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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is dated as of July 23,
2000, between ELECTRONIC MEDICAL DISTRIBUTION, INC. d/b/a XXX.XXX, a
Delaware corporation (the "Company"), and XXXXXX XXXXXX (the
"Executive").
1. Employment. The Company hereby agrees to employ the Executive,
and the Executive hereby agrees to be employed by the Company, on the
terms and conditions set forth herein.
2. Term.
(a) The "Initial Term" of the employment of the Executive
by the Company as provided in Section 1 will commence on July 23, 2000
(the "Effective Date") and will terminate at 11:59 p.m. on July 22,
2003 (the "Expiration Date") unless extended or sooner terminated as
hereinafter provided (such period, the "Employment Period").
(b) The "Employment Period" may be extended beyond the
Initial Term by the mutual agreement of the parties in writing at least
ninety (90) days prior to the end of the Initial Term (the "Extended
Term").
(c) The "Business" of the Company shall be medical
e-commerce online and provide physicians with internet medication
management solutions.
3. Position, Duties and Responsibilities.
(a) Position. The Executive hereby agrees to serve as
Vice President - Product Management of xXX.xxx reporting to the
President of the Company.
Duties/Goals/Objectives:
- Working closely with the Sales and Information
Technology Departments to maximize the utilization of
the xXX.xxx product offering
- Work closely with the Sales Department in the sales
effort to various healthcare organizations
- Work closely with the Information Technology
Department to refine the usability of xXX.xxx's
product
- Take responsibility for driving utilization in the
physician's office
(b) Other Activities. Except with the prior written
approval of the President (which the President may grant or withhold in
his/her sole and absolute discretion), the Executive, during the
Employment Period, will not (i) accept any other employment, or (ii)
engage, directly or indirectly, in any other business activity (whether
or not pursued for pecuniary advantage) that is
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or may be competitive with or that might place her in a competing
position to, that of the Company or any of its affiliates.
Notwithstanding the foregoing, the Company agrees that the Executive
(or affiliates of the Executive) shall be permitted: (i) to make any
passive personal investments that are not in a business activity that
is directly or indirectly competitive with the Company (ii) to
participate in industry organizations, and (iii) to participate in
charitable or educational activities.
(c) Present Outside Activities. Executive shall disclose
to the President all outside activities, if any, in which she is
involved and any apparent conflict of interest prior to the execution
of this Agreement.
4. Compensation and Related Matters.
(a) Salary and Bonus. During the Employment Period, the
Company shall pay the Executive a salary of one hundred fifty thousand
dollars ($150,000.00) annually (the "Salary"). The Executive shall also
be eligible for bonuses of up to 50% of the Executive's salary as may
be determined in the sole discretion of the Board of Directors and/or
the President. All Salary and bonuses to be paid consistent with the
standard payroll practices of the Company (e.g., timing of payments and
standard employee deductions, such as income tax withholdings, social
security, etc.).
(b) Stock Options. In addition to the base salary and
bonus, the Executive will be entitled to receive incentive stock
options to purchase 90,000 shares of the Company's common stock which
options shall be granted in accordance with the terms and conditions
set forth in the Company's incentive stock option plan and stock option
agreement. Such options shall have an exercise price of $4.67 per share
and shall vest over a three-year period such that options to purchase
30,000 shares of such stock shall become exercisable on each July 23,
2001, July 23, 2002 and July 23, 2003.
(c) Vacation. During the Employment Period Executive
shall be entitled to 20 days of vacation during each calendar year and
shall not be cumulative, unless and until the Company changes its
policy toward accumulation of vacation days for other employees of the
Company in which case Executive's vacation days shall follow such
policy of the Company. Unless and until such policy change at no time
shall Executive be entitled to receive more than 20 days of vacation.
(d) Business Expenses. The Company will reimburse the
Executive for reasonable bona fide business expenses (which shall
include temporary living and commuting expenses) incurred on behalf of
the Company in the ordinary course of business, provided, however, that
the expense is otherwise deductible by the Company as an ordinary and
necessary business expense for federal income tax purposes.
(e) Other Benefits. The Executive shall generally be
entitled to participate in or receive health, long-term disability
insurance, and similar benefits as the Company provides from time to
time to its executives. The Executive shall cooperate with the issuance
of a key man term life insurance policy for the benefit of the Company,
if so requested by the Company.
