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Exhibit 10(a)
EXECUTIVE EMPLOYMENT AGREEMENT
AGREEMENT dated as of April 1, 1997 (the "Commencement Date") between
NetMed, Inc., an Ohio corporation, with its principal offices located at 000
Xxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxx 00000 hereinafter the "Company"), and
Xxxxx X. Xxxxxxxx, residing at 0000 Xxxxxxxx Xxxxx, Xxxxxx, Xxxx 00000
("Executive").
RECITALS
A. Executive was a founder of the Company and has served as its
President and a director since it was organized in 1989.
B. The Company desires to assure itself of the continued services of
Executive, on the terms and conditions hereinafter set forth.
STATEMENT OF AGREEMENT
In consideration of the foregoing, and of their mutual promises
contained herein, and intending to be legally bound thereby, the parties agree
as follows:
Section 1. Definitions. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Affiliate" shall mean a corporation which, directly or indirectly,
controls, is controlled by or is under common control with the Company, and for
purposes hereof, "control" shall mean the ownership of 20% or more of the voting
shares of the corporation in question.
"Basic Salary" shall have the meaning assigned to it in Section 5 of
this Agreement.
"The Business" shall mean the business conducted by the Company in the
past and on the date of execution of this Agreement, including business
activities under investigation or in developmental stages, all other business
activities which flow therefrom by a reasonable expansion of the present
activities of the Company or any Affiliate, and all business activities which
may be developed by the Company or any Affiliate during the Term.
"Commencement Date" shall be the effective date of this Agreement, as
stated in the introductory paragraph.
"Confidential Information" shall include, without limitation by reason
of specification, any information, including, without limitation, trade
"know-how," trade secrets, customer lists, pricing policies, operational
methods, methods of doing business, technical processes, formulae, designs and
design projects, inventions, research projects, and other business affairs of
the Company, which is or are designed to be used in or are or may be useful in
connection with the business of the Company or any Affiliate, or which in the
case of any of these entities, results from any of their research or
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development activities, and which (i) is private or confidential in that it is
not generally known or available to the public, except as the result of
unauthorized disclosure by or information supplied by Executive, or (ii) which
gives the Company an opportunity or the possibility of obtaining an advantage
over competitors who may not know or use such information or who are not
lawfully permitted to use the same.
"Death/Disability Benefit" shall mean an amount equal to the amount of
Basic Salary payable to Executive during the year in which he dies or becomes
disabled; provided, however, that the Death/Disability Benefit shall be reduced
by any amount to be received by Executive or his designated beneficiary under
life or disability insurance policies, the premiums for which are paid for by
the Company.
"Employment Year" shall mean each twelve-month period, or part thereof,
during which Executive is employed hereunder, commencing on the Commencement
Date or on April 1 of any subsequent calendar year, the first such subsequent
Employment Year being the twelve-month period which will begin on April 1, 1998.
"Incentive Bonus" shall have the meaning assigned to it in Section 6.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether Federal,
state, county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
"Restricted Period" shall mean the term of employment of Executive
under this Agreement or any extension thereof and the twenty-four-month period
thereafter; provided, however, that the Restricted Period shall terminate
immediately upon the occurrence of any termination of the employment of
Executive under Sections 9.4, 9.5 or 9.6 of this Agreement.
"Subsidiary" shall mean a corporation, 50% or more of the outstanding
voting shares of which is owned or controlled directly or indirectly by the
Company.
"Term" shall mean the term of employment of Executive under this
Agreement.
"Termination Date" shall have the meaning assigned to it in Section 3.
Wherever from the context it appears appropriate, each word or phrase
stated in either the singular or the plural shall include the singular and the
plural, and each pronoun stated in the masculine, feminine or neuter gender
shall include the masculine, feminine and neuter.
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Section 2. Employment and Duties of Executive.
2.1. Employment; Title; Duties. The Company hereby employs Executive,
and Executive hereby accepts appointment as, and his election as, the President
and Chief Executive Officer of the Company. In such capacity, Executive shall
render such services as are necessary and desirable to protect and advance the
best interests of the Company, acting in all instances under the supervision of
and in accordance with the policies set by the Board of Directors.
As President and Chief Executive Officer, Executive shall have general
executive authority over the management of the Company, subject to the direction
and control of the Board of Directors, including but not limited to the
authority to employ and terminate employees, to sign agreements and otherwise
commit the Company contractually, and to expend corporate funds for corporate
purposes.
