests to be administered by or under the supervision of a physician
duly licensed in North Carolina who is not an employee of the Company
and is acceptable to the Employee, ordered by the Company to be
conducted at the Company's expense, to determine the Employee's
disability hereunder. The Employee shall continue to receive
compensation pursuant to Section 3 during the ninety (90) day period.
For purposes of this Section 5(b), illegal usage of drugs shall not be
defined as a disability, sickness or disease. In the event of death of
the Employee, the Employee's estate shall receive any unpaid, earned
compensation, including, without limitation, unreimbursed expenses and
prorated salary and bonus due the Employee and this Agreement shall
terminate.
(c) Should the Company terminate this Agreement other than
pursuant to Sections 5(a) or 5(b) above, the Employee will be entitled
to and the Company will be obligated to pay the Employee the greater of
(i) the bonuses provided by Section 3(b) pro-rated until the date of
termination or (ii) "Severance Pay" (as defined below). For purposes of
this Agreement, "Severance Pay" shall mean equal, monthly payment(s) by
the Company to the Employee commencing within one (1) month after the
Employee's termination from employment with the Company and in the
amount of the Employee's unpaid base annual salary remaining under the
term of the Agreement.
6. Non-Competition Agreement.
(c) Competition with the Company. Until termination of his
employment and for a period of twelve (12) months commencing on the
date of termination, the Employee, directly or indirectly, in
association with or as a stockholder, director, officer, consultant,
employee, partner, joint venturer, member or otherwise of or through
any person, firm, corporation, partnership, association or other
entity, shall not compete with the Company or any of its subsidiaries
in the offer, sale or marketing of products or services that are
identical or substantially the same as the products or services offered
by the Company at or on the date the Agreement terminates for any
reason, within any metropolitan area in the United States or elsewhere
in which the Company or any of its subsidiaries is then engaged in the
offer and sale of competitive products or services; provided, however,
the foregoing shall not prevent the Employee from accepting employment
with an enterprise engaged in two or more lines of business, one of
which is the same or similar to the Company's business (the "Prohibited
Business") if the Employee's employment is totally unrelated to the
Prohibited Business; provided, further, that the foregoing shall not
prohibit the Employee from owning up to 5% of the securities of any
publicly-traded enterprise provided the Employee is not an
employee, director, officer, consultant to such enterprise or otherwise
reimbursed for services rendered to such enterprise.
(d) Solicitation of Customers. During the periods in which the
provisions of Section 6(a) shall be in effect, the Employee, directly
or indirectly, shall not seek Prohibited Business from any Customer (as
defined below) on behalf of any enterprise or business other than the
Company, refer Prohibited Business from any Customer to any enterprise
or business other than the Company or receive commissions based on
sales or otherwise relating to the Prohibited Business from any
Customer, or any enterprise or business other than the Company. For
purposes of this Section 6(b), the term "Customer" means any person,
firm, corporation, partnership, association or other entity to which
the Company or any of its subsidiaries sold or provided goods or
services during the twelve (12) month period prior to the time at which
any determination is required to be made as to whether any such person,
firm, corporation, partnership, association or other entity is a
Customer.
(e) No Payment. The Employee acknowledges and agrees that no
separate or additional payment will be required to be made to him in
consideration of his undertakings in this Section 6; provided, however,
if the Employee is terminated for any reason except pursuant to
Sections 5(a) or 5(b) and the Company breaches its obligations
regarding Severance Pay under Section 5(c), then this Section 6 shall
be null and void.
7. Non-Disclosure of Confidential Information.
(a) Confidential Information. Confidential Information
includes trade secrets of the Company as defined by the common law and
statutes in Florida and/or North Carolina or any future Florida and/or
North Carolina statute, processes, policies, procedures, techniques,
designs, drawings, know-how, studies, show-how, technical information,
specifications, computer software and source code, information and data
relating to the development, research, testing, costs, marketing and
uses of the Services (as defined herein), the Company's budgets and
strategic plans, and the identity and special needs of customers for
the Services, databases, data, all technology relating to the Company's
businesses, systems, methods of operation, client or customer lists,
customer information, solicitation leads, marketing and advertising
materials, methods and manuals and forms, all of which pertain to the
activities or operations of the Company, names, home addresses and all
telephone numbers and e-mail addresses of the Company's employees and
former employees. Confidential Information also includes, without
limitation, Confidential Information received from the Company's
subsidiaries and affiliates. For purposes of this Agreement, the
following will not constitute Confidential Information (i) information
which is or subsequently becomes generally available to the public
through no act of the Employee, (ii) information known to the Employee
prior to disclosure to the Employee by or on behalf of the Company, and
(iii) information which is lawfully obtained by the Employee in writing
from a third party (excluding any affiliates of the Employee) who did
not acquire such Confidential Information, directly or indirectly, from
the Company. As used herein, the
term "Services" shall include all formulations, foods, drugs and
medical devices for which the Company has performed any clinical or
pre-clinical research, testing, protocol design, data management,
medical writing or other together with all other services provided by
the Company, during the term of the Employee's employment.
