EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of February 15, 2004, by and between
InforMedix, Inc., a Maryland corporation with executive offices at Georgetowne
Office Park, 0000 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000-0000 (the "COMPANY"),
and Xxxxxxx X. Xxxxx, an individual residing at 0000 Xxxxx Xxxx Xxxx, Xxxxxxx,
Xxxxxxxx 00000 ("EXECUTIVE").
WITNESSETH:
WHEREAS, subject to the terms and considerations hereinafter set forth,
the Company wishes to employ Executive in the position set forth herein and
Executive wishes to accept such employment.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein set forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. EMPLOYMENT.
The Company hereby employs Executive and Executive hereby accepts such
employment, as an executive of the Company, subject to the terms and conditions
set forth in this Agreement.
2. TERM OF EMPLOYMENT.
Subject to the provisions for termination provided herein, the parties
hereto agree that the Executive shall be employed as an "at will" employee.
3. DUTIES.
Executive shall serve as Vice President of Sales and Marketing of the
Company and shall properly perform such duties as may be assigned to him from
time to time by the Company's President and Chief Operating Officer. For as long
as Executive shall remain an employee of the Company, Executive shall devote his
full attention and apply his best-efforts, energies and skills on a full-time
basis, to the business of the Company, and shall not be engaged in any other
business activity, whether or not such business activity is pursued for gain,
profit, or other pecuniary advantage, unless otherwise authorized by the
President and Chief Operating Officer of the Company. Subject to the provisions
of Section 7 herein, the foregoing restriction shall not be construed as
preventing Executive from investing his assets in such form or manner as will
not require any services on his part in the operation of the affairs of the
companies in which such investments are made.
4. COMPENSATION OF EXECUTIVE.
4.1 BASE SALARY. For all services rendered by Executive under this
Agreement, the Company shall pay Executive and Executive shall accept an annual
salary of One Hundred Sixty-Two Thousand ($162,000) Dollars ("BASE SALARY") to
be payable in 24 equal installments in accordance with Company policy. All
amounts payable hereunder shall be subject to all applicable withholding taxes.
The Company agrees to review Executive's Base Salary on an annual basis.
4.2 INCENTIVE COMPENSATION. The Company shall pay to Executive a quarterly
performance bonus in an amount equal to 4% of actual cash collected (after any
discounts, rebates, reallowances or similar charges) from customer accounts for
which Executive is directly responsible during the quarter up to targeted cash
collections of $2,000,000 for the year ending December 31, 2004 ("INCENTIVE
COMPENSATION"). During the year ending December 31, 2004, the Company agrees
that the minimum quarterly Incentive Compensation that Executive shall receive
is Five Thousand ($5,000) Dollars which will serve as an offset against all
performance bonuses in 2004. In the event that the Company shall collect cash in
excess of $2,000,000 in the year ending December 31, 2004, Executive shall be
entitled a discretionary bonus in an amount to be determined by the Compensation
Committee of the Board of Directors of the Company (the "BOARD OF DIRECTORS").
In addition to the above, should the Company hire a salesperson in 2004, then
Executive shall also receive 1% of cash collected attributable to that
salesperson's customer accounts. The Company agrees to review Executive's sales
targets and bonus percentages on an annual basis.
4.3 Executive shall be eligible to receive an additional bonus established
by the Compensation Committee of the Board of Directors for extraordinary
performance.
4.4 OMNIBUS STOCK OPTION PLAN. For as long as Executive shall remain an
employee of the Company, Executive shall be eligible to participate in the
Company's Omnibus Stock Option Plan (the "PLAN"). Executive acknowledges that as
of the date hereof, the Plan is insufficient to cover a grant of options to
Executive. The Board of Directors has recommended to the stockholders of the
Company that the Company increase the number of shares of common stock
authorized by the Company. Upon approval of this amendment to the Company's
Charter, the Compensation Committee of the Board of Directors will review the
Plan to increase the number of options to be included under the Plan. It is the
intention of the parties hereto that upon amendment of the Plan, Executive shall
be entitled to receive options to purchase up to 3% of the Company's current
outstanding Common Stock, vesting in equal installments of 25% per year over
four years on the each anniversary of the date of this Employment Agreement.
4.5 EXPENSES. For as long as Executive shall remain an employee of the
Company, the Company shall reimburse Executive for all reasonable and necessary
travel expenses and other disbursements incurred by Executive on behalf of the
Company in the performance of Executive's duties hereunder, consistent with the
Company's practice or written policy in effect with respect to the reimbursement
of expenses to senior executives of the Company. Such expenses shall be
reimbursed upon presentation of paid receipts and/or original invoices and such
other information as shall be required for tax purposes. Executive shall adhere
to all general Travel and Entertainment policies as may be established by the
Company from time-to-time. Any airfare in excess of $1000 for a single trip
shall be approved in advance by the President and COO.
