Employment Agreement (the "Agreement") dated as of January 23,
1997, by and between SYNETIC, INC., a Delaware corporation (the "Company"), and
Xxxxx X. Xxxxxxxxx, M.D. ("Executive").
WHEREAS, the Company, Synternet Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of the Company, CareAgents, Inc., a
Massachusetts corporation ("CareAgents"), and certain shareholders of CareAgents
have entered into an Agreement and Plan of Merger, dated as of the date hereof
(the "Merger Agreement"), pursuant to which the Company will purchase (the
"Purchase") all of the issued and outstanding capital stock of CareAgents; and
WHEREAS, in connection with the Purchase, the parties desire
to enter into this Agreement, to be effective upon the Closing (as defined in
the Merger Agreement);
NOW, THEREFORE, in consideration of the mutual covenants in
this Agreement, the parties agree as follows:
1. Effectiveness of Agreement and Employment of Executive.
1.1. Effectiveness of Agreement. This Agreement shall become
effective as of the Closing Date (as defined in the Merger Agreement). In the
event that the Closing is not consummated, this Agreement shall be null and
void.
1.2. Employment by the Company. The Company hereby employs
Executive and Executive hereby accepts such employment with the Company. The
Executive shall report to, and perform such duties and services for the Company,
CareAgents and their respective subsidiaries and affiliates (CareAgents and such
subsidiaries and affiliates collectively, "Affiliates"), and at such locations
as may be designated from time to time by, the Chief Executive Officer or the
Board of Directors of the Company (the "Board"), or the designee of either
thereof (it being understood that any change in location following the Closing
Date shall be requested by the Chief Executive Officer of the Company or the
Board, or the designee of either thereof, in good faith and for a valid business
purpose). Without limiting the generality of the foregoing, Executive hereby
acknowledges that the Company may from time to time pursue acquisitions of other
companies which may result in changes in the duties and responsibilities
assigned to the Executive. Executive shall use his best and most diligent
efforts to promote the interests of the Company and the Affiliates, and shall
conform to established business policies of the Company. The Executive shall
devote all of his business time and attention to his employment under this
Agreement.
1.3. Confidentiality. (a) Executive understands and
acknowledges that in the course of his employment, he will have access to and
will learn information proprietary to the Company and its Affiliates that
concerns the operation and methodology of the Company and its Affiliates,
including, without limitation, business plans, financial information, protocols,
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proposals, manuals, clinical procedures and guidelines, scientific data,
computer source codes, programs, software, knowhow and specifications,
copyrights, trade secrets, market information, Developments (as hereinafter
defined), data and customer information (collectively, "Proprietary
Information"). Executive agrees that, at all times (including following
termination of the Employment Period (as hereinafter defined)), he will keep
confidential and will not disclose directly or indirectly any such Proprietary
Information to any third party, except as required to fulfill his duties
hereunder, and will not misuse, misappropriate or exploit such Proprietary
Information in any way. The restrictions contained herein shall not apply to any
information which Executive can demonstrate by written record (a) was already
available to the public at the time of disclosure, or subsequently become
available to the public, otherwise than by breach of this Agreement, or (b) was
the subject of a court order to disclose. Upon any termination of the Employment
Period, Executive shall immediately return to the Company all copies of any
Proprietary Information in his possession.
(b) Executive agrees that at any time during the Employment
Period or thereafter, the Executive shall not make, or cause or assist any other
person to make, any statement or other communication to any third party which
impugns or attacks, or is otherwise critical of, the reputation, business or
character of the Company, its Affiliates or any of their respective officers,
employees, products or services.
1.4. Restrictions on Solicitation. During the period beginning
on the Closing Date and ending on the second anniversary of the date of
cessation of the employment of the Executive for any reason whatsoever,
Executive shall not, directly or indirectly, without the prior written approval
of the Company, solicit or contact any customer, or any prospective customer
with whom the Executive has had contact during the Employment Period, of the
Company or any of the Affiliates for any commercial pursuit that could be
reasonably construed to be in competition with the Company or any of the
Affiliates, or that is contemplated from time to time by the Company's or
CareAgents's business plan, or take away or interfere or attempt to interfere
with any custom, trade, business or patronage of the Company or any of the
Affiliates, or induce, or attempt to induce, any employees, agents or
consultants of or to the Company or any of the Affiliates to do anything from
which Executive is restricted by reason of this Agreement nor shall Executive,
directly or indirectly, offer or aid others to offer employment to or interfere
or attempt to interfere with any employees, agents or consultants of the Company
or any of the Affiliates.
