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EXHIBIT 10.19
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of June 28, 2000, by and
between CLINTRIALS RESEARCH, INC., a Delaware corporation (hereinafter, the
"Employer"), and Graham May, M.D., a resident of the State of New Jersey (the
"Employee").
WITNESSETH
WHEREAS, Employer desires to continue to employ Employee, and Employee desires
to continue such employment on the terms and conditions set forth herein.
WHEREAS, Employer desires to assure continuance of a full-time employment
relationship with Employee on certain terms and conditions which are set forth
herein; and
WHEREAS, Employee is willing to accept such employment and terms and conditions.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements made herein, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound hereby, agree as
follows:
1. Employment. Employer hereby continues to employ Employee, and Employee
hereby accepts employment with employer on the terms and conditions
specified herein.
2. Term. The term of this Agreement shall be for a period commencing on
January 1, 2000 and ending December 31, 2000, except that the
provisions of Section 8 and 9 will survive the expiration or earlier
termination of this Agreement. This Agreement shall be automatically
renewed for additional and successive one (1) year periods unless
either party provides ninety (90) days notice prior to any anniversary
date of its intent not to renew this Agreement (the initial term and
any and all renewal terms each being a "Period of Employment").
Employee will continue to be paid full pay and benefits during this
ninety (90) day period. In the event Employer elects not to renew this
Agreement upon any such anniversary date, Employee will be entitled to
receive a severance payment in an amount equal to Employee's base
monthly compensation (not including incentive compensation) at the time
of non-renewal multiplied by twelve(12), payable in a lump sum.
3. Duties of Employee. Employee's principal duties and responsibilities
shall be as follows: to serve as President ClinTrials Research North
America and be responsible for operations under his purview and for
achieving annual revenue and profitability goals, as well as other
quantitative and qualitative goals and plans. Employee shall also
perform such other executive duties and responsibilities assigned to
Employee from time to time in accordance with the policies and
objectives established by the Company. Employee agrees to devote his
full business time, attention and skill to his duties hereunder.
Employee shall be required to engage in travel from time to time in
connection with his duties for the Employer.
4. Compensation. For his employment hereunder, Employee shall be paid
$________ per month during the Period of Employment and in accordance
with the Employer's standard payroll practices.
Employee shall also be eligible to participate in a bonus program pool
based on individual and company-wide performance under such programs as
may from time to time be provided to employees of Employer of similar
rank, and shall also receive a merit review after close of the books
for the calendar year then ending.
5. Benefits. Employee shall be entitled to such medical, dental,
disability and life insurance, vacation, participation in any profit
sharing plan of Employer and other employee benefits as may be provided
to employees of Employer of similar rank from time to time. Employee
shall be
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entitled to four weeks vacation per calendar year, and shall be
entitled to all other fringe benefits offered to Employer's employees
of similar rank.
6. Stock Options. From time to time Employee shall be eligible for
consideration for a stock option award (the "Stock Options"), which
Stock Options shall be formally awarded by the Board of Directors and
which shall be exercisable at the option price that is the price per
share at the close of trading on the date of the grant.
7. Termination. The employment of the Employee will terminate as follows:
a. Termination on Death. The employment of Employee will
automatically terminate upon the death of Employee.
b. Termination by Employer for Cause. Employer may terminate the
employment of Employee for "cause" at any time upon written
notice to the Employee. For the purpose of this subparagraph 7
(b), the term "cause" shall mean any act or omission which
constitutes a refusal on the part of the Employee to perform
the services required of him under this Agreement, any breach
by Employee of his fiduciary duties to the Employer, abuse of
office amounting to breach of trust, fraud, any conviction of
a felony or any crime involving moral turpitude or any act of
theft or dishonesty. Any dispute which shall arise between the
parties hereto regarding whether Employee has committed any
act which could give Employer "cause" to terminate this
Agreement shall be settled by arbitration as provided below.
