Exhibit 10.1
EMPLOYMENT, CONFIDENTIALITY, NON-COMPETITION
AND SEVERANCE AGREEMENT
THIS EMPLOYMENT, CONFIDENTIALITY, NON-COMPETITION AND SEVERANCE
AGREEMENT (the "Agreement") dated as of March 14, 2003 is made and entered into
by and between AmericasDoctor, Inc., a Delaware corporation (the "Company"), and
Xxxxx Xxxx (the "Employee").
WHEREAS, the Company wishes to retain the services of the Employee as a
key employee of the Company who is expected to make major contributions to the
short- and long-term profitability, growth and financial strength of the
Company; and
WHEREAS, Company and Employee believe that it is in their respective
best interests to enter into and deliver this Agreement; and
WHEREAS, the Employee acknowledges that in the course of his employment
by the Company, he will or may have access to and become informed of the
Company's confidential information and will frequently come into contact with
the Company's customers (including, without limitation, its investigative
research sites) and accounts such that the Employee will influence the business
and relationships between the Company and its customers and accounts; and
WHEREAS, the Employee has agreed to certain confidentiality,
non-solicitation, non-competition, and severance agreements; and in
consideration for such agreements, the Company has agreed to pay the Employee
termination payments upon severance of the Employee's employment hereunder; and
NOW, THEREFORE, the Company and the Employee agree as follows:
1. Certain Defined Terms. In addition to terms defined elsewhere herein, the
following terms have the following meanings when used in this Agreement
with initial capital letters:
(a) "Board" means the Board of Directors of the Company.
(b) "Cause," when used in the phrase "for cause" or "without cause"
means:
(i) the willful and continued failure by Employee to
substantially perform his duties hereunder (other than any
such failure resulting from Employee's incapacity due to
Disability);
(ii) engagement by the Employee in misconduct or gross negligence
which is materially injurious to the Company, monetarily or
otherwise;
(iii) a willful act by the Employee of dishonesty, fraud,
embezzlement or theft in connection with his duties or in the
course of his employment with the Company or any Subsidiary;
(iv) a willful appropriation of a material business opportunity of
the Company or any Subsidiary, including securing any
personal profit in connection with any transaction entered
into on behalf of the Company or any Subsidiary, and which
appropriation causes the Company or any Subsidiary to incur
ascertainable damages;
(v) willful damage by the Employee to property of the Company or
any Subsidiary;
(vi) breach of Section 10, 11, or Section 12 hereof;
(vii) material breach of this Agreement;
(viii) the conviction of, or the entering of a guilty plea or plea
of no contest with respect to, a felony involving fraud,
theft or the equivalent thereof, or any other crime involving
fraud or theft (but in each case only if such fraud, theft or
similar crime relates to the business of the Company or a
Subsidiary) with respect to which imprisonment for more than
one (1) year is a possible punishment.
(c) "Disabled" means the Employee's incapacity due to physical or mental
condition to perform the essential functions of Employee's duties,
with or without reasonable accommodation, on a full-time basis for
six consecutive months unless the Employee returns to the full-time
performance of the Employee's duties for a period of at least three
consecutive months no later than 30 days after the Company has given
the Employee a notice of termination. If the Employee disagrees with
a determination to terminate him because the Company believes he is
Disabled, the Company and the Employee, or in the event of the
Employee's incapacity to designate a doctor, the Employee's legal
representative, together shall choose a qualified medical doctor who
shall determine whether the Employee is Disabled. If the Company and
the Employee cannot agree on the choice of a qualified medical
doctor, then the Company and the Employee each shall choose a
qualified medical doctor and the two doctors together shall choose a
third qualified medical doctor, who shall determine whether the
Employee is Disabled. The determination of the chosen qualified
medical doctor as to whether the Employee is Disabled shall be
binding upon the Company and the Employee unless such determination
is clearly made in bad faith.
(d) "Involuntary Termination" means the occurrence of any of the
following: (i) the Company gives written notice to the Employee that
the Company intends to terminate the Agreement, (ii) the Company
reduces the Employee's base salary as set forth in Section 4, unless
such reduction in base salary is part of a reduction applicable
generally to senior Employees of the Company, or (iii) unless
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otherwise agreed by the Employee, the Company relocates the Employee
or his offices or the principal place where he is required to
perform his duties hereunder farther than 50 miles from Gurnee,
Illinois or such other place as the Company's principal Employee
offices may, from time to time, be located.