1.5. Restrictions on Competitive Employment. During the period
beginning on the Closing Date and ending on the second anniversary (first
anniversary in the case of a termination by the Company without Cause or a
termination by the Company pursuant to Section 4.1 below) of the date of
cessation of the employment of Executive for any reason whatsoever, Executive
shall not (as principal, agent, employee, consultant or otherwise), anywhere in
the United States, Canada or Europe, directly or indirectly, without the prior
written approval of the Company, engage in activities for, or render services to
(including, without limitation, computer programming, data entry, sales or
product development), any
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firm or business (i) engaged in direct or indirect competition
with CareAgents, (ii) conducting a business of the type and character engaged in
by CareAgents (or contemplated by the Company's or CareAgents's business plan),
(iii) developing products or services competitive with those of CareAgents or
(iv) conducting any other business in which the Company or any of its Affiliates
is then engaged if Executive has engaged in activities for such business of the
Company or such Affiliates or obtained Proprietary Information with respect
thereto (all of the businesses in clauses (i), (ii), (iii) and (iv)
collectively, "Competitive Business"). Notwithstanding the foregoing, Executive
may have an interest consisting of publicly traded securities constituting less
than 1 percent of any class of publicly traded securities in any public company
engaged in a Competitive Business so long as he is not employed by and does not
consult with, or become a director of or otherwise engage in any activities for,
such company. Notwithstanding anything contained in this Section 1, Executive
agrees that Executive shall not, at any time during the period beginning on the
Closing Date and ending on the second anniversary of the date of cessation of
the Employment Period for any reason whatsoever, deliberately take any action
which (a) would interfere with any contractual or customer relationships of the
Company or its Affiliates, or any relationship with the employees of, or vendors
or contractors to, the Company or its Affiliates, (b) would result in a
diminution of business to the Company or its Affiliates or (c) is otherwise
detrimental to the best interests of the Company or its Affiliates.
1.6. Extension of Restricted Period. The period during which
the Executive is subject to the restrictions contained in Section 1.4 and 1.5
shall be extended by the length of any period during which Executive is in
breach of such restrictions.
1.7. Assignment of Developments. All Developments that are at
any time made, conceived or suggested by Executive, whether acting alone or in
conjunction with others, during or as a result of Executive's employment under
this Agreement or any prior employment with the Company or the Affiliates, shall
be the sole and absolute property of the Company and the Affiliates, free of any
reserved or other rights of any kind on Executive's part. During Executive's
employment and, if such Developments were made, conceived or suggested by
Executive during or as a result of Executive's employment under this Agreement
or any prior employment with the Company or the Affiliates, thereafter,
Executive shall promptly make full disclosure of any such Developments to the
Company and, at the Company's cost and expense, do all acts and things
(including, among others, the execution and delivery under oath of patent and
copyright applications and instruments of assignment) deemed by the Company to
be necessary or desirable at any time in order to effect the full assignment to
the Company and the Affiliates of Executive's right and title, if any, to such
Developments. For purposes of this Agreement, the term "Developments" shall mean
all data, discoveries, findings, reports, designs, inventions, improvements,
methods, practices, techniques, developments, programs, concepts, and ideas,
whether or not patentable, relating to the present or planned activities, or
future activities of which Executive is aware, or the products and services of
the Company or any of the Affiliates.
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1.8. Disclosure of Information. During the Employment Period,
Executive shall use his best efforts to disclose to the Chairman of the Board or
the Chief Executive Officer of the Company any bona fide information known by
him that would have any material negative impact on the Company or an Affiliate.
1.9. Remedies. Executive acknowledges and agrees that damages
for a breach or threatened breach of any of the covenants set forth in this
Section 1 will be difficult to determine and will not afford a full and adequate
remedy, and therefore agrees that the Company, in addition to seeking actual
damages in connection therewith and the remedies described in the Escrow
Agreement (as defined below), may seek specific enforcement of any such covenant
in any court of competent jurisdiction, including, without limitation, by the
issuance of a temporary or permanent injunction.
2. Compensation and Benefits.
2.1. Salary. The Company shall pay Executive for services
during the Employment Period a base salary at the annual rate of $175,000. Any
and all increases to Executive's base salary shall be determined by the Board in
its sole discretion. Such base salary shall be payable in equal installments, no
less frequently than monthly, pursuant to the Company's customary payroll
policies in force at the time of payment, less any required or authorized
payroll deductions.
2.2. Benefits. During the Employment Period, Executive shall
be entitled to participate, on the same basis and at the same level as other
similarly situated employees of the Company, in any group insurance,
hospitalization, medical, health and accident, disability, fringe benefit and
tax-qualified retirement plans or programs of the Company now existing or
hereafter established to the extent that he is eligible under the general
provisions thereof.
2.3. Expenses. Pursuant to the Company's customary policies in
force at the time of payment, Executive shall be promptly reimbursed, against
presentation of vouchers or receipts therefor, for all authorized expenses
properly and reasonably incurred by him on behalf of the Company or its
Affiliates in the performance of his duties hereunder.
