EXHIBIT 10.16
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and effective as of the date
indicated below by and between DATATRAK INTERNATIONAL, INC., an Ohio corporation
with its principal place of business at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 0000,
Xxxxxxxxx, Xxxx 00000 ("Company") and XXXXX X. BLACK ("Employee").
WITNESSETH:
WHEREAS, on or about July 15, 1994, Employee entered into an
Employment Agreement with Collaborative Clinical Research, Inc., pursuant to
which Employee was retained as Vice President Finance, Chief Financial Officer,
Treasurer and Assistant Secretary of Collaborative Clinical Research, Inc.; and
WHEREAS, following the sale of Collaborative Clinical Research, Inc.'s
clinical research division, Collaborative Clinical Research, Inc. changed its
name to DATATRAK International, Inc.; and
WHEREAS, the Company desires to retain Employee as its Vice President
Finance, Chief Financial Officer, Treasurer and Assistant Secretary, and
Employee desires to be so retained; and
WHEREAS, the Employee and the Company desire to enter into an
agreement expressly indicating the terms and conditions of their relationship;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the Company and the Employee agree as follows:
1. DUTIES. The Company employs Employee in the position of Vice
President Finance, Chief Financial Officer, Treasurer and Assistant Secretary.
Employee shall perform his duties under the direction of the Company's President
and Chief Executive Officer or designee of the Company. Employee agrees to
accept election to and serve as an officer of the Company. During the Term of
this Agreement, as those terms are defined herein, Employee shall at all times,
faithfully, industriously and to the best of his abilities, perform all duties
that reasonably may be required of him by virtue of his position. Employee shall
devote his full business time and efforts to the affairs of the Company.
2. SALARY. The Company will pay Employee a base salary of One Hundred
Twenty Five Thousand ($125,000) per year in accordance with the Company's
payroll practices, or in such other periodic method to which both parties agree,
minus appropriate withholdings and deductions. The Company will review
Employee's compensation hereunder on an annual basis, and may adjust the
above-indicated level, in its sole discretion, based on Employee's performance
of his duties hereunder and/or the performance of the Company, provided,
however, that the Company shall not reduce the Employee's salary to be paid in
any
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succeeding year to an amount less than the Employee's base salary as established
herein or as increased over time without Employee's written agreement. Both
parties agree that the above reference to an "annual base salary" or to other
benefits of employment, including but not limited to bonuses, does not in any
way guarantee and/or add to the express length of employment of Employee, other
than as set forth herein.
3 BONUS PLANS. The Company may pay Employee additional compensation in
the form of a discretionary bonus and/or pursuant to an established bonus
plan(s) that the Company may have in effect from time to time for similarly
situated employees. The Company reserves the right to modify or cancel any bonus
plan(s) that it may have in effect at any given time. The Company will be
obligated to pay all amounts earned and due to Employee prior to the
modification or cancellation of any established bonus plans. The bonus may be
paid in cash, in equity securities of the Company, in stock options, or in any
combination thereof at the Company's discretion.
4. STOCK OPTION PLAN. Employee shall be eligible to participate in any
stock option plans that the Company may make available from time to time for
similarly situated employees. The granting of stock options will be pursuant to
the terms and conditions of a separate Stock Option Agreement.
5. BENEFITS. During the Term of this Agreement, Employee shall be
entitled to participate in any employment benefit plans which are maintained or
established by the Company for its similarly situated employees, including
enrollment in medical, dental, and life insurance policies or plans, as well as
a 401K plan, and all paid holidays afforded to other similarly situated
employees.
6. VACATIONS. During the Term of this Agreement, Employee shall be
entitled to annual paid vacation time equal to twenty (20) days, to be taken at
a time or times acceptable to the Company and otherwise consistent with the
terms and conditions of this Agreement and the Company's vacation pay policy.
7. RELOCATION EXPENSES. During the Term of this Agreement, if Employee
is required by the Company to relocate his permanent residence to a location
outside of Northeastern Ohio, then the Company will reimburse Employee for all
reasonable relocation expenses, including the expense of moving Employee's
possessions and reasonable expenses incurred in travel to the new location for
the purpose of locating housing. The Company will further reimburse Employee for
all reasonable temporary housing expenses at the new location for the first 90
days after the date requested by the Company for the Employee's relocation.
7.1 REAL ESTATE BROKER'S COMMISSIONS. The Company will reimburse
Employee for reasonable licensed real estate broker's commission (Broker's Fee)
incurred by Employee in the sale of the Employee's permanent residence if
Employees is required by the Company to relocate his permanent residence to a
location outside of Northeastern Ohio. The Employee will provide the Company
with appropriate documentation to
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support the Broker's Fee incurred by Employee.
