Exhibit 10.13
Ref: 20000909
EMPLOYMENT AGREEMENT #2
BETWEEN
INFORMEDIX, INC. AND XXXXXX X. XXXXXX
This EMPLOYMENT AGREEMENT #2 ("Employment Agreement #2") dated as of the
1st day of September, 2000 (the "Effective Date") is between INFORMEDIX, INC., a
Maryland corporation (the "Corporation") with offices at 0000 Xxxxxxx Xx.,
Xxxxxxxxx, XX 00000-0000 and Xxxxxx X. Xxxxxx residing at 0000 Xxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx, 208 17 (" Employee").
WITNESSETH:
WHEREAS, the Corporation and Employee entered into an employment agreement
dated August 9, 1999 ("Employment Agreement #l"), and the Corporation and
Employee both wish to supersede and replace Employment Agreement #l in its
entirety with this Employment Agreement #2 as of the Effective Date of this
Employment Agreement #2; and
WHEREAS, the Corporation desires to continue to employ the Employee as its
President and Chief Operating Officer (" COO"), and the Employee desires to
continue such employment upon the terms and conditions set forth in this
Employment Agreement #2.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, and the consideration, the receipt and sufficiency of
which is hereby acknowledged, the Corporation and Employee hereto agree as
follows.
1. Employment Agreement #2 and Employment.
A. As of the Effective Date of this Employment Agreement #2, this
Employment Agreement #2 shall supersede and replace Employment
Agreement #l in its entirety as of the Effective Date of this
Employment Agreement #2, and after the Effective Date of this
Employment Agreement #2, Employment Agreement #l shall have no further
force and effect.
B. The Corporation hereby continues to employ the Employee, and the
Employee hereby continues his employment by the Corporation as
President and COO of the Corporation upon the terms and conditions set
forth in this Employment Agreement #2.
C. Employee will report to the Chief Executive Officer of the Corporation
(the "CEO"), and to the Board of Directors of the Corporation (the
"Board"), as so directed by the Board.
D. The Employee will perform the Employee's duties under this Employment
Agreement #2 at the Corporation's offices at 0000 Xxxxxxx Xx.,
Xxxxxxxxx, XX 00000-0000.
2. Term.
A. The term of this Employee's employment under this Employment Agreement
#2 shall commence on September 1, 2000 and end on the effective date
of termination of employment (the "Term of Employment"), and payment
of salary and other payments shall begin upon that date.
B. The Corporation may terminate the employment relationship at any time
for any reason, with or without cause, by giving sixty (60) days prior
written notice of such termination.
C. The Employee may terminate the employment relationship at any time for
any reason, with or without cause, by giving sixty (60) days prior
written notice of such termination.
3. Duties.
A. The Employee shah perform such duties and services and shall be
allocated such resources, consistent with the Employee's position, as
may be assigned to him from time to time by the Chairman of the Board
("Chairman") and CEO of the Corporation. In furtherance of the
foregoing, the Employee hereby agrees to perform well and faithfully
such duties and responsibilities.
B. The Employee shall continue to be recommended for election to the
Executive Committee of the Board (the "EC") at the next meeting of the
Board, or by a special resolution circulated to the Board.
C. Employee shall perform the following:
(1) develop and implement, in conjunction with CEO, EC, and Board, a
business development program focused on negotiating and closing
patent licenses and corporate strategic alliances;
(2) assist the CEO and Chairman as needed in implementing the current
InforMedix business plan and any revised business plans created;
(3) implement a licensing and corporate alliance program through
soliciting interested third party licensees and corporate
partners, conducting due diligence, formulating initial
negotiation strategy/deal structure, assist in negotiating and
closing transactions, and coordinating work with the
Corporation's General Counsel and with outside counsel to create
license agreements; and
(4) coordinate the Corporation's patent program, patent and trademark
strategy, both inside and outside the U. S., patent enforcement
strategy, and monitoring patent infringement by others.
D. Employee shall be subject to the terms and conditions of employment
set forth in the Corporation's Policies and Procedures Manual, which
may be revised unilaterally by the Corporation at any time. To the
extent that there are any
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inconsistencies between that Manual and this Employment Agreement #2,
the terms of this Employment Agreement #2 shall control.
4. Time to be Devoted to Employment.
A. Except for vacations, holidays and personal days and absences due to
temporary illness, during the Term of Employment, the Employee shall
devote the Employee's full time and energy to the business of the
Corporation.
B. Employee shall conform to such hours of work as may from time to time
reasonably be required of him and shall not be entitled to receive any
additional remuneration for work for the Corporation outside the
Employee's normal hours.
C. Employee shall be entitled to a total of twenty-six (26) days of
annual paid time off ("Annual PTO"), as defined below, during this
Employment Agreement. Annual PTO days not used by the Employee during
one twelve month period may be accrued and used during the next twelve
(12) months. Annual PTO includes the following time taken off from
work for the Corporation for any of the following reasons: vacations;
national holidays; illness; personal use; or any other purpose not
otherwise restricted or prohibited by this Employment Agreement.
D. During the Term of Employment, the Employee shall not be engaged in
any other business activity without the express written consent of the
Corporation, except as follows:
(1) Employee may serve on the Board of Directors of up to two (2)
other corporations that do not compete with, or are not in the
same general business as the Corporation, with the written
approval of the Board; and,
(2) Employee may exercise passive ownership of up to five percent
(5%) of the securities in any other company that does not compete
with, or is not in the same business as, the Corporation.
E. Employee hereby represents that he is not a party to any binding
relationship or contract, which would be an impediment to entering
into this Employment Agreement #2, and that he is permitted to enter
into this Employment Agreement #2 and perform the obligations
hereunder.