2.2. Place of Employment. The principal place of employment of
Executive shall be within a twenty mile radius of Dublin, Ohio or such other
location as is consented to by Executive. It is however understood and agreed
that Executive may be required, in connection with the performance of his
duties, to work from time to time at other locations designated by the Board of
Directors or as required in connection with the Business of the Company. When
required to travel to and/or spend time at such other locations, Executive's
reasonable traveling and temporary living expenses shall be reimbursed to him by
the Company, upon his submittal of written expense reports, supported by
appropriate documentation and subject to the general reimbursement policies of
the Company applicable to executive officers.
2.3. Facilities. The Company shall provide the Executive with a fully
furnished office and secretarial assistance, and the facilities of the Company
shall be generally available to the Executive in the performance of his duties
pursuant to this Agreement, it being understood and contemplated by the parties
that all equipment, supplies and office personnel required in the performance of
the Executive's duties under this Agreement shall be supplied by the Company.
2.4. Performance of Duties. Executive shall devote substantially his
full working time, attention and efforts to the performance of his duties as an
executive of the Company, including any duties as are assigned him from time to
time by the Board of Directors. During the term of this Agreement, Executive
shall not engage in or become employed, directly or indirectly, in the
commercial or professional business of any other Person, without the prior
written consent of the Board of Directors of the Company, nor shall he act as a
consultant to or provide any services to, whether on a remunerative basis or
otherwise, the commercial or professional business of any other Person, without
such written consent, which, in both instances, may be given or withheld by the
Board of Directors in its absolute discretion.
2.5. Services to Subsidiaries. During the term of this Agreement,
Executive shall also accept election or appointment, and serve, during all or
any part of the Term, as an officer and
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director of any Subsidiary of the Company, and perform the duties appropriate
thereto, without additional compensation other than as set forth in this
Agreement.
Section 3. Term of Employment.
The employment of Executive pursuant to this Agreement shall commence
as of the Commencement Date and end on the earlier of (i) March 31, 2000, or
(ii) the first date on which such employment is terminated in accordance with
Section 9 hereof (the "Termination Date").
Section 4. Compensation and Benefits.
The Company shall pay Executive as compensation for all of the services
to be rendered by him hereunder during the Term, and in consideration of the
various restrictions imposed upon Executive during the Term and the Restricted
Period, and otherwise under this Agreement, the Basic Salary and other benefits
as provided for and determined pursuant to Sections 4 to 8, inclusive, of this
Agreement.
Section 5. Basic Salary.
The Company shall pay Executive, as compensation for all of the
services to be by him rendered hereunder during the Term, a minimum annual base
salary of $225,000.00 (the "Basic Salary"), which may be increased, but not
decreased, from time to time by the Board of Directors (or its Compensation
Committee). Such Basic Salary shall be payable in accordance with the regular
payroll practices of the Company for executives, less such deductions or amounts
as are required to be deducted or withheld by applicable laws or regulations and
less such other deductions or amounts, if any, as are authorized by Executive.
Section 6. Incentive Bonus. Within 60 days after the last day of each
Employment Year, the Company shall pay Executive as additional compensation (the
"Incentive Bonus") an amount up to a maximum of 100% of the Basic Salary for
such Employment Year, to be determined according to reasonable criteria
established by the Board of Directors (or its Compensation Committee), after
consultation with Executive, at the beginning of such Employment Year.
Section 7. Additional Benefits. The Company shall provide the following
additional benefits to Executive during the Term:
(i) payment of an automobile allowance in the amount of $1,000
per month;
(ii) payment of premiums on a term insurance policy or
policies on Executive's life with a minimum aggregate face amount of
$1,000,000, such policies to be owned by the Executive, it being is
understood that the Company shall report the amount of such premiums to
the Internal Revenue Service in accordance with the Internal Revenue
Code and the Regulations issued thereunder as income payable to
Executive;
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(iii) participation on an equitable basis in all group life,
medical, hospitalization, accident/disability insurance plans,
retirement plans, health and other benefit programs offered by the
Company to any of its executive employees;
(iv) payment of reasonable country club dues and related
business entertainment expenses of Executive;
(v) reimbursement of all ordinary and necessary travel,
entertainment and other business expenses incurred by the Executive in
the performance of his duties hereunder, in accordance with reporting
and reimbursement policies established by the Board of Directors
applicable to executive officers;
(vi) four weeks vacation with pay in each Employment Year,
subject to reasonable policies of the Company with respect to carryover
of unused vacation time or pay from year to year; and
(vii) participation in a non-qualified executive retirement
plan with terms reasonably acceptable to the Executive and the Board of
Directors of the Company.
