EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “Agreement”), made as of this 4th day of March, 2009, is
entered into by Bio-Imaging Technologies, Inc., a Delaware corporation with its principal place of
business at 000 Xxxxxxx Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxx 00000 (the “Company”), and Xxxx X.
Xxxxxxxxx (the “Employee”).
WHEREAS, the Employee is currently serving as the President and Chief Executive Officer of the
Company.
WHEREAS, the Employee is currently a party to the Amended and Restated Employment Agreement
with the Company dated as of December 31, 2008 (the “Prior Employment Agreement”) which will
terminate on February 28, 2009.
WHEREAS, the Company and the Employee desire to continue the Employee’s employment with the
Company in accordance with terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained in this
Agreement, and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties to this Agreement, the parties agree as follows:
1. Term of Employment. The Company hereby agrees to employ the Employee, and the
Employee hereby accepts employment with the Company, upon the terms set forth in this Agreement,
for the period commencing on March 1, 2009 and ending on February 28, 2012 (such period, as it may
be extended, the “Employment Period”), unless sooner terminated in accordance with the provisions
of Section 4.
2. Title; Capacity. The Employee shall serve as President and Chief Executive Officer
or in such other reasonably comparable position as the Company or its Board may determine from time
to time. The Employee shall be based at the Company’s headquarters in Newtown, Pennsylvania, or
such place or places in the continental United States as the Board shall determine. The Employee
shall be subject to the supervision of, and shall have such authority as is delegated to the
Employee by, the Board or such officer of the Company as may be designated by the Board.
The Employee hereby accepts such employment and agrees to undertake the duties and
responsibilities inherent in such position and such other duties and responsibilities as the Board
or its designee shall from time to time reasonably assign to the Employee. The Employee agrees to
devote his entire business time, attention and energies to the business and interests of the
Company during the Employment Period. The Employee agrees to abide by the rules, regulations,
instructions, personnel practices and policies of the Company and any changes therein which may be
adopted from time to time by the Company. The Employee further agrees to abide by the applicable
rules, practices, policies, restrictions and principles outlined by the Board in its’ Corporate
Policy Governance Manual and amendments adopted thereto.
3. Compensation and Benefits.
3.1 Salary. The Company shall pay the Employee, in periodic installments in
accordance with the Company’s customary payroll practices, an annual base salary of $370,000. Such
salary may be subject to cost of living or other increases thereafter as determined by the Board.
3.2 Fringe Benefits. The Employee shall be entitled to participate in all bonus and
benefit programs that the Company establishes and makes available to its employees, if any, to the
extent that Employee’s position, tenure, salary, age, health and other qualifications make him
eligible to participate, including, but not limited to, a car allowance not to exceed $750 per
month. The monthly car allowance shall be paid in equal installments on each payroll date during
the month in accordance with the Company’s customary payroll practices. The Employee shall be
entitled to four (4) weeks paid vacation per year, to be taken at such times as may be approved by
the Board or its designee.
3.3 Reimbursement of Expenses. The Company shall reimburse the Employee for all
reasonable travel, entertainment and other expenses incurred or paid by the Employee in connection
with, or related to, the performance of his duties, responsibilities or services under this
Agreement, in accordance with policies and procedures, and subject to limitations, adopted by the
Company or the Board from time to time. The Employee must submit to the Company receipts and other
details of each such expense, in the form required by the Company, within sixty (60) days after the
later of (i) the Employee’s incurrence of such expense or (ii) the Employee’s receipt of the
invoice for such expense. If such expense qualifies for reimbursement, then the Company will
reimburse the Employee the expense within thirty (30) days thereafter. In no event will such
expense be reimbursed after the close of the calendar year following the calendar year in which
that expense is incurred. The amount of reimbursements to which the Employee may become entitled
in any one calendar year shall not affect the amount of expenses eligible for reimbursement
hereunder in any other calendar year. The Employee’s right to reimbursement cannot be liquidated
or exchanged for any other benefit or payment.