5. Compensation; Reimbursement.
A. During the Term of Employment, the Corporation (or at the
Corporation's option, any subsidiary or affiliate thereof) shall pay
to the Employee an annual base salary ("Base Salary") of One Hundred
Forty Thousand Dollars ($140,000), plus a stock option bonus
calculated as set forth below (the "Bonus").
B. The Base Salary will be paid in bi-weekly installments, as follows:
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(1) if, in the opinion of the Executive Committee of the Board (the
"EC"), the Corporation is able to pay the Base Salary in cash or
cash equivalents, then, at the option of the Employee, Employee
shall be paid either in cash or cash equivalents, or paid in
options to purchase shares of the Corporation's common stock, in
accordance with the method set forth in Subsection 5.B.(2) below;
or
(2) if, in the opinion of the EC, the Corporation is unable to pay
the Base Salary in cash or cash equivalents, then Employee shall
be paid in options to purchase shares of the Corporation's common
stock ("Base Salary Options").
C. The exercise price for Base Salary Options shall be One Dollar ($1.00)
per each share of common stock covered by the option grant. Base
Salary Options shall be granted on the last day of each biweekly
period, as earned, and shall be vested and non-forfeitable upon grant.
Base Salary Options first shall become exercisable one (1)year from
the date of grant. The number of shares of common stock to be covered
by such options each year shall equal one hundred and fifty percent
(150%) of the Base Salary divided by ten (10). Base Salary Options
shall be treated as non-qualified stock options as defined in the
Corporation's Omnibus Stock Plan ("Plan").
D. The Bonus shall be paid in stock options, as provided for in Section 6
below. All of the Bonus options shall be granted immediately upon the
execution and delivery of this Employment Agreement #2. The exercise
price for the Bonus options shall be $10 (ten dollars) per each share
of common stock covered by the option grant. Bonus options shall vest
according to the schedule set forth in Section 6 below, reflecting
increases in the total annual revenues from all sources earned by the
Corporation ("Revenues").
E. Each installment of the Bonus shall vest on January 1 following the
fiscal year in which the Corporation achieves specified levels of
accrued Revenues as determined by the Board of Directors under
Generally Accepted Accounting Principles.
6. Performance-Based Stock Options and Vesting
A. The Corporation grants to the Employee bonus options with respect to
sixty-four Thousand (64,000) shares of the Corporation's common stock.
Bonus options shall be treated as incentive stock options as defined
in the Corporation's Plan. The exercise price with respect to the
options granted under this Employment Agreement #2 (the "Option
Shares") shall be $10 per share of common stock.
B. The Performance-Based Option Vesting schedule for 64,000 qualified
shares of the Corporations common stock vest when the cumulative
combined total of the Corporation's licensing fees and royalties
actually received by the Corporation
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("License Fees")reach or exceed the revenue targets below. At each
target level, vesting of 8,000 shares is achieved:
1. $250,000
2. $500,000
3. $1,000,000
4. $2,000,000
5. $3,000,000
6. $5,000,000
7. $7,000,000
8. $10,000,000
C. If the Employee ceases to be an employee or director of the
Corporation, no Option Shares shall vest thereafter, except as
specifically provided in Subsection 8.C. below.
7. Review of Base Salary; Additional Bonus; Benefits Program.
A. The Base Salary shall be reviewed annually and be subject to increase
at the option and in the sole discretion of the Board. The base salary
shall be decreased only if there are across-the-board salary
reductions applicable to all senior management employees of the
Corporation.
B. At the close of the Corporation's fiscal year, Employee may be
entitled to an additional bonus, as determined by the Board in its
sole discretion, based on Employee's performance.
C. During the Term of Employment, when, and if, the Corporation creates
any benefits programs for employees, the Employee shall be entitled to
participate in those programs as they are added. Those programs may
include: family medical and dental coverage; short and long term
disability coverage; 401(k) or similar plans; and such other benefits
as are made available from time to time to the employees of the
Corporation. When, and if, the Corporation creates a benefits program
for employees, the Corporation may unilaterally modify the benefits
offered to Employee of the Corporation, and will notify the Employee
in writing as to any such change.
D. The Corporation shall reimburse Employee, in accordance with its
general practices and procedures from time to time for other employees
of the Corporation, for all reasonable and necessary travel expenses,
disbursement and other reasonable and necessary incidental expenses
incurred by Employee for or on behalf of the Corporation in the
performance of the Employee's duties under this Employment Agreement
#2, upon presentation by the Employee to the Corporation of
appropriate vouchers and/or other expense reports, and otherwise in
accordance with its general practices and procedures as established
from time to time by the Corporation.
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E. The Option Shares shall accelerate and become one hundred percent
vested upon the occurrence of any of the following conditions
(collectively referred to as the "Accelerated Vesting Conditions"):
(1) upon the dissolution or liquidation of the Company; or
(2) upon a reorganization, merger, or consolidation of the Company as
a result of which the outstanding securities of the class of
securities then subject to the Options are changed into or
exchanged for cash or property or securities not of the Company's
issue; or
(3) any combination thereof;
(4) upon a sale of substantially all of the property of the Company
to, or the acquisition of the shares of common stock then
outstanding by, another Corporation or person; or
(5) a Termination without Cause, as defined below, of the Employee.
8. Effect of Termination of Employment.
A. For purposes of this Section of the Employment Agreement #2, the
following definitions apply.
(1) "Termination Without Cause" is defined as any termination,
including a "Voluntary Termination", "Death or Disability
Termination", and a "Constructive Termination", but excluding a
"Termination With Cause", all as defined below.
