EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into on November
17, 2004, and effective as of August 1, 2004, by I-TRAX, INC., a Delaware
corporation with its principal business offices located at One Xxxxx Square,
Suite 2615, 000 X. 00xx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 (the
"Company"), and XXXXX X. XXXX, an individual residing at 0000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000 ("Executive").
The Company desires to employ Executive, and Executive desires to be
employed by the Company on the terms set forth in this Agreement.
In consideration of the mutual covenants and premises contained in this
Agreement, and other good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged by the Company and Executive, the Company and
Executive agree as follows:
1. Term of Employment. Upon the terms set forth in this Agreement, the
Company employs Executive and Executive accepts employment with the Company for
the period commencing on August 1, 2004 and ending on July 31, 2007 (such
period, the "Original Term"), unless sooner terminated in accordance with the
provisions of Section 4 below. Upon the expiration of the Original Term, the
term of the Executive's employment will automatically extend for an additional
period of two years (such period, the "Additional Term") unless the Additional
Term is sooner terminated in accordance with the provisions of Section 4 below
or unless on or before six months prior to the end of the Original Term,
Executive or the Company notifies the other in writing that the Executive's
employment under this Agreement will not be extended beyond the Original Term.
2. Title and Capacity. Executive will serve as Senior Vice President
and Chief Financial Officer of the Company and its Affiliates (as defined
below), and will perform the duties commensurate with such positions and such
other duties as the Company's Board of Directors (the "Board") may assign to
Executive. Executive will devote attention and energies on a full-time basis to
the above duties, and Executive will not, during the term of this Agreement,
actively engage in any other for profit business activity, except Executive may
continue to serve as a director of The Enterprise Social Investment Company and
The Pioneer Fund and affiliated fund groups.
3. Compensation and Benefits.
3.1 Base Salary. During the Original Term and Additional Term,
the Company will pay Executive an annual base salary of $250,000 and such
discretionary bonuses, if any, as the Compensation Committee of the Board (the
"Compensation Committee") in its sole discretion may determine.
3.2 Payment in Installments. The Company will pay Executive's
annual base salary in periodic installments in accordance with the Company's
general payroll practices, after withholding for all Federal, state and local
taxes and other required deductions. The Company may pay any discretionary bonus
at such time as the Compensation Committee determines in its
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sole discretion.
3.3 Stock Options. On August 10, 2004, the Company granted
Executive options to acquire 400,000 shares of the Company's common stock at an
exercise price of $2.68 per share under the Company's 2001 Equity Compensation
Plan (the "Plan Options"). The Plan Options are exercisable as follows: 133,333
shares on September 1, 2005; and the balance in eight equal, quarterly
installments beginning on December 1, 2005. The Plan Options will accelerate and
be vested and exercisable in full in accordance with the terms of the stock
option agreement between the Company and Executive (a) if the Company terminates
Executive's employment under Section 4.3 for any reason other than for cause,
(b) if Executive terminates Executive's employment under Section 4.5(b) for good
reason, or (c) in the event of a "Change in Control," as such term is defined in
the 2001 Equity Compensation Plan. Except as provided in this Section 3.3, the
Plan Options are in all respects subject to the terms of the stock option
Agreement between the Company and the Executive covering the Plan Options.
3.4 Benefits. Provided Executive meets and continues to meet
the full-time and any and all other eligibility requirements set forth in the
Company's Employee Manual and benefits plans sponsored by the Company, the
Company will make available to Executive the standard full-time employee
benefits and benefit plans, subject to employee cost sharing provisions and
other provisions of such benefits and benefit plans. Notwithstanding the
preceding, the Company may change, modify, amend, eliminate, or terminate any
benefit or benefit plan or change the employee cost sharing provisions of any
such benefit or benefit plan, and if the Company does so, thereafter Executive
will be entitled only to then available standard full-time employee benefits and
benefit plans.
3.5 Paid Time Off. Executive is entitled to 20 paid time off
days per year to be accrued in accordance with the Company's policy, as amended
from time to time, and taken at such times as may be approved by the Chief
Executive Officer of the Company.
3.6 Expenses.
(a) The Company will reimburse Executive for all
reasonable travel, entertainment and other expenses
incurred or paid by Executive in connection with, or
related to, the performance of his duties under this
Agreement in accordance with the Travel and Expense
Policy published by the Company's Finance Department,
as amended from time to time.
(b) In addition to reimbursing expenses set forth in
Section 3.6(a) above, the Company will pay Executive
a $300 per month travel allowance.
