EXHIBIT 10.25
EXECUTION COPY
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated as of May 26, 1998, by
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and between SYNETIC, INC., a Delaware corporation (the "Company"), and XXXXXXX
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XXXXX ("Executive").
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WHEREAS, the Company desires to employ the Executive on a full-time
basis and the Executive desires to be so employed by the Company;
NOW, THEREFORE, in consideration of the mutual covenants in this
Agreement, the parties agree as follows:
1. Effectiveness of Agreement and Employment of Executive.
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1.1. Effectiveness of Agreement. This Agreement shall become
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effective as of May 26, 1998 (the "Effective Date").
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1.2. Employment by the Company. The Company hereby employs Executive
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as a senior officer of the healthcare communications business of the Company and
Executive hereby accepts such employment with the Company. Executive shall
report to the Chairman of the Board (the "Chairman") or Chief Executive Officer
(the "CEO") of the Company or their designee(s), any such designee being some
one who reports directly to the Chairman or the CEO, and perform such duties and
services for the Company and its subsidiaries and affiliates (such subsidiaries
and affiliates collectively, "Affiliates"), and at such locations, as may be
designated from time to time, by any such person. Executive shall use his best
and most diligent efforts to promote the interests of the Company and the
Affiliates, and shall devote all of his business time and attention to his
employment under this Agreement. Executive agrees to relocate to the proximity
of the Company's New Jersey headquarters and the Company agrees to reimburse all
reasonable expenses incurred in connection with such relocation. Executive also
agrees to relocate from the New Jersey area to any other location as may be
designated by the Board of Directors of the Company (the "Board") or the CEO, it
being understood that any such change in location shall be requested by the
Chairman or the CEO, in good faith and for a valid business purpose. The
Company agrees to reimburse all reasonable expenses incurred in connection with
any such relocation.
1.3. Confidentiality. (a) Executive understands and acknowledges that
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in the course of his employment, he will have access to and will learn
information that is proprietary to, or confidential to the Company and its
Affiliates that concerns the operation, methodology and plans of the Company and
its Affiliates, including, without limitation, business strategy and plans,
financial information, protocols, proposals, manuals, clinical procedures and
guidelines, technical data, computer source codes, programs, software, know-how
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specifications, copyrights, trade secrets, market information, Developments
(as hereinafter defined), information regarding acquisition and other strategic
partner candidates, and customer information (collectively, "Proprietary
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Information"). Executive agrees that, at all times (including following
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termination of this Agreement), he will keep confidential and will not disclose
directly or indirectly any such Proprietary Information to any third party,
except as required to fulfill his duties hereunder, and will not misuse,
misappropriate or exploit such Proprietary Information in any way. The
restrictions contained herein shall not apply to any information which Executive
can demonstrate (a) was already available to the public at the time of
disclosure, or subsequently becomes available to the public, otherwise than by
breach of this Agreement by Executive or (b) was the subject of a court order
for Executive to disclose. Upon any termination of this Agreement, Executive
shall immediately return to the Company all copies of any Proprietary
Information in his possession.
(b) Executive agrees that at no time during his employment by the
Company or thereafter, shall he make, or cause or assist any other person to
make, any statement or other communication to any third party which falsely
impugns or attacks, or is otherwise critical of, the reputation, business or
character of the Company, its Affiliates or any of their respective officers or
employees.
1.4. Restrictions on Solicitation. During the period beginning on
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the Effective Date and ending on the first anniversary of the date of cessation
of the employment of the Executive for any reason whatsoever (the "Customer Non-
Solicitation Restricted Period"), Executive shall not, directly or indirectly,
without the prior written approval of the Company, solicit or contact any
customer, or any prospective customer, of the Company or any of the Affiliates
for any commercial pursuit which is in competition with the Company or any of
the Affiliates, or that is contemplated from time to time by the Business Plan
(as defined below) or take away or interfere or attempt to interfere with any
custom, trade, business or patronage of the Company or any of the Affiliates.
During the period beginning on the Effective Date and ending on the second
anniversary of the cessation of the employment of the Executive for any reason
whatsoever ("the Employee Non-Solicitation Restricted Period," and, together
with the Customer Non-Solicitation Restricted Period the "Non-Solicit Restricted
Periods") Executive shall not, directly or indirectly, without the prior written
approval of the Company, solicit or induce, or attempt to solicit or induce, any
employees, agents or consultants of or to the Company or any of the Affiliates
to leave the employ of the Company or such Affiliate or do anything from which
Executive is restricted by reason of this Agreement nor shall Executive,
directly or indirectly, offer or aid others to offer employment to or interfere
or attempt to interfere with any employees, agents or consultants of the Company
or any of the Affiliates. For purposes of this Agreement, "Business Plan" shall
mean, at any point in time, the then current business plan of the Company and
any business plans of the Company in effect during the prior 18 months.