4.6 BENEFITS. For as long as Executive shall remain an employee of the
Company, Executive shall be entitled to participate in any pension or profit
sharing plan, stock purchase plan, stock option plan, group life insurance plan,
hospitalization insurance plan, and medical services plan and other similar
plans, and all other benefits now or hereafter existing, afforded to other
senior executives. Executive acknowledges that as of the date hereto the Company
does not have a health plan for its employees. Until such time as the Company
establishes such a health plan, the Company agrees to reimburse Executive on a
monthly basis for the cost of Executive paying for his personal health insurance
only through his existing health plan, up to a reasonable amount to be approved
by the Company.
4.7 VACATION AND HOLIDAYS. Executive shall be entitled to a vacation of
two (2) weeks per year, during which period his Base Salary shall be paid in
full. In addition, Executive shall be entitled all national holidays recognized
by the Company. Executive shall take his vacation at such time or times as
Executive and the Company shall determine is mutually convenient. No portion of
any unused vacation time shall be carried over to a subsequent period unless
specifically authorized by the Company.
4.8 LAPTOP COMPUTER. For as long as Executive remains an employee of the
Company, the Company shall provide Executive with a laptop computer and other
appropriate tools and technology. Upon termination of Executive's employment,
Executive shall return such laptop computer and any tools and technology to the
offices of the Company.
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5. TERMINATION.
5.1 DEATH OR TOTAL DISABILITY.
(a) DEATH. This Agreement shall terminate upon the death of
Executive; provided, however, that the Company shall continue to pay to the
estate of Executive the Base Salary as set forth in Section 4.1 up to the end of
the month in which his death occurs, plus any Incentive Compensation earned
through the date of termination and all unpaid expense reimbursements as of such
date. The Company shall have no further obligation to Executive's estate.
(b) DISABILITY. If Executive is unable to perform his duties
hereunder by reason of physical or mental incapacity or infirmity (a
"DISABILITY") for a continuous period of three (3) months or any ninety (90)
business days during any period of two hundred fifty (250) continuous business
days, then Executive shall be "DISABLED" for purposes of this Agreement and the
period of his Disability as provided above shall be referred to herein as the
"DISABILITY PERIOD." The existence of a Disability hereunder shall be determined
by a licensed physician selected by the Company, and Executive hereby consents
to an examination by such physician for such purpose. During the Disability
Period, the Company shall continue to pay Executive his Base Salary and any
Incentive Compensation earned hereunder; provided, however, that such payments
shall be reduced by the amount of any disability income payments Executive
receives during the Disability Period under any policy carried by the Company of
which Executive is the beneficiary. The Company shall have the right to
terminate this Agreement and Executive's employment hereunder for a Disability
at any time after the end of the Disability Period. The Company shall pay
Executive his Base Salary until the date of termination (the date after the end
of the Disability Period), plus any Incentive Compensation earned through the
date of termination and all unpaid expense reimbursements as of such date.
5.2 TERMINATION FOR CAUSE; EXECUTIVE'S RESIGNATION.
(a) CAUSE. The Company shall have the right to terminate Executive's
employment for Cause (as hereinafter defined) at any time, which termination
shall be effective immediately upon the Company giving notice to Executive
setting forth in reasonable detail the grounds therefore. For purposes of this
Agreement, any of the following actions or events shall constitute grounds for
termination of Executive's employment for "CAUSE":
(i) Executive's neglect or refusal to perform, or if he
otherwise fails to perform, his duties as an employee of the
Company, including, without limitation, failure to perform
such duties as are delegated to him by the President and Chief
Operating Officer of the Company;
(ii) any other conduct constituting a breach of this Agreement
or of any code of conduct heretofore or hereafter adopted by
the Company;
(iii) Executive's conviction (including a conviction on a nolo
contendere plea) of a felony or misdemeanor (other than minor
traffic offenses);
(iv) any willful, intentional, or grossly negligent act having
the effect of injuring Executive's reputation or the
reputation or business of the Company; or
(v) any other malfeasance, misfeasance or nonfeasance by
Executive relative to or in connection with the performance of
his duties hereunder (including, without limitation,
Executive's inability to perform his duties hereunder as a
result of chronic alcoholism or drug addiction).
(b) RESIGNATION. Executive shall have the right to terminate this
Agreement and his employment thereunder for any reason, upon thirty (30) days'
prior written notice to the Company.
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(c) PAYMENT UPON TERMINATION FOR CAUSE OR RESIGNATION. In the
event Executive is discharged for Cause or in the event Executive resigns (other
than pursuant to Section 5.3(b) hereof), the Company shall pay to Executive,
within forty-five (45) days after termination for Cause or resignation, his Base
Salary and any Incentive Compensation earned through the date of notice of
termination and all unpaid expense reimbursements as of such date. Executive
hereby acknowledges that upon termination of his employment for Cause or upon
his resignation, he shall have no right to receive any other payments or
benefits provided for under this Agreement.