Upon such termination, Employee shall continue to be bound by
the provisions of Sections 8 and 9 hereof and all obligations
of Employer to Employee shall cease other than obligations to
pay compensation and/or provide benefits earned and/or vested
as of the date of termination.
c. Termination by Employer for Other Than Cause. Employer may
terminate the employment of Employee at any time upon written
notice to the Employee. In such event, Employee shall be paid
the amount of any unpaid salary earned by the Employee up to
and including the date for such Termination by Employer, an
amount equal to Employee's then current monthly base salary
multiplied by twelve (12), payable in a lump sum and any
unpaid vacation earned by him up to and including the date of
such Termination by Employer. Also for a twelve (12) month
period from effective date of Termination by Employer,
Employer shall continue to make the employer contributions
necessary to maintain the Employee's coverage pursuant to all
benefit plans provided to the Employee by the Employer
immediately prior to such Termination by Employer, and
Employer shall deduct from any payments payable to the
Employee pursuant to this Section the amount of any employee
contributions necessary to maintain such coverage, and
Employee shall continue to be bound by the provisions of
Sections 8 and 9 hereof and all unvested stock options shall
become fully vested and shall remain exercisable for the
remainder of the stated term of such stock options.
d. Termination by Employee. Employee may terminate this Agreement
upon ninety (90) days written notice to Employer, in which
case Employer shall pay the Employee any unpaid salary earned
by the Employee up to and including the date of such
Termination by Employee, an amount equal to Employee's then
current monthly base salary multiplied by three (3), payable
in a lump sum and any unpaid vacation pay earned by him up to
an including the date of such Termination by Employee. Also,
for a three (3) month period from the effective date of
Termination by Employee, Employer shall continue to make the
employer contributions necessary to maintain the Employee's
coverage pursuant to all benefit plans provided to the
Employee by the Employer immediately prior to such Termination
by Employee, and Employer shall deduct from any payments
payable to the Employee pursuant to
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this Section the Amount of any employee contributions
necessary to maintain such coverage and Employee shall
continue to be bound by the provisions of Section 8 and 9
hereof.
e. Termination of Incapacity. If at any time during the term of
this Agreement, Employee becomes disabled or is unable for any
reason substantially to perform his duties hereunder, Employer
may terminate his employment, and provided he has not
otherwise materially breached any of the provisions of this
Agreement, benefits shall be paid to him as delineated in the
Employer disability manual entitled "Your disability
Benefits". In such event, Employee shall continue to be bound
by the provisions of Sections 8 and 9 hereof.
f. Failure to Renew. If Employer gives Employee notice as
provided in Section 2 of its election not to renew this
Agreement, Employee's employment shall terminate upon the
anniversary date. In such event, Employee shall be paid the
amount of any unpaid salary earned by the Employee up to and
including the date of such Failure to Renew by Employer, an
amount equal to Employee's then current monthly base salary
multiplied by twelve (12), in a lump sum and any unpaid
vacation pay earned by him up to and including the date of
such Termination by Employer. Also, for a twelve (12) month
period from the effective date of termination by Employer,
Employer shall continue to make the employer contributions
necessary to maintain the Employee's coverage pursuant to all
benefit plans provided to the Employee by the Employer
immediately prior to such Failure to Renew by Employer, and
Employer shall deduct from any payment payable to the Employee
pursuant to this Section the amount of any employee
contributions necessary to maintain such coverage, an Employee
shall continue to be bound by the provisions of Section 8 and
9 hereof, and all unvested stock options shall become fully
vested and shall remain exercisable for the remainder of the
stated term of such stock options.
g. Change of Control. In the event there is a "Change in Control"
of the ownership of the Employer, and the Employee's
employment with the Employer is terminated as a result of such
Change in Control, the Employee shall be entitled to receive
as a severance payment following such termination an amount
equal to Employee's base monthly compensation (not including
incentive compensation) at the time of termination multiplied
by twelve (12), payable in a lump sum. In addition, any earned
but unpaid base salary, incentive compensation and any unpaid
vacation pay earned by him up to and including the date of
such termination as a result of Change in Control will be
paid. Also, for the twelve (12) month period following the
termination date, Employee will continue to receive the
Employer contributions necessary to maintain the Employee's
coverage pursuant to all benefit plans provided to the
Employee by the Employer immediately prior to such termination
as a result of Change in Control. Employer shall deduct from
any payments payable to the Employee pursuant to this Section
the amount of any employee contributions necessary to maintain
such coverage. Further, any Stock Options granted to the
Employee will be fully vested upon a Change in Control,
whether or not the Employee is terminated and shall remain
exercisable for the remainder of the stated term of such stock
options.