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1.5. Restrictions on Competitive Employment. During the period
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beginning on the Effective Date and ending on the first anniversary of the date
of cessation of the employment of the Executive for any reason whatsoever (the
"Non-Competition Restricted Period"), Executive shall not (as principal, agent,
employee, consultant or otherwise), anywhere in the United States, directly or
indirectly, without the prior written approval of the Company, (i) engage in
direct or indirect competition with the Company, (ii) conduct a business of the
type and character engaged in by the Company (or contemplated by the Business
Plan), or (iii) develop products or services competitive with those of the
Company (collectively, "Competitive Business"). Notwithstanding the foregoing,
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Executive may have an interest consisting of publicly traded securities
constituting less than 1 percent of any class of publicly traded securities in
any public company engaged in a Competitive Business so long as he is not
employed by and does not consult with, or become a director of or otherwise
engage in any activities for, such company.
1.6. Extension of Restricted Periods. Each of the Non-Solicitation
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Restricted Periods and the Non-Competition Restricted Period shall be extended
by the length of any period during which Executive is in breach of the terms of
this Section 1.
1.7. Assignment of Developments. All Developments that are at any
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time made, conceived or suggested by Executive, whether acting alone or in
conjunction with others, arising out of or as a result of Executive's
employment with the Company shall be the sole and absolute property of the
Company and the Affiliates, free of any reserved or other rights of any kind on
Executive's part. During Executive's employment and, if such Developments were
made, conceived or suggested by Executive during or as a result of Executive's
employment under this Agreement or any other employment with the Company or the
Affiliates, thereafter, Executive shall promptly make full disclosure of any
such Developments to the Company and, at the Company's cost and expense, do all
acts and things (including, among others, the execution and delivery under oath
of patent and copyright applications and instruments of assignment) deemed by
the Company to be necessary or desirable at any time in order to effect the full
assignment to the Company and the Affiliates of Executive's right and title, if
any, to such Developments. For purposes of this Agreement, the term
"Developments" shall mean all data, discoveries, findings, reports, designs,
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inventions, improvements, methods, practices, techniques, developments,
programs, concepts, and ideas, whether or not patentable, relating to the
present or planned activities, or future activities, or the products and
services of the Company or any of the Affiliates.
1.8. Remedies. Executive acknowledges and agrees that damages for a
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breach or threatened breach of any of the covenants set forth in Sections 1.1
through 1.7 will be difficult to determine and will not afford a full and
adequate remedy, and therefore agrees
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that the Company, in addition to seeking actual damages in connection therewith,
may seek specific enforcement of any such covenant in any court of competent
jurisdiction, including, without limitation, by the issuance of a temporary or
permanent injunction.
2. Compensation and Benefits.
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2.1. Salary. The Company shall pay Executive for services during the
term of this Agreement a base salary at the annual rate of $175,000.00 ("Base
Salary"). Any and all increases to Executive's Base Salary shall be determined
by the Board in its sole discretion. Such Base Salary shall be payable in equal
installments, no less frequently than monthly, pursuant to the Company's
customary payroll policies in force at the time of payment, less any required or
authorized payroll deductions. Executive may receive bonus compensation in
addition to his Base Salary. Whether Executive shall receive such bonus
compensation and the amounts, if any, that may from time to time be granted to
Executive shall be in the absolute discretion of the Board, whose determination
shall be conclusive.
2.2. Benefits. During the term of this Agreement, Executive shall be
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entitled to participate, on the same basis and at the same level as other
similarly situated executives of the Company, in any group insurance,
hospitalization, medical, health and accident, disability, fringe benefit and
tax-qualified retirement plans or programs or vacation leave of the Company now
existing or hereafter established to the extent that he is eligible under the
general provisions thereof.
2.3. Expenses. Pursuant to the Company's customary policies in force
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at the time of payment, Executive shall be promptly reimbursed, against
presentation of vouchers or receipts therefor, for all authorized expenses
properly and reasonably incurred by him on behalf of the Company or its
Affiliates in the performance of his duties hereunder.
3. Employment Period.
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Executive's employment under this Agreement shall commence as of the
Effective Date, and shall terminate on the fifth anniversary thereof (the
"Initial Employment Period"), unless terminated earlier pursuant to Section 4.
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Unless written notice of either party's desire to terminate this Agreement has
been given to the other party prior to the expiration of the Initial Employment
Period (or any annual renewal thereof contemplated by this sentence), the term
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of this Agreement shall be automatically renewed for successive one-year
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periods.