(c) The Company will reimburse executive a maximum of
$7,200 if Executive cannot renegotiate his obligation
under a lease associated with Executive's prior
engagement by an investment banking firm.
4. Employment Termination. The employment of Executive by the Company
under this Agreement will terminate upon the occurrence of any of the following:
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4.1 Expiration of Term. At the election of Executive or the
Company upon the expiration of the Original Term if Executive or the Company
notified the other pursuant to Section 1 above that Executive's employment under
this Agreement will not be extended for the Additional Term.
4.2 Cause. At the election of the Company, for "cause" as
defined below, immediately upon written notice by the Company to Executive.
"Cause" for termination is deemed to exist by reason of (a) any action by
Executive resulting in the conviction of Executive of, or the entry of a plea of
guilty or nolo contendere by Executive to, any crime involving moral turpitude,
any felony, or any misdemeanor involving misconduct or fraud in business
activities, (b) any breach of a fiduciary duty involving personal profit, (c)
Executive's willful failure to perform his duties under this Agreement, (d)
Executive's willful misconduct, recklessness or gross negligence in the
performance of his duties under this Agreement, (e) any action by Executive that
violates Section 6 below, or (f) repeated refusals by Executive to comply with
the reasonable directives of the Board; provided, however, that the Company may
terminate Executive's employment under Sections 4.2(c), (e) or (f) above only
after Executive fails (x) to commence and continue to correct or cure each
specific instance comprising cause within 10 days of receipt by Executive of
written notice of the Board identifying each instance constituting cause or (y)
to correct or cure each identified instance within 45 days of receipt of such
notice.
4.3 Without Cause. At the election of the Company, at any
time, upon 30 days written notice for any reason whatsoever other than for
cause.
4.4 Death or Disability. Upon Executive's death or 30 days
after Executive's disability. "Disability" means the inability of Executive, due
to a physical or mental disability, to perform the duties contemplated under
this Agreement for a period of three consecutive months or for a cumulative
period of four months within any six consecutive months. A physician
satisfactory to Executive and the Company will determine if Executive is
disabled. If Executive and the Company cannot agree on a physician within 30
days of either party's written notice to the other, Executive and the Company
will each select a physician, who will together select a third physician. The
determination of the physician(s) as to disability will be binding on all
parties.
4.5 Termination by Executive. At the election of Executive:
(a) at any time if his health should become impaired to an extent that makes the
continued performance of his duties under this Agreement hazardous to his
physical or mental health or his life, as certified by a physician designated by
Executive and reasonably acceptable to the Company; (b) for "good reason" upon
delivery of written notice of such "good reason" to the Company; or (c) upon 90
days written notice of termination, which termination will be deemed a breach by
Executive of his obligations under this Agreement. "Good reason" means: (1) the
failure by the Company to continue Executive in the position of Chief Financial
Officer (or such other senior executive position as may be offered by the
Company and which Executive may in his sole discretion accept); (2) material
diminution by the Board or a senior executive officer of the Company of
Executive's responsibilities, duties or authority as Chief Financial Officer of
the Company (or such other senior executive position as may be offered by the
Company and which Executive may in his sole discretion accept) or assignment to
Executive of any duties inconsistent with
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Executive's position as Chief Financial Officer of the Company (or such other
senior executive position as may be offered by the Company and which Executive
may in his sole discretion accept); (3) failure by the Company to pay and
provide to Executive the compensation provided in Section 3.1 above, which
failure is not cured within 30 days after written notice of such failure is
delivered by Executive to the Company; (4) requiring Executive to be permanently
based anywhere other than within 25 miles of his present home in Bethesda,
Maryland (excluding business related travel as required by the Company's
business); or (5) any other material breach of this Agreement by the Company,
which breach is not cured within 30 days after written notice of such breach is
delivered by Executive to the Company.
5. Effect of Termination.
5.1 Expiration of Term.
(a) If Executive elects not to renew Executive's
employment for the Additional Term under Section 4.1,
the Company will pay to Executive the base salary and
benefits otherwise payable to Executive under
Sections 3.1, 3.2 and 3.4, pro rata through the last
day of Executive's actual employment by the Company.
(b) If the Company elects not to renew Executive's
employment for the Additional Term under Section 4.1,
the Company will pay to Executive (1) severance equal
to six months of base salary then applicable under
Section 3.1 in the manner provided under Section 3.2
and (2) for the period that Executive is receiving
severance, an additional amount equal to the
Company's then applicable contribution to Executive's
standard full-time health benefits. Executive is not
required to mitigate damages to receive the payments
set forth in this Section 5.1(b).
