EXHIBIT 10.23
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of October 23,
2000 (the "Effective Date"), by and between XxXxxxxx.xxx, Inc., a Delaware
corporation (the "Corporation"), and Xxxxx Xxxxxx (the "President").
WITNESSETH:
WHEREAS, the Corporation and the President desire to set forth the
terms and conditions on which, from and after the Effective Date, (i) the
Corporation shall employ the President, (ii) the President shall render services
to the Corporation, and (iii) the Corporation shall compensate the President for
such services;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants herein contained, the parties agree as follows:
1. EMPLOYMENT DUTIES
(a) The Corporation engages and employs the President, and the
President hereby accepts engagement and employment, as President and Chief
Operating Officer of the Corporation. The President shall perform such services
and duties as are normally incident to such position and are commensurate with
the President's background, education and professional standing, all as the
Board of Directors of the Corporation shall reasonably determine.
(b) The President shall perform his duties hereunder from the
Corporation's executive office in the Cincinnati, Ohio area, but understands
that travel outside of the Cincinnati, Ohio area is likely to be required in
connection with the performance of his duties.
(c) The President shall devote such time and efforts to the Corporation
as required for the proper discharge of his duties and responsibilities under
this Agreement.
2. TERM
The President's employment hereunder shall be for an initial period of
four (4) years commencing on the Effective Date and continuing through the
fourth anniversary thereof, unless sooner terminated as hereinafter provided
(the "Initial Term"). Thereafter, the term and each extension will be
automatically extended for successive one-year periods, unless the Corporation
gives written notice of termination to the other party at least 60 days prior to
the expiration of the current term.
3. COMPENSATION
(a) Subject to the terms and conditions of this Agreement, as
compensation for the performance of his duties on behalf of the Corporation, the
President shall be compensated as follows:
(i) The Corporation shall pay the President a base salary at the
rate of $175,000 per annum payable no less frequently than
monthly in arrears on or before the first day of each
succeeding month (the "Base Salary").
(ii) Promptly at the end of each three-month period beginning on
the Effective Date, the President shall receive an advance in
the amount of $12,500 (each a "Quarterly Advance," and
collectively the "Quarterly Advances"). The President shall
be eligible to receive an annual performance bonus targeted
at $75,000 (the "Cash Bonus"; the Base Salary and the Cash
Bonus shall be referred to collectively herein as the "Total
Annual Cash Compensation"), based upon the achievement of
certain objectives to be agreed upon by the Corporation's
Board of Directors and the President within the three-month
period following the Effective Date. Promptly following each
anniversary of the Effective Date, the Board of Directors
shall determine the amount of the President's Cash Bonus, and
such Cash Bonus shall be paid to the President, less the
Quarterly Advances paid to the President during that year. In
the event that the Quarterly Advances for that year exceed
the President's Cash Bonus for that year, the President shall
promptly repay the difference between such amounts to the
Corporation.
(iii) The Corporation shall reimburse the President for all
reasonable and customary relocation expenses, including, but
not limited to transaction costs in connection with the sale
of his present home and purchase of a new home, moving and
temporary housing. The President shall also receive
additional cash compensation to cover the tax liability
resulting the payment of such relocation expenses.
(iv) Promptly following the Effective Date, the President shall
receive from the Corporation an incentive option to purchase
600,000 shares of common stock of the Corporation (the
"Option Shares") at an exercise price of $2.00 per share,
which is not less than the fair market value of the Option
Shares on the date of grant as determined by the Board of
Directors of the Corporation. Such option shall have a term
of ten years and vest over four (4) years subject to the
terms contained in the Corporation's stock option plan and
the stock option agreement attached as Exhibit A hereto.
(v) The Corporation shall withhold all applicable federal, state
and local taxes, social security and workers' compensation
contributions and such other amounts as may be required by
law or agreed upon by the parties with respect to the
compensation payable to the President pursuant to this
paragraph 3(a).
(b) The Corporation shall reimburse the President for all reasonable
expenses incurred by the President in furtherance of the business and affairs of
the Corporation, including reasonable travel and entertainment, against receipt
by the Corporation of appropriate vouchers or other proof of the President's
expenditures and otherwise in accordance with such Expense Reimbursement Policy
as may from time to time be adopted by the Board of Directors of the
Corporation.