3. Employment Period.
Executive's employment under this Agreement shall commence as
of the Closing Date, and shall terminate on the fifth anniversary thereof (the
"Employment Period"), unless terminated earlier pursuant to Section 4. Unless
written notice of either party's desire to terminate the Employment Period has
been given to the other party prior to the expiration of the Employment Period
(or any one-month renewal thereof contemplated by this sentence), the Employment
Period shall be automatically renewed for successive one-month periods.
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4. Termination.
4.1. Termination by the Company During First Six Months. The
Employment Period may be terminated by the Company at any time during the
six-month period commencing on the Closing Date, if the Company determines in
its reasonable discretion that the performance, action or behavior of Executive
is incompatible with or disruptive to the ongoing or future operations and
business needs of the Company or any of its Affiliates. Upon such a termination,
the Company shall have no obligation to Executive other than the payment of
Executive's earned and unpaid compensation to the effective date of such
termination. Executive hereby acknowledges that such a termination would result
in a "Termination Event" for purposes of the Escrow Agreement dated as of
January 23, 1997, among the Executive, Xxxxx X. Xxxxxx, Xxxxx Xxxxxx, Xxxxx X.
Xxxxxxxxx, Xxxx X. Pearl, the Company and United States Trust Company of New
York, as escrow agent (the "Escrow Agreement"), which would have the
consequences set forth therein. Executive hereby further acknowledges that such
a termination will not be deemed to be a termination without "cause" for
purposes of the Option Agreement (as defined below) or any other employee
benefit plan or program of the Company or any of its Affiliates.
4.2. Termination by the Company for Cause. (a) The Employment
Period may be terminated at any time by the Company for Cause. Upon such a
termination, the Company shall have no obligation to Executive other than the
payment of Executive's earned and unpaid compensation to the effective date of
such termination. Executive hereby acknowledges that such a termination would
result in a "Termination Event" for purposes of the Escrow Agreement, which
would have the consequences set forth therein.
(b) For purposes of this Agreement, the term "Cause" shall
mean any of the following:
1. A willful failure of Executive to perform his
duties in any material respect which failure is not cured by Executive
within 10 days following written notice from the Company detailing such
failure (other than any such failure resulting from a Permanent
Disability (as hereinafter defined) of Executive);
2. Any willful misconduct by Executive relating,
directly or indirectly, to the Company or any of its Affiliates, or any
breach by Executive of any material policy of the Company or any of its
Affiliates, as reasonably determined by the Board, which breach, if
susceptible to cure, is not cured by Executive within 10 days following
written notice from the Company detailing such breach;
3. Any breach by Executive of any material provision
contained in Sections 1.2, 1.3, 1.4, 1.5, 1.7 and 1.8 of this
Agreement, as reasonably determined by the Board; or
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4. Any willful violation by Executive of any federal
or state law or regulation applicable to the business of the Company or
any of its Affiliates, or Executive's commission of a common law fraud
or conviction of a felony or crime involving moral turpitude.
4.3. Permanent Disability. If during the Employment Period,
(i) Executive shall become ill, mentally or physically disabled, or otherwise
incapacitated so as to be unable regularly to perform the duties of his position
for a period in excess of 90 consecutive days or more than 120 days in any
consecutive 12 month period, or (ii) a duly licensed physician selected by the
Company with the reasonable approval of Executive determines that Executive is
mentally or physically disabled so as to be unable to perform regularly the
duties of his position and such condition is expected to be of a permanent
duration (a "Permanent Disability"), then the Company shall have the right to
terminate the Employment Period upon written notice to Executive. Upon a request
by the Company, Executive will submit to a medical examination to determine
whether Executive is Permanently Disabled. Upon such a termination, the Company
shall have no obligation to Executive other than (i) the payment of Executive's
earned and unpaid compensation to the effective date of such termination and
(ii) as provided in the Option Agreement.
4.4. Death. The Employment Period shall be deemed terminated
by the Company upon the death of Executive and the Company shall have no
obligation to Executive or Executive's estate other than (i) the payment of
Executive's earned and unpaid compensation to the effective date of such
termination and (ii) as provided in the Option Agreement.
4.5. Resignation by the Executive. If the Executive terminates
his employment during the Employment Period for any reason, the Company shall
have no obligation to Executive other than the payment of Executive's earned and
unpaid compensation to the effective date of such termination. Executive hereby
acknowledges that such a termination would result in a "Termination Event" for
purposes of the Escrow Agreement, which would have the consequences set forth
therein.
4.6. Termination by the Company Without Cause. The Employment
Period may be terminated at any time by the Company without Cause. If the
Company terminates the Employment Period without Cause, the Company shall have
no obligation to Executive other than other than (i) the payment of Executive's
earned and unpaid compensation to the effective date of such termination and
(ii) as provided in the Option Agreement.