3.4 Bonuses; Incentive Compensation.
(a) The Employee shall be eligible to receive, at the sole discretion of the Board, an annual
bonus (the “MIP Bonus”) up to a maximum amount equal to 50% of the Employee’s annual base salary
upon the achievement of certain milestones as set forth in an annual Management Incentive Plan, to
be mutually agreed upon (the “Management Incentive Plan”). Additional milestones may be
established to increase the MIP Bonus to a maximum amount equal to 100% of the Employee’s annual
base salary. The specific annual milestones will be set each year by the Board following
consultation with the Employee. Notwithstanding the foregoing, unless otherwise waived by the
Board, the Employee shall not be eligible to receive the MIP Bonus if the Company has not achieved
pre-tax earnings for that applicable fiscal year. Any MIP Bonus awarded to the Employee shall be
paid by the 15th day of the third month following the close of the calendar year for which such
bonus is earned or as soon as administratively practicable thereafter, but in no event shall such
payment be made prior to the
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first business day in January in the calendar year immediately following the calendar year for
which that bonus is earned or after April 30 of that calendar year.
(b) In addition to Section 3.4(a) above, upon the execution of this Agreement, the Employee
shall be entitled to receive an equity bonus in the form of restricted stock units covering 40,000
shares of the Company’s common stock (the “RSU Award”), which will be awarded as of March 4, 2009,
pursuant to the Company’s 2002 Stock Incentive Plan, as amended and restated from time to time (the
“Plan”). The RSU Award will vest as to 13,333 shares on March 1, 2010, 13,333 shares on March 1,
2011 and 13,334 shares on March 1, 2012. Notwithstanding the foregoing vesting schedule, the
shares of Common Stock underlying the RSU Award will not be issued to the Employee until the
earlier of: (i) the Employee’s Cessation of Service (as defined in the Plan) with the Company; or
(ii) a Change of Control (as defined in the Plan); or (iii) seven years from the date of the award.
Any future equity awards during the Employment Period may be awarded by the Company’s Compensation
Committee in its sole discretion to be reviewed on an annual basis. The remaining terms of the RSU
Award, including the share issuance schedule and the payment of withholding taxes, shall be as set
forth in the Company’s form Restricted Stock Unit Award Agreement.
(c) The number of shares of the Company’s common stock to which the Employee may become
entitled pursuant to Paragraph 3(b) shall be appropriately adjusted in the event of any stock
split, stock dividend, combination or exchange of shares, recapitalization or other similar
transaction affecting the outstanding shares of the Company’s common stock without the Company’s
receipt of consideration.
3.5 Withholding. All salary, bonus and other compensation payable to the Employee
shall be subject to applicable withholding taxes.
4. Termination of Employment Period. The employment of the Employee by the Company
pursuant to this Agreement shall terminate upon the occurrence of any of the following:
4.1 Expiration of the Employment Period;
4.2 At the election of the Company, for Cause (as defined below), immediately upon written
notice by the Company to the Employee, which notice shall identify the Cause upon which the
termination is based. For the purposes of this Section 4.2, “Cause” shall mean (a) a good faith
finding by the Company that (i) the Employee has repeatedly failed to perform his assigned duties
for the Company, or (ii) the Employee has engaged in dishonesty, gross negligence or misconduct, or
(b) the conviction of the Employee of, or the entry of a pleading of guilty or nolo contendere by
the Employee to, any crime involving moral turpitude or any felony;
4.3 At the election of the Employee, for Good Reason (as defined below), immediately upon
written notice by the Employee to the Company, which notice shall identify the Good Reason upon
which the termination is based. For the purposes of this Section 4.3, “Good Reason” for
termination shall mean (i) a material adverse change in the Employee’s authority, duties or
compensation without the prior written consent of the Employee (provided
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that neither the hiring of a chief operating officer nor the hiring of a chief financial
officer by the Company and the relinquishment of such title and associated duties by the Employee
shall constitute Good Reason hereunder), (ii) a material breach by the Company of the terms of this
Agreement, which breach is not remedied by the Company within 10 days following written notice from
the Employee to the Company notifying it of such breach or (iii) the relocation of the Employee’s
place of work more than 50 miles from the Company’s current executive offices.