5.3 Upon termination under sections 5.1 or 5.2 above, the Company shall
have the right, but not the obligation, to redeem any outstanding stock owned by
Executive, and/or his family or affiliates, at a price determined by the fair
market value of the stock on the date of termination, within 60 days of the date
of termination.
5.4 TERMINATION WITHOUT CAUSE;
(a) WITHOUT CAUSE. The Company shall have the right to terminate
Executive's employment without Cause, other than for death or a Disability, at
any time upon ninety (90) days' prior written notice thereof to Executive, with
an additional thirty (30) days' notice for each year of service up to a maximum
of six months (the "Severance Period"). Executive shall continue to be paid his
base salary as severance compensation during the Severance Period, and shall
cooperate with the Company during the Severance Period to provide an orderly
transfer of Executive's responsibilities and customer accounts.
(b) PAYMENT UPON TERMINATION WITHOUT CAUSE. If Executive's
employment is terminated by the Company without Cause and other than as a result
of Executive's death or Disability, then, and in any such event, the Company
shall pay Executive, his Base Salary and any Incentive Compensation earned
through the date of notice of termination and all unpaid expense reimbursements
as of such date. Executive hereby acknowledges that upon termination of his
employment, he shall have no right to receive any other payments or benefits
provided for under this Agreement.
6. CONFIDENTIAL INFORMATION. Executive recognizes that he has and will continue
to have access to secret and confidential information regarding the Company or
any of its subsidiaries or affiliated companies, including but not limited to
information relating sales, strategies, customers, formulas, processes, methods,
or ideas, belonging to or relating to the business of the Company or any of its
subsidiaries or affiliated companies (the "CONFIDENTIAL INFORMATION"). Executive
acknowledges that such Confidential Information is of great value to the
Company, is the sole property of the Company, and has been and will be acquired
by him in confidence. In consideration of the obligations undertaken by the
Company herein, Executive shall not at any time, during or after his employment
hereunder, reveal, divulge or make known to others or use to the detriment of
the Company, any such Confidential Information. The provisions of this Section 6
shall survive Executive's termination of employment hereunder.
7. COVENANTS AND RESTRICTIONS.
7.1 COMPETITION. Executive recognizes that the services to be performed by
him hereunder are special, unique and extraordinary. The parties confirm that it
is reasonably necessary for the protection of the Company that Executive agree,
and accordingly, Executive does hereby agree that, except as provided in Section
7.3 hereof, he shall not, directly or indirectly, at any time during the
Restricted Period within the Restricted Area (as such terms are defined in
Section 7.4 hereof), engage in any business which is competitive with the
business of the Company or any of its subsidiaries or affiliated companies,
either on his own behalf or as an officer, director, stockholder, partner,
principal, trustee, investor, consultant, associate, employee, owner, agent,
creditor, independent contractor, co-venturer of any other business, firm,
corporation, partnership or other entity or in any other relationship or
capacity.
7.2 SOLICITATION. Executive hereby agrees that he will not, directly or
indirectly, for or on behalf of himself or any other business, firm,
corporation, partnership or other entity, at any time during the Restricted
Period (i) solicit on behalf of a competitor any past or present customer of the
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Company or any of its subsidiaries or affiliated companies, or (ii) solicit,
employ or engage, or cause, encourage or authorize, directly or indirectly, to
be employed or engaged, for or on behalf of himself or any other business, firm,
corporation, partnership or other entity, any employee or agent of the Company
or any of its subsidiaries or affiliated companies.
7.3 EXCEPTIONS. This Section 7 shall not be construed to prevent Executive
from owning, directly and indirectly, in the aggregate, an amount not exceeding
4.9% of the issued and outstanding voting securities of any class of any
corporation whose voting capital stock is traded on a national securities
exchange or in the over-the-counter market.
7.4 CERTAIN DEFINITIONS. The term "RESTRICTED PERIOD" as used in this
Section 7, shall mean the period of Executive's actual employment hereunder plus
twenty-four (24) months after the date Executive is no longer employed by the
Company. The term "RESTRICTED AREA" as used in this Section 7 shall mean
anywhere in the world.
7.5 SURVIVAL. The provisions of this Section 7 shall survive the
termination of Executive's employment hereunder.