Section 8. Grant of Stock Options.
8.1. Grant. Pursuant to the terms of the Company's Amended and Restated
1995 Stock Option Plan (the "Plan") the Company hereby grants to Executive
("Optionee") an option (the "Option") to purchase 150,000 of the Company's no
par value common shares ("Common Shares"). The Option shall be an Nonstatutory
Stock Option as defined in the Plan. The right to acquire such Common Shares
pursuant to the Option shall vest at the rate of 50,000 shares for each
Employment Year during the Term when Executive shall be in the employ of the
Company or any successor in interest thereto, on the last day of the relevant
Employment Year. The exercise price for the 50,000 shares vesting in the first
Employment Year shall be $6.94 per share, for the 50,000 shares vesting in the
second Employment Year shall be $10.00 per share, and for the 50,000 shares
vesting in the third Employment Year shall be $12.00 per share. Executive may
exercise said Option, in whole or in part, at any time or from time to time, but
only with respect to stock the option rights to which have previously vested in
him hereunder, and only on or prior to April 1, 2007. Other terms and conditions
of the Option (including without limitation provisions relating to
transferability, manner of exercise, sale of the Option shares, termination of
the Option, and adjustment of the number of Common Shares subject to the Option)
shall be as provided in the Plan to the extent not otherwise inconsistent with
this Agreement.
8.2. Further Provisions for Termination of Option. Executive's Option
rights hereunder shall expire, to the extent not theretofore vested in Executive
under Section 8.1, in the event of voluntary termination of employment by
Executive under Section 9.7, or in the event of the Company's termination of
Executive's employment pursuant to Section 9.3 hereof. However such
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expiration or termination shall not derogate from Executive's rights with
respect to any portion of the Option which has previously vested in him pursuant
to Section 8.1.
8.3. Reservation of Stock. The Company shall at all times prior to the
expiration of the Option reserve sufficient common shares as are subject to the
Option.
8.4. Restriction with Respect to Stock. The Company shall use its best
efforts to register the common shares issuable upon exercise of the Option under
the Securities Act of 1933 (the "Act") on Form S-8 (or any successor form for
registration of shares issuable pursuant to stock option or similar employee
benefit plans) and to maintain the effectiveness of such registration during the
term of the Option. If despite the best efforts of the Company the common shares
of issuable upon any exercise of the Option are not registered under the Act at
the time of exercise, then, unless the said shares have previously, or will
simultaneously or immediately thereafter be registered under the Act, the person
exercising the Option shall, as a condition of its exercise, furnish the Company
with a written statement signed by him representing and agreeing (i) that he is
purchasing the stock subject to this Option for investment and not with a view
to a distribution, (ii) that he will not offer, sell, pledge or otherwise
transfer the shares acquired through the exercise of this Option, without having
first obtained and delivered to Company an opinion of counsel satisfactory to
the Company to the effect that such transfer will not be in violation of the
Act, or a letter from the staff of the Securities and Exchange Commission to the
effect that no action will be taken or recommended by such staff in the event of
such transfer, and (iii) that the Company is authorized to inscribe on all share
certificates issued upon the exercise of the Option a legend referring to the
provisions of this paragraph.
Section 9. Termination of Employment.
9.1. Death. If Executive dies during the Term, (i) his employment under
this Agreement shall automatically terminate on the date of his death, and (ii)
within sixty (60) days of his death, the Company shall pay his designated
beneficiary any unpaid portion of his Basic Salary through the date of death,
any accrued vacation pay, reimbursement for previously unreimbursed business
expenses, and an amount equal to the Death/Disability Benefit. Executive agrees
to cooperate with the Company fully and promptly in applying for any insurance
which the Company may elect to obtain to insure the Death/Disability Benefit. If
Executive dies during the Term, his rights to receive his Incentive Bonus
hereunder for any Employment Year which has ended shall remain vested, but his
right to receive his Incentive Bonus for the Employment Year in which he has
died shall be prorated to the date of his death. If Executive dies during the
Term, the Option granted to him under Section 8 of this Agreement shall be fully
vested as of the date of his death.
