EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and effective as of
the 23rd day of August, 2004, (the "Effective Date"), by and between Xxxxx X.
XxXxxxxxxx (hereinafter referred to as "Employee") and PharmaFrontiers Corp.
(hereinafter referred to as "PharmaFrontiers").
W I T N E S S E T H:
WHEREAS, Employee desires employment with PharmaFrontiers on the terms and
conditions below; and
WHEREAS, PharmaFrontiers' success requires the protection of its
intellectual property, proprietary information and goodwill and PharmaFrontiers
is willing to employ Employee, subject to the terms and conditions below; and
NOW, THEREFORE, for and in consideration of the employment by
PharmaFrontiers, the compensation and other remuneration paid and to be paid by
PharmaFrontiers and received by the Employee for such employment, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by Employee, it is agreed by and between the parties hereto as
follows:
1. Employment
PharmaFrontiers agrees to employ the Employee, and Employee agrees that
Employee will devote Employee's full productive time, skill, and best efforts
during Employee's employment to such duties as may be reasonably assigned to
Employee. Employee will faithfully and diligently endeavor to further the best
interests of PharmaFrontiers during Employee's employment. PharmaFrontiers
acknowledges and authorizes Employee to spend a nominal amount of time each day
for work outside PharmaFrontiers. Either PharmaFrontiers or Employee may
terminate this Agreement at any time for any or no reason.
2. Duties and Title
Employee shall have the title of and shall act as the Chief Executive
Officer of PharmaFrontiers. Employee shall have the following responsibilities
and duties: Employee shall report to PharmaFrontiers' Board of Directors, shall
have general supervisions over the operations of the Company and will have such
other duties and responsibilities consistent with his position as Chief
Executive Officer, as may reasonably be assigned to Employee by the Company's
Board of Directors from time to time.
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3. Compensation
As compensation, PharmaFrontiers shall pay Employee a salary of $250,000
per year, paid monthly. In addition, PharmaFrontiers grants to Employee a three
year option to purchase up to 370,000 shares of common stock of PharmaFrontiers
the terms of which are set forth in the Incentive Stock Option Agreement
attached hereto as Exhibit "A" (the "Option Agreement"). Upon the signing of
this Agreement, Employee agrees to sign and be bound to the terms of the Option
Agreement.
4. Benefits
PharmaFrontiers will provide Employee with the benefits and insurance
coverage as generally provided by PharmaFrontiers to its management employees,
but only if and when such benefits and/or coverage are provided. As of the
Effective Date, no such benefits or coverage are provided. If provided, such
benefits and insurance coverages may be changed by PharmaFrontiers from time to
time.
5. Confidential and Proprietary Information; Documents
5.1 PharmaFrontiers shall provide Employee with information deemed secret
and confidential by PharmaFrontiers. Such secret or confidential information or
know-how of PharmaFrontiers (referred to collectively as "Confidential
Information") shall include, without limitation, the following: the status and
plans for research and development; materials, cells, tissues, and other
biological samples and specimens; cell banking methods, apparatus, and services;
pending and planned patent applications (until published by the Patent Office);
invention disclosures; research and technical data and information; methods of
creating, preparing, and using stem cells and other biological materials;
license, sublicense, and other agreements relating to intellectual property
rights; PharmaFrontiers' plans; customer or contact information; contributor
information; strategies, costs, prices, uses, applications of products and
services; results of and data from investigations or experiments; all apparatus,
products, processes, compositions, samples, formulas, computer programs, pricing
policy, financial information, and methods of doing business; policy and/or
procedure manuals, training and recruiting procedures; accounting procedures;
the status and content of PharmaFrontiers' contracts with its contributors,
clients, and customers; PharmaFrontiers' business philosophy, and servicing
methods and techniques; all at any time used, developed, or investigated by
PharmaFrontiers, before or during the Employee's tenure of employment, which are
not generally available to the public or which are maintained as confidential by
PharmaFrontiers.
5.2 Employee recognizes and acknowledges that Employee will have access to
certain information of PharmaFrontiers that is confidential and proprietary and
constitutes valuable and unique property of PharmaFrontiers. Employee agrees
that Employee will not at any time, either during or subsequent to Employee's
employment, disclose to others, use, copy or permit to be copied, except in
pursuance of Employee's duties on behalf of PharmaFrontiers, its successors,
assigns or nominees, any Confidential Information or know-how of PharmaFrontiers
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(whether or not developed by the Employee) without PharmaFrontiers' prior
written consent. Employee further agrees to maintain in confidence any
confidential information of third parties received as a result of Employee's
employment with PharmaFrontiers.
