EXHIBIT 10.19
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and effective as of
the date written below by and between DATATRAK International, Inc. (the
"Company"), and Xxxx Xxxxxx (the "Employee").
WITNESSETH:
WHEREAS, on or about July 7, 1998, Employee entered into an employment
agreement (the "Prior Employment Agreement") with the Company pursuant to which
Employee was retained as Director North American Operations; and
WHEREAS, as of October 1, 1999, Employee became Vice President, North
American Operations, and the Company desired to retain Employee as its Vice
President, North American Operations with terms and conditions of employment
different from those set forth in the Prior Employment Agreement; and
WHEREAS, the Company and Employee desire to waive compliance with the
Prior Employment Agreement, as well as any and all amendments thereto, and enter
into an agreement with new terms and conditions of their relationship, including
an automatically renewing term of employment, which terminates only upon written
notice;
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, Research & Development. Employee shall perform his duties under the
direction of the President or other designee of the Company. Employee agrees to
accept election to and serve as an officer of the Company. During the course of
his employment, 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 and shall use all diligence to make and keep the
Company's trade and/or business. 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
Forty Five Thousand Dollars ($145,000.00) 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. Both parties
agree that the above reference to an "annual base salary" or to other benefits
of
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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 Company-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. Any such 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 previously entered into separate stock
option agreements entitling him to purchase an aggregate of 69,500 shares of
Collaborative Clinical Research, Inc. common stock ("the Common Shares") .
Employee shall have the right to participate in any stock option plan that the
Company may have in effect for similarly-situated employees.
5. BENEFITS. During the course of employment, 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 401(k) plan, and all paid holidays afforded to other similarly-situated
employees.
6. VACATIONS. During the course of employment, Employee shall be
entitled to paid vacation time equal to fifteen (15) 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. TERM AND TERMINATION OF AGREEMENT. The Term of this Agreement shall
commence on the date of this Agreement and shall continue for a period of one
(1) year, (the "Initial Term"), unless sooner terminated as provided in
paragraphs 7.1, 7.2, 7.3, 7.5, 7.6, or 7.7 of this Agreement. This Agreement
will renew automatically for successive one (1) year periods (each, a "Renewal
Period," and collectively with the Initial Term and each proceeding Renewal
Period, the "Term") unless previously terminated, or unless either party gives
notice of non-renewal at least 90 days prior to the commencement of such Renewal
Period.
7.1 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
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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.
7.2 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 provision during the term of this
Agreement, employee shall be entitled to his salary through the date of
such termination, and to any other employee benefits maintained or
established by the Company for its similarly-situated employees.
7.3 TERMINATION FOR CAUSE. 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 failure to complete satisfactorily the
Company's routine pre-employment background check;
(2) Employee's conviction of a felony involving moral
turpitude or a felony in connection with his employment;
(3) Employee's theft, fraud, embezzlement, material
willful destruction of property or material disruption of the
operations of the Company;
(4) 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
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(5) 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; or
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 that have vested on Employee's behalf prior to such
termination, if any, and except for the covenants of Employee set forth
in Section 8 of this Agreement.
7.4 SUSPENSION. In the event Employee engages in conduct
subjecting Employee to potential civil or criminal liability that 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 without pay, pending
investigation and/or the outcome of the matter.
7.5 TERMINATION BY EMPLOYEE OR NON-RENEWAL BY EMPLOYEE.
Employee may terminate his employment and this Agreement at any time
for any or no reason upon at least thirty (30) days written notice by
the Employee directly to the Company's President or other designee of
the Company. Prior to and/or during any Renewal Period, Employee 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.
Employee acknowledges and agrees that a voluntary resignation,
termination or retirement by Employee prior to the expiration of this
Agreement and/or a notice of non-renewal by Employee prior to and/or
during any Renewal Period as described in this Section 7.5 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 that have vested on Employee's behalf prior
to such termination, and except for the covenants of Employee set forth
in Section 8 of this Agreement.
7.6 TERMINATION OTHER THAN FOR CAUSE, DEATH, OR DISABILITY;
TERMINATION BY NON-RENEWAL. During the Term of this Agreement, the
Company may terminate Employee other than for 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 ninety (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 7.6, and/or gives a
notice of non-renewal prior to
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and/or during any Renewal Period as described in this Section 7.6,
Employee shall at the time of such termination be entitled to receive
his salary through the date of such termination and for a period of one
(1) year after such termination.
7.7 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 not continued by the purchaser or successor,
Employee shall at the time of such non-continuation of employment be
entitled to receive his salary through the date of such
non-continuation and for a period of one (1) year after such
non-continuation. 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. RESTRICTIVE COVENANTS OF EMPLOYEE.