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(c) The President shall be entitled to accrue paid vacation at the rate
of fifteen (15) business days per annum, plus all the appropriate Corporation
holidays.
(d) The Corporation shall pay the insurance premiums on a $500,000 life
insurance policy and a long-term disability policy for the benefit of the
President, which the President has already obtained. The Corporation shall also
provide to the President medical, dental and disability benefits under the
Corporation's existing benefit plans after his relocation to Cincinnati, Ohio.
Until such time as the President shall relocate, the Corporation shall reimburse
the President in full for all medical and dental insurance payments (including
COBRA) and any other benefit payments agreed to in advance by the Corporation.
In addition, the Corporation shall make available to the President the
opportunity to participate in a 401(k) program, if the Corporation begins such a
program. The President shall also be entitled to all other benefits generally
made available to the Corporation's executive officers from time to time.
4. REPRESENTATIONS AND WARRANTIES BY THE PRESIDENT AND CORPORATION
The President hereby represents and warrants to the Corporation as
follows:
(a) Neither the execution and delivery of this Agreement nor the
performance by the President of his duties and other obligations hereunder
violate or will violate any statute, law, determination or award, or conflict
with or constitute a default under (whether immediately, upon the giving of
notice or lapse of time or both) any prior employment agreement, contract, or
other instrument to which the President is a party or by which he is bound.
(b) The President has the full right, power and legal capacity to enter
and deliver this Agreement and to perform his duties and other obligations
hereunder. This Agreement constitutes the legal, valid and binding obligation of
the President enforceable against him in accordance with its terms. No approvals
or consents of any persons or entities are required for the President to execute
and deliver this Agreement or perform his duties and other obligations
hereunder.
The Corporation hereby represents and warrants to the President as
follows:
(a) The Corporation is duly organized, validly existing and in good
standing under the laws of the State of Delaware, with all requisite corporate
power and authority to own its properties and conduct its business in the manner
presently contemplated.
(b) The Corporation has full power and authority to enter into this
Agreement and to incur and perform its obligations hereunder.
(c) The execution, delivery and performance by the Corporation of this
Agreement does not conflict with or result in a breach or violation of or
constitute a default under (whether immediately, upon the giving of notice or
lapse of time or both) the certificate of incorporation or by-laws of the
Corporation, or any agreement or instrument to which the Corporation is a party
or by which the Corporation or any of its properties may be bound or affected.
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5. NON-COMPETITION
(a) The President understands and recognizes that his services to the
Corporation are special and unique and agrees that during the term of this
Agreement and during the NonCompete period, he shall not in any manner,
directly, on behalf of himself or any person, firm, partnership, joint venture,
corporation or other business entity ("Person"), enter into or engage in any
business or business activity relating to pharmaceutical marketing, either as an
individual for his own account, or as a partner, joint venturer, executive,
agent, consultant, salesperson, officer, director or shareholder of a Person
operating or intending to operate within the area that the Corporation is, at
the date of termination, conducting its business, provided, that, the President
may be a stockholder of a publicly-held company which is or may be a competitor
of the Company (the "Competitor") if the President's ownership of such
Competitor does not exceed two percent (2%) of the issued and outstanding shares
of the Competitor.
(b) During the Non-Compete Period, the President shall not interfere
with or disrupt or attempt to disrupt the Corporation's business relationship
with any of its customers, affirmatively suggest or propose that any of the
employees of the Corporation leave such employment, or retain, help retain, or
participate in retaining employees of the Corporation.
(c) The Non-Compete Period shall mean the period of time beginning on
the date of the President's termination and ending twelve (12) calendar months
following such termination.
(d) In the event that the President breaches any provisions of this
Paragraph 5 or there is a threatened breach of this Paragraph 5, then, in
addition to any other rights which the Corporation may have, the Corporation
shall be entitled, without the posting of a bond or other security, to
injunctive relief to enforce the restrictions contained herein. In the event
that an actual proceeding is brought in equity to enforce the provisions of this
Paragraph 5, the President shall not argue as a defense that there is an
adequate remedy at law nor shall the Corporation be prevented from seeking any
other remedies which may be available.