5.2 Termination for Cause. If the Company terminates
Executive's employment for cause under Section 4.2, the Company will pay to
Executive the base salary and benefits otherwise payable to Executive under
Sections 3.1, 3.2 and 3.4, pro rata through the last day of Executive's actual
employment by the Company.
5.3 Termination Without Cause.
(a) If the Company terminates Executive's employment
under Section 4.3 for any reason other than for cause
at any time during the Original Term or the
Additional Term, the Company will pay to Executive
(1) severance equal to 12 months of base salary then
applicable under Section 3.1 in the manner provided
under Section 3.2 and (2) for the period that
Executive is receiving severance, an additional
amount equal to the Company's then applicable
contribution to Executive's standard full-time health
benefits.
(b) Executive acknowledges that if Executive's employment
is terminated pursuant to Section 4.3, the payment in
full of severance under this Section 5.3 represents
the total obligation of the Company to Executive
under this Agreement. Further, Executive is not
required to mitigate damages to receive the payments
set forth in Section 5.3(a).
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5.4 Termination for Death or Disability. If Executive's
employment is terminated by death or because of disability under Section 4.4,
the Company will pay to the estate of Executive or to Executive, as applicable,
the base salary and benefits otherwise payable to Executive under Sections 3.1,
3.2 and 3.4 above through the end of the month in which termination of
Executive's employment because of death or disability occurs.
5.5 Termination by Executive.
(a) If Executive terminates Executive's employment under
Section 4.5(a) for reasons of health, the Company
will pay to Executive the base salary and benefits
otherwise payable to Executive under Sections 3.1,
3.2 and 3.4 through the date of termination.
(b) If Executive terminates Executive's employment under
Section 4.5(b) for good reason at any time during the
Original Term or the Additional Term, the Company
will pay to Executive (1) severance equal to 12
months of base salary then applicable under Section
3.1 in the manner provided under Section 3.2 and (2)
for the period that Executive is receiving severance,
an additional amount equal to the Company's then
applicable contribution to Executive's standard
full-time health benefits.
(c) Executive acknowledges that if Executive's employment
is terminated pursuant to Section 4.5(b), then the
payment in full of severance under Section 5.5(b)
represents the total obligation of the Company to
Executive under this Agreement. Further, Executive is
not required to mitigate damages to receive the
payments set forth in Section 5.5(b).
(d) If Executive terminates Executive's employment under
Section 4.5(c), the Company will pay to Executive the
base salary and benefits otherwise payable to him
under Sections 3.1, 3.2 and 3.4 pro rata through the
last day of his actual employment by the Company, and
the Company may assert a claim for damages caused to
the Company by reason of Executive's termination in
breach of Executive's obligations under this
Agreement.
6. Non-Competition, Non-Solicitation and Confidentiality.
6.1 Non-Competition. During the Original Term and, if
automatically renewed, the Additional Term (regardless whether the Original Term
or the Additional Term are terminated under Section 4 above prior to its
scheduled expiration under Section 1) and for a period of one year after the
expiration of the Original Term and, if automatically renewed, the Additional
Term, Executive will not, including through an Affiliate (as defined in Rule
12b-2 promulgated pursuant to the Securities Exchange Act of 1934, as amended),
directly engage in the business in which the Company or its Affiliates are
engaged in at any time during the Original Term or Additional Term (the
"Business") in the United States. Each of the following activities, without
limitation, are deemed to constitute engaged in the Business: engaging in,
working with, maintaining an interest in (other than interests of less than 1%
in companies with securities traded either on the New York Stock Exchange, the
American Stock Exchange, the Nasdaq National Market, the Nasdaq SmallCap Market
or traded over-the-counter and quoted on the Bulletin Board), advising for a fee
or other consideration, managing, operating, lending money to (other than loans
by commercial banks), guaranteeing the debts or obligations of, or
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permitting one's name or any part thereof to be used in connection with an
enterprise or endeavor, either individually, in partnership or in conjunction
with any individual, partnership, corporation, limited liability company,
association, joint stock company, trust, joint venture or any other form of
business organization, unincorporated organization or governmental entity (or
any department, agency or subdivision thereof) (each, a "Person"), whether as
principal, director, agent, shareholder, partner, employee, consultant,
independent contractor or in any other manner whatsoever, any Person in the
Business.
