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EXHIBIT 10.99
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is dated as of October 11,
1999, between ELECTRONIC MEDICAL DISTRIBUTION, INC. D/B/A EMD.COM, a Delaware
corporation (the "Company"), and TIMOTHY S. HEYERDAHL (the "Executive").
1. Employment. The Company hereby agrees to employ the
Executive, and the Executive hereby agrees to be employed by the Company, on
the terms and conditions set forth herein.
2. Term.
(a) The "Initial Term" of the employment of the Executive
by the Company as provided in Section 1 will commence on October 11,
1999 (the "Effective Date") and will terminate at 11:59 p.m. on
October 11, 2002 (the "Expiration Date") unless extended or sooner
terminated as hereinafter provided (such period, the "Employment
Period").
(b) The "Employment Period" may be extended beyond the
Initial Term by the mutual agreement of the parties in writing (the
"Extended Term").
(c) The "Business" of the Company is the provision of
medical and health-related products, services and information to
consumers and healthcare providers predominantly over the internet.
3. Position, Duties and Responsibilities.
(a) Position. The Executive hereby agrees to serve as
Chief Financial Officer of the Company and of the Company's parent,
BioShield Technologies, Inc., a Georgia corporation.
(b) Place of Employment. During the term of this
Agreement, the Company's headquarters shall be located in the Atlanta,
Georgia area.
(c) Other Activities. Except with the prior written
approval of the Board of Directors of the Company (the "Board") (which
the Board may grant or withhold in its sole and absolute discretion),
the Executive, during the Employment Period, will not (i) accept any
other employment, or (ii) engage, directly or indirectly, in any other
business activity (whether or not pursued for pecuniary advantage)
that is or may be competitive with or that might place him in a
competing position to, that of the Company or any of its affiliates.
Notwithstanding the foregoing, the Company agrees that the Executive
(or affiliates of the Executive) shall be permitted: (i) to make any
passive personal investments that are not in a business activity that
is directly or indirectly competitive with the Company (ii) to
participate in industry organizations, (iii) with the consent of the
Board of Directors of the Company, to be a member of Boards of
Directors of other entities which do not directly compete with the
Company, and (iv) to participate in charitable or educational
activities.
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4. Compensation and Related Matters.
(a) Salary. During the Employment Period, the Company
shall pay the Executive a salary of Two hundred forty thousand DOLLARS
($240,000.00) annually (the "Salary").
(b) Bonus. The Executive shall also be eligible for an
annual bonus up to 100% of the Executive's Salary. The President and
Chief Executive Officer of the Company shall recommend to the
Compensation Committee of the Board of Directors whether Executive
shall receive a bonus and, if so, the amount of such bonus, based upon
quantifiable deliverables and objectives determined by the President
and Chief Executive Officer and/or the Compensation Committee of the
Board of Directors. Executive understands and agrees that the
Compensation Committee of the Board of Directors has sole discretion
to determine if Executive will receive a bonus and, if so, the amount
of such bonus.
(c) Stock Options. The Company shall recommend to the
Compensation Committee of the Board of Directors of the Company that
Executive be granted as of the date of this Agreement an option to
purchase 200,000 shares of the Company's common stock at a price to be
determined by such committee with the shares to be exercisable in one
third increments on the first, second and third anniversaries of
grant, respectively. The Company shall also recommend to the
Compensation Committee of the Board of Directors of BioShield
Technologies, Inc. that Executive be granted as of November 17, 1999,
an option to purchase 50,000 shares of the common stock of BioShield
Technologies, Inc. at an exercise price per share of the mean between
the high and low sales price of the stock on the date of grant with
the shares to be exercisable in one third increments on the first,
second and third anniversaries of grant, respectively.
(d) Vacation. During the Employment Period Executive shall
be entitled to twenty days of vacation during each calendar year.
These days of vacation shall be non-cumulative which means that he
receives the twenty days of vacation at the beginning of each calendar
year for use during the calendar year. Days of vacation not used
during a calendar year shall not carry over and shall be forfeited. In
the event, the Executive requests time off between signing of this
agreement and December 31, 1999, the Executive can discuss the request
with the Chief Executive Officer.