8.1 NONCOMPETITION. During the period of Employee's employment
by the Company and, (i) in the case of the termination of Employee's
employment under either Section 7.6 or 7.7 hereof, for a period of
twelve (12) months thereafter, or (ii) in the case of the termination
of Employee's employment under any provision of Section 7 hereof other
than Section 7.6 or 7.7, for a period of fifteen (15) months (the
"Noncompetition Period"), Employee shall not, directly or indirectly,
whether as an individual on his own account, or as a shareholder,
partner, joint venturer, director, officer, employee, consultant,
creditor and/or agent or otherwise, in any State of the United States
in which the Company now or hereafter conducts business:
(iii)enter into or engage in any business including,
without limitation, for a clinical contract research
organization (a "clinical CRO"), or otherwise perform any
clinical contract research, which competes with the business
now or hereafter carried on by the Company or any parent or
subsidiary of, or entity controlled by the Company ("Company
Affiliates");
(iv) solicit customers, business patronage or orders
from or on behalf of or perform other services for, any
business, any person, firm, association,
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corporation or other entity, engaged in any business,
including without limitation, an Application Services Provider
or, clinical CRO, which directly or indirectly competes with
the business of the Company or any Company Affiliate; or
(v) promote or assist, financially or otherwise, any
person, firm, association, corporation or other entity,
including, without limitation, an Applications Services
Provider or any clinical CRO, which competes with the current
or future business of the Company or any Company Affiliates;
provided, however, that the foregoing covenant shall not be
deemed to have been violated solely by (a) the ownership of
equity securities of any 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 (b) the ownership for investment purposes of less
than five percent (5%) of the equity securities of an entity
which has equity securities listed on a national securities
exchange or publicly traded in the over-the-counter-market.
8.2 CONFIDENTIALITY AND WORK PRODUCT. Employee
acknowledges that during his/her employment with the Company he/she 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/her or otherwise,
including, without limitation, trade secrets, design information,
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/her employment he/she
may be producing designs, analyses, recommendations, reports,
compilations, studies and other work product, acquiring information on
behalf of the Company and 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:
(i) he/she will promptly disclose in writing to the
Company all Work Product;
(ii) 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,
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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;
(iii) Employee shall not divulge, disclose or
communicate to any third party in any manner, directly or
indirectly, Proprietary Information or Work Product;
(iv) Employee will not use for his/her own benefit or
purposes or for the 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;
(v) upon the termination of his/her 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; and
(vi) Following termination of the Noncompetition Period,
the obligations of employee in this Section 8.2 shall continue
for all Proprietary Information or Work Product of the Company
or any Affiliate, whenever developed.
8.3 NO INTERFERENCE. During the Noncompetition Period,
Employee agrees that he/she shall not:
(i) take any action which would 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
(ii) take any action which would 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;
(iii) make remarks or take any other action that
disparages or diminishes the reputation of the Company or any
Company Affiliate;
(iv) without limiting the generality of the
foregoing, without the prior written consent of the
President/Chief Executive Officer, directly or indirectly
employ, whether as an employee, officer, director, agent,
consultant or
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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 (iii)
shall not apply with respect to such person terminated by
action of the Company or any Company Affiliate or who has
resigned their position with the Company or any Company
Affiliate.
8.4 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/her hereunder, the Company may not have an adequate remedy at law.
Accordingly, the Company, in addition to any other rights that it may
have, shall be entitled to seek injunctive relief to enforce such
restrictions and obligations without the necessity of posting any bond.
9. 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. Employee further certifies that he (i) has carefully read the
entire contents of this Agreement before signing his/her name hereto, (ii) was
encouraged and afforded sufficient opportunity by the Company to obtain
independent legal advice prior to his executing this Agreement, (iii) fully
understands all of the terms, conditions, restrictions and provisions set forth
in this Agreement, particularly including, but not limited to, those
restrictions contained in Section 8 hereof, (iv) agrees that such restrictions
are necessary for the reasonable and proper protection of the Company's
business, and (v) acknowledges that each such term, condition, restriction and
provision is fair and reasonable with respect to the subject matter thereof.
10. 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.
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11. 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.
12. NOTICE. Any notice required 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.
13. 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. Only a written instrument specifically referring to this
Agreement, executed by the party waiving compliance, may waive the terms or
covenants of this Agreement. 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.
14. 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.
15. 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.
16. 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.
EXECUTED THIS ____ DAY OF July, 2002.
Date: MARCH 5, 2003 /s/ XXXX X. XXXXXX
----------------------------- ----------------------------------
Xxxx X. Xxxxxx
DATATRAK International, Inc.
Date: NOVEMBER 22, 2002 /s/ XXXXXXX X. XXXXX
------------------------------ ----------------------------------
By: Xxxxxxx X. Xxxxx
Title: President and CEO
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