4.4 Upon the death or disability of the Employee. As used in this Agreement, the term
“disability” shall mean the inability of the Employee, due to a physical or mental disability, for
a period of 90 days, whether or not consecutive, during any 360-day period, to perform the services
contemplated under this Agreement, with or without reasonable accommodation as that term is defined
under state or federal law. A determination of disability shall be made by a physician
satisfactory to both the Employee and the Company; provided, that, if the Employee
and the Company do not agree on a physician, the Employee and the Company shall each select a
physician and these two together shall select a third physician, whose determination as to
disability shall be binding on all parties;
4.5 At the election of either party, upon not less than 180 days’ prior written notice of
termination.
5. Effect of Termination.
5.1 At-Will Employment. If the Employment Period expires pursuant to Section 1
hereof, then, unless the Company notifies the Employee to the contrary, the Employee shall continue
his employment on an at-will basis following the expiration of the Employment Period. Such at-will
employment relationship may be terminated by either party at any time and shall not be governed by
the terms of this Agreement.
5.2 Payments Upon Termination.
(a) In the event the Employee’s employment is terminated pursuant to Section 4.1, Section 4.2,
Section 4.4 or by the Employee pursuant to Section 4.5, the Company shall pay to the Employee the
compensation and benefits otherwise payable to him under Section 3 through the last day of his
actual employment by the Company.
(b) In the event the Employee’s employment is terminated by the Employee pursuant to Section
4.3 or by the Company pursuant to Section 4.5, then the following provisions shall apply, provided
the Employee executes a mutual general release and waiver in a form reasonably satisfactory to the
Board (the “Release”) within 21 days (or 45 days if such longer period is required under law) and
such Release becomes effective and enforceable in accordance with applicable law after the
expiration of any applicable revocation period.
(i) The Company shall continue to pay to the Employee his salary as in effect on the date of
termination for a period of six (6) months. Such salary continuation payments shall be made at
periodic intervals in accordance with the Company’s customary payroll practices for salaried
employees, beginning within the 60-day period following the Employee’s Separation from Service
provided the requisite Release is effective following the
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expiration of any applicable revocation period, but in no event will the first such payment be
made later than the last day of such 60-day period on which the Release is so effective.
(ii) The Company shall pay, in a series of six (6) equal monthly installments, beginning
within the 60-day period following the Employee’s Separation from Service due to such termination
provided the requisite Release is effective following the expiration of any applicable revocation
period but in no event later than the last day of such 60-day period on which the Release is so
effective, an amount equal in the aggregate to the annual bonus paid to him for the fiscal year
immediately prior to the fiscal year in which his termination date occurs.
(iii) Should the Employee elect under Code Section 4980B to continue health care coverage
under the Company’s group health plan for himself, his spouse and his eligible dependents following
such termination date, then the Company shall provide such continued health care coverage at the
Company’s expense until the earlier of (i) the expiration of the 120-day period measured
from the date of such termination or (ii) the first date the Employee is covered under another
employer’s heath benefit program which provides substantially the same level of benefits without
exclusion for pre-existing medical conditions. Should the Company’s provision of such continued
health care coverage result in the recognition of taxable income (whether for federal, state or
local income tax purposes) by the Employee, then the Company shall report such taxable income as
taxable W-2 wages and collect the applicable withholding taxes, and the Employee shall be
responsible for the payment of any additional income and employment tax liability resulting from
such coverage. To the extent the health care coverage under this Section 5.2(b)(iii) is to be
provided through a self-funded program maintained by the Company, the Employee shall directly pay
for the costs to obtain such health care coverage and shall, within 30 days after each periodic
payment for a reimbursable health care coverage expense under this Section 5.2(b)(iii), submit
appropriate evidence of such payment to the Company for reimbursement, and the Company shall pay
such reimbursement on the 30th day following receipt of the submission. During the period such
health care coverage remains in effect hereunder, the following provisions shall govern the
arrangement: (a) the amount of the health care costs eligible for reimbursement in any one calendar
year of such coverage shall not affect the amount of such costs eligible for reimbursement in any
other calendar year for which such reimbursement is to be provided hereunder; (ii) no costs shall
be reimbursed after the close of the calendar year following the calendar year in which those costs
were incurred; and (iii) the Employee’s right to the reimbursement of such costs cannot be
liquidated or exchanged for any other benefit. In the event the reimbursement of health care
coverage results in the recognition of taxable income (whether for federal, state or local income
tax purposes) by the Employee, then the Company shall make an additional payment (the “Health Care
Gross-Up Payment”) to the Employee in a dollar amount to fully cover all taxes payable by the
Employee on the income recognized with respect to the reimbursed health care coverage, including
taxes imposed upon the Health Care Gross-Up Payment. The Health Care Gross-Up Payment shall be
paid to the Employee at the time the related taxes are remitted to the tax authorities.