(2) "Termination With Cause" is defined as a termination initiated by
the Corporation due to:
(a) the Employee's misconduct with respect to the business
and/or affairs of the Corporation or any subsidiary or
affiliate thereof, which action materially and adversely
affects the business and/or affairs of the Corporation or
any subsidiary or affiliate thereof; and/or
(b) the Employee failing, in any material respect, to observe
and perform the Employee's obligations and duties under this
Employment Agreement #2, after being given written notice by
the Board of an alleged failure to perform and a reasonable
opportunity to correct that failure; and/or
(c) the commission by the Employee of an act involving
embezzlement or fraud, or commission or conviction of a
felony.
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(3) "Voluntary termination" is defined as a termination due to a
resignation of employment by Employee, including a voluntary
retirement by the Employee, unless the resignation constitutes a
"Constructive Termination", as defined below.
(4) "Constructive Termination" shall occur when Employee resigns
within six (6)months of any one or more of the following events:
(a) any reduction in the level of Base Salary, except for
across-the-board salary reductions applicable to all
management employees of the Employer; and/or
(b) a relocation of the Employee's place of employment to a
location more than sixty (60)miles from 0000 Xxxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxx 00000-0000.
(c) For purposes of the definition of Constructive Termination,
the hiring of a new President, CEO, and/or COO by the
Corporation will not be considered a Constructive
Termination. If such event occurs, Employee agrees to become
an Executive Vice President when, and if, a new President,
CEO, and/or COO, is hired, and/or a substantial investor,
individual or corporate, so requests, and/or the Board deems
it to be in the bests interest of the Corporation.
(5) "Death or Disability Termination" is defined as the following
occurrences:
(a) If the Employee dies during the Term of Employment, the
Employee's employment under this Employment Agreement #2
shall be deemed to cease as of the date of the Employee's
death; or,
(b) the Corporation may terminate Employee's employment upon the
Employee's failure, by reason of any physical or mental
impairment, to perform the Employee's normal duties under
this Employment Agreement #2 for a period of ninety
(90)consecutive days or for ninety (90)days during any
consecutive 365-day period, with such disability termination
to become effective at the end of the applicable ninety
(90)day period.
(c) In the event of Corporation terminating Employee's
Employment for Disability Termination, Employee shall resign
as CEO, and shall still be entitled to serve as Chairman of
the Board of Corporation, if serving in that position at the
time of Disability Termination, unless Employee fails to
perform the duties of Chairman for a 365 day period.
B. Termination Without Cause.
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Upon the termination of the Employee's employment under this
Employment Agreement #2 pursuant to Termination Without Cause, neither
the Employee nor the Employee's beneficiary or estate shall have any
further rights or claims against the Corporation under this Employment
Agreement #2, except to receive the following:
(1) the unpaid portion of the Base Salary computed on a pro rata
basis to the date of such termination; and
(2) reimbursement for any expenses for which the Employee shall not
have already been reimbursed;
(3) payment of all unused vacation time accrued through the date of
termination; and
(4) Base Salary for six (6)months.
C. Upon a Termination Without Cause, a Constructive Termination, and/or
Death or Disability Termination, Employee shall be entitled to the
vesting of the Option Shares for the year of such termination, under
the terms and conditions set forth in Section 6. above, the
Performance-Based Stock Options and Vesting Section of this Employment
Agreement #2.
D. Termination With Cause.
Upon the termination of the Employee's employment under this
Employment Agreement #2 pursuant to a Termination With Cause, as
defined above, neither the Employee nor the Employee's beneficiary or
estate shall have any further rights or claims against the Corporation
under this Employment Agreement #2, except (
(1) to receive the following:
(a) the unpaid portion of the Base Salary computed on a pro rata
basis to the date of termination; and
(b) reimbursement for any expenses for which the Employee shall
not have theretofore been reimbursed; and
(c) payment of all unused vacation time accrued through the date
of termination; and
(2) less the following:
(a) all amounts owing to the Corporation; and
(b) the total value of any possible misappropriations from the
Corporation.
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(3) In addition, on the date of a Termination With Cause:
(a) all unvested options shall immediately terminate; and
(b) all unvested warrants and other unvested rights granted to
the Employee to purchase or otherwise receive stock of the
Corporation, shall immediately terminate; and
(c) all vested but unexercised options shall become immediately
exercisable, and Employee shall have the right to exercise
all, or a portion of, such vested but unexercised options,
subject to the following terms and conditions:
[l] the Employee shall have twenty (20) days from the date
of a Termination With Cause to give written notice to
the Corporation of the Employee's intention to exercise
all, or a portion of, such vested but unexercised
options; and
[2] within forty (40) days from the date of a Termination
With Cause, Employee must:
[a] exercise all, or a portion of, such vested but
unexercised options; and
[b] make payment in full to the Corporation in cash,
cash equivalents, or other immediately available
funds; and
[c] otherwise complete the entire settlement process
for the exercise of all, or a portion of, such
vested but unexercised options.
E. Notwithstanding anything to the contrary in this Effect of Termination
of Employment Section of this Employment Agreement #2, if any other
officer or employee of the Corporation receives more favorable
termination provisions than contained in this Effect of Termination of
Employment Section of this Employment Agreement #2, then those more
favorable termination provisions shall apply.
9. Corporation's Rights to Intellectual Property of Employee.
A. The Employee shall promptly disclose, grant and assign ownership to
the Corporation for its sole use and benefit, any and all inventions,
improvements, information, copyrights, trademarks, service marks,
intellectual property, and suggestions (whether patentable or not),
for devices and/or products that hold medication, and/or devices,
products, and/or programs that provide medication, whose function is
prompting for, and ascertaining medication
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compliance, and/or are portable technologies that are used by patients
to capture data on medication compliance and/or health status, which
Employee may develop, acquire, conceive or reduce to practice while
employed by the Corporation (whether or not during usual working
hours), together with all patent applications, letters patent,
copyrights, trademarks, service marks, and other intellectual property
(collectively "Intellectual Property"), and reissues thereof that may
at any time be granted for or upon any such invention, improvement or
information.