(b) Legitimate Business Interests. The Employee recognizes
that the Company has legitimate business interests to protect and as a
consequence, the Employee agrees to the restrictions contained in this
Agreement because they further the Company's legitimate business
interests. These legitimate business interests include, but are not
limited to (i) trade secrets, (ii) valuable confidential business or
professional information that otherwise does not qualify as trade
secrets, including all Confidential Information; (iii) substantial
relationships with specific prospective or existing customers or
clients; (iv) customer or client goodwill associated with the Company's
business; and (v) specialized training relating to the Company's
technology, methods and procedures.
(c) Confidentiality. During the Term and for a period of two
(2) years following termination of employment, the Confidential
Information shall be held by the Employee in the strictest confidence
and shall not, without the prior written consent of the Company, be
disclosed to any person other than in connection with the Employee's
employment by the Company. The Employee further acknowledges that such
Confidential Information as is acquired and used by the Company or its
affiliates and its Parent is a special, valuable and unique asset. The
Employee shall exercise all reasonable precautions to protect the
integrity of the Company's Confidential Information and to keep it
confidential whether it is in written form, on electronic media or
oral. The Employee shall not copy any Confidential Information except
to the extent necessary to his employment nor remove any Confidential
Information or copies thereof from the Company's premises except to the
extent necessary to his employment. All records, files, materials and
other Confidential Information obtained by the Employee in the course
of his employment with the Company are confidential and proprietary and
shall remain the exclusive property of the Company or its customers, as
the case may be. The Employee shall not, except in connection with and
as required by his performance of his duties under this Agreement, for
any reason, use the Confidential Information for his own benefit or the
benefit of any person or entity with which he may be associated or
disclose any such Confidential Information to any person, firm,
corporation, association or other entity for any reason or purpose
whatsoever without the prior written consent of an officer of the
Company (excluding the Employee, if applicable). Notwithstanding the
foregoing, it will not be a breach of this provision for the Employee
to disclose Confidential Information if required to do so under law or
in a judicial or other governmental investigation or proceeding,
provided the Company has been given prior notice and the Employee has
sought all legally available safeguards against widespread
dissemination prior to such disclosure as advised by the Employee's
legal counsel.
8. Conflicts of Interest. While employed by the Company, the Employee
shall not, directly or indirectly, unless approved in writing by the Board:
(g) participate as an individual in any way in the benefits of
transactions with any of the Company's suppliers or customers,
including, without limitation, having a financial interest in the
Company's suppliers or customers, or making loans to, or receiving
loans, from, the Company's suppliers or customers;
(h) realize a personal gain or advantage from a transaction in
which the Company has an interest or use information obtained in
connection with the Employee's employment with the Company for the
Employee's personal advantage or gain; or
(i) accept any offer to serve as an officer, director,
partner, consultant, manager with, or to be employed in a technical
capacity by, a person or entity which does business with the Company.
9. Equitable Relief.
(a) The Company and the Employee recognize that the services
to be rendered under this Agreement by the Employee are special, unique
and of extraordinary character, and that in the event of the breach by
the Employee of the terms and conditions of this Agreement or if the
Employee, without the prior consent of the Board, shall leave his
employment for any reason and take any action in violation of Section 6
or Section 7, the Company shall be entitled to institute and prosecute
proceedings in any court of competent jurisdiction referred to in
Section 9(b) below, and to seek to enjoin the Employee from breaching
the provisions of Section 6, Section 7 or Section 8. In such action,
the Company shall not be required to plead or prove irreparable harm or
lack of an adequate remedy at law or post a bond or other security.
Nothing contained in this Section 9 shall be construed to prevent the
Company from seeking such other remedy in arbitration in case of any
breach of this Agreement by the Employee, as the Company may elect.
