EXHIBIT 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, made this 28th day of March 2002, by and
between THE VALIDATION GROUP, INC., a New Jersey corporation (hereinafter called
"Company"), and (hereinafter called "Executive").
BACKGROUND
Company wishes to employ Executive and Executive wishes to enter into
the employ of the Company on the terms and conditions contained in this
Agreement.
NOW, THEREFORE, in consideration of the facts, mutual promises and
covenants contained herein and intending to be legally bound hereby, Company and
Executive agree as follows:
1. Definitions.
As used herein, the following terms shall have the meanings set forth below
unless the contexts otherwise requires.
"Base Compensation" shall mean the annual rate of compensation set
forth in Section 5, as such amount may be otherwise requires.
"Board" shall mean Board of Directors of the Company as supervised
and/or directed by the Board of Directors of Xxxxx Xxxxx, Inc.
"Cause" shall mean:
(a) Executive is convicted of a felony or a crime involving moral
turpitude whether or not related to Executive's employment or
has entered a plea of nolo contendere (or similar plea) to a
charge of such an offense or the substantial weight of
credible evidence indicates that Executive has committed such
a crime;
(b) Executive uses alcohol or any unlawful controlled substance to
an extent that it substantially interferes with the
performance of Executive's duties under the Agreement;
(c) Any act of fraud, misappropriation or personal dishonesty
relating to or involving Company in any way;
(d) Violation of any express direction of the Board or any
committee or designee thereof or material violation of any
rule, regulation, policy or plan established by Company from
time to time regarding the conduct of its employees and/or its
business;
(e) Material violation by Executive of Executive's obligations
hereunder and which are not remedied within a reasonable time
period after receipt of written notice from Company. In the
event of a material breach which cannot be cured (for example,
disclosure of confidential information), there shall be no
cure period;
(f) Executive engages in grossly negligent or willful misconduct
in the performance of Executive's duties;
(g) The existence of any material conflict between the interest of
Company and Executive that is not disclosed in writing by
Executive to the Board and approved in writing by the
authority of the Board.
"Confidential Information" shall have the meaning specified in Section 14
hereof.
"Disability" shall mean Executive's inability, for a period of six (6)
consecutive weeks, or a cumulative period of two (2) months out of a consecutive
period of three (3) months, to perform the essential duties of Executive's
position, even taking into account any reasonable accommodation required by
applicable law, due to a mental or physical impairment which substantially
limits one or more major life activities. Due to the nature of Executive's
position, Executive acknowledges that it would be an undue hardship on the
Company if any of the time periods specified in the preceding sentence were
longer.
"Employment Year" shall mean each twelve-month period, or part thereof, during
which the Executive is employed hereunder, commencing on the date of this
Agreement.
"Good Reason" shall mean a reduction in Executive's Base Compensation or if the
Board effects a substantial change in Executive's duties and responsibilities,
which change if not acceptable to Executive and would substantially reduce
Executive's stature, importance and dignity within the Company.
"Restricted Area" shall have the meaning specified in Section 14 hereof.
"Restricted Period" shall have the meaning specified in Section 14 hereof.
"Subsidiary" shall mean any corporation in which Company owns directly or
indirectly 50% or more of the Voting Stock or 50% or more of the equity; or any
other venture in which it owns either 50% or more of the voting rights or 50% or
more of the equity.
"Term" shall mean the period specified in Section 4 hereof as the same may be
terminated in accordance with this Agreement.
2. Employment.
Company hereby employs Executive and Executive hereby accepts employment by
Company for the period and upon the terms and conditions specified in this
Agreement.
3. Office and Duties.
Executive shall serve the Company as its Vice President and shall provide
services commensurate with such xxxxxx and office. Without in any way limiting
the generality of the foregoing, Executive shall assist in developing and
refining and shall execute the Company's business plan and maximize the
opportunities of the Company's technologies and product offerings. Executive
shall report directly to the chief executive officer of the Company and the
Board or such person as the Board may from time to time designate. Executive
shall perform any other duties reasonably required by the Company, and shall
serve as an officer or director of any Subsidiary without additional
compensation.
So long as Executive shall remain an employee of Company, Executive's entire
working time, energy, skill and best efforts shall be devoted to the performance
of Executive's duties hereunder and in a manner which will faithfully and
diligently further the business and interests of Company. Executive may engage
in charitable, civic, fraternal and trade professional association activities
provided that they do not interfere materially with Executive's obligations to
Company, but Executive shall not work for any other for-profit business.
Executive shall render Executive's service at Company's office in Bensalem,
Pennsylvania, or such other location within the same general geographic area to
which the Company may relocate.
Executive is not permitted or authorized to make any disbursements or purchases
or to incur any liabilities on behalf of Company or to otherwise obligate or
bind Company in any manner whatsoever except as is permitted by the Company's
purchasing policies and procedures as may be established by the Board from time
to time.
