Employment Agreement - eResearchTechnology Inc. and Bruce Johnson
[eResearchTechnology, Inc. Letterhead]
MANAGEMENT EMPLOYMENT AGREEMENT
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The following agreement (hereinafter known as "Agreement") is hereby entered
into between Bruce Johnson (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
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Employee agrees to hold the position of Sr. Vice President and Chief
Financial Officer and shall be directly responsible to the Chairman of
the Audit Committee.
2. BEST EFFORTS
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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 private business benefit.
3. ETHICAL CONDUCT
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Employee will conduct his or her self 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
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This Agreement will be effective upon full execution and will continue
year to year unless terminated.
5. COMPENSATION
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a. Salary shall be $220,000/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. Benefits shall be the standard benefits of the Company, as
they shall exist from time to time.
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c. This position qualifies for the Executive Bonus Plan of the
Company. For 2004, the Employee's bonus target will be 40% of
his base salary if the company meets its Board approved
objectives for the year, and may be increased or decreased
based on performance as per the 2004 bonus plan. The Employee
will also be eligible to participate in the Executive Bonus
Plan each year thereafter for the life of the Agreement at a
level to be determined by the Compensation Committee of the
Company's Board of Directors.
6. NON-DISCLOSURE
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Employee acknowledges that employment with the Company requires him 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
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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/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.
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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
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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 any discoveries, improvements and other
inventions made prior to the date of initial employment with the
Company or the date hereof, which have not been filed in the United
States Patent Office, are attached on Exhibit A, which shall be
executed by both the Employee and the Company.
10. NO CURRENT CONFLICT
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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
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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 30 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 any business opportunity of the Company; (iv) destroys or
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converts to his own use any property of the Company, 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. 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 an
opportunity to cure within fifteen (15) days of such written
notice. If the Employee fails to cure, the Company may
terminate the Employee for Cause and shall give notice of
termination to the Employee as required under Section 11.a.
d. Upon any termination of this Agreement, the Company shall have
no further obligation to Employee other than for annual salary
and bonus 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 Company shall provide
to the Employee (i) severance equal to 100% of his
then-current annual salary and applicable prorated bonus,
based on 100% performance, payable in one lump sum in
accordance with the Company's policy and (ii) continuation of
Benefits (as hereafter defined), subject to applicable benefit
plan provisions, for one year.
e. Notwithstanding any contrary provision contained in this
Agreement, upon the first occurrence of a Trigger Event (as
hereafter defined), the Employee shall be entitled to receive
(i) severance equal to 100% of his then-current annual salary
and applicable prorated bonus, based on 100% performance,
payable in one lump sum in accordance with the Company's
policy; (ii) continuation of Benefits (as hereafter defined),
subject to applicable benefit plan provisions, for one year;
and (iii) accelerated vesting of all stock options, such that
all stock options held by Employee immediately prior to the
date of the Change of Control (as hereafter defined) shall
become exercisable in full as of the date of the Change of
Control.
The term "Benefits" as utilized in this Section 11, shall mean
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 "Trigger Event" as utilized in this Section 11 shall
mean the occurrence of a Change of Control (as hereafter
defined) in connection with or after which either (i) the
Employee is terminated other than for Cause; (ii) the Employee
resigns his employment within 60 days after the Change of
Control because neither the Company nor the other party to the
Change of Control (the "Buyer") offers the Employee a position
with comparable responsibilities, authority, location and
compensation; or (iii) the Employee is employed by the Company
or the Buyer, or a division or subsidiary thereof, for one
year after the date of the Change in Control.
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The term "Change of Control", as utilized herein, shall mean:
(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.
In order to implement the provisions of this Section 11.e., in
connection with any Change of Control, the Company shall, as a
condition thereto, accelerate the vesting of all unvested
stock options as of the date of the Change of Control or cause
the Buyer to either assume all stock options held by the
Employee immediately prior to the Change of Control or grant
equivalent substitute options containing substantially the
same terms, and the Company shall not otherwise take any
action that would cause any stock options held by the Employee
that are not then exercisable to terminate prior to the Change
of Control or Trigger Event, as otherwise permitted by the
Company's 2003 Stock Option Plan or as may be permitted by the
Buyer's stock option plan, respectively.
12. MISCELLANEOUS
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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.
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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.
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:
Bruce Johnson Joseph Esposito
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Name: Joseph Esposito
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Date: August 20, 2004 Date: August 20, 2004
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