(b) Any proceeding or action brought pursuant to Section 9(a)
above must be commenced in Miami-Dade County, Florida (unless the
parties agree in writing to a different location). The Employee and the
Company irrevocably and unconditionally submit to the exclusive
jurisdiction of such courts and agree to take any and all future action
necessary to submit to the jurisdiction of such courts. The Employee
and the Company irrevocably waive any objection that they now have or
hereafter may have to the laying of venue of any suit, action or
proceeding brought in any such court and further irrevocably waive any
claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum. Final judgment against
the Employee or the Company in any such suit shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment, a
certified or true copy of which shall be conclusive evidence of the
fact and the amount of any liability of the Employee or the Company
therein described, or by appropriate proceedings under any applicable
treaty or otherwise.
10. Assignability. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the Company. The Company, is a third party beneficiaries of the
confidentiality and non-compete agreements. The Employee's obligations hereunder
may not be assigned or alienated and any attempt to do so by the Employee shall
be void.
11. Severability.
(a) The Employee expressly agrees that the character, duration
and geographical scope of the non-competition provisions set forth in
this Agreement are reasonable in light of the circumstances as they
exist on the date hereof. Should a decision, however, be made at a
later date by a court of competent jurisdiction that the character,
duration or geographical scope of such provisions is unreasonable, then
it is the intention and the agreement of the Employee and the Company
that this Agreement shall be construed by the court in such a manner as
to impose only those restrictions on the Employee's conduct that are
reasonable in the light of the circumstances and as are necessary to
assure to the Company the benefits of this Agreement. If, in any
judicial or arbitration proceeding, a court shall refuse to enforce all
of the separate covenants deemed included herein because, taken
together, they are more extensive than necessary to assure to the
Company the intended benefits of this Agreement, it is expressly
understood and agreed by the parties hereto that the provisions of this
Agreement that, if eliminated, would permit the remaining separate
provisions to be enforced in such proceeding shall be deemed
eliminated, for the purposes of such proceeding, from this Agreement.
(b) If any provision of this Agreement otherwise is deemed to
be invalid or unenforceable or is prohibited by the laws of the state
or jurisdiction where it is to be performed, this Agreement shall be
considered divisible as to such provision and such provision shall be
inoperative in such state or jurisdiction and shall not be part of the
consideration moving from either of the parties to the other. The
remaining provisions of this Agreement shall be valid and binding and
of like effect as though such provision were not included.
12. Notices and Addresses. All notices, offers, acceptance and any
other acts under this Agreement (except payment) shall be in writing, and shall
be sufficiently given if delivered to the addressees in person, by Federal
Express or similar receipted delivery, by facsimile delivery or, if mailed,
postage prepaid, by certified mail, return receipt requested, as follows:
To the Company: SFBC/Pharmaceutical Development Associates, Inc.
c/o SFBC International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, P.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
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▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To the Employee: Mr. David ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as either of them, by notice to the other may designate
from time to time. The transmission confirmation receipt from the sender's
facsimile machine shall be conclusive evidence of successful facsimile delivery.
Time shall be counted to, or from, as the case may be, the delivery in person or
by mailing.
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. The execution of this
Agreement may be by actual or facsimile signature.
14. Arbitration. Except for a claim for equitable relief, any
controversy, dispute or claim arising out of or relating to this Agreement, or
its interpretation, application, implementation, breach or enforcement which the
parties are unable to resolve by mutual agreement, shall be settled by
submission by either party of the controversy, claim or dispute to binding
arbitration in Washington, D.C. (unless the parties mutually agree in writing to
a different location), before the arbitrators in accordance with the rules of
the American Arbitration Association then in effect. In any such arbitration
proceeding the parties agree to provide all discovery deemed necessary by the
arbitrators. The decision and award made by the arbitrators shall be final,
binding and conclusive on all parties hereto for all purposes, and judgment may
be entered thereon in any court having jurisdiction thereof.
15. Attorney's Fees. In the event that there is any controversy or
claim arising out of or relating to this Agreement, or to the interpretation,
breach or enforcement thereof, and any action or proceeding is commenced to
enforce the provisions of this Agreement, the prevailing party shall be entitled
to a reasonable attorney's fee, costs and expenses.