4. Term.
Executive shall be employed by Company for a term of three (3) years, commencing
on the date hereof, unless sooner terminated as hereinafter provided (the
"Term"). The Term may be renewed upon mutual agreement of the parties. Any such
renewal must be in writing signed by the Executive and the Chairman of the
Board, or his designee.
5. Compensation and Benefits.
For all the service rendered by Executive to Company, Executive shall receive
Base Compensation during the Term at the gross annual rate (without regard to
authorized or legally required deductions and withholdings) of one hundred and
thirty thousand dollars ($130,000), payable in installments in accordance with
Company's regular payroll practices in effect from time to time. Base
Compensation will be reviewed by the Board on or about the first and each
subsequent anniversary of the commencement of the Term, and may be increased if
and to the extent such an increase is determined to be appropriate by the Board.
6. Bonus
The Company may pay Executive an annual bonus during the Term of up to fifty
percent of base compensation, upon achievement of certain annual goals for the
fiscal year as defined in writing by the Board. The bonus plan for the first
year of the term is attached hereto as Exhibit A. The Board and the Executive
shall negotiate in good faith and agree on mutually acceptable goals for
subsequent years, using such criteria as prior years performance and expected
growth over the prior year.
7. Expenses
Company will reimburse Executive for all reasonable and necessary expenses
incurred by Executive in connection with the performance of Executive's duties
hereunder following receipt of documentation therefor in accordance with
Company's regular reimbursement procedures and practices as may be established
or revised by the Board from time to time.
8 . Fringe Benefits.
Executive shall be eligible to participate in any profit sharing, stock option,
employee stock ownership, or retirement plans and any health, life, accident,
general liability, directors and officers liability, or disability insurance,
vacation, sick leave or other benefit plans or programs made available to other
similarly situated employees of Company, if and when adopted by the Company and
as long as they are kept in force by Company, and further provided that
Executive meets the eligibility requirements and other terms, conditions and
restrictions of the respective plans and programs. If Executive at the time of
Executive's termination is eligible to participate in any Company incentive or
bonus plan then in effect, Executive shall be entitled (subject to the terms of
any plan document) to receive a prorated share of such incentive or bonus award
based upon the number of days Executive is employed during the plan year up to
the date of Executive's termination. Such pro-rata amount shall be calculated in
the usual way and paid at the usual time.
9. Disability.
If the Executive suffers a Disability, Company shall have the right to terminate
the Term and this Agreement at any time thereafter without penalty by giving
Executive five (5) days written notice of termination. In any such event,
Company shall pay to Executive the Base Compensation for a period of two (2)
months after termination, or until the end of the Term, whichever period is
shorter, such amount to be paid in accordance with the regular payroll practices
of Company.
10. Death.
If Executive dies during the Term, the Term and Executive's employment with
Company shall terminate as of the end of the calendar month in which the death
occurs. Company shall have no obligation to Executive or Executive's estate for
Base Compensation or other form of compensation or benefit other than amounts
accrued through the date of Executive's termination on account of death, except
as otherwise required by applicable law or by Company benefit plans then in
effect.
11. Termination for Cause.
Company may terminate the Term and Executive's employment relationship with
Company at any time for Cause. Company shall have no obligation to Executive for
Base Compensation or other form of compensation or benefits, except as otherwise
required by law, other than amounts accrued through the date of termination, and
reimbursement of appropriately documented expenses incurred by Executive before
the termination of employment, to the extent that Executive would have been
entitled to such reimbursement but for the termination of employment.
12. Termination Without Cause or Resignation for Good Reason.
If Executive is terminated without Cause, or resigns for Good Reason:
Executive shall continue to receive his Base Compensation (payable in
installments in accordance with Company's regular payroll practices in effect
from time to time) and any medical or insurance coverage provided to Executive
as of the effective date of termination or resignation, in each case for the
lesser of six (6) months or the remaining Term, and Executive shall receive any
bonuses or incentive compensation accrued through the effective date of such
termination or resignation. The Company's obligation to continue such medical
and insurance coverage shall cease upon Executive's acceptance of other
employment pursuant to which reasonably comparable coverage is normally
provided.
13. Company Property.
All engineering diagrams, research and development records, inventions,
conceptions, business plans, sales information, customer lists, manufacturers'
and other materials or articles or information including, without limitation,
data processing reports, computer programs, software, customer information and
records, business records, price lists or information, samples, or any other
materials or data of any kind furnished to Executive by Company or developed by
Executive on behalf of Company or at Company's direction or for Company's use or
otherwise in connection with Executive's employment hereunder, are and shall
remain the sole property of Company, including in each case all copies thereof
in any medium, including, without limitation, computer tapes and other forms of
information storage. If Company requests the return of such materials (whether
or not containing confidential information) at any time during or at or after
the termination of Executive's employment, Executive shall immediately deliver,
without limitation, all originals and all copies of the same to Company.