6. INVENTIONS ASSIGNMENTS; CONFIDENTIAL INFORMATION
All inventions, improvements, ideas, names, patents, trademarks,
copyrights, and innovations (including all data and records pertaining thereto),
whether or not reduced to writing, which the President may originate, make or
conceive during the term of his employment and for a period of three (3) months
thereafter, either alone or with others and whether or not during working hours
or by the use of facilities of the Corporation, and which relate to or are or
may likely be useful in connection with the business or contemplated business of
the Corporation shall be the exclusive property of the Corporation.
The President agrees that during the course of his employment or at any
time after termination, he will not disclose or make accessible to any other
person, the Corporation's products, services and technology, both current and
under development, promotion and marketing programs, lists, trade secrets and
other confidential and proprietary business information of the Corporation or
any of its clients. The President agrees: (i) not to use any such information
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for himself or others; and (ii) not to take any such material or reproductions
thereof from the Corporation's facilities at any time during his employment by
the Corporation, except as required in the President's duties to the
Corporation. The President agrees immediately to return all such material and
reproductions thereof in his possession to the Corporation upon request and in
any event upon termination of employment. The foregoing notwithstanding, the
parties acknowledge and agree that the confidential and proprietary information
of the Corporation and/or its clients shall not include the following: (a)
information already in the public domain or hereafter disclosed to the public
through no fault of the President; including but not limited to knowledge of (i)
the business of other companies in the field, (ii) general business methods and
structures useful in operating pharmaceutical marketing companies, (iii) the
status of patents and other technology in the field other than those of the
Corporation; (b) general knowledge about the field of pharmaceutical marketing
obtained through the President's academic experience, or (c) specific ideas and
projections of the field of pharmaceutical marketing's evolution.
Except with prior written authorization by the Corporation, the
President agrees not to disclose or publish any of the confidential, technical
or business information or material of the Corporation, its clients or any other
party to whom the Corporation owes an obligation of confidence, at any time
during or after his employment with the Corporation.
7. TERMINATION
(a) Subject to Paragraph 2 above, the President's employment hereunder
shall begin on the Effective Date and shall continue thereafter until terminated
upon the first to occur of the following events:
(i) the death of the President or the Disability of the
President, as defined below; or
(ii) termination by the Board of Directors of the Corporation,
either with or without Cause (as defined below); or
(iii) voluntary resignation by the President after providing the
Corporation with at least thirty days prior written notice.
(b) Upon termination pursuant to clause (a)(i) above, an additional
37,500 Option Shares shall vest. "Disability" of the President shall be deemed
to have occurred if the President, by virtue of any injury, sickness, or
physical condition is unable to perform substantially and continuously the
duties assigned to him hereunder for more than sixty (60) consecutive or
non-consecutive days out of any consecutive twelve (12) month period, exclusive
of any accrued vacation.
(c) Upon termination during the Initial Term or any renewal Term
pursuant to clause (a)(ii) for any reason other than for Cause (as defined
below), (i) the Corporation shall offer the President a six (6) month consulting
agreement (the "Consulting Agreement") commencing immediately upon the date of
the President's termination (the "Termination Date"), and (ii) so long as the
President has been employed by the Corporation for more than six months at the
time of the Termination Date, the number of Option Shares equal to that which is
to vest at the next scheduled vesting date, shall vest. During the term of the
Consulting Agreement, the President
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shall be compensated based upon the Total Annual Cash Compensation (as adjusted
for such six month period). In addition, during the term of the Consulting
Agreement, the President shall be entitled to all health and other benefits
described in paragraph 3(d) of this Agreement unless the President becomes
entitled to comparable health and other benefits provided by a new employer or
contractor at such new employer or contractor's expense. The President shall
have no duty to mitigate the Corporation's obligations hereunder by seeking any
other comparable employment or consulting arrangements during the term of the
Consulting Agreement. If during such term the President becomes entitled to
health and other benefits provided by a new employer or contractor at such new
employer or contractor's expense, the President agrees to inform the Corporation
promptly of such entitlement and to cooperate with the Corporation in
terminating the President's coverage under the Corporation's benefit plans.