4.7. Liquidated Damages. Executive acknowledges that any
payments or benefits under Section 4.6 resulting from a termination of the
Employment Period by the Company without Cause are in lieu of any and all claims
that the Executive may have against the Company other than benefits under the
Company's employee benefit plans that by their terms survive termination of
employment and benefits under the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended, and represent liquidated damages (and not a
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penalty). The Company may request that the Executive confirm such
acknowledgement in writing prior to the receipt of such benefits.
4.8 Board Representation. If the Employment Period is
terminated for any reason prior to the appointment of Executive to the Board
pursuant to Section 4.04 of the Merger Agreement, the Company's obligations
under such Section 4.04 shall become null and void.
5. Options.
5.1. New Option Grant. Executive has been granted an option
(the "New Option") under the Parent Option Plan (as defined in the Merger
Agreement) to purchase shares of the Company's common stock, par value $.01 per
share, on the terms and conditions specified in the Stock Option Agreement (the
"Option Agreement") attached hereto as Exhibit A ("Exhibit A").
6. Notices. Any notice or communication given by either party
hereto to the other shall be in writing and personally delivered or mailed by
registered or certified mail, return receipt requested, postage prepaid, to the
following addresses:
(a) if to the Company:
Synetic, Inc.
River Drive Center 2
000 Xxxxx Xxxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Telecopier No.: (000) 000-0000
Attention.: General Counsel
(b) if to the Executive:
Xxxxx X. Xxxxxxxxx, M.D.
00 Xxxx Xxxxx Xxxx
Xxxxxx, XX 00000
Any notice shall be deemed given when actually delivered to such address, or two
days after such notice has been mailed or sent by Federal Express, whichever
comes earliest. Any person entitled to receive notice may designate in writing,
by notice to the other, such other address to which notices to such person shall
thereafter be sent.
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7. Miscellaneous.
7.1. Entire Agreement. This Agreement, Exhibit A and the
Escrow Agreement contain the entire understanding of the parties in respect of
their subject matter and supersede upon their effectiveness all other prior
agreements and understandings between the parties with respect to such subject
matter.
7.2. Amendment; Waiver. This Agreement may not be amended,
supplemented, cancelled or discharged, except by written instrument executed by
the party affected thereby. No failure to exercise, and no delay in exercising,
any right, power or privilege hereunder shall operate as a waiver thereof. No
waiver of any breach of any provision of this Agreement shall be deemed to be a
waiver of any preceding or succeeding breach of the same or any other provision.
7.3. Binding Effect; Assignment. The rights and obligations of
this Agreement shall bind and inure to the benefit of any successor of the
Company by reorganization, merger or consolidation, or any assignee of all or
substantially all of the Company's business and properties. The Company may
assign its rights and obligations under this Agreement to any of its Affiliates
without the consent of the Executive. Executive's rights or obligations under
this Agreement may not be assigned by Executive, except that the rights
specified in Section 4.3 shall pass upon the Executive's death to Executive's
executor or administrator.
7.4. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect the meaning or interpretation
of this Agreement.
7.5. Governing Law; Interpretation. This Agreement shall be
construed in accordance with and governed for all purposes by the laws and
public policy (other than conflict of laws principles) of the State of New York
applicable to contracts executed and to be wholly performed within such State.
Each party hereto (i) agrees that any legal suit, action or proceeding arising
out of or relating to this Agreement shall be instituted and heard exclusively
in any New York federal or state court in New York City, (ii) waives any
objection that such party may now or hereafter have to the laying of venue of
any such legal suit, action or proceeding and (iii) irrevocably submits to the
exclusive jurisdiction of any such court in any such legal suit, action or
proceeding.
7.6. Further Assurances. Each of the parties agrees to
execute, acknowledge, deliver and perform, and cause to be executed,
acknowledged, delivered and performed, at any time and from time to time, as the
case may be, all such further acts, deeds, assignments, transfers, conveyances,
powers of attorney and assurances as may be reasonably necessary to carry out
the provisions or intent of this Agreement.
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7.7. Severability. The parties have carefully reviewed the
provisions of this Agreement and agree that they are fair and equitable.
However, in light of the possibility of differing interpretations of law and
changes in circumstances, the parties agree that if any one or more of the
provisions of this Agreement shall be determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the
provisions of this Agreement shall, to the extent permitted by law, remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Moreover, if any of the provisions contained in this Agreement is determined by
a court of competent jurisdiction to be excessively broad as to duration,
activity, geographic application or subject, it shall be construed, by limiting
or reducing it to the extent legally permitted, so as to be enforceable to the
extent compatible with then applicable law.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
SYNETIC, INC.
By:
--------------------------
Name:
Title:
EXECUTIVE
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