Employment Agreement - eResearchTechnology Inc. and Joseph Esposito
[Company Letterhead]
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MANAGEMENT EMPLOYMENT AGREEMENT
The following agreement is hereby entered into between, Joseph Esposito
(hereinafter known as Employee) and eResearchTechnology, Inc. (together with its
affiliated corporations hereinafter known as the "Company") and having its
principal offices at 30 S. 17th Street, Philadelphia, PA 19103.
1. DUTIES AND RESPONSIBILITIES
Employee agrees to hold the position of President and Chief Executive
Officer and shall be directly responsible to Board of Directors.
2. BEST EFFORTS
Employee agrees to devote his best efforts to his employment with the
Company, on a full-time (no less than 40 hours/week) basis. He further
agrees not to use the facilities, personnel or property of the Company
for personal or private business benefit.
3. ETHICAL CONDUCT
Employee will conduct himself in a professional and ethical manner at
all times and will comply with all company policies as well as all
State and Federal regulations and laws as they may apply to the
services, products, and business of the Company.
4. TERM OF THE AGREEMENT
This agreement will be for a period of one year, commencing January 1,
2004 and will continue from year to year unless terminated.
5. COMPENSATION
a. Salary shall be $330,000/year payable in equal installments as
per the company's payroll policy. Salary shall be considered
on an annual basis and adjusted based on performance.
b. Annual incentive bonus shall be determined by the Company's
Compensation Committee of its Board of Directors and shall be
based on performance.
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c. Benefits shall be the standard benefits of the Company as they
shall exist from time to time with the exception of vacation,
which will be five weeks.
d. Car Allowance of $900/month.
6. NON-DISCLOSURE
Employee acknowledges that employment with the Company requires him/her
to have access to confidential information and material belonging to
the Company, including customer lists, contracts, proposals, operating
procedures, trade secrets and business methods and systems, which have
been developed at great expense by the Company and which Employee
recognizes to be unique assets of the Company's business. Upon
termination of employment for any reason, Employee agrees to return to
the Company any such confidential information and material in his
possession with no copies thereof retained. Employee further agrees,
whether during employment with the Company or any time after the
termination thereof (regardless of the reason for such termination), he
will not disclose nor use in any manner, any confidential or
proprietary material relating to the business, operations, or prospects
of the Company except as authorized in writing by the Company or
required during the performance of his duties.
7. BUSINESS INTERFERENCE; NONCOMPETITION
a. During employment with the Company and for a period of one
year (the "Restrictive Period") thereafter (regardless of the
reason for termination) Employee agrees he will not, directly
or indirectly, in any way for his own account, as employee,
stockholder, partner, or otherwise, or for the account of any
other person, corporation, or entity: (i) request or cause any
of the Company's suppliers, customers or vendors to cancel or
terminate any existing or continuing business relationship
with the Company; (ii) solicit, entice, persuade, induce,
request or otherwise cause any employee, officer or agent of
the Company to refrain from rendering services to the Company
or to terminate his or her relationship, contractual or
otherwise, with the Company; or (iii) induce or attempt to
influence any customer or vendor to cease or refrain from
doing business or to decline to do business with the Company
or any of its affiliated distributors or vendors.
b. The Employee agrees that, during the Restrictive Period, the
Employee will not, directly or indirectly, accept employment
with, provide services to or consult with, or establish or
acquire any interest in, any business, firm, person,
partnership, corporation or other entity which engages in any
business or activity that is the same as or competitive with
the business conducted by the Company in any state of the
United States of America and in any foreign country in which
any customer to whom the Company is providing services or
technology is located.
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8. FORFEITURE FOR BREACH; INJUNCTIVE RELIEF.
a. Any breach of the covenants made in Sections 6 and 7 hereof
shall result in the forfeiture of the Employee's right to any
and all payments which may be required to be made under this
Agreement following such breach and shall relieve the Company
of any obligation to make such payments.
b. The Employee acknowledges that his compliance with the
covenants in Sections 6 and 7 hereof is necessary to protect
the good will and other proprietary interests of the Company
and that, in the event of any violation by the Employee of the
provisions of Section 6 or 7 hereof, the Company will sustain
serious, irreparable and substantial harm to its business, the
extent of which will be difficult to determine and impossible
to remedy by an action at law for money damages. Accordingly,
the Employee agrees that, in the event of such violation or
threatened violation by the Employee, the Company shall be
entitle to an injunction before trial from any court of
competent jurisdiction as a matter of course and upon the
posting of not more than a nominal bond in addition to all
such other legal and equitable remedies as may be available to
the Company.