6.2 Non-solicitation. During the Original Term and, if
automatically renewed, the Additional Term (regardless whether the Original Term
or the Additional Term are terminated under Section 4 above prior to its
scheduled expiration under Section 1) and for a period of one year after the
expiration of the Original Term and, if automatically renewed, the Additional
Term, Executive will not, directly or indirectly, and no Person (including an
Affiliate) over which Executive exercises control (whether as an officer,
director, individual proprietor, holder of debt or equity securities,
consultant, partner, member or otherwise) (a) solicit or engage or employ or
otherwise enter into any agreement or understanding, written or oral, relating
to the services of any Person who is known or should be known by Executive to be
then employed or to have been employed within the preceding six months by the
Company or its Affiliates, (b) take any action which could be reasonably
expected to lead any Person to cease to deal with the Company or its Affiliates
or (c) solicit the business of, enter into any written or oral agreement with or
otherwise deal with any supplier of goods, products, materials or services in
competition with the Company or its Affiliates or solicit the business of
customers of the Company or its Affiliates who were such at any time during the
two-year period preceding Executive's last date of employment, except on behalf
of businesses in which such party would then be permitted to engage directly
without violating this Section 6.
6.3 Confidentiality. During the Original Term and, if
automatically renewed, the Additional Term (regardless whether the Original Term
or the Additional Term are terminated under Section 4 above prior to its
scheduled expiration under Section 1) and for a period of five years after the
expiration of the Original Term and, if automatically renewed, the Additional
Term, Executive will treat as trade secrets all Confidential Information (as
defined below) known or acquired by Executive in the course of any affiliation
Executive has with the Company or its Affiliates and will not disclose any
Confidential Information to any Person not affiliated with the Company except as
authorized in writing by the Company. "Confidential Information" means any
information relating to the relationship of the Company or its Affiliates to
their customers (including, without limitation, the identity of any customer),
the research, design, development, manufacturing, marketing, pricing, costs,
capabilities, capacities and business plans related to the Business, the
financing arrangements of the Company, or the financial condition or prospects
of the Company; inventions, products, processes, methods, techniques, formulas,
compositions, compounds, projects, developments, plans, research data, clinical
data, financial data, personnel data, computer programs, software, including
source code, object code, operating systems, bridgeware, firmware, middleware or
utilities and customer and supplier lists and any other confidential information
relating to the assets, condition or business of the Company or its Affiliates.
Notwithstanding the foregoing, Executive will have no obligation with respect to
(a) information disclosed to Executive by a Person who does not owe a duty of
confidentiality to the Company or its Affiliates; or (b) information which is in
the public
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domain and is readily available; or (c) information where disclosure is required
by law or is necessary in connection with a claim, dispute or litigation to
which Executive is or becomes a party and the Company is given ten business days
prior written notice of the intent to make disclosure.
6.4 Injunctive Relief. The restrictions contained in this
Section 6 are necessary for the protection of the business and goodwill of the
Company and its Affiliates and are considered by Executive to be reasonable for
such purpose. Executive acknowledges that a breach or threatened breach by
Executive of the covenants contained in this Section 6 would cause the Company
irreparable harm and that the extent of damages to the Company would be
impossible to ascertain and that there is and will be available to the Company
no adequate monetary damages or other remedy at law to compensate it in the
event of any such breach. Consequently, in the event of a breach of any such
covenant, in addition to any other relief to which the Company is or may be
entitled, the Company may seek, as a matter of course, an injunction or other
equitable relief, including the remedy of specific performance, to enforce any
or all of such covenants by Executive, his or her employer, employees, partners,
agents or any of them.
6.5 Modification of Covenants. In the event an arbitrator,
court or governmental agency or authority determines that any provision of
Section 6 is invalid by reason of the length of any period of time or the size
of any area during or in which such provision is effective, such period of time
or area will be considered to be reduced to the extent required to cure such
invalidity.
6.6 Extension of Covenant. In the event Executive violates the
restrictions contained in Section 6.1, the duration of such restriction will
extend for a period of time equal to the period of time during which such
violation continued.
6.7 Counter-claims. Any claim or cause of action by Executive
against the Company, whether predicated on this Agreement or otherwise, will not
constitute a defense to the enforcement by the Company of the restrictions
contained in this Section 6, but will be litigated separately including, without
limitation, any claim by Executive that Executive has not been terminated for
cause pursuant to Section 4.2 above, unless the claim and defense arise out of
the same event and joinder would be required.