5.3 Employee further agrees to deliver to PharmaFrontiers at the
termination of Employee's employment all biological materials correspondence,
memoranda, notes, records, drawings, sketches, plans, customer, client and/or
contributor lists, product compositions, or other documents and all copies
thereof (all of which are hereafter referred to as the "Documents"), made,
composed or received by Employee, solely or jointly with others, and which are
in Employee's possession, custody, or control at such date and which are related
in any manner to the past, present, or anticipated business of PharmaFrontiers.
In this regard, Employee hereby grants and conveys to PharmaFrontiers all right,
title and interest in and to, including without limitation, the right to
possess, print, copy, and sell or otherwise dispose of, any biological
materials, reports, records, papers summaries, photographs, drawings or other
documents, and writings, copies, abstracts or summaries thereof, or any other
works of authorship, which may be prepared by Employee or under Employee's
direction or which may come into Employee's possession in any way during the
term of Employee's employment with PharmaFrontiers which relate in any manner to
the past, present or anticipated business of PharmaFrontiers.
5.4 Employee further agrees that Employee will not, during Employee's
employment, receive from persons not employed by PharmaFrontiers, any
confidential information not belonging to PharmaFrontiers, unless a valid
agreement is signed by both an officer of PharmaFrontiers and by the disclosing
party that states that PharmaFrontiers will not be in a confidential
relationship with the disclosing party. Employee further agrees that Employee
will not use or disclose to other employees of PharmaFrontiers, during
Employee's employment with PharmaFrontiers, confidential information belonging
to Employee's former employers, or any other third parties unless written
permission has been given by such persons to PharmaFrontiers to use and/or
disclose such information.
5.5 In the event of a breach or threatened breach of any of the provisions
of Section 5, PharmaFrontiers shall be entitled to an injunction ordering the
return of such Documents and any and all copies thereof and restraining Employee
from using or disclosing, for Employee's benefit or the benefit of others, in
whole or in part, any Confidential Information, including but not limited to the
Confidential Information which such Documents contain, constitute, or embody.
Employee further agrees that any breach or threatened breach of any of the
provisions of Section 5 would cause irreparable injury to PharmaFrontiers for
which it would have no adequate remedy at law. Nothing herein shall be construed
as prohibiting PharmaFrontiers from pursuing any other remedies available to it
for any such breach or threatened breach, including the recovery of damages.
6. Noncompetition/No-Hire Agreement
6.1 Employee agrees that, from the Effective Date until a period of one
year following the date of the termination of Employee's employment (the
"Noncompetition Period"), Employee will not directly or indirectly, either as an
employee, employer, consultant, agent, principal, partner, corporate officer,
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director, or in any other individual or representative capacity, engage or
participate in any "Competitive Business" anywhere in the United States of
America (the "Noncompetition Territory"). As used herein, a "Competitive
Business" is defined as any business relating to stem cells or cell banking,
which the Company is currently involved or will be involved during the term of
this Agreement.
6.2 Employee further agrees that during the Noncompetition Period and
within the Noncompetition Territory Employee will not, directly or indirectly,
either as an employee, employer, consultant, agent, principal, partner,
corporate officer, director, or in any other individual or representative
capacity, call on, solicit, recruit, or attempt to call on, solicit, or recruit,
or attempt to hire any of the employees of PharmaFrontiers, regardless of
whether for the benefit of the Employee or for any other person, firm, or
corporation.
6.3 Employee shall not during the Noncompetition Period and within the
Noncompetition Territory, either directly or indirectly (i) make known to any
Competitive Business the names and addresses of any of PharmaFrontiers'
customers or contacts or any other information pertaining to such persons or
businesses or (ii) call on, solicit, or take away, or attempt to call on,
solicit or take away any of the customers of PharmaFrontiers with whom Employee
became acquainted during Employee's association with PharmaFrontiers, regardless
of whether for the benefit of the Employee or for any other person, firm or
corporation.