16. Governing Law. This Agreement and any dispute, disagreement, or
issue of construction or interpretation arising hereunder whether relating to
its execution, its validity, the obligations provided therein or performance
shall be governed or interpreted according to the internal laws of the State of
Florida where the Company is incorporated without regard to choice of law
considerations.
17. Entire Agreement. This Agreement constitutes the entire Agreement
between the parties and supersedes all prior or contemporaneous oral and written
agreements between the parties hereto with respect to the subject matter hereof.
Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated, except by a statement in writing signed by the party
against which enforcement or the change, waiver, discharge or termination is
sought.
18. Additional Documents. The parties hereto shall execute such
additional instruments as may be reasonably required by their counsel in order
to carry out the purpose and intent of this Agreement and to fulfill the
obligations of the parties hereunder.
19. Section and Paragraph Headings. The section and paragraph headings
in this Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement as of the date and year first above written.
SFBC/Pharmaceutical Development
Associates, Inc.
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By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------- --------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President
Employee:
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/S/ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------- -----------------------------------
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") entered into as of this
29th day of March, 2000, between SFBC International, Inc. (the "Company") and D.
▇▇▇▇▇ ▇▇▇▇▇ (the "Employee"), an employee of the Company.
WHEREAS, by action taken by the board of directors (the "Board") of the
Company, it has adopted the 1999 Stock Option Plan (the "Plan"); and
WHEREAS, by action taken by the Board on the above date, it has been
determined that in order to enhance the ability of the Company to attract and
retain qualified employees, it will grant the Employee the right to purchase
stock in the Company pursuant to incentive and non-qualified options.
NOW THEREFORE, in consideration of the mutual covenants and promises
hereafter set forth and for other good and valuable consideration, receipt of
which is acknowledged, the parties hereto agree as follows:
1. Grant of Options. The Company grants to the Employee, as a matter of
separate agreement and not in lieu of salary or other compensation for services,
the right and option (the "Options") to purchase all or any part of an aggregate
of 100,000 shares of authorized but unissued or treasury common stock of the
Company on the terms and conditions herein set forth. The common stock shall be
unregistered unless the Company voluntarily files a registration statement
covering such shares with the Securities and Exchange Commission. The Options
are intended to be Incentive Stock Options ("ISOs") as defined by Section 422 of
the Internal Revenue Code of 1954, as amended (the "Code") to the maximum extent
permissible by the Code.
2. Price. The exercise price of the shares of common stock subject to
the Options shall be the greater of (i) $6.00 per share or (ii) the initial
public offering ("IPO") price of the Common Stock if the Company effects an IPO
in 2000.
3. When Exercisable.
(a) As long as the Employee is employed by the Company on the
respective dates below, the Options shall vest as follows:
Date No. of Shares
---- -------------
Immediately 33,334
March 29, 2001 33,333
March 29, 2002 33,333
(b) The Options shall be exercisable from the date of vesting
through the expiration or termination of the Options as set forth
herein. To the extent that the aggregate fair market value (determined
as of the date of grant) of stock with respect to which the Options
(together with any other Company ISOs held by the Employee) are
exercisable for the first
time in any one calendar year exceeds $100,000, the Options will be
treated as non-qualified stock options.
(c) Subject to prior termination, all Options shall expire and
no longer be exercisable 10 years from the date of this Agreement.
4. Termination of Relationship.
(a) If for any reason, except death, the Employee ceases to
act as an employee of the Company, all rights granted hereunder shall
terminate effective three months from the date the Employee ceases to
act as an employee, except as otherwise provided for herein.
(b) However, notwithstanding any other provision of this
Agreement, all Options, whether vested or unvested shall be immediately
forfeited in the event of:
(1) Termination of employment for Cause as defined by
the Employee's Employment Agreement with the Company.
(2) Purchasing or selling securities of the Company
without written authorization in accordance with the Company's
inside information guidelines then in effect;
(3) Breaching any duty of confidentiality including
that is required by the Company's inside information
guidelines then in effect;
(4) Competing with the Company;
(5) Being unavailable for consultation after leaving
the Company's employ if such availability is a condition of
any agreement between the Company and the Employee;
(6) Recruitment of Company personnel after
termination of employment, whether such termination is
voluntary or for cause;
(7) Failure to assign any invention or technology to
the Company if such assignment is a condition of employment or
any other agreements between the Company and the Employee; and
(8) A finding by the Company's Board that the
Employee has acted against the interests of the Company.