9.2. Disability. If, during the Term, Executive becomes physically or
mentally disabled, whether totally or partially, so that he is unable to perform
substantially all his services hereunder for (i) a period of six (6) consecutive
months, or (ii) for shorter periods aggregating six (6) months during any twelve
(12) month period, the Company may, at any time after the last day of the sixth
consecutive month of disability, or after the day on which the shorter periods
of disability shall have
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equaled an aggregate of six (6) months, terminate Executive's employment by
written notice to him. Executive's employment, Basic Salary and benefits
hereunder shall continue during any period of disability until written notice of
termination is provided under this Section 9.2. The date on which Company sends
written notice of termination under this Section 9.2 shall be the Termination
Date hereunder. In case of any dispute as to whether or not Executive is
disabled within the meaning of this Section 9.2, the determination of disability
is to be made by a licensed physician selected by the Board of Directors of the
Company and acceptable to Executive, in his reasonable judgment, which
physician's decision shall be final and binding on the parties hereto. In the
event Executive's employment is terminated pursuant to this Section 9.2, the
Company shall pay him the Death/Disability Benefit. If Executive's employment is
terminated under this Subsection 9.2, his right to receive his Incentive Bonus
hereunder for any Employment Year which has ended shall remain vested, but his
right to receive his Incentive Bonus for the year in which he is terminated
shall be prorated to the Termination Date, and if Executive shall have no
further right to receive Incentive Bonus except as stated hereinabove. In
addition, the Option granted to Executive pursuant to Section 8 hereof shall be
deemed to have become fully vested in him pursuant to and subject to the
provisions of said Section.
9.3. Termination for Good Cause. (a) Except as otherwise provided in
this Agreement, the Company may terminate the employment of the Executive
hereunder only for good cause and upon written notice.
(b) As used in this Section 9.3, "good cause" shall include:
(i) the Executive's is formally charged with a felony (other
than a traffic offense), that in the reasonable good faith judgment of the Board
of Directors, results in material damage to the Company or its reputation, or
would materially interfere with the performance of Executive's obligations under
this Agreement;
(ii) acts by Executive of fraud, embezzlement, theft or other
material dishonesty directed against the Company;
(iii) the breach by Executive of any material obligation to
the Company under this Agreement which remains uncorrected after written notice
of such breach to the Executive and a reasonable opportunity to cure;
(iv) the Executive's willful and persistent failure to take
actions permitted by law and necessary to implement directives of the Board of
Directors which have been communicated to him in writing, provided that minutes
of a Board of Directors meeting attended in its entirety by the Executive shall
be deemed communicated in writing to the Executive;
(v) any condition which either results from the Employee's
substantial dependence, as reasonably determined in good faith by the Board of
Directors, on alcohol, or on any narcotic drug or other controlled or illegal
substance; but if such determination is disputed by the
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Executive, the Company and the Executive agree to abide by the diagnosis of a
physician selected by the Board of Directors from a list of three physicians
provided by Executive, and Executive hereby consents to the release to the Board
of Directors of such diagnosis and any associated test results.
(c) The date of the written notice provided under Section 9.3(a) shall
be the Termination Date. If Executive's employment is terminated for good cause
under this Section 9.3, then Executive shall be entitled to receive only the
following payments: any portion of his Basic Salary and benefits accrued to the
Termination Date and not theretofore paid to him (including vacation pay); any
Incentive Bonus to which he is entitled for any completed Employment Year under
this Agreement which has not theretofore been paid to him; and the right to
exercise any portion of the Option granted to him hereunder which has previously
vested in him under the provisions of Section 8, plus reimbursement for any
expenses of Executive which are reimbursable under this Agreement, which
expenses have been incurred prior to the Termination Date and not previously
reimbursed. Except as set forth in the immediately preceding sentence, all of
Executive's rights to compensation hereunder shall be terminated as of the
Termination Date.
9.4. Termination Other Than for Good Cause. In the event the Company
terminates the employment of Executive other than pursuant Sections 9.2, or 9.3,
the Company shall provide the Employee with at least two (2) weeks' prior
written notice of termination, which notice shall state a Termination Date.
Following such termination, the Company shall continue to pay Executive his
Basic Salary and provide health insurance benefits as provided in this Agreement
for a period of eighteen (18) months from the Termination Date, and shall
promptly reimburse any previously unreimbursed business expenses. Executive's
right to receive Incentive Bonus for each completed Employment Year shall remain
in effect, and Executive's right to receive Incentive Bonus on account of the
year of his termination shall be prorated to the date of such termination. In
addition, the Option granted to Executive pursuant to Section 8 hereof shall be
deemed to have become fully vested in him pursuant to and subject to the
provisions of said Section.