(e) "Restricted Business" means (i) any business or division of a
business which consists of providing services to investigative sites
and to their customers in connection with clinical research and
development, patient recruitment and persistency, training and
quality assurance for clinical research, excluding pharmaceutical,
CRO, and biotech companies, (ii) any business or division of a
business which provides marketing or clinical research services to
pharmaceutical companies, excluding CRO and biotech companies, (iii)
any business of a kind in whole or in part similar to that
heretofore or hereafter engaged in by the Company or any Subsidiary,
excluding pharmaceutical, CRO, and biotech companies, and (iv) any
other principal line of business developed or acquired by the
Company or its affiliates.
(f) "Subsidiary" means an entity in which the Company directly or
indirectly beneficially owns 50% or more of the outstanding Voting
Stock.
(g) "Termination Date" means the date on which the Employee's employment
is terminated (the effective date of which shall be the date of
termination).
(h) "Voluntary Termination" means the occurrence of any of the
following: (i) the date two weeks after the Employee gives written
notice to the Company that the Employee intends to terminate this
Agreement or if later, the date specified in such written notice,
(ii) the Employee dies or (iii) the Employee becomes Disabled.
(i) "Voting Stock" means securities entitled to vote generally in the
election of directors.
1. Term.
(a) This Agreement shall be for a term that commences on the date this
Agreement is approved by the Board ("Effective Date") and, subject
to any benefit continuation requirements of applicable laws, expires
on the earliest of (i) an Involuntary Termination, or (ii) a
Voluntary Termination. For purposes of this Agreement, any reference
to the "term" of this Agreement includes the original term and any
extension thereof.
(b) The provisions of Sections 10, 11, and 12 survive termination of
this Agreement for any reason, unless otherwise agreed to in writing
and signed by Employee and the Chief Executive Officer of the
Company.
2. Continued Employment. The Company hereby agrees to the continued
employment of the Employee, and the Employee hereby agrees to continue to
be employed by the Company, upon the terms and conditions herein set
forth.
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3. Duties of the Employee. The Employee serves as the Company's Vice
President, Operations. This Agreement survives a change in title or duties
as directed by the Board or CEO. The Employee reports directly to the
Company's Chief Executive Officer, or to another Corporate Officer as
designated by the Board, and has such duties as the Chief Executive Officer
and the Board may from time to time prescribe. The Employee devotes his
full time and best efforts to the Company's business of providing services
to investigative sites and to their customers in connection with clinical
research and development and any other related duties and responsibilities
that may from time to time be prescribed by the Chief Executive Officer or
the Board; so long as it does not interfere with the Employee's employment
hereunder, the Employee may serve as an officer, director or otherwise
participate in educational, welfare, social, religious and civic
organizations. The Employee represents that he is not under a restrictive
covenant, non-competition agreement, confidentiality agreement or other
agreement or obligation that might prohibit Employee from being employed by
the Company or from performing the duties contemplated in this Section 3.
4. Compensation.
The Employee currently receives a gross base salary of $160,000 per annum,
which base salary the Board may adjust from time to time, payable at the
times and in the manner consistent with the Company's general policies
regarding compensation of senior Employees. Such base salary includes any
salary reduction contributions to (i) any Company-sponsored plan (the
"401(k) Plan") that includes a cash-or-deferred arrangement under Section
401(k) of the Internal Revenue Code of 1986, as amended (the "Code"), (ii)
any other Company-sponsored plan of deferred compensation or (iii) any
Company-sponsored "cafeteria plan" under Section 125 of the Code.
5. Benefits. The Company shall make available to the Employee, subject to the
terms and conditions of the applicable plans, including without limitation
the eligibility rules, participation for the Employee and his eligible
dependents in the Company-sponsored employee benefit plans or arrangements
and such other usual and customary benefits now or hereafter generally
available to employees of the Company and such benefits and perquisites as
may be from time to time made available to Employees of the Company.
6. Expenses. The Company shall pay or reimburse the Employee, in accordance
with the general policies of the Company, for reasonable and necessary
expenses incurred by the Employee in connection with his duties on behalf
of the Company.
