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EXHIBIT 10.9
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("AGREEMENT"), by and between Medical Science
Systems, Inc., a Texas Corporation (the "CORPORATION"), and Xxxxxxx X. Xxxxxxx
("EMPLOYEE"), is effective this 1st day of January, 1996 ("EFFECTIVE DATE"). The
Corporation and Employee are hereinafter sometimes referred to, individually and
collectively, as a "PARTY" or the "PARTIES."
1 TERM. The term of employment of Employee hereunder shall commence as of the
date hereof and shall continue in full force and effect until the fifth
anniversary of the date hereof (the "INITIAL TERM"), and shall automatically
continue thereafter for successive 12 month periods unless terminated at the end
of such Initial Term or any subsequent 12 month term after the Initial Term by
either party hereto on not less than six months prior written notice to the
other party (the "EMPLOYMENT TERM"). The term of this Agreement shall be
coincident with the Employment Term.
2 DUTIES. Employee shall serve as Chief Scientific Officer of Product Discovery
of the Corporation or such other position as may be agreed between Employee and
the Corporation, and shall perform such duties, services and responsibilities as
are consistent with such position. Employee's duties, services and
responsibilities will be performed under the overall supervision of, the
President of the Corporation. Employee shall also be entitled to serve as a
director of the Corporation.
During the Employment Term, Employee shall devote his full business time,
attention and skill to the performance of such duties, services and
responsibilities, and will use his reasonable efforts to promote the interests
of the Corporation. Employee will not, without the prior written approval of the
Board of Directors, engage in any other business activity which would interfere
with the performance of his duties, services and responsibilities hereunder or
which is in violation of policies established from time to time by the
Corporation. Personal passive investments and personal business affairs not
inconsistent with this Agreement shall not be prohibited.
3 COMPENSATION. In consideration of the performance by Employee of Employee's
obligations during the Employment Term (including any services as an officer,
director, employee, member of any committee
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of the Corporation or any of its subsidiaries, or otherwise), the Corporation
will pay Employee a salary (the "Salary") at an annual rate of $250,000 per year
during the Employment Term.
The Salary shall be payable in accordance with the normal payroll practices of
the Corporation then in effect. The Salary, and all bonuses or other forms of
compensation paid to Employee hereunder, shall be subject to all applicable
taxes required to be withheld by the Corporation pursuant to federal, state or
local law. Employee shall be solely responsible for income taxes imposed on
Employee by reason of any cash or non-cash compensation and benefits provided
hereunder.
In addition to the payment of the Salary, Employee shall be entitled to
participate in any employee benefit plans then in effect for similarly situated
employees to the extent Employee meets the eligibility requirements for any such
plan, including group insurance, retirement, supplemental pension, bonus plan,
stock option or awards plans; provided, however, that the Corporation shall
provide health or medical insurance benefits to Employee and his spouse or any
dependent of Employee as provided by any health and medical insurance plans
sponsored for employees of the Corporation in general without any eligibility
requirements or waiting periods as permitted under those plans and provided
further that, at Employee's option, Employee shall be entitled to maintain his
current insurance policy and the Corporation shall reimburse or pay directly
Employee's insurance premiums. Employee may switch to the Corporation's plan at
any time.
4 WORKING CONDITIONS. Employee shall be provided with workspace, office
equipment, plain paper fax machine, computer equipment, furniture, supplies, and
such other facilities and services as determined by the Corporation as is
reasonably necessary for the performance of his duties.
5 EXPENSES. The Corporation shall reimburse Employee for all normal and
reasonable business expenses upon presentation of an approved expense report and
related receipts ("Expense Report"). Such reimbursable expenses will include
Employee's business airfare, travel, lodging, car rentals, automobile, meals,
long-distance telephone expenses, subscription dues, car telephone, home
business telephone, home facsimile, mobile telephone, facsimile expenses (or
similar technology as it becomes available) and reasonable client entertainment.
Employee shall be reimbursed for such reasonable business expenses upon the
verification and approval of such expenses. The Corporation shall either approve
or disapprove such expense report no later than thirty (30) days after the
submission of such expense report by Employee, and such report
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shall be deemed approved unless expressly disapproved by Corporation within the
thirty (30) day period. The Corporation agrees that the accumulation of frequent
flyer mileage benefits shall be credited to Employee personally.