9.5. Constructive Termination of Executive. In the event the Company
removes Executive from the position of Chief Executive Officer, President, or
Director of the Company without his consent (or fails to re-elect Executive as
President and Chief Executive Officer at any meeting of the Board of Directors
of the Company held for the purpose of electing or re-electing officers of the
Company) or substantially changes his duties or his reporting responsibility to
the Board of Directors under Section 2.1, the employment of Executive, at his
option, exercisable by written notice given to the Company at any time within
sixty (60) days following such event (time of notice being deemed to be of the
essence), shall be deemed to have been constructively terminated by the Company
hereunder, as of the date of Executive's notice; provided, however, that such
constructive termination shall not be deemed a breach by the Company of its
obligations under this Agreement and further provided, however, that termination
for cause pursuant to Section 9.3 shall make the provisions of this Section 9.5
inapplicable. If Executive's employment is terminated under this Section 9.5,
the Company shall continue to pay Executive his Basic Salary and provide health
insurance benefits as provided in this Agreement for a period of eighteen (18)
months from the
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Termination Date, and shall promptly reimburse any previously unreimbursed
business expenses. Executive's right to receive Incentive Bonus for each
completed Employment Year shall remain in effect, and Executive's right to
receive Incentive Bonus on account of the year of his termination shall be
prorated to the date of such termination. In addition, the Option granted to
Executive pursuant to Section 8 hereof shall be deemed to have become fully
vested in him pursuant to and subject to the provisions of such Section.
9.6. Voluntary Termination of Employment upon Change in Control
(a) If during the Term a Change in Control of the Company, as defined
in Section 9.6(b) shall occur, and the Executive shall:
(i) voluntarily terminate his employment within one (1) year
following such Change in Control and such termination shall be as a
result of the Executive's good faith determination that as a result of
the Change in Control and a change in circumstances thereafter
significantly affecting his position, he can no longer adequately
exercise the authorities, powers, functions or duties attached to his
position as an executive officer of the Company, or
(ii) voluntarily terminate his employment within one (1) year
following such Change in Control, and such termination shall be as a
result of the Executive's good faith determination that he can no
longer perform his duties as an executive officer of the Company by
reason of a substantial diminution in his responsibilities, status,
perquisites or position; or
(iii) voluntarily terminate his employment within one (1) year
following such Change in Control, if the Company has breached any
material obligation to Executive contained in this Agreement or has
otherwise failed to assume all obligations of the Company under this
Agreement; or
(iv) have his employment terminated by the Company for reasons
other than those specified in Section 9.3(b) within one (1) year
following such Change in Control;
then in any of the above four cases, and notwithstanding any other provision of
this Agreement, the Executive shall have the right to immediately terminate this
Agreement by written notice to the Board of Directors and a nonforfeitable right
to receive, payable in a lump sum within ten (10) business days following such
written notice, an amount equal to eighteen (18) months of Base Salary at the
then current rate, reimbursement of any previously unreimbursed business
expenses, plus an amount equal to the greater of (x) the full Incentive Bonus
for which Executive could receive under any bonus criteria established by the
Board of Directors for the Employment Year in which termination occurs
(regardless of whether such criteria are actually satisfied), or (y) the
Incentive Bonus actually paid to Executive during the previous Employment Year.
In addition, on the date of such written notice (which shall be the Termination
Date) the Option granted to Executive
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pursuant to Section 8 hereof shall be deemed to have become fully vested in him
pursuant to and subject to the provisions of such Section, and the Company shall
continue for a period of eighteen (18) months Executive's coverage under
medical, hospitalization, and health benefit plans as applicable on the
Termination Date. Notwithstanding the foregoing, payments made to Executive
pursuant to this Section, together with any other payments to the Executive by
the Company under this Agreement or otherwise, shall not exceed the maximum
amount allowable as a deduction to the Company for federal income tax purposes,
as may be determined in the reasonable discretion of the Company, under any
applicable provision of law or regulations.