7. Inventions, Patents and Intellectual Property.
7.1 Executive agrees that all inventions, discoveries,
computer programs, data, software, technology, designs, innovations and
improvements (whether or not patentable and whether or not copyrightable)
(individually, an "Invention," and collectively, "Inventions") related to the
business of the Company which are made, conceived, reduced to practice, created,
written, designed or developed by Executive, solely or jointly with others and
whether during normal business hours or otherwise, during the Original Term, the
Additional Term or thereafter if resulting or directly derived from Confidential
Information, will be the sole property of the Company. Executive hereby assigns
to the Company all Inventions and any and all related patents, copyrights,
trademarks, trade names, and other industrial and intellectual property rights
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and applications therefor, in the United States and elsewhere and appoints any
officer of the Company as Executive's duly authorized attorney to execute, file,
prosecute and protect the same before any government agency, court or authority.
Upon the request of the Company and at the Company's expense, Executive will
execute such further assignments, documents and other instruments as may be
necessary or desirable to fully and completely assign all Inventions to the
Company and to assist the Company in applying for, obtaining and enforcing
patents or copyrights or other rights in the United States and in any foreign
country with respect to any Invention.
7.2 Executive will promptly disclose to the Company all
Inventions and will maintain adequate and current written records (in the form
of notes, sketches, drawings and as may be specified by the Company) to document
the conception and/or first actual reduction to practice of any Invention. Such
written records will be available to and remain the sole property of the Company
at all times.
8. Return of Confidential Information. All files, letters, memoranda,
reports, records, data, sketches, drawings, laboratory notebooks, program
listings or other written, photographic or other tangible material, in each
event, containing Confidential Information, whether created by Executive or
others, which come into Executive's custody or possession, are and will be the
exclusive property of the Company to be used by Executive only in the
performance of his duties for the Company.
9. Cooperation. At any time during the term of this Agreement or
thereafter, Executive will reasonably cooperate with the Company in any
litigation or administrative proceedings involving any matters with which
Executive was involved during Executive's employment by the Company. The Company
will reimburse Executive for reasonable expenses, if any, incurred in providing
such assistance.
10. Notices. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing, and may be given
by a party hereto by (a) personal service (effective upon delivery), (b) mailed
by registered or certified mail, return receipt requested, postage prepaid
(effective five business days after dispatch), (c) reputable overnight delivery
service, charges prepaid (effective the next business day) or (d) telecopy or
other means of electronic transmission (effective upon receipt of the telecopy
or other electronic transmission in complete, readable form), if confirmed
promptly by any of the methods specified in clauses subparagraphs (a)-(c) of
this Section 10, to the other party at the address shown above, or at such other
address or addresses as either party shall designate to the other in accordance
with this Section 10.
11. Non-Disparagement. During the term of Executive's employment
hereunder and for five years thereafter, Executive will not disparage,
deprecate, or make any negative comment with respect to the Company or its
Affiliates or their respective businesses, operations, or properties.
12. Pronouns. Whenever the context may require, any pronouns used in
this Agreement include the corresponding masculine, feminine or neuter forms,
and the singular
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forms of nouns and pronouns include the plural and vice versa.
13. Entire Agreement. This Agreement, and such other agreements,
schedules and exhibits as are referenced in this Agreement, constitute the
entire agreement between the parties and supersede all prior agreements and
understandings, whether written or oral, relating to the subject matter of this
Agreement.
14. Amendment. This Agreement may be amended or modified only by a
written instrument executed by both the Company and Executive.
15. Governing Law; Consent to Jurisdiction.
15.1 This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of Delaware, notwithstanding
any contrary application of conflicts of laws principles.
15.2 Each of the Company and Executive consents to the
jurisdiction of all Federal and state courts located in the Commonwealth of
Pennsylvania which have jurisdiction over any disputes arising under this
Agreement. Service of process in any action or proceeding commenced in a court
located in the Commonwealth of Pennsylvania may be made by written notice as
provided in Section 10.
16. Successors and Assigns. This Agreement will be binding upon and
inure to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company may be
merged or which may succeed to its assets or business; provided, however, that
the obligations of Executive are personal and may not be assigned by him.
17. Miscellaneous.
17.1 No delay or omission by the Company in exercising any
right under this Agreement operates as a waiver of that or any other right. A
waiver or consent given by the Company on any one occasion is effective only in
that instance and will not be construed as a bar or waiver or any right on any
other occasion.
17.2 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
17.3 In case any provision of this Agreement is invalid,
illegal or otherwise unenforceable, the validity, legality and enforceability of
the remaining provisions will in no way be affected or impaired.
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have executed this Agreement as of the day and year set forth above.
COMPANY:
I-TRAX, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Executive Officer
Attest:
--------------------------------
Name:
Title:
EXECUTIVE:
Witness: /s/ Xxxxx X. Xxxx
-------------------------------- --------------------------------
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