6.4 Employee agrees that the restraints created by the covenants in
Section 6 are no greater than necessary to protect PharmaFrontiers' legitimate
interests. Furthermore, Employee agrees that such covenants of Section 6 do not
hinder, or otherwise cause hardship to Employee in finding and performing
employment elsewhere upon termination of this Agreement. Similarly, Employee
agrees that PharmaFrontiers' need for the protection afforded by the covenants
of Section 6 is not outweighed by either the hardship to Employee or any injury
likely to the public.
6.5 Employee agrees that this Section is ancillary to this Agreement, and
independent of any other agreement related to Employee's employment with
PharmaFrontiers, and Employee acknowledges that the consideration given by
PharmaFrontiers for this Agreement includes PharmaFrontiers' agreement to
provide to the Employee access to the Confidential Information, as well as
employment. Further, the existence of any claim or cause of action of Employee
against PharmaFrontiers or any officer, director, or employee of
PharmaFrontiers, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by PharmaFrontiers of Employee's
covenants contained in this Agreement. In addition, this Agreement shall
continue to be binding upon Employee in accordance with its terms,
notwithstanding the termination of Employee's employment.
6.6 Employee agrees that Employee's breach or violation, or threat
thereof, of this covenant not to compete shall entitle PharmaFrontiers, as a
matter of right, to an injunction without the necessity of posting bond, issued
by any court of competent jurisdiction, restraining any further or continued
breach or violation of this covenant. Such right to an injunction shall be
cumulative and in addition to, and not in lieu of, any other remedies to which
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PharmaFrontiers may show itself justly entitled. Further, during any period in
which Employee is in breach of this covenant not to compete, the time period of
this covenant shall be extended for an amount of time that Employee is in
breach.
7. Inventions and Other Intellectual Property
7.1 Employee agrees to hold in complete trust for the benefit of
PharmaFrontiers, and to disclose promptly and fully to PharmaFrontiers in
writing, and hereby assigns, and binds Employee's heirs, executors,
administrators, and all legal representatives to assign, to PharmaFrontiers any
and all inventions, discoveries, ideas, concepts, improvements, copyrightable
works, biological materials, and other developments (all of the above are
collectively referred to as the "Developments") conceived, made, discovered or
developed by him, solely or jointly with others, during Employee's employment by
PharmaFrontiers, whether during or outside of usual working hours and whether on
PharmaFrontiers' premises or not, which relate in any manner to the past,
present or anticipated business of PharmaFrontiers. Any and all such
Developments shall be the sole and exclusive property of PharmaFrontiers,
whether patentable, copyrightable, or neither, and Employee agrees that Employee
will assist and fully cooperate in every way, at PharmaFrontiers' expense, in
securing, maintaining, and enforcing, for the benefit of PharmaFrontiers or its
designee, patents, copyrights or other types of proprietary or intellectual
property protection for such Developments in any and all countries. Employee
acknowledges and agrees that any and all such Developments conceived, created,
or authored by him within the scope of Employee's employment is a "work made for
hire," as defined by the federal copyright laws, and therefore all copyrights in
and to such works are and will be owned by PharmaFrontiers. To the extent that
Employee authors any copyrightable work in any medium during the Term of this
Agreement which relates or pertains in any way to PharmaFrontiers or any of the
operations or activities of either and which was not prepared within the scope
of Employee's employment, Employee hereby assigns all right, title, and
interest, including but not limited to all rights of copyright, in and to such
works to PharmaFrontiers. Within six months following the termination of
Employee's employment, and without limiting the generality of the foregoing, any
Development of the Employee relating to any PharmaFrontiers subject matter on
which Employee worked or was informed during Employee's employment by
PharmaFrontiers shall be conclusively presumed to have been conceived and made
prior to the termination of Employee's employment (unless the Employee clearly
proves that such Development was conceived and made following the termination of
Employee's employment), and shall accordingly belong, and be assigned, to
PharmaFrontiers and shall be subject to this Agreement.