7. Place of Performance. In connection with his employment by the Company,
unless otherwise agreed by the Employee, the Employee shall be based at
offices located in Gurnee, Illinois or, at the Company's request, such
other place as the Company's principal Employee offices may, from time to
time, be located, except for travel reasonably required for Company
business.
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8. Termination Payments, Vesting and Exercise of Stock Options.
(a) If an Involuntary Termination occurs other than for Cause and the
Employee enters into an agreed-upon general release and settlement
agreement with the Company, the Company will provide Employee with
severance of three (3) months base salary at Employee's current
salary, less applicable payroll taxes, withholdings and other
deductions and the additional benefits outlined in this paragraph.
Employee understands and agrees that this payment and the benefits
described are not required by AmericasDoctor's policies and
procedures. This payment and the benefits shall be in lieu of and
discharge any obligations of AmericasDoctor to Employee for
compensation, wages, bonuses, benefits, stock options, pain and
suffering, or any other expectation of remuneration or benefit on the
part of Employee.
(i) notwithstanding anything to the contrary in the Employee's
stock option agreement(s) or certificate(s) or in the stock
option plan(s) under which Employee's stock options were
granted, (A) all of the Employee's stock options shall cease
vesting as of the Termination Date, (B) Employee shall have the
right to exercise any and all vested stock options at any time
not later than 12 months after the Termination Date and (C) all
unvested stock options shall be canceled on the Termination
Date. Notwithstanding the foregoing or anything to the contrary
in the Employee's stock option agreement(s) or certificate(s)
or in the stock option plan(s) under which Employee's stock
options were granted, in the event of an Involuntary
Termination other than for Cause within two years following a
Change in Control, all of Employee's stock options shall
immediately become 100% vested and exercisable.
(ii) any termination payments hereunder shall not be taken into
account for purposes of any retirement plan or other benefit
plan sponsored by the Company, except as otherwise set forth
herein or as expressly required by such plans or applicable
law.
(b) If (i) a Voluntary Termination other than due to Employee's death or
Disability occurs or (ii) an Involuntary Termination for Cause
occurs, Employee will be entitled to receive his base salary then in
effect only through the last day of the payroll period in which the
Termination Date occurs and he will not be entitled to any bonus for
the fiscal year during which such termination occurs or any
subsequent fiscal year. Notwithstanding anything to the contrary in
the Employee's stock option agreement(s) or certificate(s) or in the
stock option plan(s) under which Employee's stock options were
granted, all of Employee's stock options shall immediately be
canceled.
(c) If a Voluntary Termination due to Employee's becoming Disabled during
the term of this Agreement occurs, then notwithstanding anything to
the contrary in the Employee's stock option agreement(s) or
certificate(s) or in the stock option plan(s) under which Employee's
stock options were granted, Employee shall have
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a period of one year following Employee's Disability to exercise any
vested stock options and all other stock options shall be immediately
canceled.
(d) Notwithstanding the foregoing, if the Employee breaches Section 10,
11, or 12 hereof, any right of the Employee to receive termination
payments, to have the vesting of his options accelerated or to have
the period during which he may exercise his options extended under
this Section 8 shall be forfeited, but without prejudice to any
exercise of options that may have occurred prior to such forfeit, and
the Employee shall reimburse the Company in full for all termination
payments made to the Employee under this Section 8 no later than 30
days after the Company gives notice of such breach to the Employee.
9. Benefits Upon Termination. Employee and any dependents will have any
conversion rights available under the health insurance plans and as
otherwise provided by law, including the Comprehensive Omnibus Budget
Reconciliation Act ("COBRA") effective the first of the month following the
date of termination. Employee further agrees that on the first of the month
following the date of termination, Employee will be responsible for the
full insurance premiums for COBRA coverage.
10. Confidentiality Agreement.
(a) The Employee acknowledges that in the course of his employment by the
Company, he will or may have access to and become informed of
confidential and secret information that is a competitive asset of
the Company ("Confidential Information"), including, without
limitation, (i) the terms of agreements between the Company and its
employees, customers (including, without limitation, its
investigative research sites) and suppliers, (ii) pricing strategy,
(iii) sales and marketing methods, (iv) product development ideas and
strategies, (v) personnel training and development programs, (vi)
financial results, (vii) strategic plans and demographic analyses,
(viii) proprietary computer and systems software and (ix) any
non-public information concerning the Company, its employees,
suppliers and customers. Regardless of any actual or alleged breach
by the Company of this Agreement, the Employee shall keep all
Confidential Information in strict confidence and shall not directly
or indirectly make known, divulge, reveal, furnish, make available or
use any Confidential Information (except in the course of his regular
authorized duties on behalf of the Company) until and unless such
Confidential Information becomes, through no fault of the Employee,
generally known to the public or the Employee is required by law to
make disclosure (after giving the Company reasonable notice and an
opportunity to contest such requirement). The Employee's obligations
under this Section 10 are in addition to, and not in limitation or
preemption of, all other obligations of confidentiality which the
Employee may have to the Company under general legal or equitable
principles.