Termination shall be deemed to be a result of a Change in
Control (I) if such termination occurs within twelve (12)
months following the Change in Control; or (II) any change in
the Employee's title, reporting relationship, responsibilities
or authority as in effect immediately prior to any Change in
Control is made within twelve (12) months of such Change in
Control and which adversely affects to a material degree his
role in the management of the Employer; or (III) if any
reduction in the Employee's salary paid to him by the Employer
as in effect immediately prior to any Change in Control or, if
such salary has been subsequently increased at any
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time or from time to time, any reduction in such increased
salary; or (IV) if any termination of the Employee's employee
benefit programs, including but not limited to , any stock
option plan, investment plan, savings plan, incentive
compensation plan or life insurance, medical plans or
disability plans provided by the Employer to the Employee and
in which the Employee is participating or under which the
Employer is covered, all is in effect immediately prior to any
Change in Control; or (V) if there is any requirement by the
Employer that the Employee's position and principal office be
based and located more that twenty (20) mile outside the
boundaries of the principal office of the company immediately
prior to the Change in Control; or (VI) if any failure or
refusal of the Employer to renew this Employment Agreement
under Section 2. After any Change in Control shall have
occurred.
A "Change in Control" shall be deemed to have occurred if (I)
a tender offer shall be made and consummated for the ownership
of more than 50% of the outstanding voting securities of the
Employer, (II) the Employer shall be merged or consolidated
with another corporation and as a result of such merger or
consolidation less than 50% of the outstanding voting
securities of the surviving or resulting corporation shall be
owned on the aggregate by the former shareholders of the
Employer, as the same shall have existed immediately prior to
such merger or consolidation, (III) the Employer shall sell
all, or substantially all, of its assets to another
corporation that is not a wholly-owned subsidiary, or (IV) a
person, within the meaning of Section 3 (a)(9) or of Section
13 (d)(3) (as in effect on the date hereof) of the Securities
and Exchange Act of 1934 ("Exchange Act"), shall acquire more
than 50% of the outstanding voting securities of the Employer
(whether directly, indirectly, beneficially or of record). For
purposes hereof, ownership of voting securities shall take
into account and shall include ownership as determined by
applying the provisions of Rule 13d-3(d)(1)(I) (as in effect
of the date hereof) pursuant to the Exchange Act.
h. Supersedes Prior Benefits. The provisions of this Section 7
concerning payments to Employee upon termination of employment
shall supersede and replace all other severance and
termination arrangements in effect prior to or after the date
hereof, including without limitation, the provisions of this
Agreement shall supersede the Employee Manual where
inconsistent. Whenever Section 7 of this Agreement requires or
permits the payment of an amount of money calculated by
reference to the Employee's base salary, the payment of such
amount to Employee shall be deemed a severance and/or
termination payment and shall not be deemed to extend the
period of employment during the time which such payment are
made or to require the provision of Employer of any benefits
to Employee during such period of time, other than those
benefits which may be required by applicable law to be
provided.
8. Confidential Information. In consideration of the covenants of Employer
contained herein, Employee agrees as follows:
a. Employee hereby agrees and acknowledges that he has and has
had access to or is aware of certain confidential, restricted
and/or proprietary information concerning operation by the
Employer and its affiliates of their businesses (collectively
the "Business"). Employee hereby undertakes and agrees that he
shall have a duty to Employer and its affiliates to protect
such information from use or disclosure.
b. For the purposes of the Section 8, the following definitions
shall apply:
(I) "Trade Secret" as related to the Business, shall mean
any specialized technical information or data
relating to (I) management or clinical trials,
biostatistical services, or product registration
services; (II)
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marketing strategy or plans of Employer or it
affiliates, (III) proprietary computer software; and
(IV) terms of contracts and specific contract
proposals with existing and potential suppliers,
employees and customers of Employer or it affiliates,
which are of value and not generally known to the
competitors of Employer and which are or were treated
as confidential by Employer or it affiliates.
(II) "Confidential Information" as related to the
Business, shall mean any data or information, other
than Trade Secrets, which is material to Employer or
its affiliates and not generally known by the public
and which are, or were treated as, confidential by
Employer or its affiliates. Confidential Information
shall include, without limitation, any information
pertaining to the Business Opportunities (as
hereinafter defined) of Employer or its affiliates,
the details of this Agreement, and the business
plans, financial statements and projections of
Employer or its affiliates.