7.2 Without limiting the foregoing, Employee agrees at the request of
PharmaFrontiers (but without additional compensation from PharmaFrontiers during
Employee's employment by PharmaFrontiers) to execute any and all papers and
perform all lawful acts which PharmaFrontiers deems necessary for the
preparation, filing, prosecution, and maintenance of applications for United
States and foreign letters patent, or for United States and foreign copyrights,
on the Developments, and to execute such instruments as are necessary or
convenient to assign to PharmaFrontiers, its successors, assigns or nominees,
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all of the Employee's right, title, and interest in the Developments and the
like, so as to establish, maintain or perfect, in PharmaFrontiers, its
successors, assigns or nominees, the entire right, title, and interest to the
Developments, and also to execute any instruments necessary or which
PharmaFrontiers may deem desirable it connection with any continuation, renewal
or reissue thereof, or in the conduct of any proceedings or litigation in regard
thereto.
7.3 All expenses incurred by the Employee by reason of the performance of
any of the obligations set forth in this Section on Inventions shall be borne by
PharmaFrontiers. Should the Employee's assistance be requested by
PharmaFrontiers after termination of employment, PharmaFrontiers would
compensate the Employee at a reasonable rate.
8. Conflicts of Interest
8.1 In keeping with Employee's fiduciary duties to PharmaFrontiers,
Employee agrees that Employee shall not, directly or indirectly, become involved
in any conflict of interest with reference to any transaction or opportunity
including PharmaFrontiers ("Conflict"), or upon discovery thereof, allow such a
Conflict to continue. Moreover, Employee agrees that Employee shall promptly
disclose to the Board of PharmaFrontiers any facts which might involve any
reasonable possibility of a Conflict. Employee shall maintain the highest
standards of conduct, and shall not do anything likely to injure the reputation
or goodwill of PharmaFrontiers, or embarrass or otherwise generate adverse
publicity for or bring unwanted attention to PharmaFrontiers.
8.2 It is agreed that any direct or indirect interest in, connection with,
or benefit from any outside activities, particularly commercial activities,
which interest might in any way adversely affect PharmaFrontiers or any of its
subsidiaries or affiliates, involves a possible Conflict. Circumstances in which
a Conflict on the part of Employee would or might arise, and which should be
reported immediately by Employee to an officer of PharmaFrontiers, include,
without limitation, the following: (a) ownership of a material interest in,
acting in any capacity for, or accepting directly or indirectly any payments,
services or loans from a supplier, contractor, subcontractor, customer or other
entity with which PharmaFrontiers does business; (b) misuse of information or
facilities to which Employee has access in a manner which will be detrimental to
PharmaFrontiers' interest; (c) disclosure or other misuse of information of any
kind obtained through the Employee's connection with PharmaFrontiers; (d)
acquiring or trading in, directly or indirectly, other properties or interests
connected with the design, manufacture or marketing of products designed,
manufactured or marketed by PharmaFrontiers; (e) the appropriation to the
Employee or the diversion to others, directly or indirectly, of any opportunity
in which it is known or could reasonably be anticipated that PharmaFrontiers
would be interested; and (f) the ownership, directly or indirectly, of a
material interest in an enterprise in competition with PharmaFrontiers or its
dealers and distributors or acting as a director, officer, partner, consultant,
employee or agent of any enterprise which is in competition with PharmaFrontiers
or its dealers or distributors.
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9. Activities Associated With Maintenance of Professional Status and
Community Activities
PharmaFrontiers will reimburse Employee for the costs of activities
associated with the maintenance of the Employee's professional status, including
the payment of licensing fees and required continuing education, expenses for
professional/network meetings, as well as community activities.
10. Prior Discoveries
Employee attaches hereto as Exhibit "B," concurrently with the execution
of this Agreement, a list and brief description of all unpatented inventions and
discoveries, if any exist, made or conceived by Employee prior to Employee's
employment with PharmaFrontiers and which are to be excluded from this
Agreement. If no such list is attached at the time of execution of this
Agreement, it shall be conclusively presumed that Employee has waived any right
Employee may have to any such invention or discovery which relates to
PharmaFrontiers' business.
11. Publicity
11.1 Employee agrees that PharmaFrontiers may use, and hereby grants
PharmaFrontiers the nonexclusive and worldwide right to use, Employee's name,
picture, likeness, photograph, signature, or any other attribute of Employee's
persona (all of such attributes are hereafter collectively referred to as
"Persona") in any media for any advertising, publicity or other purpose at any
time, either during or subsequent to Employee's employment by PharmaFrontiers.