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(f) Withholding. All salary, bonus payments, stock option
exercises, benefit payments and other payments due to Executive under
this Agreement shall be paid in a manner consistent with the standard
payroll practices of the Company. The Company may withhold from any
payment any required taxes or other governmental withholdings,
insurance or benefit payments and similar items.
5. Termination or Resignation.
(a) Termination. The Executive's employment hereunder
shall or may be terminated and shall constitute a "Termination" under
the following circumstances:
(i) Death. The Executive's employment hereunder
shall terminate upon her death.
(ii) Disability. The Executive's employment
hereunder shall terminate on the Executive's physical or mental
disability or infirmity which, in the opinion of a competent physician
selected by the Board, renders the Executive unable to perform her
duties under this Agreement for more than 30 days during any 120-day
period.
(iii) With Cause. The Company may terminate the
Executive's employment hereunder for Cause. "Cause" shall mean (a)
Executive's material breach of any of the terms of this Agreement, (b)
Executive's conviction of a crime involving moral turpitude or
constituting a felony under the laws of any state, the District of
Columbia or of the United States, (c) Executive's repeated failure or
refusal to follow the directives of the President; or (d) Executive's
inappropriate business conduct that is directly related to Executive's
activities on behalf of the Company that may cause material harm to the
business interests of the Company.
(iv) By the Company for Any Other Reason. The
Company may terminate the Executive's employment hereunder at any time
for any reason other than the Executive's Death or Disability or for
Cause.
(v) Resignation of Executive. The Executive may
voluntarily resign her position and terminate her employment and Salary
with the Company at any time, with or without cause, by delivery of a
written notice of resignation to the Company (the "Notice of
Resignation"). The Notice of Resignation shall set forth the date such
resignation shall become effective (the "Date of Resignation"), which
date shall, in any event, be at least thirty (30) days and no more than
sixty (60) days from the date the Notice of Resignation is delivered to
the Company. At its option, the Company may reduce such notice period
to any length, upon written notice to the Executive.
(b) Notice of Termination by Company. Any termination of
the Executive's employment by the Company shall be communicated by
written Notice of Termination to the Executive. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice that
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shall indicate the specific termination provision in this Agreement
relied upon and shall set forth, if applicable, in reasonable detail
the facts and circumstances claimed to provide a basis for termination
of the Executive's employment under the provision so indicated. "Date
of Termination" shall mean (i) if the Executive's employment is
terminated by her death, the date of her death, (ii) if the Executive's
employment is terminated by reason of her disability, the date of the
opinion of the physician referred to in Section 5(a)(ii), above, (iii)
if the Executive's employment is terminated by the Company for Cause
pursuant to subsection 5(a)(iii) above or without Cause pursuant to
subsection 5(a)(iv) above, the date specified in the Notice of
Termination and (iv) if the Executive voluntarily resigns pursuant to
subsection 5(a)(v) above, the date of the Notice of Resignation.
(c) Terminability of Employment. Notwithstanding the Term
of this Agreement and the annual salary to be paid to the Executive
during her employment with the Company, nothing in this Agreement
should be construed as to confer any right of the Executive to be
employed by the Company for a fixed or definite term. Executive
specifically acknowledges and agrees that she is an employee at will.
Subject to Section 6 hereof, the Executive hereby agrees that the
Company may dismiss her under subsection 5(a) hereof. The Executive's
employment with the Company may be terminated by the Company at any
time by delivery of a Notice of Termination to the Executive, for any
reason, with or without cause, without liability except with respect to
the payments provided for by Section 6.
(d) Termination Obligations. In exchange for the Company
entering into the Agreement and payment of the Severance Payments
provided for in Section 6(b), the Executive agrees that, at the time of
her resignation or termination from the Company:
(i) The Executive will promptly return to the
Company all personal property, both tangible and intangible, furnished
to or prepared by the Executive in the course of or incident to her
employment, the Executive hereby acknowledging and agreeing that such
property belongs to the Company, such that following termination the
Executive will not retain any written or other tangible material
containing any proprietary information of the Company. "Personal
property" includes, without limitation, all computers, cellular phones,
company credit cards, access keys, books, manuals, records, reports,
notes, contracts, lists and other documents or materials, or copies
thereof (including computer files), and all other proprietary
information relating to the business of the Company.