c. The rights and remedies of the Company as provided in this
Section 8 shall be cumulative and concurrent and may be
pursued separately, successively or together against Employee,
at the sole discretion of the Company, and may be exercised as
often as occasion therefor shall arise. The failure to
exercise any right or remedy shall in no event be construed as
a waiver or release thereof.
d. The Employee agrees to reimburse the Company for any expenses
incurred by it in enforcing the provisions of Sections 6 and 7
hereof if the Company prevails in that enforcement.
9. INVENTIONS
Employee agrees to promptly disclose to the Company each discovery,
improvement, or invention conceived, made, or reduced to practice
(whether during working hours or otherwise) during the term of
employment. Employee agrees to grant to the Company the entire interest
in all of such discoveries, improvements, and inventions and to sign
all patent/copyright applications or other documents needed to
implement the provisions of this paragraph without additional
consideration. Employee further agrees that all works of authorship
subject to statutory copyright protection developed jointly or solely,
while employed shall be considered a work made for hire and any
copyright thereon shall belong to the Company. Any invention,
discovery, or improvement conceived, made, or disclosed, during the one
year period following the termination of employment with the Company
shall be deemed to have been made, conceived, or discovered during
employment with the Company.
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Employee acknowledges that the only discoveries, improvements, and
other inventions made prior to the date hereof which have not been
filed in the United States Patent Office are attached as Exhibit A.
10. NO CURRENT CONFLICT
Employee hereby assures the Company that he is not currently restricted
by any existing employment or non-compete agreement that would conflict
with the terms of this Agreement.
11. TERM; TERMINATION AND TERMINATION BENEFITS
a. Employment is "at will" which means that either the Company or
Employee may terminate at any time, with or without cause or
good reason, upon written notice given at least ninety (90)
days prior to termination.
b. This Agreement shall terminate upon the death of the Employee.
In addition, if, as a result of a mental or physical condition
which, in the reasonable opinion of a medical doctor selected
by the Company's board of directors, can be expected to be
permanent or to be of an indefinite duration and which renders
the Employee unable to carry out the job responsibilities held
by, or the tasks assigned to, the Employee immediately prior
to the time the disabling condition was incurred, or which
entitles the Employee to receive disability payments under any
long-term disability insurance policy which covers the
Employee for which the premiums are reimbursed by the Company
(a "Disability"), the Employee shall have been absent from his
duties hereunder on a full-time basis for 120 consecutive
days, or 180 days during any twelve month period, and within
thirty (30) days after written notice (which may occur before
or after the end of such 120 or 180 day period), by the
Company to Employee of the Company's intent to terminate the
Employee's employment by reason of such Disability, the
Employee shall not have returned to the performance of his
duties hereunder, the Employee's employment hereunder shall,
without further notice, terminate at the end of said
thirty-day notice.
c. The Company may also terminate the Employee's employment under
this Agreement for Cause. For purposes of this Agreement the
Company shall have "Cause" to terminate the Employee's
employment if the Employee, in the reasonable judgment of the
Company: (i) fails to perform any reasonable directive of the
Company that may be given from time to time for the conduct of
the Company's business; (ii) materially breaches any of his
commitments, duties or obligations under this Agreement; (iii)
embezzles or converts to his own use any funds of the Company
or its Affiliates or any business opportunity of the Company
of its Affiliates; (iv) destroys or converts to his own use
any property of the Company or its Affiliates, without the
Company's consent; (v) is convicted of, or indicted for, or
enters a guilty plea or plea of no contest with respect to, a
felony; (vi) is adjudicated an incompetent; or (vii) violates
any federal, state, local or other law applicable to the
business of the Company or engages in any conduct which, in
the reasonable judgment of the Company, is injurious to the
business or interests of the Company.