B. In connection therewith, the Employee shall:
(1) without charge, but at the expense of the Corporation, promptly
at all times hereafter execute and deliver such applications,
assignments, descriptions and other instruments as may be
reasonably necessary or proper in the opinion of the Corporation
to vest title to any such inventions, improvements, technical
information, patent applications, patents, copyrights or
reissues, and/or other Intellectual Property thereof in the
Corporation and enable it to obtain and maintain the entire right
and title thereto throughout the world; and
(2) render to the Corporation at its expense (including reimbursement
to the Employee of reasonable out-of-pocket expenses incurred by
the Employee and a reasonable payment for the Employee's time
involved in case he is not then in its employ) all such
assistance as it may reasonably require in the prosecution of
applications for said patents, copyrights or reissues thereof, in
the prosecution or defense of interferences which may be declared
involving any said applications, patents or copyrights and in any
litigation in which the Corporation may be involved relating to
any such patents, inventions, improvements or technical
information.
(3) As a pre-condition to the effectiveness of this Employment
Agreement #2, Employee will sign the Corporation's
Confidentiality, Non-Competition and Invention Assignment
Agreements. If there is a conflict between such agreements and
this Employment Agreement #2, this Employment Agreement #2 shall
prevail including the Protection of Information Section of this
Employment Agreement #2.
10. Protection of Information.
A. Employee hereby covenants with Corporation that, throughout the term
of the Employee's employment by Corporation, Employee will serve
Corporation's best interests loyally and diligently. Throughout the
course of employment by the Corporation and thereafter, Employee will
not disclose or provide to any person, firm, corporation or entity
(except when authorized by Corporation) any confidential information,
materials, sales information, marketing plans or commercial
activities; which are owned by the Corporation or which come into the
possession of the Corporation from a third party under an obligation
of confidentiality, including without limitation, information relating
to trade secrets, business methods, products processes, procedures,
development or experimental
10
projects, suppliers, customers lists or the needs of customers or
prospective customers, clients, etc. (collectively "Confidential
Information"), which Confidential Information, comes into Employee's
possession or knowledge during the Term of Employment, and he will not
use such Confidential Information for the Employee's own purpose or
for the purpose of any person, firm, corporation or entity, other than
the Corporation.
B. The provisions of this Section of the Employment Agreement #2 shall
not apply to the following Confidential Information:
(1) Confidential Information which at the time of disclosure is
already in the public domain;
(2) Confidential Information which subsequently becomes part of the
public domain through no fault of the Employee;
(3) Confidential Information which becomes known to the Employee
through a third party who is under no obligation of
confidentiality to the Corporation; and
(4) Confidential Information which is required to be disclosed by law
or by judicial or administrative proceedings.
11. Non-Compete.
A. Employee agrees that during the Term of Employment and for a period of
twenty-four (24)months following any termination of the Employee set
forth in the Effect of Termination of Employment Section of this
Employment Agreement #2, Employee agrees not to enter the employ of,
directly or indirectly, or serve as an officer, director, employee,
consultant, owner, partner, stockholder, agent, or in any other
capacity, of or for, any person, company, or entity that owns,
controls, manufactures, sells, leases, markets, licenses, and/or
distributes -devices and/or products that hold medication, and/or
devices, products, and/or programs that provide medication: whose
function is prompting for, and ascertaining medication compliance;
and/or are portable technologies that are used by patients to capture
data on medication compliance and/or health status.
B. In the unlikely event that Employee breaches Employee's obligations as
described in this Section, both parties agree that irreparable harm
will have been caused to InforMedix. Therefore, in the event of a
determination of such a breach by a court of competent jurisdiction,
Employee hereby agrees that InforMedix shall be entitled to temporary
or permanent injunctive relief, and to a judgment for damages caused
by the breach, and any other equitable or legal remedies provided by
applicable law or at equity.
12. Notices.
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A. Notices and other communications under this Employment Agreement #2
shall be in writing and shall be delivered personally or sent by
nationally recognized overnight air courier or first class certified
or registered mail, return receipt requested and postage prepaid,
addressed as follows unless the party specifies a new address in
writing:
If to the Employee: Xxxxxx X. Xxxxxx, Ph. D.
0000 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 208 17
If to the Corporation: President
InforMedix, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000-000 1
With a copy to: General Counsel
InforMedix, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000-000 1
B. All notices and other communication given to any party to this
Employment Agreement #2 in accordance with the provisions of this
Employment Agreement #2 shall be deemed to have given to the date of
delivery if personally delivered; on the business day after the date
when sent if sent by air courier; and on the third business day after
the date when sent if sent by mail, in each case addressed to such
party as provided in this Section or in accordance with the latest
unrevoked direction from such party.
13. General Provisions
A. This Employment Agreement #2 contains the entire understanding between
the parties and supersedes any prior written or oral agreements,
understandings, term sheets, or other between them, with the exception
of the specific agreements between the Corporation and the Employee
specifically referenced in this Employment Agreement #2. This
Employment Agreement #2 shall not be modified or waived except by
written instrument signed by the parties.
B. This Employment Agreement #2 and any or all terms hereof may not be
changed, waived, discharged, or terminated orally, but only by way of
an instrument in writing signed by the parties.
C. There are no collective bargaining agreements affecting Employee's
employment.
D. Employee acknowledges that this Employment Agreement #2 was made by
the parties in Maryland and shall be governed and enforced in
accordance with the laws of Maryland. without reference to the
conflicts of laws of the State of Maryland or any other jurisdiction.
Employee acknowledges that the state and federal courts of Maryland
shall be the exclusive for a for the resolution of any
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disputes concerning this Employment Agreement #2 or concerning
Employee's employment with the Company and that he agrees to submit to
the jurisdiction of those courts.