(III) "Business Opportunity" shall mean any information or
plans of Employer or its affiliates concerning the
purchase of or investment in any contract research
organization operations, or the availability of any
such operations for purchase or investment by
Employer or its affiliates, together with all related
information, concerning the specifics of any
contemplated purchase or investment (Including price,
terms and the identity of such operations),
regardless of whether Employer or its affiliates have
entered into any such agreement, made any commitment,
or issued any bid or offer to such operations.
c. Employee shall not, without the prior written consent of
Employer, for so long as the information and data remain Trade
Secrets, make use of, disclose, or negligently permit any
unauthorized person which is not an employee of Employer to
use, disclose, or gain access to any Trade Secrets of Employer
or its affiliates or of any other person or entity making
Trade Secrets available for the use of Employer or its
affiliates.
d. Employee shall not, without the prior written consent of
Employer, use or disclose, or intentionally permit any
unauthorized person who is not employed by Employer or its
affiliates to use, disclose, or gain access to, any
"Confidential Information" or "Business Opportunity" data to
which Employee obtained access by virtue of his relationship
with Employer or its affiliates for a period of one (1) year
following any termination of the Employee except when (I) it
is in the public domain without any fault or responsibility on
the Employee's part; or (II) it is properly within the
legitimate possession of the Employee prior to its disclosure
and without any obligation of confidentiality attaching
thereto; or (III) after disclosure, it is lawfully received by
the Employee from another Person who is lawfully in possession
of such Confidential Information and such other Person was not
restricted from disclosing the said information to the
Employee; or (IV) it is independently developed by the
Employee through Persons who have not had access to, or
knowledge of, the Confidential Information; or (V) it is
approved by the Employer for disclosure prior to its actual
disclosure.
e. Employee hereby agrees to deliver to, or maintain on behalf
of, Employer and its affiliates all memoranda, notes, records,
drawings, manuals or other documents, including all copies of
such materials, containing Trade Secrets or Confidential
Information, whether made or compiled by Employee or furnished
to him from any source by virtue of his relationship with
Employer or its affiliates.
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9. Non-Compete, Etc. In consideration of the covenants of the Employer
contained herein and provided he receives all payments and benefits due
to him upon termination, the Employee agrees as follows:
a. During the Employee's employment with Employer, and for a
period of six (6) months immediately following the termination
of his employment with Employer, Employee shall not, except as
an employee of Employer, either directly or indirectly through
any partnership, corporation or business entity in which he
has an ownership interest or serves as an officer, employee or
independent contractor of or as a consultant for, solicit,
divert or take away the business of, or attempt to solicit,
divert or take away the business of, any of the customers of
Employer with whom Employee had significant contact at any
time within the last two (2) years of the term of his
employment with Employer or any prospective customers of
Employer that the Employee solicited on behalf of Employer
within such two-year period.
b. During the term of his employment with Employer and for a
period of six (6) months immediately following the termination
of his employment with Employer, Employee shall not solicit,
entice or persuade any other employees or agents or Employer
to leave the services of Employer for any reason.
c. During the term of his employment with Employer and for a
period of six (6) months immediately following the termination
of his employment with Employer: (I) Employee shall not make
any statements or perform any acts intended to advance the
interest of any existing or prospective competitors of
Employer in any way that will injure the interest of Employer;
and (II) without the prior express written approval by the
Board, Employee shall not directly or indirectly own or hold
any proprietary interest in or be employed by or receive
compensation from any party engaged in the same or any similar
business in the same geographic area Employer does business,
both within and without the United States. For the purposes of
the Agreement, proprietary interest means legal or equitable
ownership, whether through stock holdings or otherwise, of a
debt or equity interest (including options, warrants, rights,
notes and convertible interests) in a business firm or entity,
or ownership of more than 5% of any class of equity interest
in a publicly held company. The Employee acknowledges that the
covenants contained in this Section 9 herein are reasonable as
to geographic and temporal scope. In the event a court
considering this Agreement concludes that such provisions are
not enforceable due to their duration or scope, the parties
hereto expressly consent to the revision of such provisions by
such court to duration or scope which shall be enforceable.