14. Noncompetition, Trade Secrets, Etc.
Executive hereby acknowledges that but for Executive's agreement to the terms
contained in this section, Company would not enter into this Agreement with
Executive. Therefore, Executive hereby agrees as follows:
For so long as Executive remains an employee of the Company and for a period of
one (1) year after the Term or earlier termination of employment with Company,
as such period may be extended as hereinafter set forth (the "Restricted
Period"), Executive shall not, (i) directly or indirectly, own, manage, operate,
finance, join, control or participate in the ownership, management, operation,
financing or control of, or be connected as an officer, employee, partner,
principal, agent, representative, consultant or otherwise engage in any business
which, directly or indirectly, provides, distributes, markets or sells any
validation services or validation consulting services to the pharmaceutical or
medical device industries within the United States or Puerto Rico.; provided,
however, nothing contained in this Section 14 shall prevent Executive from
holding for investment no more than five percent (5%) of any class of equity
securities of a company whose securities are publicly traded on a national
securities exchange or in a national market system; or (ii) induce or attempt to
influence directly or indirectly any employee, customers, independent
contractors or suppliers, of or to the Company to terminate, restrict, limit or
reduce employment or any other relationship with Company.
Executive shall not, directly or indirectly, use for Executive's personal
benefit, or disclose, communicate or divulge to, or use for the direct or
indirect benefit of any person, firm, association or company other than Company,
any "Confidential Information" which term shall mean any information regarding
the business, relationships, methods, business policies, policies, procedures,
techniques, research or development projects or results, pricing, historical or
projected financial information, budgets, trade secrets or other knowledge or
processes of or developed by Company or any names and addresses of customers,
clients or any data on or relating to past, present or prospective customers,
clients or any other confidential information involving, relating to or dealing
with the business operations, research and development activities or other
activities of Company, made known to Executive or learned or acquired by
Executive while in the employ of Company, but Confidential Information shall not
include information otherwise lawfully known generally by the trade or the
general public. At no time shall Executive, directly or indirectly, remove or
cause to be removed from the premises of Company or any Subsidiary any
memorandum, note, list, record, file, document or other paper, equipment or any
like term relating to its business (including copies, extracts and summaries
thereof), except in furtherance of the performance of Executive's duties
hereunder. The foregoing provisions of this section shall apply during and after
the period when Executive is an employee of the Company and shall be in addition
to (and not a limitation of) any legally applicable protections of Company's
interest in confidential information, trade secrets and the like.
Any and all writings, inventions, improvements, strategies, processes,
procedures and/or techniques which Executive may make, conceive, discover or
develop, either solely or jointly with any other person or persons, at any time
when Executive is an employee of Company, whether or not during working hours
and whether or not at the request or upon the suggestion of Company, which
relate to or are useful in connection with any business now or hereafter carried
on or contemplated by Company, including developments or expansions of its
present fields of operations, shall be and remain the sole and exclusive
property of Company. Executive shall make full disclosure to Company of all such
writings, inventions, improvements, strategies, processes, procedures and
techniques, and shall do everything necessary or desirable to convey and vest
the absolute title thereto in Company. Executive shall write and prepare all
specifications and procedures regarding such inventions, improvements,
strategies, processes, procedures and techniques and otherwise aid and assist
Company so that Company may prepare and present applications for trademark,
trade names, copyright or Letters Patent, therefor and may secure such
trademark, trade names, copyright or Letters Patent wherever possible, as well
as reissues, renewals, and extensions thereof, and may obtain the record title
to such trademark, trade names, copyright or patents so that Company shall be
the sole and absolute owner thereof in all countries in which it may desire to
have copyright or patent protection. Executive shall note be entitled to any
additional or special compensation or reimbursement regarding any and all such
writings, inventions, improvements, processes, trademarks, trade names,
strategies, procedures and techniques.
Executive acknowledges that the covenants and restrictions contained in this
Section in view of the nature of the business in which the Company is engaged,
are reasonable and necessary in order to protect the legitimate interests of
Company, that their enforcement will not impose a hardship on Executive or
significantly impair Executive's ability to earn a livelihood, and that any
violation thereof would result in irreparable injuries to Company. Executive
therefore acknowledges that, in the event of Executive's violation of any of
these covenants and restrictions, Company shall be entitled to obtain from any
court of competent jurisdiction preliminary and permanent injunctive relief as
well as damages and an equitable accounting of all earnings, profits and other
benefits arising from such violation, which rights shall be cumulative and in
addition to any other rights or remedies to which Company may be entitled at law
or in equity.