E. Employee acknowledges that, if he breaches any provision of this
Employment Agreement #2, the Company will be irreparably harmed, that
monetary damages alone may not be sufficient to adequately protect the
Company from such breach, and that, in addition to any other remedy,
the Company shall be entitled to recover all expenses incurred in
enforcing these provisions, including attorneys' fees and court costs,
and to a preliminary and permanent injunction enjoining such breach.
F. If any portion of this Employment Agreement #2 shall be found to be
invalid or contrary to public policy, the same may be modified or
stricken by a Court of competent jurisdiction, to the extent necessary
to allow the Court to enforce such provisions in a manner which is as
consistent with the original intent of the provisions as possible. The
striking or modification by the Court of any provision shall not have
the effect of invalidating the Employment Agreement #2 as a whole. In
addition, if any valid federal or state law or final determination of
any administrative agency or court of competent jurisdiction affects
any provision of this Employment Agreement #2, then the provision or
provisions so affected shall automatically be modified to conform to
the law or determination and otherwise this Employment Agreement #2
shall continue in full force and effect.
G. The section headings contained in this Employment Agreement #2 are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Employment Agreement #2.
H. This Employment Agreement #2 is personal in its nature and the parties
hereto shall not, without the consent of the other, assign or transfer
this Employment Agreement #2 or any rights or obligations under this
Employment Agreement #2; provided, however, that the provisions hereof
shall inure to the benefit of, and be binding upon the parties and
their respective executors, administrators, personal representatives,
heirs, assigns and successors in interest. And each successor of the
Corporation, whether by merger, consolidation, transfer of all or
substantially all assets, or otherwise and the heirs and legal
representatives of the Employee.
I. The obligations of the General Provisions Section, the Corporation's
Rights to Intellectual Property of the Employee Section, and the
Protection of Information Section shall survive the termination or
expiration of this Employment Agreement #2.
J. Both parties have read the foregoing Employment Agreement #2 in its
entirety and voluntarily agree to each of its terms and conditions
with full knowledge of such terms and conditions
K. The Corporation and Employee acknowledge and agree that any and all
grants of stock options or restricted stock under this Employment
Agreement #2 are made
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pursuant to the authorization and terms and conditions of the
Corporation's Omnibus Stock Plan and Restricted Stock Agreement which
shall be controlling except where expressly modified in this
Employment Agreement #2.
IN WITNESS WHEREOF, the parties have duly executed this Employment
Agreement #2 as of the date first above written.
INFORMEDIX, INC. ("Corporation")
By /s/ Xxxxx Xxxx January 22, 2003
-------------------------------- ---------------------------------
Xxxxx Xxxx, M.D. Date
Chairman and CEO
EMPLOYEE ("Employee")
By /s/ Xxxxxx X. Xxxxxx January 22, 2003
-------------------------------- ---------------------------------
Xxxxxx X. Xxxxxx, M.D. Date
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Ref: 2001040301
AMENDMENT #l TO EMPLOYMENT AGREEMENT #2
BETWEEN INFORMEDIX AND XXXXXX X. XXXXXX
This Amendment #l to the Employment Agreement #2 Between InforMedix and
Xxxxxx X. Xxxxxx (the "Amendment# 1") dated as of the 5th day of February, 2001
and effective on January 1, 2001 (the "Effective Date") is between InforMedix,
Inc., a Delaware corporation ("Employer" or the "Corporation") with offices at
0000 Xxxxxxx Xx., Xxxxxxxxx, XX 00000-0000 and Xxxxxx X. Xxxxxx residing at 0000
Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx, 00000 ("Employee").
WITNESSETH:
WHEREAS, Employer has previously employed the Employee as its President and
Chief Operating Officer ("COO") under and pursuant to Employment Agreement #2
with Employee dated as of September 1, 2000 (the "Employment Agreement#2"); and,
WHEREAS, both the Employer and the Employee wish to amend the Employment
Agreement #2 and have the Employee continue employment with the Employer upon
the terms and conditions set forth in this Amendment #l.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, and the consideration, the receipt and sufficiency of
which is hereby acknowledged. Employer and Employee agree as follows.
1. Effect of this Amendment #l.
A. All of the terms and conditions set forth in this Amendment #1 shall:
(1) be effective as of the Effective Date, unless a different date is
specifically referred to in this Amendment #1; and
(2) supersede and replace those sections of the Employment Agreement #2,
which they specifically change.
B. All other terms and conditions not specifically changed by this
Amendment #1 shall remain in full force and effect in accordance with
the terms and conditions of the Employment Agreement #2.
2. Compensation; Reimbursement
Section 5 of the Employment Agreement #2, entitled Compensation;
Reimbursement, is replaced in its entirety by this Section 2 of this
Amendment #1, entitled Compensation; Reimbursement.
A. Commencing on the Effective Date, Employer (or at Employer's option,
any subsidiary or affiliate thereof)shall pay to the Employee an
annual salary of
$140,000.00 (One Hundred Forty Thousand Dollars), with a minimum of
$40,000 (forty thousand dollars)to be paid in cash (the "Salary"). The
Salary will be paid in bi-weekly installments.
B. If it is determined by the Executive Committee of the Board of
Directors of Employer (the "Executive Committee")that there are
insufficient funds to pay any portion of the Salary in cash, then the
portion of the Salary not paid in cash, up to the full amount of the
Salary, w-ill be paid in the form of non-qualified stock options of
Employer, as defined in Employer's Omnibus Stock Plan (" Plan"), with
an exercise price per share of $1.00 (one dollar), which vest
immediately when granted, and become exercisable one year after the
date of each grant (the "Salary Options").