d. Employee acknowledges and agrees that the covenants contained
in Section 9 of this Agreement shall survive any termination
of employment, with or without cause, at the instigation or
upon the initiative of either party. Employee further
acknowledges and agrees that the ascertainment of damages in
the event of Employee's breach of any covenant contained in
this Section 9 of this Agreement would be difficult, if at all
possible. Employee therefor acknowledges and agrees that
Employer (in addition to and without limiting any other remedy
or right which it might have) shall have the right, upon
submitting whatever pleadings the law may require, and posting
any necessary bond, to have a court of competent jurisdiction
enjoin Employee from committing any such breach. Employee
hereby waives the defense in such a case that Employer has, or
will then have, an adequate remedy at law.
e. The Employee will, with reasonable notice during or after the
Period of Employment, furnish information as may be in his
possession and cooperate with Employer as may reasonable be
requested in connection with any claims or legal actions in
which Employer is may become a party other than actions of
Employee against Employer.
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10. Assignments, Successors and Assigns. The rights and obligations of
Employee hereunder are not assignable or delegable, and any prohibited
assignment or delegation will be null and void. The Employer may assign
and delegate this Agreement. The provisions hereof shall inure to the
benefit of and be binding upon the permitted successors and assigns of
the parties hereto.
11. Governing Law. This Agreement shall be interpreted under, subject to
and governed by the laws of the State of Delaware and all questions
concerning its validity, construction and administration shall be
determined in accordance thereby.
12. Counterparts. This Agreement may be executed simultaneously in any
number of counter parts, each of which will be deemed an original but
all of which will together constitute one and same instrument.
13. Invalidity. The validity or unenforceability of any provision of this
Agreement shall not affect any other provision hereof, and this
Agreement shall be construed in all respects as if such invalid or
unenforceable provision was omitted. Furthermore, in lieu of such
illegal, invalid, or unenforceable provision there shall be added
automatically as a part of this Agreement a provision as similar in
terms to such illegal, invalid, or unenforceable provision as may be
possible and be legal, valid and enforceable.
14. Exclusiveness. This Agreement and the agreements referred to herein
constitute the entire understanding and agreement between the parties
with respect to the employment by the Employer of Employee and
superseded any and all other agreements, oral or written, between the
parties.
15. Modification. This Agreement may not be modified or amended except on
writing signed by the parties. No term or condition of this Agreement
will be deemed to have been waived except in writing by the party
charged with waiver. A waiver shall operate only as to the specific
term or condition waived and will not constitute a waiver for the
future or act on anything other than which is specifically waived.
16. Arbitration. Any dispute among the parties hereto shall be settled by
final and binding arbitration in Raleigh Durham, North Carolina, in
accordance with the then effective rules of the American Arbitration
Association, and judgment upon the award rendered may be entered in any
court having jurisdiction thereof. In any action or proceeding brought
to enforce any provision of this Agreement, the prevailing party shall
be entitled to recover its costs from the opposing party, including
reasonable legal fees and expenses.
17. Notices. All notices, requests, consents and other communications
hereunder shall be n writing and shall be deemed to have been made when
delivered or mailed first-class postage prepaid by registered mail,
return receipt requested, or when delivered if by hand, overnight
delivery service or confirmed facsimile transmission, to the following:
a. If to the Employer, at:
11000 WESTON PARKWAY
CARY, NC 27513
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With a copy to:
HARWELL HOWARD HYNE GABBERT & MANNER, P.C.
1800 FIRST AMERICAN CENTER
315 DEADERICK STREET
NASHVILLE, TN 37238
ATTN: MARK MANNER
Or at such other addresses may have been furnished to the
Employee by the Employer in writing; or
b. If to Employee, at:
GRAHAM MAY
151 MINE MOUNT ROAD
BERNARDSVILLE, NJ 07924
With a copy to:
PAUL J. OTTAVIANO
11000 WESTON PARKWAY
CARY, NC 27513
Or such other address as may have been furnished to Employer
by Employee in writing.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date fist above written.
"EMPLOYER"
CLINTRIALS RESEARCH, INC.
By:
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Title:
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"EMPLOYEE"
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Graham May, M.D.
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