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4. Termination.
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4.1. Termination by the Company for Cause. (a) This Agreement and
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Executive's employment with the Company may be terminated at any time by the
Company for Cause. Upon such a termination, the Company shall have no
obligation to Executive other than the payment of Executive's earned and unpaid
compensation to the effective date of such termination.
(b) For purposes of this section of the Agreement, the term "Cause"
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shall mean any of the following:
1. A willful failure of Executive to perform his duties in any
material respect which failure is not cured by Executive within 20 days
following written notice from the Company detailing such failure;
2. Any willful misconduct by Executive relating, directly or
indirectly, to the Company or any of its Affiliates, which breach, if
susceptible to cure, is not cured by Executive within 20 days following
written notice from the Company detailing such breach;
3. Any breach by Executive of any material provision contained
in this Agreement, which breach, if susceptible to cure, is not cured by
Executive within 20 days following written notice from the Company
detailing such breach; or
4. Executive's conviction of a felony or crime involving moral
turpitude.
4.2. Permanent Disability. If during the term of this Agreement,
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Executive shall become ill, mentally or physically disabled, or otherwise
incapacitated so as to be unable regularly to perform the duties of his position
for a period in excess of 90 consecutive days or more than 120 days in any
consecutive 12 month period, then the Company shall have the right to terminate
this Agreement and Executive's employment with the Company upon written notice
to Executive. Upon such a termination, the Company shall have no obligation to
Executive other than (i) the payment of Executive's earned and unpaid
compensation to the effective date of such termination and (ii) as provided in
the Stock Option Agreement (as defined below).
4.3. Death. This Agreement shall be deemed terminated by the Company
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upon the death of Executive and the Company shall have no obligation to
Executive or
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Executive's estate other than (i) the payment of Executive's earned and unpaid
compensation to the effective date of such termination and (ii) as provided in
the Stock Option Agreement.
4.4. Termination by the Company Without Cause. This Agreement and
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Executive's employment with the Company may be terminated at any time by the
Company without Cause. If the Company terminates this Agreement and Executive's
employment without Cause (not including by notice of the Company pursuant to
Section 3 of its desire to not renew this Agreement), the Company shall have no
obligation to Executive other than (i) the payment of Executive's earned and
unpaid compensation to the effective date of such termination and (ii) if
Executive has relocated, at the request of the Company, from his current
residence located at the address set forth on the signature page hereof,(x) the
payment of a monthly severance payment equal to one twelfth (1/12th) of his then
applicable Base Salary, less all required payroll deductions for a period ending
one (1) year from the date of such termination, or until the occurrence of any
circumstances or event that would constitute Cause under Section 4.1 of this
Agreement, if sooner, and (y) if any portion of the Company Stock Option (as
defined in Section 5) remains unvested as of the date of such termination, the
Company Stock Option shall be deemed to have continued in accordance with its
terms, as specified in the Stock Option Agreement (as defined in Section
5)therefore, until 30 days following the date of the next annual vesting
thereunder.
4.5. Termination by the Executive For Cause. This Agreement and
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Executive's employment with the Company may be terminated by the Executive for
Executive Cause on 30 days written notice to the Company, which notice shall
detail the specific basis for such termination. The Company shall be given the
opportunity to cure the basis for such termination within such 30 day period.
For the purpose of this Section 4.5, the term "Executive Cause" means any of the
following: (1) a material breach by the Company of its obligations to the
Executive under this Agreement, which, if susceptible to cure, remains uncured,
(2) a material demotion of his position with the Company, and (3) if Executive
is required to relocate from the New Jersey area for other than a valid business
purpose of the Company. If the Executive terminates this Agreement and his
employment with the Company for Executive Cause after the expiration of the
Company's right to cure the basis for such termination without having cured it,
the Company shall have no other obligation to Executive except those obligations
the Company would have pursuant to Section 4.4 hereof if the Company had
terminated this Agreement and the Executive's employment without Cause.
4.6. Liquidated Damages. Executive acknowledges that any payments
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and benefits under Sections 4 and 5 resulting from a termination of this
Agreement and Executive's employment with the Company are in lieu of any and all
claims that the Executive may have against the Company (other than benefits
under the Company's employee benefit plans that by their terms survive
termination of employment and benefits under the Consolidated Omnibus
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Budget Reconciliation Act of 1985, as amended and rights to indemnification
under certain indemnification arrangements for officers of the Company), and
represent liquidated damages (and not a penalty). The Company may request that
the Executive confirm such acknowledgment in writing prior to the receipt of
such benefits.