(e) Business Expenses. The Company will reimburse the
Executive for reasonable bona fide business expenses incurred on
behalf of the Company in the ordinary course of business, provided,
however, that the expense is otherwise deductible by the Company as an
ordinary and necessary business expense for federal income tax
purposes.
(f) General Benefits. The Executive shall generally be
entitled to participate in or receive health, long-term disability
insurance, and similar benefits as the Company provides from time to
time to its executives. The Executive shall cooperate with the
issuance of a key man term life insurance policy for the benefit of
the Company, if so requested by the Company.
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(g) Professional Dues and Fees. The Executive shall be
entitled to reimbursement for his professional dues and any expenses
related to the educational requirements to maintain his status as a
Certified Public Accountant.
(h) Health Club. Executive shall receive reimbursement for
the monthly dues of a Health Club of his choice up to $300.00 per
month; provided, however, that no reimbursement will be paid to
Executive unless such a payment may be deducted by the Company as an
ordinary business expense.
(i) Withholding. All salary, bonus payments, stock option
exercises, benefit payments and other payments due to Executive under
this Agreement shall be paid in a manner consistent with the standard
payroll practices of the Company. The Company may withhold from any
payment any required taxes or other governmental withholdings,
insurance or benefit payments and similar items.
5. Termination or Resignation.
(a) Termination. The Executive's employment hereunder
shall be, or may be, as the case may be, terminated and shall
constitute a "Termination" under the following circumstances:
(i) Death. The Executive's employment hereunder
shall terminate upon his death.
(ii) Disability. The Executive's employment
hereunder shall terminate on the Executive's physical or
mental disability or infirmity which, in the opinion of a
competent physician selected by the Board, renders the
Executive unable to perform his duties under this Agreement
for more than 30 days during any 120-day period.
(iii) With Cause. The Company may terminate the
Executive's employment hereunder for Cause. "Cause" shall
mean (i) Employee's material breach of any of the terms of
this Agreement, (ii) his conviction of a crime involving
moral turpitude or constituting a felony under the laws of
any state, the District of Columbia or of the United States,
(iii) his gross negligence, willful misconduct or fraud in
the performance of his duties hereunder; (iv) his repeated
failure or refusal to follow the directives of the Board; or
(v) inappropriate business conduct that is directly related
to Executive's activities on behalf of the Company that may
cause material harm to the business interests of the Company.
(iv) By the Company for Any Other Reason. The
Company may terminate the Executive's employment hereunder at
any time for any reason other than the Executive's Death or
Disability or for Cause.
(v) Termination by Executive for Good Reason.
The Executive may terminate his employment with the Company
at any time for "Good Reason." "Good Reason" shall mean
without the express written consent of the Executive the
occurrence of any of the following events unless such events
are substantially corrected within thirty (30) days following
written notification by Executive to the
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Company that he intends to terminate his employment hereunder
for one of the following reasons: (i) any material reduction
or diminution in the duties, responsibilities and status of
Executive's position; (ii) a material breach by the company
of any provision of this Agreement; (iii) a relocation by the
Company of its principal place of business to another city or
state more than fifty (50) miles from Norcross, Georgia and
the Company requires Executive to relocate to such new
principal place of business; and (iv) the occurrence of a
Change in Control. The Executive understands, acknowledges
and agrees that any voluntary resignation by him shall not
constitute Good Reason. Further Executive understands,
acknowledges and agrees that if the Company is separated from
its parent BioShield Technologies, Inc. through an initial
public offering, stock dividend or otherwise and he no longer
serves as chief financial officer of BioShield Technologies,
Inc., this will not constitute Good Reason under this
Agreement.
As used in this Agreement, "Change of Control" means
the occurrence of any of the following: (i) the adoption of a
plan relating to the liquidation or dissolution of the
Company, (ii) the consummation of any transaction (including,
without limitation, any merger or consolidation) the result
of which is that any person or group, other than Jacques
Elfersy or Timothy C. Moses or their affiliates (the
"Principals"), becomes the "beneficial owner" (as such term
is defined in Rule 13d-3 and Rule 13d-5 under the Securities
Exchange Act of 1934), directly or indirectly, of more than
fifty percent (50%) of the total voting power of the total
outstanding shares of the Company on a fully diluted basis,
or (iii) the consummation of the first transaction
(including, without limitation, any merger or consolidation)
the result of which is that any person or group, other than
the Principals, becomes the beneficial owner, directly or
indirectly, of more than fifty percent (50%) of the total
voting power of the total outstanding voting stock of the
Company on a fully diluted basis.