6 MISCELLANEOUS. The Corporation agrees to purchase professional books,
professional journals and publications in an amount that Employee and the
Corporation reasonably agree, for use by Employee during the term of this
Agreement. Such books, publications and journals shall be considered and shall
remain the property of the Corporation. The Corporation shall also pay
continuing education and certification fees of Employee.
7 LIFE INSURANCE. During the Employment Term, the Corporation shall pay the
premium on a policy of life insurance with a value of $1,000,000, naming the
Employee's spouse as beneficiary. At the end of the term of the Agreement all
rights under such policy (including any cash surrender value) shall belong to
Employee; prior thereto, they shall belong to the Corporation.
8 AUTOMOBILE REIMBURSEMENT. In recognition of Employee's need for an automobile
for business purposes, the Corporation shall reimburse Employee Six Hundred
Dollars ($600.00) per month for automobile expenses, including automobile
payments, maintenance, gasoline and car telephone costs incident thereto.
9 VACATION. Employee shall be entitled to four (4) weeks vacation annually,
without loss of compensation, during Employee's full time employment under the
terms of this Agreement. The times for these vacation periods shall be those
most convenient to the Corporation's business, as may be orally agreed upon by
the Corporation. In the event Employee's total accrued vacation is in excess of
twelve (12) weeks vacation at the end of any calendar year (December 31st),
accrual of vacation shall cease.
10 LEAVE OF ABSENCE. Employee shall be entitled to take an unpaid leave of
absence (no compensation or benefits under this Agreement) only if approved by
the Corporation.
11 HOLIDAYS. Employee shall be entitled to all holidays designated by the
Corporation, without loss of compensation.
12 TERMINATION OF AGREEMENT.
12.1 TERMINATION WITHOUT CAUSE. Employee's employment with the
Corporation shall be terminated and, except as provided below, this Agreement
shall terminate as follows:
12.1.1 Whenever the Corporation and Employee shall
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mutually agree, in writing, to termination; or
12.1.2 Upon the death of Employee; or
12.1.3 If (i) Employee is absent from work for 180 calendar days
in any twelve month period by reason of illness or incapacity (whether physical
or otherwise) or (ii) an independent
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medical examiner reasonably determines that Employee is unable to perform his
duties, services and responsibilities hereunder by reason of illness or
incapacity (whether physical or otherwise) for a total of 180 calendar days in
any twelve-month period during the Employment Term ("Disability"), the
Corporation shall not be obligated to pay Employee any compensation (Salary or
bonus) for any period in excess of such days; furthermore, any such payments
shall be reduced by any amount Employee is entitled to receive as a result of
such disability under any plan provided through the Corporation or under state
or federal law. If the independent medical examiner certifies that Employee can
work part-time after the expiration of the 180 day period, the Corporation shall
reasonably accommodate Employee to allow him to work part-time. Compensation
will be reduced proportionately. All of Employee's non-compete obligations shall
survive any period of disability.
12.1.4 The existence of a disabling mental or physical condition
and the date upon which such condition preventing performance of such duties
commenced shall be determined by an independent medical examiner. In the event
either party requests to have an independent medical examiner determine whether
Employee is disabled, then the Corporation and Employee agree to meet and confer
in good faith with one another to mutually select an independent medical
examiner. The Corporation or Employee, whichever elects to request an
independent medical examiner, shall give written notice of that election to the
other party. The parties, or their legal representatives, agree to meet, at the
offices of the Corporation, within ten (10) days of the notice of election to
select an independent medical examiner. In the event that after meeting and
conferring in good faith, the Corporation and Employee are unable to agree on
the selection of an independent medical examiner within five (5) days, one
medical examiner shall be selected by the Corporation and one medical examiner
shall be selected by Employee, which two (2) medical examiners shall select a
third medical examiner, and the third medical examiner shall determine, within
fifteen (15) days after his or her appointment, if Employee is disabled. In the
event that Employee (or Employee's legal representative) refuses to meet
promptly with the Corporation to confer in good faith, or Employee (or
Employee's legal representative) fails to select a medical examiner within said
five (5) day period, the Corporation's selection of a medical examiner shall be
binding.
In accordance with the foregoing, Employee (or Employee's legal representative)
shall cooperate fully and comply with any requests made by the Corporation
and/or the medical examiner in allowing said medical examiner to make a
determination whether or not Employee is disabled and the estimated commencement
date of
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Disability.