(d) Upon termination by the Corporation during the Initial or any
renewal Term pursuant to clause (a)(ii) with Cause or upon the voluntary
resignation of the President pursuant to clause (a)(iii), such termination shall
be effective immediately or on the effective date of the President's notice, as
the case may be, and the President will be paid a portion of the Total Annual
Cash Compensation due to the Termination Date, which has not been paid to him.
(e) In addition to the provisions of Section 7(c), if within one year
following a Change in Control (i) the President is terminated by the Corporation
without Cause, or (ii) the President voluntarily resigns following a substantial
diminution in his responsibilities, the Corporation shall offer to extend the
Consulting Agreement for an additional three-month period, such that the total
term of the Consulting Agreement provided for in Section 7(c) is nine months.
For purposes of this Agreement, "Change in Control" shall mean (i) the sale by
the Corporation of all, or substantially all, of its assets; (ii) the
acquisition by a person (or group of related persons) of fifty percent or more
of the Corporation's outstanding stock, or (iii) the merger or consolidation of
the Corporation with, or into, another company where the outstanding shares of
the Corporation immediately prior to such merger or consolidation represent or
are converted into or exchanged for securities which represent fifty percent or
less of the voting power of the surviving or resulting entity.
(f) For purposes of this Agreement, "Cause" shall mean the unlawful
conduct of the President constituting a felony under the law or dishonest
conduct of the President involving moral turpitude and causing material harm to
the Corporation, willful, reckless or grossly negligent misconduct or
insubordination which is or is reasonably likely to be injurious to the
Corporation, monetarily or otherwise, continuing after written notice thereof by
the Board of Directors or a material breach of any of the President's
obligations (not occasioned by the President's death or Disability) hereunder
after written notice by the Corporation and failure to cure within 30 days of
such notice.
8. NOTICES
Any notice or other communication under this Agreement shall be in
writing and shall be deemed to have been given upon receipt by the other party.
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9. SEVERABILITY OF PROVISIONS
If any provision of this Agreement shall be declared by a court of
competent jurisdiction to be invalid, illegal or incapable of being enforced in
whole or in part, the remaining conditions and provisions or portions thereof
shall nevertheless remain in full force and effect and enforceable to the extent
they are valid, legal and enforceable, and no provision shall be deemed
dependent upon any other covenant or provision unless so expressed herein.
10. ENTIRE AGREEMENT; MODIFICATION
This Agreement contains the entire agreement of the parties relating to
the subject matter hereof, and the parties hereto have made no agreements,
representations or warranties relating to the subject matter of this Agreement
which are not set forth herein. No modification of this Agreement shall be valid
unless made in writing and signed by the parties hereto.
11. BINDING EFFECT
The rights, benefits, duties and obligations under this Agreement shall
inure to, and be binding upon, the Corporation, its successors and assigns, and
upon the President and his legal representatives. This Agreement constitutes a
personal service agreement, and the performance of the President's obligations
hereunder may not be transferred or assigned by the President.
12. NON-WAIVER
The failure of either party to insist upon the strict performance of
any of the terms, conditions and provisions of this Agreement shall not be
construed as a waiver or relinquishment of future compliance therewith, and said
terms, conditions and provisions shall remain in full force and effect. No
waiver of any term or condition of this Agreement on the part of either party
shall be effective for any purpose whatsoever unless such waiver is in writing
and signed by such party.
13. governing law; waiver of jury trial
This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the Commonwealth of Massachusetts without regard to
principles of conflict of laws. The parties irrevocably waive all right to a
trial by jury in any suit, action, or other proceeding hereafter instituted by
or against such party in respect of its obligations hereunder or the
transactions contemplated hereby.
14. ATTORNEYS FEES, COSTS.
In the event a party breaches this Agreement, the breaching party shall
pay all costs and attorneys' fees incurred by the other party in connection with
such breach, whether or not any litigation is commenced.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXXXXXXX.XXX, INC.
By: /s/ C. Xxxxxx Xxxxxx
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Title: Chief Executive Officer
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/s/ Xxxxx Xxxxxx
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