(1) The number of shares subject to the Salary Options (the "Salary
Option Share(s)")will be determined by dividing the amount of the
Salary not to be paid in cash, by the per share price of
InforMedix Common Stock on the date of grant of the Salary
Options (on the Effective Date of this Amendment #1 it is $10.00
[ten dollars]per share), less the $1.00 (one dollar)exercise
price. or $9.00 (nine dollars).
(2) For example, were $160,000.00 (one hundred sixty thousand
dollars) of Salary not to be paid in cash, then, Salary Options
to purchase 11, 111.111 (eleven thousand, one hundred eleven
point one one one) Salary Option Shares would be granted.
(3) If Employer sells, or otherwise cause to be issued, any shares of
InforMedix Common Stock, or other instruments convertible into
InforMedix Common Stock, for less than $10.00 (Ten Dollars)per
share (the "Revised Price Per Share"), then Employer shall issue
to Purchaser, additional Salary Option Shares so that the Salary
Option Shares equal the amount of the Salary not to be paid in
cash, divided by the Revised Price Per Share.
C. Employer, at the election of the Board of Directors, may exercise a
call on some or all of the issued, but unexercised Salary Options held
by Employee as of the date of such call (a "Call"), and purchase those
Salary Options from Employee within 60 (sixty) days of a Call, at a
purchase price per Salary Option Share equal to the then-effective
market price per share of InforMedix Common Stock, but in no event
less than $10.00 (Ten Dollars)per share, less the $1.00 exercise
price, and subject to the terms and conditions set forth below.
(1) At any time during a calendar year, Employer may exercise a Call
to purchase some or all of the unexercised Salary Options earned
by Employee at any time in that calendar year, up to and
including the date of the exercise of a Call.
(2) Up to and including March 31st of any year, Employer may exercise
a Call to purchase some or all of the unexercised Salary Options
earned by Employee at any time in the preceding calendar year.
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(3) Nothing in this Subsection of Amendment #1 shall authorize or
permit Employer to purchase InforMedix Common Stock owned by
Employee which had previously been subject to Salary Options of
Employee, and which had previously been exercised by Employee and
converted to InforMedix Common Stock.
3. Performance-Based Stock Options and Vesting.
Section 6 of the Employment Agreement #2, entitled Performance-Based
Stock Options and Vesting, is replaced in its entirety by this Section
3 of this Amendment #1, entitled Performance-Based Stock Options and
Vesting.
A. Employer hereby issues to the Employee upon the Effective Date of this
Amendment #1, 24,500 (twenty-four thousand, five hundred)
performance-based stock options to purchase InforMedix Common Stock,
in the form of non-qualified, incentive stock options of Employer, as
defined in the Plan, with an exercise price of $10.00 (ten dollars)per
share, which shall vest and be exercisable according to the schedule
below, exercisable upon the vesting date of each grant, and otherwise
subject to the terms and conditions of this Section 3. of Amendment #1
(the "PB Options").
B. The PB Options to purchase InforMedix Common Stock will vest based
upon the attainment of pre-determined and pre-assigned performance
targets, as determined by the Board of Directors.
C. The PB Options will be for a three-year period, with one-third of the
shares subject to the PB Options (the "PB Option Share(s)"), vesting
in each of the three years of each grant (a "Grant").
D. The number of PB Option Shares subject to the PB Options for each
Grant, will be 8,166.66 (eight thousand, one hundred sixty-six point
six six), which will be eligible for vesting in each of the three
(3)years of each Grant.
E. After the date that the Employee ceases to be an employee or director
of Employer, no PB Options or PB Option Shares shall vest. except as
specifically provided in Section 5. of this Amendment #1.
4. Acceleration of Vesting of Salary Options and PB Options.
Subsection 7.E. of the Employment Agreement #2 is hereby superseded by
the following, which shall replace that Subsection in its entirety
A. The Salary Options and the PB Options shall accelerate and become one
hundred percent vested and immediately exercisable, upon the
occurrence of any of the following conditions (collectively referred
to as the "Accelerated Vesting Conditions"):
(1) upon the dissolution or liquidation of the Company; or
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(2) upon a reorganization, merger, or consolidation of the Company as
a result of which the outstanding securities of the class of
securities then subject to the Options are changed into or exchanged
for cash or property or securities not of the Company's issue; or
(3) any combination thereof;
(4) upon a sale of substantially all of the property of the Company
to, or the acquisition of a majority of the shares of InforMedix
Common Stock then outstanding by, another Corporation or person; or
(5) a Termination without Cause of the Employee.
5. Adjustment of Agreement and Amendment #l Options.
A new-Section 7A is added to the Employment Agreement #2 as follow-s.
7A. Adjustment of Agreement and Amendment #l Options.
A. In the event that InforMedix issues shares of its InforMedix Common
Stock or rights, options or warrants for, or securities convertible or
exchangeable into InforMedix Common Stock, to any person or entity
other than Employee (collectively referred to as a "Third Party"),
entitling such Third Party to subscribe for or purchase shares of
InforMedix Common Stock at a price per share that is lower at the
record date than the exercise price of the Base Salary Options and
Option Shares issued under the Employment Agreement #2, and Salary
Options and/or the PB Options issued under this Amendment #l
(collectively referred to as the "Agreement and Amendment #1 Options"
and such event referred to as a "Dilutive Event"), the exercise price
of the Agreement and Amendment #l Options shall be reduced to the
exercise price or share price of the Dilutive Event.
(1) The new number of shares of InforMedix Common Stock purchasable
upon the exercise of the Agreement and Amendment #l Options shall
be determined by multiplying the old number of shares purchasable
by the Agreement and Amendment, #1 Options, by the old exercise
price of the Agreement and Amendment #1 Options, divided by the
new-exercise price of the Agreement and Amendment# 1 Options.
(2) A Dilutive Event will not be deemed to have occurred for the sale
or issuance of shares of InforMedix Common Stock (including
options)to employees of InforMedix, that are approved by the
Board, or the exercise of currently authorized options and
warrants.
