Exhibit 10.11
Ref 62000909
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Employment Agreement")dated the lst day of
January, 2000 ("Effective Date") is between INFORMEDIX, INC., a Delaware
corporation (the "Corporation") with offices at 0000 Xxxxxxx Xx., Xxxxxxxxx, XX
00000-0000 and Xxxxx X. Xxxx, M.D. residing at 0000 Xxxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxx, 00000 ("Employee").
WITNESSETH:
WHEREAS, the Corporation desires to employ the Employee as its Chairman of
the Board of Directors ("Chairman") and Chief Executive Officer ("CEO"); and,
WHEREAS, the Employee desires to accept such employment upon the terms and
conditions set forth in this Employment Agreement.
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.
A. The Corporation hereby employs the Employee, and the Employee hereby
accepts the employment by the Corporation as Chairman and CEO of the
Corporation upon the terms and conditions set forth in this Employment
Agreement.
B. Employee will report to the Board of Directors of the Corporation (the
"Board').
C. The Employee will perform the Employee's duties under this Employment
Agreement 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 Agreement shall
commence on January 1, 2000 and end on the effective date of
termination of employment (the "Term of Employment").
B. Employee shall actively assume the Employee's position on or before
January 1, 2000 and payment of salary and other payments shall begin
upon that date.
C. The Corporation may terminate this Employment Agreement only by a
two-thirds (2/3) vote by the Board then serving, with Employee not
voting and not being counted as a director for purposes of such vote.
Employment Agreement Between Ref: 620000909
InforMedix and Xxxxx X. Xxxx, M.D. Page 2 of 15 Pages
D. In the event that a successor CEO is selected, Employee shall
immediately cease to be the CEO, but shall remain an Executive Vice
President of the Corporation, with a minimum salary of $200,000 per
annum. Employee shall also remain as Chairman for the remainder of
Employee's term as a director, unless two-thirds (2/3) of the
directors of the Corporation then serving shall vote to remove
Employee as Chairman, with Employee not voting and not being counted
as a director for purposes of such vote. All other provisions of this
Employment Agreement shall remain in full force and effect and be
binding upon the Corporation and Employee, except for the requirements
of Section 3. B., which may be modified by majority vote of the Board.
3. Duties.
A. The Employee shall 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 Board. In furtherance
of the foregoing, the Employee hereby agrees to perform well and
faithfully such duties and responsibilities.
B. In his role as CEO, Employee shall perform the following:
(1) Primary responsibility for the oversight and coordination of all
of the Corporation's operations including, but not limited to,
Research and Development, Manufacturing, Software, Internet,
Sales and Marketing, Distribution, Strategic Partner Relations,
and Customer Relations.
(2) Direct, coordinate, support and monitor the activities of all of
the officers and employees of the Corporation.
(3) Develop and implement, in conjunction with the President,
Executive Committee of the Board of Directors ("EC"), and Board,
a business development program focused on negotiating and closing
corporate strategic alliances, supply chain relationships, and
distribution alliances.
(4) Chief inventor.
(5) Primary responsibility to develop and implement the current
InforMedix business plan and any revised business plans created.
(6) Primary responsibility for raising capital on behalf of the
Corporation.
C. In his role as Chairman, the Employee shall perform the following:
(1) Create, update and communicate the Corporation Mission Statement.
(2) Assist and advise the CEO, if different than Employee, in
research and development, business development, corporate
strategic partnership
Employment Agreement Between Ref: 620000909
InforMedix and Xxxxx X. Xxxx, M.D. Page 3 of 15 Pages
development and maintenance, employee relations and other aspects
of corporate operations.
(3) Chief inventor.
(4) Assist in raising capital for the Corporation.
(5) Chair the meetings of the Corporation's Board of Directors.
(6) Assist in recruitment of additional Directors.
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 inconsistencies between that Manual and this
Employment Agreement, the terms of this Employment Agreement shall
control.
4. Time to be Devoted to Employment.
A. Except as otherwise provided in this Section 4, 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 not be entitled to receive any additional remuneration
for work 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 set forth below. Specifically excluded from
the restrictions below is Employee's service on the Board of Directors
and ownership of the securities of both: Contemporary Psychiatric
Services, Inc. and Health Resource Management, Inc.
(1) Employee may serve on the Board of Directors of other
corporations that do not compete with, or are not in the same
general business as the Corporation.
Employment Agreement Between Ref: 620000909
InforMedix and Xxxxx X. Xxxx, M.D. Page 4 of 15 Pages
(2) Employee may continue to oversee the business operations of
Contemporary Psychiatric Services, Inc., and may continue to
treat up to three (3) long-term psychiatric patients, not to
exceed six (6) hours per week.
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, and that he is permitted to enter into
this Employment Agreement and perform the obligations under this
Agreement.
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 Two Hundred
Thousand Dollars ($200,000), 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:
(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 bi-weekly
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 nonqualified 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. 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
Employment Agreement Between Ref: 620000909
InforMedix and Xxxxx X. Xxxx, M.D. Page 5 of 15 Pages
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
145,020 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 Agreement ("the Option Shares") shall be $1.0 per share of common
stock.