8. TERM AND TERMINATION OF AGREEMENT. This Agreement shall commence on
the date signed by both parties as indicated below and shall continue for a
period of one (1) year (the "Initial Term"), unless sooner terminated as
provided in paragraphs 8.1, 8.2, 8.3, 8.5, 8.6, 8.7 or 8.8 of this Agreement.
This Agreement will renew automatically for successive one (1) year periods (the
"Renewal Period," and collectively with the Initial Term, the "Term") unless
previously terminated or either party gives notice of non-renewal at least 90
days prior to the commencement of such Renewal Period.
8.1 TERMINATION FOR DEATH. This Agreement shall terminate
automatically upon the Employee's death. With the exception of any benefits
under the Company's employee benefit plans, and any stock options that have
vested under the Company's Stock Option Plan(s) which may inure to the benefit
of Employee's beneficiaries, upon Employee's death, the Company shall have no
further obligations under the terms and conditions of this Agreement. If
Employee's employment is terminated pursuant to this section during the Term of
this Agreement, employee shall be entitled to his salary through the date of
such termination, payment for any pro-rata bonus earned and due at the time of
termination pursuant to any (if any) bonus plan(s) the Company may have in
effect at the time of termination, and to any other employee benefits maintained
or established by the Company for its similarly situated employees.
8.2 TERMINATION FOR DISABILITY. The Company and the Employee
acknowledge and agree that the essential functions of the Employee's position
are unique and critical to the Company and that a disability condition which
causes the Employee to be unable to perform the essential functions of his
position with or without reasonable accommodations for a period in excess of one
hundred twenty (120) calendar days will constitute an undue hardship on the
Company. If the Company determines in good faith upon medical certification and
in consultation with Employee and, if necessary or appropriate, with Employee's
physician(s), that the Employee is disabled and unable to perform the essential
function of his position with or without reasonable accommodations, it may give
Employee written notice of its intention to terminate Employee's employment. If
Employee's employment is terminated pursuant to this section during the Term of
this Agreement, employee shall be entitled to his salary through the date of
such termination, payment for any pro-rata bonus earned and due at the time of
termination pursuant to any (if any) bonus plans the Company may have in effect
at the time of termination, and to any other employee benefits maintained or
established by the Company for its similarly situated employees.
8.3 TERMINATION BY COMPANY FOR CAUSE. During the Term of this
Agreement, the Company may terminate Employee's employment for cause by written
notification citing the specific reasons for termination. For purposes of this
Agreement, "Cause" means:
(1) Employee's conviction of a felony involving moral
turpitude or a felony in connection with his employment;
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(2) Employee's theft, fraud, embezzlement, material willful
destruction of property or material disruption of the operations of the Company;
(3) Employee's use or possession of illegal drugs and/or
unauthorized use or possession of alcohol on Company premises or reporting to
work under the influence of same; or
(4) Employee's engaging in conduct, in or out of the
workplace, which in the Company's reasonable determination has an adverse effect
on the reputation or business of the Company;
Under any such termination for Cause, all rights, benefits,
obligation and duties of the parties hereunder shall immediately cease, except
any compensation due and owing through the date of termination and/or fringe
benefits which have vested on Employee's behalf prior to such termination, if
any, and except for the covenants of Employee set forth in Section 9 of this
Agreement.
8.4 SUSPENSION. In the event Employee engages in conduct
subjecting Employee to potential civil or criminal liability which could have an
adverse effect upon the Company's reputation or business or is related to
Employee's duties and responsibilities, the Company reserves the right to
immediately suspend Employee with pay, pending investigation and/or the outcome
of the matter.
8.5 TERMINATION BY EMPLOYEE WITHOUT GOOD REASON/NON-RENEWAL BY
EMPLOYEE. During the Term of this Agreement, Employee may terminate his
employment and this Agreement at any time for any or no reason upon at least 30
days written notice by the Employee directly to the Company's President. Prior
to and/or during any Renewal Period, Employee may also terminate this Agreement
by giving a notice of non-renewal at least 120 days prior to the commencement of
the next Renewal Period. Employee acknowledges and agrees that a voluntary
resignation, termination or retirement by Employee during the Term of this
Agreement as described in this Section 8.5, and/or a notice of non-renewal by
Employee prior to and/or during any Renewal Period as described in this Section
8.5, shall result in the termination of this Agreement and all rights and
obligations under this Agreement shall immediately cease, except any fringe
benefits or stock options which have vested on Employee's behalf prior to such
termination.