(ii) The Executive will tender her resignation
from all offices and directorships then held with the Company;
Executive, however, shall not be required to tender her resignation
from the Board of Directors of the Company.
(iii) The Executive will execute a release
acceptable to the Company of all liability of the Company, and its
directors, officers, shareholders, employees, agents and attorneys, to
the Executive in connection with or arising out of her employment with
the Company, except with respect to any Severance Payments under
Section 6(b) which may be payable to her under the terms of the
Agreement.
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(iv) The representations and warranties contained
herein and the Executive's obligations under Sections 5(d), 7, 8, 10
and 16 through 19 shall survive termination of the Employment Period
and the expiration of this Agreement.
6. Compensation Upon Termination. Upon the occurrence of any of
the events described in Section 5(a)(i) through 5(a)(v) of this
Agreement, the Executive shall be entitled, unless otherwise provided
herein, to the following remuneration in respect of such Termination
(the "Severance Payments") for the period of time specified therein
(the "Severance Period"):
(a) Death. If the Executive's employment shall be
terminated pursuant to Section 5(a)(i), the Company shall pay the
Executive's personal representative her Salary payable pursuant to
Section 4(a) through the Date of Termination. At the Executive's own
expense, the Executive's dependents shall also be entitled to any
continuation of health insurance coverage rights under any applicable
law.
(b) Disability. If the Executive's employment shall be
terminated by reason of disability pursuant to Section 5(a)(ii), the
Executive shall receive her Salary payable pursuant to Section 4(a) up
to the Date of Termination and for 30 days thereafter; provided that
payments so made to the Executive during the disability shall be
reduced by the sum of the amounts, if any, payable to the Executive at
or prior to the time of any such payment under any disability benefit
plan of the Company. At the Executive's own expense, the Executive and
her dependents shall also be entitled to any continuation of health
insurance coverage rights under any applicable law.
(c) Cause. If the Executive's employment shall be
terminated for Cause pursuant to Section 5(a)(iii) hereof, the Company
shall pay the Executive her Salary then payable pursuant to Section
4(a) through the Date of Termination. At the Executive's own expense,
the Executive and her dependents shall also be entitled to any
continuation of health insurance coverage rights under any applicable
law.
(d) Voluntary Resignation. If the Executive terminates
her employment with the Company pursuant to Section 5(a)(v) hereof, the
Company shall have no obligation to compensate the Executive following
the Date of Resignation, except for the payment of accrued and unpaid
salary pursuant to Section 4(a) through the Date of Resignation. In any
event, at the Executive's own expense, the Executive and her dependents
shall be entitled to any continuation of health insurance coverage
rights under any applicable law.
(e) Without Cause. If the Executive's employment shall be
terminated Without Cause pursuant to Section 5(a)(iv) hereof during the
period prior to July 23, 2001, the Company shall pay the Executive her
Salary from the Date of Termination through July 22, 2001 in accordance
with Section 4(a). If the Executive's employment shall be terminated
Without Cause during the period from July 23, 2001 through the end of
the Initial Term, she shall be entitled to receive a payment equal to
the Salary remaining in the Initial Term at the Termination Date,
multiplied by the ratio of months then remaining in the Initial Term
divided by the number of months in the Initial Term.
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At the Executive's own expense, the Executive and her dependents shall
also be entitled to any continuation of health insurance coverage
rights under any applicable law.
(f) Any Severance Payments made pursuant to this Section
6 shall be payable in accordance with the Company's regular payroll
practices. The obligation of the Company to make the Severance Payments
to the Executive is expressly conditioned upon the Executive complying
and continuing to comply with her obligations and covenants under
Sections 5(d), 7 and 8 of this Agreement following termination of her
employment with the Company, which shall survive the expiration of the
Initial Term and any extension thereof.
7. Confidentiality and Non-Solicitation Covenants.
(a) Confidentiality. The Executive hereby agrees that the
Executive will not, during the Employment Period or at any time
thereafter directly or indirectly disclose or make available to any
person, firm, corporation, association or other entity for any reason
or purpose whatsoever, any Confidential Information (as defined below).