12.2 TERMINATION FOR CAUSE. Notwithstanding anything herein set forth in
this Agreement to the contrary, the Corporation may, at any time, terminate this
Agreement for "cause." For purposes of this Agreement, "cause" shall include,
but not be limited to, the occurrence of any of the following events:
12.2.1 Employee has committed an act of theft or
embezzlement from or fraud on the Corporation;
12.2.2 Employee shall materially breach any of the terms,
covenants and conditions of this Agreement, which shall include but not be
limited to, any violation of the restrictions against competition contained in
Section 14;
12.2.3 Employee shall have committed an act of sexual
harassment or discrimination;
12.2.4 Employee shall have been convicted of a felony and
sentenced to more than fourteen (14) days in jail;
12.2.5 Employee shall fail or refuse to abide by the lawful
directions set by the Board of Directors.
Notwithstanding the foregoing, in the event the Corporation decides to
terminate Employee under this Paragraph 12.2.5, then the Corporation shall first
give Employee written notice of the breach of this Agreement, specifying the
details thereof and shall give Employee thirty (30) days to cure ("Cure Period")
said conduct. If the conduct is not cured within said thirty (30) day period,
the Corporation may terminate this Agreement at the expiration of the Cure
Period. The Corporation may immediately terminate this Agreement for violation
under Sections 12.2.1, 12.2.3 and 12.2.4.
12.3 CONTINUING OBLIGATIONS. Employee shall be only entitled to a
pro-rata share of basic compensation and benefits, up to the Termination Date,
based on the ratio that the number of days that Employee has performed in
accordance with the terms and provisions of this Agreement in the relevant term
year that bears to three hundred sixty-five (365).
13 EMPLOYEE'S DUTIES UPON TERMINATION. In the event of termination of working
relationship with the Corporation, Employee agrees to deliver promptly to the
Corporation all Corporation owned equipment, notebooks, documents, memoranda,
reports, files, manuals, models, notes, logs, technical data, software, samples,
books, correspondence, lists, or other written or graphic records,
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keys, credit cards and the like, relating to the Corporation's business, which
are or have been in his possession or under his control.
14 COMPETITIVE ACTIVITIES. During the Employment Period, Employee agrees that
Employee will not, directly or indirectly, work for, provide consulting services
on his own behalf for, own an interest in (excluding a passive investment in a
public company where employee owns less than 5% of the stock of such company),
operate, join, control, or participate in, or be connected as an officer,
employee, agent, independent contractor, partner, shareholder, or principal of
any corporation, partnership, proprietorship, firm, association, or person
marketing products, goods, equipment, and/or services which directly or
indirectly competes with the Corporation's services or products or the
Corporation's business, without the prior written consent of Corporation.
15 NOTICES. Unless otherwise specifically provided, all notices and demands
required to be given hereunder shall be deemed to be duly given at the time of
delivery if such notice or demand is personally delivered, or forty-eight (48)
hours after mailing if such notice or demand is deposited with the United States
Postal Service, postage prepaid, for mailing via registered or certified mail,
return receipt requested, to the Secretary of the Corporation and to Employee at
the addresses set forth below. Such addresses may only be changed by giving
written notice of such change to all of the other Parties hereto.
To Corporation: President
Medical Science Systems, Inc.
A Texas Corporation
0000 XxxXxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
To Employee: Xxxxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Any notice so given by mail or delivery service shall be deemed
effectively given on the date actually received. Any Party may by like written
notice to the other specify a different address for notice purposes.
16 ENTIRE AGREEMENT. This Agreement and the Confidentiality Agreement described
in Paragraph 16 contain the entire understanding between and among the Parties
hereto, and supersedes any prior written or oral agreement or negotiations
between or
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among the Parties concerning the subject matter contained herein. There are no
representations, agreements, arrangements, or understanding, oral or written,
between or among the Parties hereto, relating to the subject matter contained in
this Agreement, which are not fully expressed herein.
17 AMENDMENTS. This Agreement shall not be modified or amended except by a
writing signed by Employee and a duly empowered officer of the Corporation.
18 BINDING EFFECT. Subject to the restrictions against transfer or assignment
herein contained, the provisions of this Agreement shall inure to the benefit of
and shall be binding upon the heirs and legatees, successors-in-interest,
personal representatives, estates and assigns of each of the Parties hereto.
19 CAPTIONS. Captions at the beginning of each numbered section of this
Agreement are solely for the convenience of the Parties and shall not be deemed
part of the context of this Agreement.