(b) For purposes of this Agreement, a "Change in Control" shall mean:
(i) the obtaining by any party of fifty percent (50%) or more
of the voting shares of the Company pursuant to a "tender offer" for such shares
as provided under Rule 14d-2 promulgated under the Securities Exchange Act of
1934, as amended, or any subsequent comparable federal rule or regulation
governing tender offers; or
(ii) individuals who were members of the Company's Board of
Directors immediately prior to any particular meeting of the Company's
shareholders which involves a contest for the election of directors fail to
constitute a majority of the members of the Company's Board of Directors
following such election; or
(iii) the Company executing an agreement concerning the sale
of substantially all of its assets to a purchaser which is not a subsidiary; or
(iv) the Company's adoption of a plan of dissolution or
liquidation; or
(v) the Company's executing an agreement concerning a merger
or consolidation involving the Company in which the Company is not the surviving
corporation or if, immediately following such merger or consolidation, less than
fifty percent (50%) of the surviving corporation's outstanding voting stock is
held by persons who are share holders of the Company immediately prior to such
merger or consolidation.
9.7. Voluntary Termination of Employment. If Executive voluntarily
terminates his employment (other than as authorized under Sections 9.5 or 9.6),
then he shall be deemed to have been terminated by the Company for cause and
shall receive no further compensation or benefits except as provided in Section
9.3(c).
9.8. No Duty to Mitigate; COBRA. After any Termination Date under this
Section 9, Executive shall have no obligation to seek other employment, but
shall have the right to be otherwise employed, and any compensation of any type
whatsoever received by the Executive in connection with such employment shall
not be offset by the Company against any of the obligations of the Company under
this Agreement. Any Termination Date under this Section 9 shall be deemed to be
the date of termination of Executive's employment for purposes of the
Comprehensive Budget
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Reconciliation Act ("COBRA"), and the continuation of any compensation or
benefits after the Termination Date pursuant to any provision of this Section 9
shall not have the effect of delaying the commencement of the COBRA coverage
period beyond the Termination Date.
9.9. Stock Redemption Following Death. In the event of termination of
Executive's employment under Section 9.1, the Company shall collect the proceeds
of the life insurance policy referenced in this Section 9.9, and on the earlier
of fifteen (15) days of the date of such collection or ninety (90) days
following the death of Executive, the Company shall purchase, and the legal
representative of the estate of the Executive shall sell to the Company, at a
price per share equal to the closing price per share of the Common Shares on
Executive's date of death which is quoted by the principal exchange on which the
Common Shares are traded on such date, or the reported closing bid price per
share in the over the counter market on such date if the Common Shares are not
traded on any exchange (the "Market Price"), such number of Common Shares of the
Company as shall be obtained by dividing Two Million Dollars ($2,000,000) by the
Market Price. If the estate of the Executive holds fewer than the number of
Common Shares resulting from such calculation, the Company will purchase, and
the legal representative of the estate shall sell, such number of Common Shares
as are held by the estate. The Company shall purchase, and shall be the owner
and beneficiary of, an insurance policy on the life of Executive in an amount
sufficient to fund its obligations under this Section 9.9, and shall maintain
and pay the premiums on such policy during the term of this Agreement.
Section 10. Representations and Warranties of Executive.
Executive hereby represents and warrants, the same being part of the
essence of this Agreement that, as of the Commencement Date, he is not a party
to any agreement, contract or understanding, and that no facts or circumstances
exist which would in any way restrict or prohibit him from undertaking or
performing any of his obligations under this Agreement. The foregoing
representations and warranties shall remain in effect throughout the Term.
Section 11. Confidential Information and Proprietary Interests.
11.1. Acknowledgement of Confidentiality. Executive understands and
acknowledges that he may obtain Confidential Information in the performance of
his services. Executive further acknowledges that the services to be rendered by
him are of a special, unique and extraordinary character and that, in connection
with such services, he will have access to Confidential Information vital to the
business of the Company and its Affiliates. Accordingly, Executive agrees that
he shall not, either during the Term or at any time thereafter, use or disclose
to any person any such Confidential Information except as such use or disclosure
is reasonably required in the proper performance of his services hereunder.
The foregoing confidentiality provisions shall cease to be applicable
to any Confidential Information which becomes generally available to the public
(except by reason of or in consequence of a breach by Executive of his
obligations under this Section 11).
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In the event Executive is required by law or a court order to disclose
any such Confidential Information, he shall promptly notify the Company of such
requirement and provide the Company with a copy of any court order or of any law
which in his opinion requires such disclosure and, if the Company so elects,
permit the Company an adequate opportunity, at its own expense, to contest such
law or court order.