(c) If the Employee shall die while an employee of the
Company, his estate or any Transferee, as defined herein, shall have
the right within one year from the date of the Employee's death to
exercise the Employee's Options to the extent the right to exercise to
the Options shall have accrued and vested at the date of death, except
to the extent the Options shall have been exercised prior thereto. For
the purpose of this Agreement,
"Transferee" shall mean a person to whom such shares are transferred by
will or by the laws of descent and distribution.
(d) No transfer of the Options by the Employee by will or by
the laws of descent and distribution shall be effective to bind the
Company unless the Company shall have been furnished with written
notice thereof and a copy of the letters testamentary or such other
evidence as the board may deem necessary to establish the authority of
the state and the acceptance by the Transferee or Transferees of the
terms and conditions of the Options.
(e) If the Employee becomes disabled while employed by the
Company within the meaning of Section 22(e)(3) of the Code, the three
month period referred to in Section 4(a) of this Agreement shall be
extended to one year.
5. Profits on the Sale of Certain Shares; Redemption. If any of the
events specified in Section 4(b) of this Agreement occur within one year from
the last date of employment (the "Termination Date") (or such longer period
required by any written employment agreement), all profits earned from the sale
of the Company's securities, including the sale of shares of Common Stock
underlying Options, during the two-year period commencing one year prior to the
Termination Date shall be forfeited and forthwith paid by the Employee to the
Company. Further, in such event, the Company may at its option redeem shares of
Common Stock acquired upon exercise of Options. The Company's rights under this
Section 5 do not lapse one year from the Termination Date but are a contract
right subject to any appropriate statutory limitation period.
6. Method of Exercise. The Options shall be exercisable by a written
notice which shall:
(a) state the election to exercise the Options, the number of
shares to be exercised, the person in whose name the stock certificate
or certificates for such shares of common stock is to be registered,
his address and social security number (or if more than one, the names,
addresses and social security numbers of such persons);
(b) contain such representations and agreements as to the
holder's investment intent with respect to such shares of common stock
as set forth in Section 11 hereof;
(c) be signed by the person or persons entitled to exercise
the Options and, if the Options are being exercised by any person or
persons other than the optionee, be accompanied by proof, satisfactory
to counsel for the Company, of the right of such person or persons to
exercise the Options.
(d) be accompanied by full payment of the purchase or exercise
price therefor in United States dollars by check.
The certificate or certificates for shares of common stock as to which
the Options shall be exercised shall be registered in the name of the person or
persons exercising the Options.
7. Sale of Shares Acquired Upon Exercise of Options. Any shares of the
Company's common stock acquired pursuant to Options granted hereunder which
qualify as ISOs under Section 3(b) above cannot be sold by the Employee until at
least two years elapse from the date of grant of the Options and one year from
the date of exercise. Nothing in this Section 7 shall be deemed to reduce the
holding period set forth under the applicable securities laws.
8. Anti-Dilution Provisions. The Options granted hereunder shall have
the anti-dilution rights set forth in the Plan.
9. Necessity to Become Holder of Record. Neither the Employee nor
his/her estate, as provided in Section 4(c), shall have any rights as a
shareholder with respect to any shares covered by the Options until such person
shall have become the holder of record of such shares. No adjustment shall be
made for cash dividends or cash distributions, ordinary or extraordinary, in
respect of such shares for which the record date is prior to the date on which
he/she shall become the holder of record thereof.
10. Reservation of Right to Terminate Relationship. Nothing contained
in this Agreement shall restrict the right of the Company to terminate the
relationship of the Employee at any time, with or without cause. The termination
of the relationship of the Employee by the Company, regardless of the reason
therefor, shall have the results provided for in Sections 4 and 5 of this
Agreement.
11. Conditions to Exercise of Options.
(a) In order to enable the Company to comply with the
Securities Act of 1933 (the "Securities Act") and relevant state law,
the Company may require the Employee, his estate, or any Transferee as
a condition of the exercising of the Options granted hereunder, to give
written assurance satisfactory to the Company that the shares subject
to the Options are being acquired for his own account, for investment
only, with no view to the distribution of same, and that any subsequent
resale of any such shares either shall be made pursuant to a
registration statement under the Securities Act and applicable state
law which has become effective and is current with regard to the shares
being sold, or shall be pursuant to an exemption from registration
under the Securities Act and applicable state law.