20 DEFINITIONS.
20.1 GENDER. As used herein, the masculine, feminine and neuter gender,
and the singular or plural number, shall each be deemed to include the others
whenever the context so indicates.
20.2 LEGAL REPRESENTATIVE. As used herein, the term "legal
representative" shall refer to the executor, administrator, attorney-in-fact,
guardian or conservator of the estate of Employee, Employee's surviving spouse,
if applicable, and any trustee or successor.
21 WAIVER. No waiver of any breach or default of this Agreement by any Party
hereto shall be considered to be a waiver of any other breach or default of this
Agreement.
22 FURTHER ACTS. Each Party hereto agrees to perform any further acts and to
execute and deliver any further documents which may be reasonably necessary to
carry out the provisions of this Agreement.
23 ATTORNEYS' FEES. Should any litigation or arbitration be commenced between
the Parties hereto or their personal representatives concerning any provision of
this Agreement or the rights and duties of any person in relation thereto, the
Party substantially prevailing in such litigation or arbitration shall be
entitled, in addition to such other relief that may be granted, to all costs,
expenses, expert witness fees, etc. and reasonable
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attorneys' fees.
24 CHOICE OF LAW; VENUE. This Agreement has bee construed under and governed in
accordance with the laws of the State of California. Venue shall be in Orange
County, California.
25 COUNTERPARTS. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but such counterparts, when taken together,
shall constitute but one Agreement.
26 SEVERABILITY. Should any one or more of the provisions of this Agreement be
determined to be illegal or unenforceable, all other provisions of this
Agreement shall be given effect separately from the provisions so determined and
the other provisions shall not be affected by the illegality or
unenforceability.
27 BINDING ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof (whether arising out of contract, tort,
statute or any legal or equitable theory, including, without limitation, the
issue of arbitrability), shall be settled by binding arbitration administered by
the American Arbitration Association in accordance with its Commercial
Arbitration Rules, except as expressly modified in this Agreement, and judgment
on the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. The arbitration shall be conducted in Orange County,
California. The parties shall have the right to conduct discovery as if the
dispute were being litigated in the California Superior Court. Without limiting
the generality of the foregoing, the limitations on discovery contained in
Section 1283, 1283.50, and 1283.1 of the California Code of Civil Procedure
shall not apply. The only exception to the preceding provisions of this
paragraph 27 is that either party shall have the absolute right, at any time
prior to the entry of the award by the arbitrator, to seek any provisional
remedy including but not limited to temporary injunctive relief (without waiver
of any other rights or remedies under this Agreement) against the other party or
any third party from any court of competent jurisdiction on such grounds as
would exist for the granting of such provisional remedy in the absence of this
Agreement.
28 INDEMNITY. The Corporation shall hold harmless and indemnify Employee against
any and all liabilities, costs, damages, expenses and attorney fees resulting
from or attributable to any and all acts or omissions of Employee relating to or
arising out of Employee's employment with the Corporation provided that Employee
has acted in good faith and in a manner which Employee reasonably
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believed to be in, or not opposed to, the best interests of the Corporation.
Except as provided herein, Employee shall not be required to indemnify or
reimburse the Corporation or any insurer for any such liabilities, costs,
damages, expenses and attorneys' fees, relating to or arising out of actions of
Employee undertaken in good faith and in a manner which Employee reasonably
believed to be in, or not opposed to, the best interests of the Corporation.
29 SUCCESSORS AND ASSIGNS. Except as otherwise provided in this Agreement, the
provisions hereof shall be binding upon and shall inure to the benefit of the
Parties hereto, their personal representatives, heirs, executives,
administrators, successors and/or permitted assigns.
30 ASSIGNMENT. Neither this Agreement nor the rights, duties or obligations
arising hereunder shall be assignable by Employee.
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31 CONFIDENTIALITY AND INVENTION ASSIGNMENT AGREEMENT (THE "CONFIDENTIALITY
AGREEMENT"). Employee will be required to sign and abide by the Corporation's
Confidentiality Agreement attached hereto, which the Corporation requires all of
its employees to sign.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the day and year first above written.
DATED: January 1, 1996 MEDICAL SCIENCE SYSTEMS, INC.,
A TEXAS CORPORATION
By:
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Xxxx X. Xxxxx
President
By:
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Xxxxxxx X. Xxxxxx
Secretary
EMPLOYEE
By:
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Xxxxxxx X. Xxxxxxx
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