(b) Except in the ordinary course of the Company's business, the Employee
has not made and shall never make or cause to be made, any copies,
pictures, duplicates, facsimiles or other reproductions or recordings
or any abstracts or summaries
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including or reflecting Confidential Information. All such documents
and other property furnished to the Employee by the Company or
otherwise acquired or developed by the Company shall at all times be
the property of the Company. Upon a Voluntary Termination or
Involuntary Termination, the Employee shall return to the Company
any such documents or other property of the Company which are in the
possession, custody or control of the Employee.
11. Ownership of Inventions, Discoveries, Improvements, Etc.
(a) Employee shall promptly disclose and describe to the Company all
inventions, improvements, discoveries and technical developments,
whether or not patentable, made or conceived by Employee, either
alone or with others, during the term of this Agreement and for a
period of one (1) year following the Termination Date, and that (i)
are based in whole or in part upon Confidential Information, or (ii)
are along the lines of, useful in or related to the Company's
business, or (iii) result from, or are suggested by, any work that
may be done by Employee for or on behalf of the Company
("Inventions"). Employee hereby assigns and agrees to assign to the
Company Employee's entire right, title and interest in and to such
Inventions, and agrees to cooperate with the Company both during and
after the term of this Agreement in the procurement and maintenance,
at the Company's expense and at its direction, of patents, copyright
registrations and/or protection of the Company's rights in such
Inventions. Employee shall keep and maintain adequate and current
written records of all such Inventions, which shall be and remain
the property of the Company.
(b) If a patent application or copyright registration is filed by
Employee or on Employee's behalf, or a copyright notice indicating
Employee's authorship is used by Employee or on Employee's behalf,
within one (1) year after the Termination Date, that describes or
identifies any Invention within the scope of Employee's work for the
Company or that otherwise related to a portion of the Company's
business (or any division or Subsidiary thereof) of which Employee
had knowledge during the term of this Agreement, it is to be
conclusively presumed that the Invention was conceived by the
Employee during the term of this Agreement. Employee agrees to
notify the Company promptly of any such application or registration
and to assign to the Company Employee's entire right, title and
interest in such Invention and in such application or registration.
(c) There is no contract or duty on Employee's part now is existence to
assign Inventions except in favor of the Company. Employee shall not
disclose or induce the Company to use any confidential information
that Employee is either now aware of, or shall become aware of, that
belongs to a former employer or anyone other than the Company or a
Subsidiary.
12. Covenant not to Compete; No Inducement; No Solicitation. In consideration
for the Employee's employment hereunder and the Company's providing the
Employee with confidential information and contacts with the Company's
customers and accounts,
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during the term of the Employment Provisions and for a period of one year
after the Termination Date,
(a) Upon voluntary termination, The Employee shall not, without the
prior written consent of the Company (which consent may be withheld
for any reason or no reason), directly or indirectly or by action in
concert with others, own, manage, operate, join, control, perform
consulting services for, be employed by, participate in or be
connected with any business, enterprise or other entity (or the
ownership, management, operation, or control of any such business,
enterprise or other entity) (a "Competing Enterprise") engaged
anywhere in the United States or Canada in the Restricted Business
which excludes pharmaceutical, CRO, and biotech companies.
Notwithstanding the foregoing, Employee may make purely passive
investments on behalf of himself, his immediate family or any trust
in public companies engaged in a Competing Enterprise so long as the
aggregate interest represented by such investments does not exceed
1% of any class of the outstanding debt or equity securities of any
Competing Enterprise.
(b) The Employee shall not, directly or indirectly, in any capacity, on
his own behalf or on behalf of any other firm, person or entity,
induce or attempt to induce any customer of the Company (including,
without limitation, any investigative research site) to cease doing
business in whole or in part with the Company, solicit the business
of any such customer for any Restricted Business or otherwise create
any ill will or negative publicity with respect to the Company.