(b) The Options are subject to the requirement that, if at any
time the Board shall determine, in its discretion, that the listing,
registration, or qualification of the shares of common stock subject to
the Options upon any securities exchange or under any state or federal
law, or the consent or approval of any governmental regulatory body, is
necessary as a condition of, or in connection with the issue or
purchase of shares under the Options, the Options may not be exercised
in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected.
(c) If the Company effects an IPO, the Employee shall execute
such lock-up agreement as may be requested by the underwriter of the
IPO as long as the Company's officers, directors and 5% stockholders
execute similar agreements.
12. Duties of Company. The Company shall at all times during the term
of Options:
(a) Reserve and keep available for issue such number of shares
of its authorized and unissued common stock as will be sufficient to
satisfy the requirements of this Agreement;
(b) Pay all original issue taxes with respect to the issue of
shares pursuant hereto and all other fees and expenses necessarily
incurred by the Company in connection therewith;
(c) Use its best efforts to comply with all laws and
regulations which , in the opinion of counsel for the Company, shall be
applicable thereto.
13. Parties Bound by Plan. The Plan and each determination,
interpretation or other action made or taken pursuant to the provisions of the
Plan shall be final and shall be binding and conclusive for all purposes on the
Company and the Employee and his/her respective successors in interest.
14. Severability. In the event any parts of this Agreement are found to
be void, the remaining provisions of this Agreement shall nevertheless be
binding with the same effect as though the void parts were deleted.
15. Arbitration. Any controversy, dispute or claim arising out of or
relating to this Agreement, or its interpretation, application, implementation,
breach or enforcement which the parties are unable to resolve by mutual
agreement, shall be settled by submission by either party of the controversy,
claim or dispute to binding arbitration in Miami-Dade County, Florida (unless
the parties agree in writing to a different location), before a single
arbitrator in accordance with the rules of the American Arbitration Association
then in effect. In any such arbitration proceeding the parties agree to provide
all discovery deemed necessary by the arbitrator. The decision and award made by
the arbitrator shall be final, binding and conclusive on all parties hereto for
all purposes, and judgment may be entered thereon in any court having
jurisdiction thereof.
16. Benefit. This Agreement shall be binding upon and insure to the
benefit of the parties hereto and their legal representatives, successors and
assigns.
17. Notices and Addresses. All notices, offers, acceptance and any
other acts under this Agreement (except payment) shall be in writing, and shall
be sufficiently given if delivered to the addressees in person, by Federal
Express or similar receipted delivery, by facsimile delivery or, if mailed,
postage prepaid, by certified mail, return receipt requested, as follows:
The Employee: Mr. David ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Company: SFBC International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, P.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as either of them, by notice to the other may designate
from time to time. The transmission confirmation receipt from the sender's
facsimile machine shall be conclusive evidence of successful facsimile delivery.
Time shall be counted to, or from, as the case may be, the delivery in person or
by mailing.
18. Attorney's Fees. In the event that there is any controversy or
claim arising out of or relating to this Agreement, or to the interpretation,
breach or enforcement thereof, and any action or proceeding is commenced to
enforce the provisions of this Agreement, the prevailing party shall be entitled
to a reasonable attorney's fee, costs and expenses.
19. Governing Law. This Agreement and any dispute, disagreement, or
issue of construction or interpretation arising hereunder whether relating to
its execution, its validity, the obligations provided herein or performance
shall be governed or interpreted according to the internal laws of the State of
Delaware without regard to choice of law considerations.
20. Oral Evidence. This Agreement constitutes the entire Agreement
between the parties and supersedes all prior oral and written agreements between
the parties hereto with respect to the subject matter hereof. Neither this
Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally, except by a statement in writing signed by the party or
parties against which enforcement or the change, waiver discharge or termination
is sought.
21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. The execution of this
Agreement may be by actual or facsimile signature.
22. Additional Documents. The parties hereto shall execute such
additional instruments as may be reasonably required by their counsel in order
to carry out the purpose and intent of this Agreement and to fulfill the
obligations of the parties hereunder.
23. Section or Paragraph Headings. Section headings herein have been
inserted for reference only and shall not be deemed to limit or otherwise
affect, in any matter, or be deemed to interpret in whole or in part any of the
terms or provisions of this Agreement.
IN WITNESS WHEREOF the parties hereto have set their hand and seals the
day and year first above written.
WITNESSES: SFBC INTERNATIONAL, INC.
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Executive Officer
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------- --------------------------------
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