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d. Upon any termination of this Agreement, the Company shall have
no further obligation to Employee other than for annual salary
earned through the date of termination, and no severance pay
or other benefits of any kind shall be payable; provided,
however, that in the event the Company terminates this
Agreement other than for Cause or as a result of the death or
Disability of the Employee, the Employee shall receive: (i)
bonus based on 100% performance and prorated based on the
number of days worked during the year in which the
termination, death or Disability occurred, payable in one lump
sum in accordance with the Company's policy; (ii) severance
equal to one year's annual salary and bonus, based on 100%
performance, payable in one lump sum in accordance with the
Company's policy; (iii) continuation of Benefits (as hereafter
defined) for one year; and (iv) accelerated vesting of all
stock options granted to Employee, all of which were in effect
prior to the date of: (i) termination of this Agreement; (ii)
death; or (iii) Disability. The Company must give the Employee
written notice of the Employee's breach under sections
11.c.(i.), 11.c.(ii), and 11.c(vii) and 15 days to cure before
the Employee is given notice of termination as required under
Section 11.a.
e. Notwithstanding any contrary provision contained in this
Employment Agreement, in the event that either: (i) there is a
"Change of Control" (as hereafter defined) and neither the
Company nor the Buyer offers the Employee a position with
comparable responsibilities, location or compensation for the
Buyer, or of a division or subsidiary thereof, even though the
position may not be that of Chief Executive Officer of a
public entity; or (ii) after the first anniversary of the date
of the Change in Control, and for a period of twelve months
thereafter, the Employee's responsibilities, authority,
location, or compensation are not acceptable to the Employee,
the Employee may elect to resign and receive: (i) bonus based
on 100% performance and prorated based on the number of days
worked during the year in which the resignation occurred,
payable in one lump sum in accordance with the Company's
policy; (ii) severance equal to one year's annual salary and
bonus, based on 100% performance, payable in one lump sum in
accordance with the Company's policy; (iii) continuation of
Benefits (as defined below) for one year; and (iv) accelerated
vesting of all stock options granted to Employee, all of which
were in effect prior to the date of the Change of Control.
The Employee must provide written notice of such election not
less than sixty days following the date of the Change of
Control or, if the Employee's new position is changed within
the time period and in the manner described above, within
thirty days following such event.
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The term "Benefits" as utilized in this Section 11, refers to
standard health, dental, disability, life and accident
insurance benefits, all of which are subject to any applicable
premium co-pay, and car allowance.
The term "Change of Control", as utilized in this Section 11,
refers to:
(i) A change of control of a nature that would be
required to be reported in the Company's proxy
statement under the Securities Exchange Act of
1934, as amended;
(ii) The approval by the Board of Directors of a sale,
not in the ordinary course of business, of all or
substantially all of the Company's assets and
business to an unrelated third party and the
consummation of such transaction; or
(iii) The approval by the Board of Directors of any
merger, consolidation, or like business combination
or reorganization of the Company, the consummation
of which would result in the occurrence of any
event described in clause (i) or (ii) above, and
the consummation of such transaction.
Except as expressly modified and amended hereby, the Employment Agreement and
its terms and provisions are hereby ratified, confirmed and approved in all
respects.
12. MISCELLANEOUS
a. This Agreement and any disputes arising herefrom shall be
governed by Pennsylvania law.
b. In the event that any provision of this Agreement is held to
be invalid or unenforceable for any reason, including without
limitation the geographic or business scope or duration
thereof, this Agreement shall be construed as if such
provision had been more narrowly drawn so as not to be invalid
or unenforceable.
c. This Agreement supersedes all prior agreements, arrangements,
and understandings, written or oral, relating to the subject
matter.
d. The failure of either party at any time or times to require
performance of any provision hereof shall in no way affect the
right at a later time to enforce the same. No waiver by either
party of any condition or of the breach by the other of any
term or covenant contained in this Agreement shall be
effective unless in writing and signed by the aggrieved party.
A waiver by a party hereto in any one or more instances shall
not be deemed or construed as a further or continuing waiver
of any such condition or breach or a waiver of any other
condition, or of the breach of any other term or covenant set
forth in this Agreement.
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e. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been
given when delivered in person, sent by certified mail,
postage prepaid, or delivered by a nationally recognized
overnight delivery service addressed, if to the Company at 30
S. 17th Street, 8th Floor, Philadelphia, PA 19103 Attn:
President and if to the Employee, at the address of his
personal residence as maintained in the Company's records.
For Employee: For the Company:
Joseph Esposito Bruce Johnson
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Name: Joseph Esposito Name: Bruce Johnson, CFO
Date: 3/4/04 Date: 3/4/04
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