8.6 TERMINATION BY EMPLOYEE FOR GOOD REASON. Employee may
terminate his employment at any time during the Term of this Agreement for "Good
Reason." "Good Reason" shall mean (a) any material reduction by the Company of
Employee's duties, responsibilities, base salary, title or position, or (b) any
involuntary removal of Employee from any position previously held (except in
connection with a promotion or a termination for Cause, Death, or Disability, or
the voluntary termination by the Employee Without Good Reason). Prior to any
Termination by Employee for Good Reason pursuant to this Section 8.6, Employee
shall
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provide the President with sixty (60) calendar days' written notice of the acts
and/or omissions of the Company which Employee asserts constitute "Good Reason,"
and if, at the conclusion of that sixty (60) calendar day period, the Company
has not undertaken reasonable efforts to cure or correct the alleged acts and/or
omissions, then Employee may terminate his employment pursuant to this Section
8.6. In the event of such termination by Employee for Good Reason, Employee
shall be entitled to receive (i) his salary through the date of such termination
and for a period of one (1) year after such termination, and (ii) outplacement
services from an agency to be selected by the Company in an amount not to exceed
Ten Thousand ($10,000) Dollars,
8.7 TERMINATION OTHER THAN FOR CAUSE, DEATH, OR DISABILITY;
TERMINATION BY NON-RENEWAL. During the Term of this Agreement, the Company may
terminate Employee for other than Cause, Death, or Disability at any time during
the Term of this Agreement, upon not less than thirty (30) days notice. Prior to
and/or during any Renewal Period, the Company may also terminate this Agreement
by giving a notice of non-renewal at least 90 days prior to the commencement of
the next Renewal Period. In the event the Company exercises its right to
terminate the Employee other than for Cause, Death, or Disability at any time
during this Agreement, during the Term of this Agreement as described in this
Section 8.7, and/or gives a notice of non-renewal prior to and/or during any
Renewal Period as described in this Section 8.7, Employee shall at the time of
such termination be entitled to receive (i) his salary through the date of such
termination and for a period of one (1) year after such termination, and (ii)
outplacement services from an agency to be selected by the Company in an amount
not to exceed Ten Thousand ($10,000) Dollars,
8.8 CHANGE OF CONTROL. If a Change of Control (as defined in this
paragraph) shall occur during the Term of this Agreement, and Employee's
employment is (a) not continued by the purchaser or successor or (b) there is a
material change in Employee's role, duties, responsibility or title following a
Change of Control and Employee voluntarily terminates his employment and this
Agreement therefor, Employee shall be entitled to receive (i) his salary through
the date of such non-continuation and for a period of one (1) year after such
non-continuation, and (ii) outplacement services from an agency to be selected
by the Company in an amount not to exceed Ten Thousand ($10,000) Dollars. For
purposes hereof, the term "Change of Control" shall mean (A) the sale of all or
substantially all of the assets of the Company, (B) the sale of a majority of
the outstanding shares of capital stock of the Company entitled to vote in a
single transaction or series of related transactions (except with respect to a
public offering of the Company's shares of capital stock), (C) the consummation
of a merger, consolidation or similar transaction involving the Company in which
the holders of the Company's capital stock immediately prior to the transaction
do not retain at least a majority of the voting power of the Company surviving
the merger or its parent Company, or (D) the complete liquidation or dissolution
of the Company.
8.9 BINDING ARBITRATION. In the event, upon termination of
Employee's employment, a disagreement exists between Employee and the Company as
to which section of this Section 8 governs such termination (i.e., if the party
terminating Employee's employment (the "Terminating Party") claims that "Cause",
"Good Reason" or
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"Disability" exists and the other party (the "Disputing Party") disputes such
claim), the issue of which section should govern such termination shall be
submitted by the parties to binding arbitration in accordance with the
provisions of this Section 8.9. Within thirty (30) days after termination of
Employee's employment the Disputing Party may challenge the claimed basis for
termination by giving written notice (the "Dispute Notice") of such challenge to
the Terminating Party. Within thirty (30) days after delivery of such Dispute
Notice, the parties shall appoint an independent arbitrator experienced in
employment matters who shall determine which section of this Section 8 applies
to the termination. In the event the parties cannot agree on an arbitrator
within thirty (30) days after delivery of the Dispute Notice, then each party
shall appoint one arbitrator, and the two arbitrators shall appoint a third
arbitrator. In either case, the determination of the arbitrator or the majority
of the arbitrators, as the case may be, shall be final and binding upon both
Employee and the Company. The authority of the arbitrators hereunder shall be
limited to determining which section of this Section 8 governs, and the
arbitrators shall not have authority to reinstate Employee, to alter the amount
of the payment due to Employee under the applicable section of this Section 8,
or to award Employee or the Company any other amounts by way of damages or
otherwise. Any arbitration hereunder shall be conducted in Cleveland, Ohio in
accordance with the National Rules for the Resolution of Employment Disputes of
the American Arbitration Association. In the event the Disputing party fails to
give the Dispute Notice within the thirty (30) day period provided above, all
rights of the Disputing Party to challenge the claimed basis for termination
shall expire.