B. The Option Shares shall vest when the annual revenues earned by the
Corporation ("Revenues"), reach or exceed the targets below,
determined at the end of the Corporation's fiscal year as provided for
in Subsection 5. D. At each revenue level below, 24,170 of the Option
Shares shall vest with Employee.
(1) $500,000
(2) $1,000,000
(3) $2,000,000
(4) $3,000,000
(5) $5,000,000
(6) $7,000,000
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
Employment Agreement Between Ref: 620000909
InforMedix and Xxxxx X. Xxxx, M.D. Page 6 of 15 Pages
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 w-ill 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,
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.
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, 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.
Employment Agreement Between Ref: 620000909
InforMedix and Xxxxx X. Xxxx, M.D. Page 7 of 15 Pages
(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, 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.
(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 w-hen 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 CEO by the Corporation
will not be considered a Constructive Termination. If a new
CEO is hired by the Corporation, Employee and Corporation
agree that Employee shall become an Executive Vice President
of the Corporation, at a minimum salary level of $200,000,
with all other provisions of this Employment Agreement
binding on Employee and Corporation except for the
provisions of Sections 3.B., which may be modified by
majority vote of the Board.
(5) "Death or Disability Termination" is defined as the following
occurrences:
Employment Agreement Between Ref: 620000909
InforMedix and Xxxxx X. Xxxx, M.D. Page 8 of 15 Pages
(a) If the Employee dies during the Term of Employment, the
Employee's employment under this Employment Agreement 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 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.
Upon the termination of the Employee's employment under this Employment
Agreement 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, 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 twelve (12)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.
Employment Agreement Between Ref: 620000909
InforMedix and Xxxxx X. Xxxx, M.D. Page 9 of 15 Pages
D. Termination With Cause.
Upon the termination of the Employee's employment under this Employment
Agreement 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, 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.
(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:
[1] 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:
Employment Agreement Between Ref: 620000909
InforMedix and Xxxxx X. Xxxx, M.D. Page 10 of 15 Pages
[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, 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, 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 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, trade-marks,
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
Employment Agreement Between Ref: 620000909
InforMedix and Xxxxx X. Xxxx, M.D. Page 11 of 15 Pages
(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, 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,
this Employment Agreement shall prevail including the Protection
of Information Section of this Employment Agreement.
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 w-ill 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 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, film,
corporation or entity, other than the Corporation.
B. The provisions of this Section of the Employment Agreement 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;
Employment Agreement Between Ref: 620000909
InforMedix and Xxxxx X. Xxxx, M.D. Page 12 of 15 Pages
(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, 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.
A. Notices and other communications under this Agreement 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: Xxxxx X. Xxxx, M. D.
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
If to the Corporation: President
InforMedix, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Employment Agreement Between Ref: 620000909
InforMedix and Xxxxx X. Xxxx, M.D. Page 13 of 15 Pages
With a copy to: General Counsel
InforMedix, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
B. All notices and other communication given to any party to this
Employment Agreement in accordance with the provisions of this
Employment Agreement 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 w-hen 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 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. This Employment
Agreement shall not be modified or waived except by written instrument
signed by the parties.
B. This Employment Agreement 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 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 disputes concerning this
Employment Agreement 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, 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 shall be found to be
invalid or contrary to public policy, the same may be modified or
stricken by a Court of
Employment Agreement Between Ref: 620000909
InforMedix and Xxxxx X. Xxxx, M.D. Page 14 of 15 Pages
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 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, then the provision or
provisions so affected shall automatically be modified to conform to
the law-or determination and otherwise this Employment Agreement shall
continue in full force and effect.
G. The section headings contained in this Employment Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Employment Agreement.
H. This Employment Agreement is personal in its nature and the parties
hereto shall not, without the consent of the other, assign or transfer
this Employment Agreement or any rights or obligations under this
Agreement; 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.
J. Both parties have read the foregoing Employment Agreement 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 Agreement are
made 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.
Employment Agreement Between Ref: 620000909
InforMedix and Xxxxx X. Xxxx, M.D. Page 15 of 15 Pages
IN WITNESS WHEREOF, the parties have duly executed this Employment
Agreement as of the date first above written.
INFORMEDIX, INC. ("Corporation")
By: /s/ Xxxxxx X. Xxxxxx February 12, 2001
----------------------------------- -----------------------------
Xxxxxx X. Xxxxxx, Ph.D. Date
President
EMPLOYEE ("Employee")
By: /s/ Xxxxx Xxxx, M.D. February 12, 2001
----------------------------------- -----------------------------
Xxxxx Xxxx, M.D. Date
Ref: 2001031901
AMENDMENT #l TO THE EMPLOYMENT AGREEMENT
BETWEEN INFORMEDIX AND XXXXX X. XXXX, M. D.
This Amendment #1 to the Employment Agreement Between InforMedix and Xxxxx
X. Xxxx, M.D. (the "Amendment #l") 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 Xxxxx X. Xxxx, M.D. residing at 0000
Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx, 00000 ("Employee").