(c) The Employee shall not, directly or indirectly, in any capacity, on
his own behalf or on behalf of any other firm, person or entity,
undertake or assist in the solicitation of any Company employee,
including, without limitation, solicitation of any employee to
terminate his or her employment with the Company.
Employee and the Company acknowledge that the nature of the foregoing
prohibited activities is geographically broad as a result of the
expansive geographic scope of the Restricted Business and the national
scope of Employee's duties hereunder.
13. Post-termination Assistance. Employee shall provide such information and
assistance to the Company as the Company may reasonably request, upon
reasonable notice, in connection with any litigation in which it or any
of its affiliates is or may become a party. The Company shall reimburse
the Employee for any expenses, including travel expenses, incurred by the
Employee in connection with providing such information and assistance.
14. Withholding of Taxes. The Company may withhold from any amounts payable
under this Agreement all federal, state, city or other taxes as the
Company is required to withhold pursuant to any law or government
regulation or ruling.
15. Specific Enforcement. The Employee acknowledges and agrees that a
violation of Sections 10, 11 or 12 hereof that results in material
detriment to the Company would cause irreparable harm to the Company, and
that the Company's remedy at law for any such violation would be
inadequate. In recognition of the foregoing, the Company shall
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have the right, in addition to any other relief afforded by law or this
Agreement, including damages sustained by a breach of this Agreement and
any forfeitures under Section 8, and without any necessity or proof of
actual damages, to enforce this Agreement by specific remedies,
including, among other things, temporary and permanent injunctions, it
being the understanding of the Company and the Employee that damages, the
forfeitures described above and injunctions shall all be proper modes of
relief and shall not be considered alternative remedies.
16. Notices. For all purposes of this Agreement, all communications,
including without limitation notices, consents, requests or approvals,
required or permitted to be given hereunder shall be in writing and shall
be deemed to have been duly given when hand delivered or dispatched by
electronic facsimile transmission (with receipt thereof confirmed), or
five business days after having been mailed by United States registered
or certified mail, return receipt requested, postage prepaid, or three
business days after having been sent by a nationally recognized overnight
courier service (such as Federal Express or UPS) addressed to the Company
(to the attention of the Secretary of the Company) at its principal
Employee office and to the Employee at his principal residence, or to
such other address as either party may have furnished to the other in
writing and in accordance herewith, except that notices of changes of
address shall be effective only upon receipt.
17. Governing Law. The validity, interpretation, construction and performance
of this Agreement shall be governed by and construed in accordance with
the substantive laws of the State of Illinois, without giving effect to
the principles of conflict of laws of such State.
18. Agreement. This Agreement contains all of the covenants and agreements
between the parties with respect to such subject matter. Each party to
this Agreement acknowledges that no representations, inducements,
promises, or other agreements, orally or otherwise, have been made by any
party, or anyone acting on behalf of any party, pertaining to the subject
matter hereof, that are not embodied herein, and that no other agreement,
statement or promise pertaining to the subject matter hereof that is not
contained in this Agreement shall be valid or binding on either party.
19. Validity. If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement and
the application of such provision to any other person or circumstances
shall not be affected, and the provision so held to be invalid,
unenforceable or otherwise illegal shall be reformed to the extent (and
only to the extent) necessary to make it enforceable, valid or legal.
20. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Employee and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto or compliance
with any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time. Unless
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otherwise noted, references to "Sections" are to sections of this
Agreement. The captions used in this Agreement are designed for
convenient reference only and are not to be used for the purpose of
interpreting any provision of this Agreement.
21. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together
shall constitute one and the same agreement.
22. Effective Date. Notwithstanding anything to the contrary herein, this
Agreement shall not become effective unless and until the Board approves
this Agreement. Upon receipt of such approval, this Agreement shall
become immediately effective.
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IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement as of the date first above written1.
AMERICASDOCTOR, INC.
/s/ C. Xxx Xxxxx /s/ Xxxxx Xxxx
------------------------------------- -----------------------------
By: C. Xxx Xxxxx
Its: Chief Executive Officer
___________________
/1/ The validity of execution of this Agreement on behalf of the Company is
subject to the approval of this Agreement by the Board.
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