9.0 RESTRICTIVE COVENANTS OF EMPLOYEE. Employee acknowledges that the
services rendered to the Company are special, unique, and of extraordinary
character; that the market for the Company's services and products is worldwide;
and that through the Internet, World Wide Web, and/or other media of electronic
commerce, the Company regularly transacts business on a worldwide basis. In
light of those factors, Employee acknowledges that the following covenants are
reasonable and necessary for the protection of the Company's reasonable business
interests.
9.1 NON-COMPETITION. During the period of Employee's employment
by the Company and, in the case of the termination of Employee's employment
under Sections 8.2, 8.6, 8.7, or 8.8 hereof, for a period of one (1) year
thereafter, or (ii) in the case of the termination of Employee's employment
under any provision of Section 8 hereof other than Sections 8.2, 8.6, 8.7, or
8.8 for a period of eighteen (18) months (the "Non-competition Period"),
Employee shall not, directly or indirectly, whether as an individual on his own
account, or as a partner, joint venturer, director, officer, employee,
consultant, creditor and/or agent or otherwise, in any place in which the
Company now or hereafter conducts business:
(a) Enter into or engage in any business which provides software and
related web hosting, educational and training services, and/or other
Applications Services Provider ("ASP") services, to customers in the
pharmaceutical, biotech, and/or medical device industries to assist in the
electronic capture of clinical trial patient data from clinical trial sites;
(b) Solicit customers, business, patronage or orders from, or perform
other services for, any person, firm, association, corporation or other entity,
engaged in any business,
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including without limitation, an Applications Services Provider, which directly
or indirectly competes with the business of the Company or parent or subsidiary
of, or entity controlling, controlled by or under common control with the
Company ("Company Affiliate"); or
(c) Promote or assist, financially or otherwise, any person, firm,
association, corporation or other entity, engaged in any business, including
without limitation, an Applications Services Provider, which competes with the
current or future business of the Company or any Company Affiliate; provided,
however, that the foregoing covenant shall not be deemed to have been violated
solely by (i) the ownership of equity securities of an entity which competes
with a future business of the Company or any Company Affiliate, to the extent
that such securities are acquired prior to the date that the Company or Company
Affiliate commences such future business; or (ii) the ownership for investment
purposes of less than five percent (5%) of the equity securities of any entity
which has equity securities listed on a national securities exchange or publicly
traded in the over-the-counter market.
9.2 CONFIDENTIALITY AND WORK PRODUCT. Employee acknowledges that
during his employment with the Company he has had and will have access to
confidential information, knowledge, and data regarding the business of the
Company and Company Affiliates, whether received, acquired or developed by him
or otherwise, including, without limitation, trade secrets, design information,
software programs, research methods and techniques, scientific data and
formulae, pricing data, customer information and all other information or data
relevant to the business of the Company (collectively, except any of the
foregoing which is at the time generally known to the public and which did not
become generally known through the breach of any agreement restricting its
disclosure, "Proprietary Information"). Employee further acknowledges that in
the course of his employment he may be producing designs, analyses,
recommendations, reports, complications, software, studies and other worth
product, acquiring information on behalf of the Company and any conceive of
ideas, innovations, processes and improvements relating to the business of the
Company (collectively, "Work Product"). As to the ownership, disclosure and use
of Proprietary Information and Work Product, Employee agrees that, from and
after the date hereof:
(a) he will promptly disclose in writing to the Company all Work
Product;
(b) all Proprietary Information, all Work Product and all rights
therein are and shall be the sole and exclusive property of the Company and all
rights or interest of Employee therein are hereby assigned by Employee to the
Company, and Employee will cooperate with and assist the Company from time to
time, in any manner reasonably requested by the Company, in obtaining title or
ownership therein or evidence thereof;
(c) Employee shall not divulge, disclose or communicate to any
third party in any manner, directly or indirectly, Proprietary Information or
Work Product;
(d) Employee will not use for his own benefit or purposes or for
the
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benefit or purposes of any third party or permit or assist, by acquiescence or
otherwise, any third party to use in any manner, directly or indirectly,
Proprietary Information or Work Product; and
(e) upon the termination of his employment, Employee will
promptly deliver to the Company all Proprietary Information and Work Product,
including, without limitation, any reproductions, copies, abstracts, summaries
or other documents or records of Proprietary Information or Work Product.