11.2. Delivery of Material. Executive shall promptly, and without
charge, deliver to the Company on the termination of his employment hereunder,
or at any other time the Company may so request, all memoranda, notes, records,
reports, manuals, computer disks, videotapes, drawings, blueprints and other
documents (and all copies thereof) relating to the business of the Company and
Affiliates, and all property associated therewith, which he may then possess or
have under his control.
11.3. Ideas, Programs, Etc. If, during the Term, Executive invents or
develops any ideas, software programs, products, devices, business systems or
procedures, marketing methods or materials, inventions, trademarks, works of
authorship or trade secrets relating to or useful in connection with the
Business of the Company, the same are and shall remain the property of the
Company, and he will promptly deliver all copies of the same to the Company,
assign his interest therein to the Company and execute such documents as
Company's counsel may request to convey title thereto to the Company including,
but not limited to applications for or assignments of patents, copyrights, or
trade or service marks, all without any further compensation.
Section 12. Non-Competition Provisions.
Executive agrees that he will not, during the Restricted Period,
compete directly or indirectly with the business of the Company or any
Affiliate. The phrase "compete directly or indirectly with the business of the
Company or any Affiliate" shall be deemed to include, without limiting the
generality thereof, (a) engaging or having a material interest, directly or
indirectly, as owner, employee, officer, director, partner, sales
representative, stockholder, capital investor, adviser or consultant, either
alone or in association with other, in the operation of any aspect of any type
of business or enterprise competitive with the business or operation of the
Company or any Affiliate; (b) soliciting any person employed by the Company or
any Affiliate to leave such employment; (3) soliciting any person employed by
the Company or any Affiliate to become an employee of any other Person; or (4)
soliciting the business of any current or prospective customer of the Company or
any Affiliate for the benefit of any Person (other than the Company or such
Affiliate) for products or services competitive with or similar to products and
services as are at the time of such solicitation provided by the Company or any
Affiliate. For purposes of this Section 12, the legal or beneficial ownership of
equity securities representing five (5%) percent or less of the voting power of
any Person shall not be deemed to be a material direct or indirect ownership or
investment interest in such Person.
Section 13. Indemnification of Executive. The Company shall indemnify
Executive against any loss or expense arising out of acts or omissions of
Executive as an officer, director or employee
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of the Company or any Affiliate (except to the extent such acts or omissions
violate Executive's obligations under this Agreement) to the full extent
permitted by the Ohio General Corporation Law and shall include Executive as a
named insured or covered person on any policies of director and officer
liability, product liability, errors and omissions or other liability insurance
maintained by the Company.
Section 14. Disputes and Remedies.
14.1. Waiver of Jury Trial. EXECUTIVE AND THE COMPANY HEREBY WAIVE THE
RIGHT TO A TRIAL BY JURY IN THE EVENT OF ANY DISPUTE WHICH ARISES UNDER THIS
AGREEMENT.
14.2. Injunctive Relief. If Executive commits a breach, or threatens to
commit a breach, of any of the provisions of Sections 11 or 12 of this
Agreement, the Company shall have the following rights and remedies (each of
which shall be independent of the other, and shall be severally enforceable, and
all of which shall be in addition to, and not in lieu of, any other rights and
remedies available to the Company at law or in equity):
(i) the right and remedy to have the provisions of this
Agreement specifically enforced by any court having equity
jurisdiction, it being acknowledged by Executive that any such breach
or threatened breach will or may cause irreparable injury to the
Company and that money damages will or may not provide an adequate
remedy to the Company and Parent; and
(ii) the right and remedy to require Executive to account for
and pay over to the Company or Parent all compensation, profits,
monies, increments, things of value or other benefits, derived or
received by Executive as the result of any acts or transactions
constituting a breach of any of the provisions of Sections 11 or 12 of
this Agreement, and Executive hereby agrees to account for and pay over
all such compensation, profits, monies, increments, things of value or
other benefits to the Company
Executive specifically agrees not to object to any application made by
the Company to any court having equity jurisdiction, seeking an injunction
restraining him from committing, threatening or continuing any violation of
Sections 11 or 12 of this Agreement.
14.3. Partial Enforceability. If any provision contained in Section 11
or 12, or any part thereof, is construed to be invalid or unenforceable, the
same shall not affect the remainder of Executive's agreements, covenants and
undertakings, or the other restrictions which he has accepted, in Sections 11 or
12, and the remaining such agreements, covenants, undertakings and restrictions
shall be given the fullest possible effect, without regard to the invalid parts.