B. The number of Agreement and Amendment #l Options w-ill be adjusted in
the same manner as other shares of InforMedix Common Stock issued and
outstanding -as of the date of the Employment Agreement #2 for the
Base Salary Options and Option Shares issued under the Employment
Agreement #2, and as of the Effective Date of this Amendment #1 for
the Salary Options and the PB
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Options issued under this Amendment #1 --in the event of, but not
limited to, any of the following, which occur and which affect the
InforMedix Common Stock: stock split; reverse stock split;
recapitalization; and/or other adjustment.
C. For as long as the stock of InforMedix has not been registered under
the United States Federal securities laws and/or state securities
laws, the Agreement and Amendment #1 Options cannot be transferred or
sold to another individual, corporation or entity unless permitted
under the InforMedix Investors Rights Agreement, or agreed upon by a
majority of the Board, and then only in compliance with applicable
laws and regulations.
D. After the stock of InforMedix has been registered under the United
States Federal securities laws and/or state securities laws, the
shares issued as a result of exercise of the Agreement and Amendment
#1 Options may be transferred or sold, but only in compliance with:
the security laws of the United States of America; the security law-s
of applicable states; all other applicable laws and regulations; any
other restrictions placed on the transferability of the Agreement and
Amendment #1 Options and agreed to by the Board of Directors of
InforMedix, including but not limited to those by the underwriter or
other investment banker with respect to the public offer, sale, and/or
transfer of the stock of InforMedix, especially those shares of stock
held by officers, directors, and insiders of InforMedix; and any other
restrictions placed on the transferability of stock agreed to by the
directors of InforMedix. Employee further agrees to have a legend
placed on the certificates for the Agreement and Amendment #1 Options
reflecting any of the provisions of this Amendment #1 and the
Employment Agreement#2.
6. Termination of Employment.
Subsections 8. C. and 8.D. of the Employment Agreement #2 are hereby
superseded by the following, which shall replace those Subsections in
their entirety.
C. Upon a Constructive Termination and/or Death or Disability
Termination, as defined in the Employment agreement #2, Employee shall
be entitled to the vesting of the PB Options only for the year of such
termination, under the terms and conditions as set forth in this
Section 3 of this Amendment #l. Nothing in this Subsection shall limit
or restrict the vesting of the Salary Options and/or Salary Shares for
Employee.
D. Termination With Cause.
Upon the termination of the Employee's employment under the Employment
Agreement #2 pursuant to a Termination With Cause, neither the
Employee nor the Employee's beneficiary or estate shall have any
further rights or claims against Employer under this Amendment #1,
except
(1) to receive the following:
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(a) the unpaid portion of the Base Salary and any Salary Options
computed on a pro rata basis to the date of termination; and
(b) reimbursement for any expenses for which the Employee shall
not have theretofore been reimbursed; and
(c) payment of all unused vacation time accrued through the date
of termination; and
(2) less the following:
(a) all amounts owing to Employer; and
(b) the total value of any possible misappropriations from
Employer.
(3) In addition, on the date of a Termination With Cause:
(a) all unvested PB Options shall immediately terminate; and
(b) all unvested warrants and other unvested rights granted to
the Employee to purchase or otherwise receive stock of
Employer, shall immediately terminate; and
(c) all vested but unexercised Salary Options and PB Options
shall become immediately exercisable, and Employee shall
have the right to exercise all, or a portion of, such vested
but unexercised Salary Options and PB Options, subject to
the following terms and conditions:
[1] the Employee shall have twenty (20)days from the date
of a Termination With Cause to give written notice to
Employer of the Employee's intention to exercise all,
or a portion of, such vested but unexercised Salary
Options and PB Options; and
[2] within forty (40) days from the date of a Termination
With Cause. Employee must:
[a] exercise all, or a portion of, such vested but
unexercised Salary Options and PB Options; and
[b] make payment in full to Employer in cash, cash
equivalents, or other immediately available funds
for the exercise of the Salary Options and PB
Options; and
6
[c] otherwise complete the entire settlement process
for the exercise of all, or a portion of, such
vested but unexercised Salary Options and PB
Options.
[3] Any portion of vested but unexercised Salary Options
and PB Options, which are not exercised under and
pursuant to the terms and conditions of this Subsection
B.(3)(c)shall immediately terminate.
7. General Provisions.
A. This Amendment #1 contains the entire understanding between the
parties and supersedes any prior written or oral agreements,
understandings, term sheets, or other between them, with respect to
the matters covered by this Amendment #1.
B. This Amendment #1 and any or all terms hereof may not be changed,
waived, discharged, or terminated orally, but only by way of an
instrument in writing signed by both Employer and Employee.
C. Employee acknowledges that this Amendment #1 was made by the parties
in Maryland and shall be governed and enforced in accordance with the
law-s of Maryland, without reference to the conflicts of laws of the
State of Maryland or any other jurisdiction. Employee acknowledges
that the state and federal courts of Maryland shall be the exclusive
for a for the resolution of any disputes concerning this Amendment #1
or concerning Employee's employment with the Company and that he
agrees to submit to the jurisdiction of those courts.
D. Employee acknowledges that, if Employee breaches any provision of this
Amendment #1, the Company .will be irreparably harmed, that monetary
damages alone may not be sufficient to adequately protect the Company
from such breach, and that, in addition to any other remedy, the
Company shall be entitled to recover all expenses incurred in
enforcing these provisions, including attorneys' fees and court costs,
and to a preliminary and permanent injunction enjoining such breach.