If the Restricted Period or the Restricted Area specified above should be
adjudged unreasonable in any action, suit or proceeding, then the period of time
shall be reduced by such amount or the area shall be reduced by the elimination
of such portion or both such reductions shall be made so that such restrictions
may be enforced for such time and in such area as is adjudged to be reasonable.
If Executive violates any of the restrictions contained in this section, the
Restricted Period shall be extended by a period equal to the length of time from
the commencement of any such violation until such time as such violation shall
be cured by the Executive to the satisfaction of the Company. Company shall have
the right and remedy to require Executive to account for any pay over to Company
all compensation, profits, monies, accruals, increments or other benefits
derived or received by Executive as the result of any transactions constituting
a breach of this Section 14, and Executive shall account for and pay over such
amounts to Company upon Company's request therefor. Executive hereby expressly
consents to the jurisdiction of any court within the Restricted Area to enforce
the provisions of this Section 14, and agrees to accept service of process by
mail relating to any such action, suit or proceeding. Company may supply a copy
of Section 14 of this Agreement to any future or prospective employer of
Executive or to any person to whom Executive has supplied information if the
Company determines in good faith that there is a reasonable likelihood that
Executive has violated or will violate such Section.
15. Prior Agreements, Conflicts of Interest.
Executive represents and warrants to Company the following: that there are no
restrictions, agreements or understandings, oral or written, to which Executive
is a party or by which Executive is bound that prevent or make unlawful
Executive's execution or performance of this Agreement; none of the information
supplied by Executive to Company or any representative of Company or placement
or search agency in connection with Executive's employment by company misstated
a material fact or omitted information necessary to make the information
supplied not materially misleading; and Executive does not have any business or
other relationship that creates a conflict between the interests of Executive
and the Company.
16. Miscellaneous.
Binding Nature of Agreement.
This Agreement shall be binding upon Company and shall inure to the benefit of
Company, its present and future Subsidiaries, successors and assigns including
any transferee of the business operation, as a going concern, in which Executive
is employed and shall be binding upon Executive, Executive's heirs and personal
representatives. None of the rights or obligations of Executive hereunder may be
assigned or delegated, except that in the event of Executive's death or
Disability, any rights of Executive hereunder shall be transferred to
Executive's estate or personal representative, as the case may be. Company may
assign its rights and obligations under this Agreement in whole or in part to
any one or more Subsidiaries or successors, but no such assignment shall relieve
Company of its obligations to Executive if any such assignee fails to perform
such obligations. Any entity into which Company is merged or with which Company
is consolidated or which acquires the business of Company or the business unit
in which Executive is to be principally employed shall be deemed to be a
successor of Company for purposes hereof.
Provisions Separable.
The provisions of this Agreement are independent of and separable from each
other, and no provision shall be affected or rendered invalid or unenforceable
by virtue of the fact that for any reason any other or others of them may be
invalid or unenforceable in whole or in part.
Entire Agreement.
This Agreement contains the entire understanding among the parties hereto with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written, except as herein contained. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof. This Agreement may not be
modified or amended other than by an agreement in writing. Notwithstanding the
foregoing, nothing herein shall limit the application of any generally
applicable Company policy, practice, plan or the terms of any manual or handbook
applicable to Company's employees generally.
Survival.
The provisions of Sections 13 and 14 shall survive expiration of the Term or
earlier termination of Executive's employment by Company and shall remain in
full force and effect thereafter in accordance with their terms.
Taxes.
Executive agrees that he is responsible for paying any and all federal, state
and local income taxes assessed with respect to any money, benefits or other
consideration received from the Company and that the Company is entitle to
withhold any tax payments from amounts otherwise due Executive to the extent
required by applicable law.
Governing Law; Consent to Jurisdiction.
This agreement shall be governed by and construed and interpreted in accordance
with the internal laws of the Commonwealth of Pennsylvania, without regard to
its provisions concerning conflict of laws.
Each of the parties hereto (i) consents to submit itself to the personal
jurisdiction of any federal court located in the State of Pennsylvania or any
Pennsylvania State court in the event any disputes arise out of this Agreement
or any of the transactions contemplated by this Agreement, (ii) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or other
request of leave from any such court, and (iii) agrees that it will not bring
any action, suit or proceeding relating to this Agreement or any of the
transactions contemplated by this Agreement in any court other than a federal
court sitting in the State of Pennsylvania or a Pennsylvania State court.
Headings.
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of the Agreement.
IN WITNESS WHEREHOF, the parties have duly executed and delivered this Agreement
on the date first above written.
THE VALIDATION GROUP, INC.
By: /s/ Xxxxxxx Xxxxxxxx
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Title: President
Name: Xxxxxxx Xxxxxxxx
/s/ Xxxx Xxxxxx
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Executive: Xxxx Xxxxxx