WITNESSETH:
WHEREAS, Employer has previously employed the Employee as its Chairman of
the Board of Directors ("Chairman") and Chief Executive Officer (" CEO")under
and pursuant to an Employment Agreement with (Employee dated as of January 1,
2000 (the "Employment Agreement"); and
WHEREAS, both the Employer and the Employee wish to amend the Employment
Agreement and have the Employee continue employment with the Employer upon the
terms and conditions set forth in this Amendment #1.
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,
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. Compensation; Reimbursement.
Section 4 of the Employment Agreement, entitled Compensation;
Reimbursement., is replaced in its entirety by this Section 2 of this
Amendment #1, entitled Compensation; Reimbursement.
Amendment #1 to Employment Agreement Ref: 2001031901
Between InforMedix and Xxxxx X. Xxxx, M.D. Page 2 of 9 Pages
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 $200,000.00 (two hundred thousand dollars), with a
minimum of $40,000 (forty thousand dollars)to be paid in cash (the
"Salary"). The Salary will be paid in biweekly 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, will 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 17,777.777 (seventeen thousand, seven hundred
seventy-seven point seven seven seven) 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
Amendment #1 to Employment Agreement Ref: 2001031901
Between InforMedix and Xxxxx X. Xxxx, M.D. Page 3 of 9 Pages
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.
(3) Nothing in this Subsection of the Employment Agreement 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, entitled Performance-Based Stock
Options and Vesting., is replaced in. its entirety by this Section 3 of
this Amendment #l, entitled Performance-Based Stock Options and Vesting.
A. Employer hereby issues to the Employee upon the Effective Date of this
Amendment #l, 35,001 (thirty-five thousand and one) 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 #l (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 11,667, 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.
Amendment #1 to Employment Agreement Ref: 2001031901
Between InforMedix and Xxxxx X. Xxxx, M.D. Page 4 of 9 Pages
4. Acceleration of Vesting of Salary Options and PB Options.
Subsection 7.E. of the Employment Agreement 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
(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 #1 Options.
A new Section 7A is added to the Employment Agreement as follows.
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, 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 #1 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 #1 Options shall
be determined by multiplying the old number of shares purchasable
by the
Amendment #1 to Employment Agreement Ref: 2001031901
Between InforMedix and Xxxxx X. Xxxx, M.D. Page 5 of 9 Pages
Agreement and Amendment #1 Options, by the old exercise price of
the Agreement and Amendment #l 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 #1 Options will be adjusted in
the same manner as other shares of InforMedix Common Stock issued and
outstanding -as of the date of the Employment Agreement for the Base
Salary Options and Option Shares issued under the: Employment
Agreement, and as of the Effective Date of this Amendment #l for the
Salary Options and the PB 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
#l Options may be transferred or sold, but only in compliance with:
the security laws of the United States of America; the security laws
of applicable states; all other applicable laws and regulations; any
other restrictions placed on the transferability of the Agreement and
Amendment #l 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
Agreement.
6. Termination of Employment.
Subsections 8.C. and 8.D. of the Employment Agreement are hereby superseded
by the following, which shall replace those Subsections in their entirety.
Amendment #1 to Employment Agreement Ref: 2001031901
Between InforMedix and Xxxxx X. Xxxx, M.D. Page 6 of 9 Pages
C. Upon a Constructive Termination and/or Death or Disability
Termination, as defined in the Employment Agreement, 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 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:
(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:
Amendment #1 to Employment Agreement Ref: 2001031901
Between InforMedix and Xxxxx X. Xxxx, M.D. Page 7 of 9 Pages
[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
[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 #l 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 #l.
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 #l 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 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
Amendment #1 to Employment Agreement Ref: 2001031901
Between InforMedix and Xxxxx X. Xxxx, M.D. Page 8 of 9 Pages
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.
F. The section headings contained in this Amendment #1 are for reference
_________________ and shall not affect in any way the meaning or
interpretation Amendment ???.
G. This Amendment #l is personal in its nature and Employer and Employ
not, without the consent of the other, assign or transfer this
Amendment #1 or ____________ obligations under this Employment
Agreement; 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. The obligations of the General Provisions Section shall survive the
termination or expiration of this Amendment #l.
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 where expressly modified in this Amendment
#l.
Amendment #1 to Employment Agreement Ref: 2001031901
Between InforMedix and Xxxxx X. Xxxx, M.D. Page 9 of 9 Pages
IN WITNESS WHEREOF, the parties have duly executed this Amendment #1
as of the date first above written.
INFORMEDIX, INC. ("Corporation")
By: /s/ Xxxxxx X. Xxxxxx April 2, 2001
----------------------------------- -----------------------------
Xxxxxx X. Xxxxxx, Ph.D. Date
President
EMPLOYEE ("Employee")
By: /s/ Xxxxx Xxxx, M.D. April 2, 2001
----------------------------------- -----------------------------
Xxxxx Xxxx, M.D. Date