E. If any portion of this Amendment #1 shall be found to be invalid or
contrary to public policy, the same may be modified or stricken by a
Court of competent jurisdiction. to the extent necessary to allow-the
Court to enforce such provisions in a manner which is as consistent
with the original intent of the provisions as possible. The striking
or modification by the Court of any provision shall not have the
effect of invalidating the Amendment #1 as a whole. In addition, if
any valid federal or state law-or final determination of any
administrative agency or court of competent jurisdiction affects any
provision of this Amendment #1, then the provision or provisions so
affected shall automatically be modified to conform to the law or.
determination and otherwise this Amendment #1 shall continue in full
force and effect.
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F. The section headings contained in this Amendment #1 are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Amendment #l.
G. This Amendment #1 is personal in its nature and Employer and Employee
shall not, without the consent of the other, assign or transfer this
Amendment #1 or any rights or obligations under this Employment
Agreement #2; provided, however, that the provisions hereof shall
inure to the benefit of, and be binding upon the parties and their
respective executors, administrators, personal representatives, heirs,
assigns and successors in interest, and each successor of Employer,
whether by merger, consolidation, transfer of all or substantially all
assets, or otherwise and the heirs and legal representatives of the
Employee.
H. he obligations of the General Provisions Section shall survive the
termination or expiration of this Amendment #1.
I. Both parties have read the foregoing Amendment #1 in its entirety and
voluntarily agree to each of its terms and conditions with full
knowledge of such terms and conditions
J. Employer and Employee acknowledge and agree that any and all grants of
Salary Options and PB Options under this Amendment #1 are made
pursuant to the authorization and terms and conditions of the
Employer's Omnibus Stock Plan and Restricted Stock Agreement which
shall be controlling except w-here expressly modified in this
Amendment #1.
IN WITNESS WHEREOF, the parties have duly executed this Amendment #1 as of
the date first above written.
INFORMEDIX, INC. ("Corporation")
By: /s/ Xxxxx Xxxx, M.D. May 21, 2001
----------------------------------- --------------------------
Xxxxx X. Xxxx, M.D. Date
Chairman and CEO
EMPLOYEE ("Employee")
By: /s/ Xxxxxx X. Xxxxxx May 21, 2001
----------------------------------- --------------------------
Xxxxxx X. Xxxxxx, Ph.D. Date
8
Ref: 20011009
AMENDMENT TO EMPLOYMENT AGREEMENT #2
BETWEEN
INFORMEDIX, INC. AND XX. XXXXXX X. XXXXXX
This Amendment to EMPLOYMENT AGREEMENT #2 ("Employment Agreement #2") dated
as of the 1st day of September, 2001 (the "Effective Date") is between
INFORMEDIX, INC., a Maryland corporation (the "Corporation") with offices at
0000 Xxxxxxx Xx., Xxxxxxxxx, XX 00000-0000 and Xx. Xxxxxx X. Xxxxxx residing at
0000 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx, 208 17 ("Employee").
WITNESSETH:
WHEREAS, the Corporation and Employee entered into an employment agreement
dated September 1, 2000 ("Employment Agreement #2"), and the Corporation and
Employee both wish to amend Employment Agreement #2 as of the Effective Date
above; and
WHEREAS Employee has voluntarily resigned as President and Chief Operating
Officer of the Corporation to assume the position of General Counsel and Chief
Patent Counsel of the Corporation; and
WHEREAS, the Corporation desires to continue to employ the Employee as its
General Counsel and Chief Patent Counsel, and the Employee desires to continue
such employment upon the terms and conditions set forth in this Amendment to
Employment Agreement #2.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, and the consideration, the receipt and sufficiency of
which is hereby acknowledged, the Corporation and Employee hereto agree to the
following modified provisions which shall supersede and replace comparable
provisions under Employment Agreement #2. All other unmodified provisions of
Employment Agreement #2 shall remain in full force and effect.
3. Duties.
C. Employee shall perform the following:
(1) Assist the CEO and Chairman, President, and Board of Directors as
needed in advising the Corporation on matters of corporate law,
and in negotiating various transactions; and
(2) Draft Agreements and other legal documents on behalf of the
Corporation; and
(3) Prepare and file patent applications, and coordinate the
Corporation's patent program, patent and trademark strategy, both
inside and outside the U. S., patent enforcement strategy, and
monitoring patent infringement by others.
Amendment to Employment Agreement #2 Between Ref: 20011009
InforMedix and Xxxxxx X. Xxxxxx Page 2 of 2 Pages
4. Time to be Devoted to Employment.
A. Except for vacations, holidays and personal days and absences due to
temporary illness, during the Term of Employment, the Employee shall
devote the Employee's one half time and energy to the business of the
Corporation.
D. During the Term of Employment, the Employee may be engaged in any
other business activity without the express written consent of the
Corporation, except as follows:
(1) Employee may serve on the Board of Directors of up to two
(2)other corporations that do not compete with, or are not in the
same general business as the Corporation, with the written
approval of the Board; and,
(2) Employee may exercise passive ownership of up to five percent
(5%)of the securities in any other company that does not compete
with, or is not in the same business as, the Corporation.
5. Compensation; Reimbursement.
A. During the Term of Employment, the Corporation (or at the
Corporation's option, any subsidiary or affiliate thereof)shall pay to
the Employee an annual base salary ("Base Salary")of Seventy Thousand
Dollars ($70,000), plus a stock option bonus calculated as set forth
in Employment Agreement #2.
IN WITNESS WHEREOF, the parties have duly executed this Amendment to
Employment Agreement #2 as of the date first above written.
INFORMEDIX, INC. ("Corporation")
By: /s/ Xxxxx Xxxx, M.D. January 22, 2003
----------------------------------- --------------------------
Xxxxx Xxxx, M.D. Date
Chairman and CEO
EMPLOYEE ("Employee")
By: /s/ Xxxxxx X. Xxxxxx January 22, 2003
----------------------------------- --------------------------
Xxxxxx X. Xxxxxx, Ph.D. Date