5. Stock Option.
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Executive has been granted an option to purchase up to 190,000 shares
of the Company's common stock, par value $.01 per share (the Shares) pursuant
to the terms of a stock option agreement ("the Stock Option Agreement"), a copy
of which has been attached hereto as Exhibit A (the "Company Stock Option").
The Company Stock Option shall vest and become exercisable with respect to 20%
of the Shares on and after the first anniversary of the Effective Date and shall
vest and become exercisable as to an additional 20% of the Shares on and after
each of the second through fifth anniversaries of the Effective Date.
Notwithstanding the foregoing, all of the terms and conditions of the Company
Stock Option shall be governed exclusively by the express provisions of the
Stock Option Agreement to be executed by the Executive evidencing the grant of
such Company Stock Option.
6. Notices.
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Any notice or communication given by either party hereto to the other
shall be in writing and personally delivered or mailed by registered or
certified mail, return receipt requested, postage prepaid, to the following
addresses:
(a) if to the Company:
Synetic, Inc.
River Drive Center 2
000 Xxxxx Xxxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Telecopier No.: (000) 000-0000
Attention: General Counsel
(b) if to the Executive at the address set forth below.
Any notice shall be deemed given when actually delivered to such address, or two
days after such notice has been mailed or sent by Federal Express, whichever
comes earliest. Any person entitled to receive notice may designate in writing,
by notice to the other, such other address to which notices to such person shall
thereafter be sent.
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7. Miscellaneous.
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7.1 Representations and Covenants. In order to induce the
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Company to enter into this Agreement, the Executive makes the following
representations and covenants to the Company and acknowledges that the Company
is relying upon such representations and covenants:
(a) No agreements or obligations exist to which the Executive is a
party or otherwise bound, in writing or otherwise, that in any way interfere
with, impede or preclude him from fulfilling all of the terms and conditions of
this Agreement.
(b) The Executive, during the Employment Period, shall use his
best efforts to disclose to the Chairman of the Board in writing or by other
effective method any bona fide information known by him that he reasonably
believes would have any material negative impact on the Company or an Affiliate.
7.2. Entire Agreement. This Agreement and the agreements relating to
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the Company Stock Options contain the entire understanding of the parties in
respect of their subject matter and supersede upon their effectiveness all other
prior agreements and understandings between the parties with respect to such
subject matter.
7.3. Amendment; Waiver. This Agreement may not be amended,
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supplemented, canceled or discharged, except by written instrument executed by
the party against whom enforcement is sought. No failure to exercise, and no
delay in exercising, any right, power or privilege hereunder shall operate as a
waiver thereof. No waiver of any breach of any provision of this Agreement
shall be deemed to be a waiver of any preceding or succeeding breach of the same
or any other provision.
7.4. Binding Effect; Assignment. The rights and obligations of this
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Agreement shall bind and inure to the benefit of any successor of the Company by
reorganization, merger or consolidation, or any assignee of all or substantially
all of the Company's business and properties. The Company may assign its rights
and obligations under this Agreement to any of its Affiliates without the
consent of the Executive. Executive's rights or obligations under this
Agreement may not be assigned by Executive, except that the rights specified in
Section 4.3 shall pass upon the Executive's death to Executive's executor or
administrator.
7.5. Headings. The headings contained in this Agreement are for
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reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
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7.6. Governing Law; Interpretation. This Agreement shall be
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construed in accordance with and governed for all purposes by the laws and
public policy (other than conflict of laws principles) of the State of New
Jersey applicable to contracts executed and to be wholly performed within such
State.
7.7. Further Assurances. Each of the parties agrees to execute,
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acknowledge, deliver and perform, and cause to be executed, acknowledged,
delivered and performed, at any time and from time to time, as the case may be,
all such further acts, deeds, assignments, transfers, conveyances, powers of
attorney and assurances as may be reasonably necessary to carry out the
provisions or intent of this Agreement.
7.8. Severability. The parties have carefully reviewed the
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provisions of this Agreement and agree that they are fair and equitable.
However, in light of the possibility of differing interpretations of law and
changes in circumstances, the parties agree that if any one or more of the
provisions of this Agreement shall be determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the
provisions of this Agreement shall, to the extent permitted by law, remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Moreover, if any of the provisions contained in this Agreement are determined by
a court of competent jurisdiction to be excessively broad as to duration,
activity, geographic application or subject, it shall be construed, by limiting
or reducing it to the extent legally permitted, so as to be enforceable to the
extent compatible with then applicable law.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
SYNETIC, INC.
By:_________________________
Name:
Title:
EXECUTIVE
_____________________________
Xxxxxxx Xxxxx
_____________________________
Street
_____________________________
City, State, Zip Code
_____________________________
Telecopier No.
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