14.4. Adjustment of Restrictions. Despite the prior provisions of this
Section 13, if any covenant or agreement contained in Section 12 or 13, or any
part thereof, is held by any court of
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competent jurisdiction to be unenforceable because of the duration of such
provision or the geographic area covered thereby, the court making such
determination shall have the power to reduce the duration or geographic area of
such provision and, in its reduced form, such provision shall be enforceable.
14.5. Attorneys Fees and Expenses. In the event that any action, suit
or other proceeding at law or in equity is brought by either party to enforce
the provisions of this Agreement, or to obtain money damages for the breach
thereof, then the party which substantially prevails in such action (whether by
judgment or settlement) shall be entitled to recover from the other party all
reasonable expenses of such litigation (including any appeals), including, but
not limited to, reasonable attorneys' fees and disbursements.
Section 15. Survival.
The provisions of Sections 11, 12, 13, 14 and this Section 15 shall
survive termination or expiration of this Agreement and remain enforceable
according to their terms.
Section 16. Severability.
The invalidity or unenforceability of any provision of this Agreement
shall in no way affect the validity or enforceability of any other provisions
hereof.
Section 17. Notices.
All notices, demands and requests required or permitted to be given
under the provisions of this Agreement shall be deemed duly given if made in
writing and delivered personally or mailed by postage prepaid certified or
registered mail, return receipt requested, which notices shall be addressed as
follows:
If to the Company:
NetMed, Inc.
000 Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxx 00000
Attention: Secretary
with a copy to:
Xxxxxxx X. Xxxxx, Xx.
Porter, Wright, Xxxxxx & Xxxxxx
00 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxx 00000
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If to Executive:
Xx. Xxxxx X. Xxxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
By notice as provided in this Section either party may from time to
time change its address or the name of any person to whose attention notice is
to be given, or designate an additional person to whom notice is to be given
under this Section.
Section 18. Assignment and Successors.
Neither this Agreement nor any of his rights or duties hereunder may be
assigned or delegated by Executive. This Agreement is not assignable by the
Company except to any successor in interest which acquires all or substantially
all of the business of the Company as it is conducted at the time of such
assignment. Any corporation into or with which the Company is merged or
consolidated or which acquires all or substantially all of the business of
Company shall be deemed to be a successor of the Company for purposes hereof.
This Agreement shall be binding upon and, except as aforesaid, shall inure to
the benefit of the parties and their respective successors and permitted
assigns.
Section 19. Entire Agreement and Waiver.
19.1. Integration. This Agreement contains the entire agreement of the
parties hereto on its subject matter and supersedes all previous agreements
between the parties hereto, written or oral, express or implied, covering the
subject matter hereof. No representations, inducements, promises or agreements,
oral or otherwise, not embodied herein, shall be of any force or effect. This
Agreement may not be amended, supplemented or rescinded except by instrument in
writing signed by the parties hereto. Neither this Agreement nor any of the
rights of any of the parties hereunder may be terminated except as provided
herein.
19.2. No Waiver. No waiver or modification of any of the provisions of
this Agreement shall be valid unless in writing and signed by or on behalf of
the party granting such waiver or modification. No waiver by any party of any
breach or default hereunder shall be deemed a waiver of any repetition of such
breach or default or shall be deemed a waiver of any other breach or default,
nor shall it in any way affect any of the other terms or conditions of this
Agreement or the enforceability thereof. No failure of the Company to exercise
any power given it hereunder or to insist upon strict compliance by Executive
with any obligation hereunder, and no custom or practice at variance with the
terms hereof, shall constitute a waiver of the right of the Company to demand
strict compliance with the terms hereof.
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Executive shall not have the right to sign any waiver or modification
of any provisions of this Agreement on behalf of the Company, nor shall any
action taken by Executive, as the President of the Company, or otherwise, reduce
his obligations under this Agreement.
Section 20. Governing Law.
This Agreement shall be governed by and construed, and the rights and
obligations of the parties hereto enforced, in accordance with the laws of the
State of Ohio.
Section 21. Headings.
The Section and Subsection headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above, which shall be deemed to be the Commencement Date.
COMPANY
NetMed, Inc.
By: Xxxxxxx X. Xxxxxxxx
------------------------------
Its: Vice President of Finance
-----------------------------
EXECUTIVE
/s/ XXXXX X. XXXXXXXX
----------------------------------
Xxxxx X. Xxxxxxxx
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