The Executive agrees that, upon Termination of her employment with the
Company, all Confidential Information in her possession that is in
written or other tangible form (together with all copies or duplicates
thereof, including computer files) shall be returned to the Company and
shall not be retained by the Executive or furnished to any third party,
in any form except as provided herein; provided, however, that the
Executive shall not be obligated to treat as confidential, or return to
the Company copies of any Confidential Information that (i) was
publicly known at the time of disclosure to the Executive, (ii) becomes
publicly known or available thereafter, but prior to the Date of
Termination, other than by any means in violation of this Agreement or
any other duty owed to the Company by any person or entity or (iii) is
lawfully disclosed to the Executive by a third party. As used in this
Agreement the term "Confidential Information" means: information
disclosed to the Executive or known by the Executive as a consequence
of or through her relationship with the Company, about the directors,
officers, shareholders, customers, employees, investors, business
methods, public relations methods, organization, procedures or
finances, including, without limitation, information of or relating to
shareholder, customer or investor lists of the Company and any
affiliate.
(b) Non-Solicitation. In addition, the Executive hereby
agrees that during the Employment Period, and for a period of one (1)
year thereafter, regardless of the reason or circumstances of
Termination of employment with the Company, the Executive will not,
either on her own account or jointly with or as a manager, agent,
officer, employee, consultant, partner, joint venturer, owner or
shareholder or otherwise on behalf of any other person, firm or
corporation, (i) carry on or be engaged or interested directly or
indirectly in, or solicit, the sale or provision of services or the
development or marketing of services as offered by the Company to its
customers at the Date of Termination, (ii) endeavor directly or
indirectly to canvas or solicit in competition with Company or to
interfere with the supply of orders for goods or services from or by
any person, firm or corporation which during the Employment Period has
been or is a supplier of goods or services to Company or become an
investor in the Company or (iii) directly or indirectly solicit or
attempt to solicit away from Company any of its officers or employees
or offer employment to any person who, at any time during the six (6)
months immediately preceding the Date of Termination, is or was an
officer or employee of Company.
8. Covenant Not to Compete. The Executive agrees that during the
Employment Period she will devote full-time to the business of the Company and
not engage in any type of business which engages in the medical internet, online
pharmacy and information services or any other related
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businesses, including but not limited to all aspects of the Business. Subject to
such full-time requirement and the restrictions set forth below in this Section
8 and Section 3(c) above, the Executive shall be permitted to continue her
existing business investments and activities and may pursue additional business
investments; provided that the Executive may not serve as a director or officer
of any public company resulting from such business investments if such public
company is in competition with the Company. The Executive agrees that, from the
end of the Employment Period through a one (1) year period thereafter, he shall
not, within the Protected Territory (as defined hereinafter), (i) invest in,
manage, consult or participate in any way in any other business in competition
with the Business (in either an active or passive manner), (ii) participate in
or advise any business which has business activities similar to the Business are
a relevant business segment, or (iii) act for or on behalf of any business that
intends to enter or participate in any business which has any business
activities similar to the Business, in each case unless the independent members
of the Company's Board determines that such action is in the best interests of
the Company. Notwithstanding the foregoing, the Executive may purchase stock as
a stockholder in any publicly traded company, including any company which is
involved in the development or operation of a medical internet site in the
Protected Territory; provided that the Executive does not own (together or
separately or through her affiliates) more than five percent (5%) of any company
(other than the Company) engaged in a business which is competitive with the
Business of the Company within the Protected Territory. In addition, the
Executive shall not invest (directly or indirectly) in any competitive business
operating within the Protected Territory unless the independent members of the
Company's Board determines that such an investment is in the best interests of
the Company. For purposes of this Agreement, the "Protected Territory" shall
mean that area within a one hundred (100) mile radius of the principal offices
of the Company at the Date of Termination.
9. Indemnity on Non-Compete. Executive hereby indemnifies the Company for
any and all liabilities that should arise from Executive's prior employments and
consulting, including necessary legal costs for Company to defend such matters.
10. Injunctive Relief and Enforcement. In the event of breach by either
party of the terms of Sections 5, 6, 7 or 8, if the non-breaching party believes
it is suffering irreparable injury, then the non-breaching party shall be
entitled to institute legal proceedings to enforce the specific performance of
this Agreement by the breaching party and to enjoin the breaching party from any
further violation of the Agreement and to exercise such remedies cumulatively or
in conjunction with all other rights and remedies provided by law and not
otherwise limited by this Agreement. The parties acknowledge, however, that the
remedies at law for any breach of the provisions of Sections 5, 6, 7 or 8 may be
inadequate. In addition, in the event the covenants set forth in Sections 5, 7
or 8 shall be determined by any court of competent jurisdiction to be
unenforceable by reason of extending for too great a period of time or over too
great a geographical area, by reason of being too restrictive or expansive, or
by constituting an unlawful restraint of trade in any other respect, each such
covenant shall be interpreted to extend over the maximum period of time and over
a maximum geographical area for which it may be enforceable, and to the maximum
extent in all other respects as to which it may be enforceable, and enforced as
so interpreted, all as determined by such court in such action.