Employee agrees that such use of Employee's Persona will not result in any
invasion or violation of any privacy or property rights Employee may have; and
Employee agrees that Employee will receive no additional compensation for the
use of Employee's Persona. Employee further agrees that any negatives, prints or
other material for printing or reproduction purposes prepared in connection with
the use of Employee's Persona by PharmaFrontiers shall be and are the sole
property of PharmaFrontiers.
11.2 Employee further agrees that at no time shall Employee write, author,
publish, distribute, or cause to be published or distributed any pictorial,
graphic, or literary works, such as but without limitation, books, articles,
stories, or pamphlets, in any medium of expression, tangible or intangible, that
relate, describe, or pertain in any way to PharmaFrontiers or to the operations,
activities, or employees of PharmaFrontiers without first obtaining the prior
written consent of the Board of Directors of PharmaFrontiers to do so and also
the prior written approval of the contents of any such work by the Board of
Directors of PharmaFrontiers.
12. Remedies
Employee and PharmaFrontiers agree that, because damages at law for any
breach or nonperformance of this Agreement by Employee, while recoverable, are
and will be inadequate, this Agreement may be enforced in equity by specific
performance, injunction, accounting or otherwise.
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13. Miscellaneous
13.1 This Agreement is made and entered into as of the Effective Date and
the rights and obligations of the parties hereto shall be binding upon the heirs
and legal representatives of the Employee and the successors and assigns of
PharmaFrontiers. This Agreement may be assigned by PharmaFrontiers but is
personal to the Employee and no rights, duties, and obligations of Employee
hereunder may be assigned.
13.2 No waiver or non-action with respect to any breach by the other party
of any provision of this Agreement, nor the waiver or non-action with respect to
any breach of the provisions of similar agreements with other employees shall be
construed to be a waiver of any succeeding breach of such provision, or as a
waiver of the provision itself.
13.3 Should any portions hereof be held to be invalid or wholly or
partially unenforceable, such holding shall not invalidate or void the remainder
of this Agreement. The portions held to be invalid or unenforceable shall be
revised and reduced in scope so as to be valid and enforceable, or, if such is
not possible, then such portions shall be deemed to have been wholly excluded
with the same force and effect as if it had never been included herein.
13.4 Employee's obligations under this Agreement to PharmaFrontiers shall
survive the termination, for whatever reason, of Employee's employment by
PharmaFrontiers.
13.5 This Agreement supersedes, replaces and merges any and all prior and
contemporaneous understandings, representations, agreements and discussions
relating to the same or similar subject matter as that of this Agreement between
Employee and PharmaFrontiers and constitutes the sole and entire agreement
between the Employee and PharmaFrontiers with respect to the subject matter of
this Agreement.
13.6 The laws of the State of Texas, excluding any conflicts of law rule
or principle that might otherwise refer to the substantive law of another
jurisdiction, will govern the interpretation, validity and effect of this
Agreement without regard to the place of execution or the place for performance
thereof, and PharmaFrontiers and Employee agree that the state and federal
courts in Xxxxxx County, Texas, shall have personal jurisdiction and venue over
PharmaFrontiers and Employee to hear all disputes arising under this Agreement.
This Agreement is to be at least partially performed in Xxxxxx County, Texas.
13.7 All notices and other communications required or permitted hereunder
or necessary or convenient in connection herewith shall be in writing and shall
be deemed to have been given when mailed by registered mail or certified mail,
return receipt requested, as follows:
If to PharmaFrontiers, to:
Xx. Xxxxxx X. Xxx
PharmaFrontiers Corporation
00000 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
If to Employee, to:
Xx. Xxxxx X. XxXxxxxxxx
00 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
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or to such other addresses as either party may designate by notice to the other
party hereto in the manner specified in this section.
13.8 This Agreement may not be changed or terminated orally, and no
change, termination or waiver of this Agreement or of any of the provisions
herein contained shall be binding unless made in writing and signed by both
parties, and in the case of PharmaFrontiers, by an authorized officer of
PharmaFrontiers. Any change or changes, from time to time, in Employee's salary
and/or duties shall not be, nor be deemed to be, a change, termination or waiver
of this Agreement or of any of the provisions herein contained.
PHARMAFRONTIERS CORPORATION EMPLOYEE
By: /s/ Xxxxxx Xxx By: /s/ Xxxxx X. XxXxxxxxxx
-------------------------- -----------------------------
Xxxxxx X. Xxx, President Xxxxx X. XxXxxxxxxx