(iv) The Company shall make a lump sum cash payment, not to exceed $7,500, to cover the cost
of any other benefits to which the Employee would have been entitled under Section 3.2 of this
Agreement had he continued in employment for an additional six (6) months following such
termination date. Such payment shall be made to the Employee within
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the 60-day period following the Employee’s Separation from Service provided the requisite
Release is effective following any applicable revocation period but in no event later than the last
day of such 60-day period on which the Release is effective.
The payment to the Employee of the amounts payable under this Section 5.2(b) shall constitute
the sole remedy of the Employee in the event of a termination of the Employee’s employment in the
circumstances set forth in this Section 5.2(b).
5.3 Section 409A. Certain payments contemplated by this Agreement may be “deferred
compensation” for purposes of Section 409A of the Code. Accordingly, the following provisions
shall be in effect for purposes of avoiding or mitigating any adverse tax consequences to the
Employee under Code Section 409A.
(a) It is the intent of the parties that the provisions of this Agreement comply with all
applicable requirements of Code Section 409A. Accordingly, all provisions of this Agreement shall
be interpreted and applied in a manner that does not result in a violation of the applicable
requirements or limitations of Code Section 409A and the applicable Treasury Regulations thereunder
and such provisions shall be deemed amended to comply with Code Section 409A and the applicable
Treasury Regulations thereunder.
(b) Notwithstanding any provision to the contrary in this Agreement, no payments or benefits
to which the Employee may become entitled under Section 4 of this Agreement shall be made or
provided to him prior to the earlier of (i) the expiration of the six (6)-month period measured
from the date of his Separation from Service with the Company or (ii) the date of his death, if the
Employee is deemed, pursuant to the procedures established by the Compensation Committee in
accordance with the applicable standards of Code Section 409A and the Treasury Regulations
thereunder and applied on a consistent basis for all non-qualified deferred compensation plans of
the Employer Group subject to Code Section 409A, to be a “specified employee” at the time of such
Separation from Service and such delayed commencement is otherwise required in order to avoid a
prohibited distribution under Code Section 409A(a)(2). Upon the expiration of the applicable Code
Section 409A(a)(2) deferral period, all payments and benefits deferred pursuant to this Section 4.3
(whether they would have otherwise been payable in a single sum or in installments in the absence
of such deferral) shall be paid or reimbursed to the Employee in a lump sum, and any remaining
payments and benefits due under this Agreement shall be paid or provided in accordance with the
normal payment dates specified for them herein. The specified employees subject to such a delayed
commencement date shall be identified on December 31 of each calendar year. If the Employee is so
identified on any such December 31, he shall have specified employee status for the twelve
(12)-month period beginning on April 1 of the following calendar year. For purposes of this
Agreement, including (without limitation) this Section 5.3(b), “Separation from Service” shall mean
a separation from service as defined under Treasury Regulation Section 1.409A-1(h).
5.4 Survival. The provisions of Sections 5.2(b), 5.3, 6, 7.2, 8.3, 8.5 and 8.9 shall
survive the termination of this Agreement.
6. Non-Competition and Non-Solicitation. The Employee affirms that the form of
Invention Assignment and Confidential Information Agreement and form of Non-Competition
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and Non-Solicitation Agreement, substantially in the form attached hereto as Exhibit A
and Exhibit B, respectively, remain in full force and effect as of the dated hereof.
7. Other Agreements.
7.1 Prior Agreements. The Employee represents that his performance of all the terms
of this Agreement and the performance of his duties as an employee of the Company do not and will
not breach any agreement with any prior employer or other party to which the Employee is a party
(including without limitation any nondisclosure or non-competition agreement). Any agreement to
which the Employee is a party relating to nondisclosure, non-competition or non-solicitation of
employees or customers is listed on Schedule A attached hereto.