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11. Notice. For the purposes of this Agreement, notices, demands
and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when personally
delivered when transmitted by telecopy with written confirmation of
transmission and receipt, three (3) days after deposit in the U.S.
mail, first class, with adequate postage thereon, or one (1) day after
delivery to an overnight air courier guaranteeing next day delivery,
addressed as follows:
If to the Executive: Xxxxxx Xxxxxx
0000 Xxxxx Xxxxx Xxx
Xxxxxxxx, XX 00000
If to the Company: xXX.xxx
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: President
With a copy to: xXX.xxx
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
or to such other address as any party may have furnished to the others
in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt as provided above.
12. Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity
or enforceability of any other provision of this Agreement, which shall
remain in full force and effect; provided, however, that if any one or
more of the terms contained in Sections 5, 7 or 8 hereto shall for any
reason be held by any court of competent jurisdiction to be
unenforceable by reason of extending for too great a period of time or
over too great a geographical area, by reason of being too restrictive
or expansive, or by constituting an unlawful restraint of trade in any
other respect, then such covenant shall not be deleted but shall be
reformed and constructed in a manner to enable it to be enforced to the
extent compatible with applicable law.
13. Assignment. This Agreement may not be assigned by the
Executive, but may be assigned by the Company to any successor to its
business and will inure to the benefit and be binding upon any such
successor.
14. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same instrument.
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15. Headings. The headings contained herein are for reference
purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
16. Choice of Law. This Agreement shall be construed, interpreted
and the rights of the parties determined in accordance with the laws of
the State of Georgia (without reference to the choice of law provisions
of Georgia), except with respect to matters of law concerning the
internal corporate affairs of any corporate entity which is a party to
or the subject of this Agreement, and as to those matters the law of
the jurisdiction under which the respective entity derives its powers
shall govern.
17. Dispute Resolution. Absent any irreparable injury being
suffered by the Company entitling the Company to seek injunctive relief
against the Executive pursuant to Section 10 hereof, in the event there
shall be a dispute among the parties arising out of or relating to this
Agreement, or the breach thereof, the parties agree to the following
procedures:
(a) Within thirty days after notice from a party of any
dispute, the parties shall meet and attempt to resolve such dispute
informally with or without a mediator as the parties mutually agree;
(b) If the parties are unable to resolve the dispute
informally, then either party may institute a lawsuit in the federal or
state courts in Gwinnett County, Georgia. The parties agree that the
federal and state courts of Gwinnett County, Georgia shall have sole
jurisdiction over such disputes and each parties expressly consents to
the personal jurisdiction of such courts and expressly waives all
defenses of lack of personal jurisdiction and inconvenient forum.
18. Entire Agreement. This Agreement contains the entire agreement
and understanding between the Company and the Executive with respect to
the employment of the Executive by the Company as contemplated hereby,
and no representations, promises, agreements or understandings, written
or oral, not herein contained shall be of any force or effect. This
Agreement shall not be changed unless in writing and signed by both the
Executive and the Board of the Company.
19. Board Approval. In any case in which this Agreement provides
for the approval, review or determination of the Board in connection
with the Executive's compensation, benefits, termination or compliance
with restrictive covenants herein expressed, then such approval, review
or determination shall be deemed a "Director's conflicting interest
transaction", subject to the procedures required by O.C.G.A. ss.
14-2-860 et seq.
20. The Executive's Acknowledgment. The Executive acknowledges he
has had the opportunity to consult with independent counsel of her own
choice concerning this Agreement, and he has read and understands the
Agreement, is fully aware of its legal effect, and has entered into it
freely based on her own judgment.
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of
the date and year first above written.
ELECTRONIC MEDICAL DISTRIBUTION
D/B/A XXX.XXX
By:
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Title: Date:
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EXECUTIVE
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Xxxxxx Xxxxxx Date:
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Date:
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Witness