8. REASONABLENESS OF COVENANTS. Executive acknowledges that he has carefully
read and considered all the terms and conditions of this Agreement, including
the restraints imposed upon him pursuant to Sections 6 and 7 hereof. Executive
agrees that said restraints are necessary for the reasonable and proper
protection of the Company and its subsidiaries and affiliates, and that each and
every one of the restraints is reasonable in respect to subject matter, length
of time, geographic area and otherwise. Executive further acknowledges that, in
the event any provision of Sections 6 and 7 hereof shall be determined by any
court of competent jurisdiction to be unenforceable by reason of its being
extended over too great a time, too large a geographic area, too great a range
of activities or any other reason, such provision shall be deemed to be modified
to permit its enforcement to the maximum extent permitted by law.
9. INSURANCE. The Company may, from time to time, apply for, purchase and
maintain, in its own name and at its own expense, life, health, accident,
disability or other insurance upon Executive in any sum or sums that it may deem
necessary to protect its interests, and Executive agrees to aid and cooperate in
all reasonable respects with the Company in procuring any and all such
insurance, including, without limitation, submitting to the usual and customary
medical examinations, and by filling out, executing and delivering such
applications and other instruments in writing as may be reasonably required by
an insurance company or companies to which an application or applications for
such insurance may be made by or for the Company. In order to induce the Company
to enter into this Agreement, Executive represents and warrants to the Company
that to the best of his knowledge Executive is insurable at standard (non-rated)
premiums.
10. MISCELLANEOUS.
10.1 ENFORCEMENT OF COVENANTS. The parties hereto agree that Executive is
obligated under this Agreement to render personal services during the Term of a
special, unique, unusual, extraordinary and intellectual character, thereby
giving this Agreement peculiar value, and in the event of a breach of any
provision of this Agreement by Executive, the injury or imminent injury to the
value and goodwill of the Company's business could not be reasonably or
adequately compensated in damages in an action at law. Executive therefore
agrees that the Company, in addition to any other remedies available to it,
shall be entitled to seek specific performance, preliminary and permanent
injunctive relief or any other equitable remedy against Executive, without the
posting of a bond, in the event of any breach or threatened breach by Executive
of any provision of this Agreement, including, but not limited to, the
provisions of Sections 6 and 7 hereof. Without limiting the generality of the
foregoing, if Executive breaches any provision of Sections 6 and 7 hereof, such
breach will entitle the Company to enjoin Executive from disclosing any
Confidential Information to any competing business, to enjoin such competing
business from receiving or using any Confidential Information, and/or to enjoin
Executive from rendering personal services to or in connection with such
competing business. The rights and remedies of the parties hereto are cumulative
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and shall not be exclusive, and each party shall be entitled to pursue all legal
and equitable rights and remedies and to secure performance of the obligations
and duties of the other under this Agreement, and the enforcement of one or more
of such rights and remedies by a party shall in no way preclude such party from
pursuing, at the same time or subsequently, any and all other rights and
remedies available to it.
10.2 SEVERABILITY. The invalidity or partial invalidity of one or more
provisions of this Agreement shall not invalidate any other provision of this
Agreement. If any portion or provision of this Agreement shall to any extent be
declared illegal or unenforceable by a court of competent jurisdiction, the
remainder of this Agreement, or the application of such portion or provision in
circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law.
10.3 ASSIGNMENTS. Neither Executive nor the Company may assign or delegate
any of their rights or duties under this Agreement without the express written
consent of the other, except the Company may transfer its rights and duties in
connection with a sale of all or substantially all of its assets or in
connection with any merger, consolidation or other similar business combination.
10.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes and embodies
the full and complete understanding and agreement of the parties with respect to
Executive's employment by the Company, supersedes all prior understandings and
agreements, whether oral or written, between Executive and the Company, and
shall not be amended, modified or changed except by an instrument in writing
executed by Executive and by an expressly authorized officer of the Company.
10.5 WAIVER. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of either party to
require the performance of any term or obligation of this Agreement, or the
waiver by either party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
10.6 BINDING EFFECT. This Agreement shall inure to the benefit of, be
binding upon and enforceable against, the parties hereto and their respective
successors, heirs, beneficiaries and permitted assigns.
10.7 HEADINGS. The headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.8 NOTICES. Any and all notices, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given when personally delivered, sent by
registered or certified mail, return receipt requested, postage prepaid, or by
private overnight mail service (e.g., Federal Express) to the party at the
address set forth above or to such other address as either party may hereafter
give notice of in accordance with the provisions hereof. Notices shall be deemed
given on the sooner of the date actually received or the third business day
after sending.
10.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the law of the State of Maryland, without giving effect to such
State's conflicts of laws principles.
10.10 COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
10.11 CONSTRUCTION. The language used in this Agreement is the language
chosen by the parties to express their mutual intent, and no rule of strict
construction will be applied against either party.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
INFORMEDIX HOLDINGS, INC.
By: /s/ Xxxxx Xxxx
----------------------------------
Name: Xxxxx X. Xxxx
Title: Chief Executive Officer and Chairman
EXECUTIVE
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
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