7.2 Executive Retention Agreement. Upon execution of this Agreement, the Company and
the Employee shall enter into the Amended and Restated Executive Retention Agreement attached
hereto as Exhibit C; provided, however, that if the Employee is terminated
for any reason, and such termination triggers a payment (including benefits) to the Employee
pursuant to the Amended and Restated Executive Retention Agreement, then the Employee shall receive
payments (including benefits) solely pursuant to the Amended and Restated Executive Retention
Agreement and not pursuant to this Agreement.
8. Miscellaneous.
8.1 Notices. Any notices delivered under this Agreement shall be deemed duly
delivered four business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, or one business day after it is sent for next-business day delivery via
a reputable nationwide overnight courier service, in each case to the address of the recipient set
forth in the introductory paragraph hereto. Either party may change the address to which notices
are to be delivered by giving notice of such change to the other party in the manner set forth in
this Section 8.1.
8.2 Pronouns. Whenever the context may require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the singular forms of
nouns and pronouns shall include the plural, and vice versa.
8.3 Entire Agreement. This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings, whether written or oral, relating
to the subject matter of this Agreement (including, without limitation, the Prior Employment
Agreement).
8.4 Amendment. This Agreement may be amended or modified only by a written instrument
executed by both the Company and the Employee.
8.5 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania (without reference to the conflicts of laws
provisions thereof). Any action, suit or other legal proceeding arising under or relating to any
provision of this Agreement shall be commenced only in a court of the Commonwealth of Pennsylvania
(or, if appropriate, a federal court located within Pennsylvania),
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and the Company and the Employee each consents to the jurisdiction of such a court. The
Company and the Employee each hereby irrevocably waive any right to a trial by jury in any action,
suit or other legal proceeding arising under or relating to any provision of this Agreement.
8.6 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of both parties and their respective successors and assigns, including any corporation with
which, or into which, the Company may be merged or which may succeed to the Company’s assets or
business; provided, however, that the obligations of the Employee are personal and
shall not be assigned by him. Notwithstanding the foregoing, if the Company is merged with or into
a third party which is engaged in multiple lines of business, or if a third party engaged in
multiple lines of business succeeds to the Company’s assets or business, then for purposes of this
Agreement, the term “Company” shall mean and refer to the business of the Company as it existed
immediately prior to such event and as it subsequently develops and not to the third party’s other
businesses.
8.7 Waivers. No delay or omission by the Company in exercising any right under this
Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the
Company on any one occasion shall be effective only in that instance and shall not be construed as
a bar or waiver of any right on any other occasion.
8.8 Captions. The captions of the sections of this Agreement are for convenience of
reference only and in no way define, limit or affect the scope or substance of any section of this
Agreement.
8.9 Severability. In case any provision of this Agreement shall be invalid, illegal
or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions
shall in no way be affected or impaired thereby.
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THE EMPLOYEE ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS AGREEMENT, HAS HAD A FULL
OPPORTUNITY TO REVIEW THIS AGREEMENT AND CONSULT WITH COUNSEL AND UNDERSTANDS AND AGREES TO ALL OF
THE PROVISIONS IN THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year set
forth above.
| BIO-IMAGING TECHNOLOGIES, INC. |
||||
| By: | /s/ Xxxxx X. Xxxxxx | |||
| Name: | Xxxxx X. Xxxxxx | |||
| Title: | Chairman of the Compensation Committee of the Board of Directors | |||
| By: | /s/ Xxx X. Xxxxxxx | |||
| Name: | Xxx X. Xxxxxxx | |||
| Title: | Executive Vice President of Finance and Administration and Chief Financial Officer | |||
| EMPLOYEE |
||||
| /s/ Xxxx X. Xxxxxxxxx | ||||
| Xxxx X. Xxxxxxxxx | ||||
[Signature Page to Employment Agreement]
SCHEDULE A
Prior Agreements
None.
EXHIBIT A
Invention Assignment and Confidential Information Agreement
EXHIBIT B
Non-Competition and Non-Solicitation Agreement
EXHIBIT C
Amended and Restated Executive Retention Agreement