9.3 NO INTERFERENCE. During the Non-competition Period, Employee
agrees that he shall not:
(a) interfere with the contractual relationship of the Company, any
Company Affiliate, customers, suppliers, employees or other which relate to the
business of the Company or any Company Affiliate; or
(b) induce any employee or representative of the Company or any
Company Affiliate not to continue as an employee or representative of the
Company or any Company Affiliate;
(c) make remarks or take any other action which disparages or
diminishes the reputation of the Company or any Company Affiliate; and
(d) without limiting the generality of the foregoing, without the
prior written consent of the Chief Executive Officer, directly or indirectly
employ, whether as an employee, officer, director, agent, consultant or
independent contractor, any person who was an employee, representative, officer
or director of the Company or any Company Affiliate at any time during the
six-month period prior to the date of such proposed employment; provided,
however, that the covenants contained in this clause (d) shall not apply with
respect to such person terminated by action of the Company or any Company
Affiliate.
9.4 INJUNCTIVE RELIEF. Both parties hereto recognize that the
services to be rendered by Employee to the Company are special, unique and of
extraordinary character; that the market for the Company's services and products
is worldwide; that through the Internet, World Wide Web, and/or other media of
electronic commerce, the Company regularly transacts business worldwide; and
that if Employee hereafter fails to comply with the restrictions and obligations
imposed upon him hereunder, the Company may not have an adequate remedy at law.
Accordingly, the Company, in addition to any other rights which it may have,
shall be entitled to seek injunctive relief to enforce such restrictions and
obligations without the necessity of posting any bond.
10. REPRESENTATIONS OF EMPLOYEE. Employee represents and warrants to
the Company that he has the capacity to enter into this Agreement that he is not
a party to any agreement, arrangement or other understanding with any person or
entity which might affect, restrain or conflict with the provisions of this
Agreement and/or the services to be provided to the Company by Employee under
this Agreement.
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11. REFORMATION OF AGREEMENT; SEVERABILITY. In the event that any
provision or term of this Agreement is found to be void or unenforceable to any
extent for any reason, it is the agreed-upon intent of the parties hereto that
all remaining provisions or terms of the Agreement shall remain in full force
and effect to the maximum extent permitted and that the Agreement shall be
enforceable as if such void or unenforceable provision or term had never been a
part hereof.
12. ASSIGNMENT. This Agreement shall inure to the benefit of, and
shall be binding upon, the Company, its successors and assigns. Employee shall
not assign this Agreement without the prior written consent of the Company.
13. NOTICE. Any notice required to be given under the terms of this
Agreement shall be in writing, and mailed to the recipient's last known address
or delivered in person. If sent by registered or certified mail, such notice
shall be effective when mailed; otherwise, it shall be effective upon delivery.
14. ENTIRE AGREEMENT; AMENDMENTS: WAIVERS. This Agreement contains the
entire agreement between the parties hereto with respect to the subject matter
hereof and replaces or supersedes any previous agreement on such subject matter.
It may not be changed orally, but only by agreement, in writing, signed by each
of the parties hereto. The terms or covenants of this Agreement may be waived
only by a written instrument specifically referring to this Agreement, executed
by the party waiving compliance. The failure of the Company at any time, or from
time to time, to require performance of any of Employee's obligations under this
Agreement shall in no manner affect the Company's right to enforce any
provisions of this Agreement at a subsequent time; and the waiver by the Company
of any right arising out of any breach shall not be construed as a waiver of any
right arising out of any subsequent breach.
15. HEADINGS. The headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
16. COUNTERPARTS. This Agreement may be executed in multiple
counterparts each of which shall be deemed an original but all of which together
shall constitute one and the same document.
17. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Ohio without giving effect to the
conflict of law provisions thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the dates written below.
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Date: February 5, 2001 /s/ Xxxxx X. Black
----------------------------------------
XXXXX X. BLACK (EMPLOYEE)
DATATRAK INTERNATIONAL, INC.
Date February 5, 2001 By /s/ Xxxxxxx X. Xxxxx
-------------------------------------
TITLE: CHIEF EXECUTIVE OFFICER AND
PRESIDENT
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