Employment Agreement - eResearchTechnology Inc. and Joel Morganroth
[Company Letterhead]
MANAGEMENT EMPLOYMENT AGREEMENT
The following agreement is hereby entered into between Joel Morganroth
(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 Chief Scientist and shall be
directly responsible to the CEO. Employee will advise the Company on
matters related to the successful operation, marketing and business
development of the Company's Diagnostic Business Unit (DX), on a best
efforts basis to achieve annual goals established with the Board of
Directors. Employee also agrees to provide medical interpretation for
diagnostic tests as such reading is from time to time required.
2. BEST EFFORTS
Employee agrees to devote his best efforts to his employment with the
Company.
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 May 21,
2001 and will continue from year to year unless terminated.
5. COMPENSATION
a. Salary shall be $175,000/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. Employee agrees to waive all standard benefits of the Company as
they shall exist from time to time.
c. Employee is eligible to receive stock option grants at the
discretion of the Compensation Committee of the Board of
Directors. All stock options currently held by the employee are a
direct result of prior employment with the Company or its
affiliated companies.
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.
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7. BUSINESS INTERFERENCE; NONCOMPETITION
a. During employment with the Company and for a period of two years
(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.
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.
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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.
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 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, 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.
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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.
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 company will provide for a severance package of 2.3 times the
annual salary, which will include base salary and benefits but
excludes any fees or compensation covered under the consulting
agreement with Joel Morganroth, M.D., P.C. 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 (a) there is a
"Change of Control" (as hereafter defined) and neither the Company
nor the Buyer offers the Executive a position with comparable
responsibilities, authority, location or compensation, or (b)
after the date of the Change in Control but before the first
anniversary thereof, the Executive's responsibilities, authority,
location, or compensation are not acceptable to the Executive the
Executive may elect to resign and receive severance equal to 2.3
times the annual salary, payable in one lump sum in accordance
with the Company's policy.
The Executive must provide written notice of such election not
less than sixty days following the date of the Change of Control
or, if the Executive's new position is changed within the time
period and in the manner described above, within thirty days
following such event.
The term "Change of Control", as utilized herein, 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.
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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.
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:
/s/ Joel Morganroth /s/ Bruce Johnson
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Date: May 21, 2001 Date: May 21, 2001
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