Notwithstanding anything to the contrary above the
sale of the Company's stock to the public in an initial
public offering or otherwise shall not constitute a Change in
Control.
(vi) Termination by Executive for Any Reason
Other Than Good Reason. The Executive may voluntarily resign
his position and terminate his employment and Salary with the
Company at any time, with or without cause, by delivery of a
written notice of resignation to the Company (the "Notice of
Resignation"). The Notice of Resignation shall set forth the
date such resignation shall become effective (the "Date of
Resignation"), which date shall, in any event, be at least
thirty (30) days and no more than sixty (60) days from the
date the Notice of Resignation is delivered to the Company.
At its option, the Company may reduce such notice period to
any length, upon written notice to the Executive.
(b) Notice of Termination by Company. Any termination of
the Executive's employment by the Company shall be communicated by
written Notice of Termination to the Executive. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice that shall
indicate the specific termination provision in this Agreement relied
upon and shall set forth, if applicable, in reasonable detail the
facts and circumstances claimed to
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provide a basis for termination of the Executive's employment under
the provision so indicated. "Date of Termination" shall mean (i) if
the Executive's employment is terminated by his death, the date of his
death, (ii) if the Executive's employment is terminated by reason of
his disability, the date of the opinion of the physician referred to
in Section 5(a)(ii), above, (iii) if the Executive's employment is
terminated by the Company for Cause pursuant to subsection 5(a)(iii)
above or without Cause pursuant to subsection 5(a)(iv) above, the date
specified in the Notice of Termination and (iv) if the Executive
voluntarily resigns pursuant to subsection 5(c) above, the date of the
Notice of Resignation.
(c) Executive is Employee-At-Will. Notwithstanding the
Term of this Agreement and the annual salary to be paid to the
Executive during his employment with the Company, nothing in this
Agreement should be construed as to confer any right of the Executive
to be employed by the Company for a fixed or definite term. Subject to
Section 6 hereof, the Executive hereby agrees that the Company may
dismiss him under subsection 5(a) hereof without regard (i) to any
general or specific policies (whether written or oral) of the Company
relating to the employment or termination of its employees, or (ii) to
any statements made to the Executive, whether made orally or contained
in any document, pertaining to the Executive's relationship with the
Company. The Executive's employment with the Company is at will and
may be terminated by the Company at any time by delivery of a Notice
of Termination to the Executive, for any reason, with or without
cause, without liability except with respect to the payments provided
for by Section 6(d).
(d) Termination Obligations. In exchange for the Company
entering into the Agreement and payment of the Severance Payments
provided for in Sections 6(b) and 6(e) herein, the Executive agrees
that, at the time of his resignation or termination from the Company:
(i) The Executive will promptly return to the
Company all personal property, both tangible and intangible,
furnished to or prepared by the Executive in the course of or
incident to his employment, the Executive hereby
acknowledging and agreeing that such property belongs to the
Company, such that following termination the Executive will
not retain any written or other tangible material containing
any proprietary information of the Company. "Personal
property" includes, without limitation, all computers,
cellular phones, company credit cards, access keys, books,
manuals, records, reports, notes, contracts, lists and other
documents or materials, or copies thereof (including computer
files), and all other proprietary information relating to the
business of the Company.
(ii) The Executive will tender his resignation
from all offices and directorships then held with the
Company.
(iii) The Executive will execute a release
acceptable to the Company of all liability of the Company,
and its directors, officers, shareholders, employees, agents
and attorneys, to the Executive in connection with or arising
out of his employment with the Company, except with respect
to any Severance Payments under Sections 6(b) or 6(d) which
may be payable to him under the terms of the Agreement.
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(iv) The representations and warranties contained
herein and the Executive's obligations under Sections 5(d),
7, 8, 9 and 15 through 18 shall survive termination of the
Employment Period and the expiration of this Agreement.
6. Compensation Upon Termination. Upon the occurrence of any of
the events described Section 5(a)(i) through 5(d)(vi) of this Agreement, the
Executive shall be entitled, unless otherwise provided herein, to the following
remuneration in respect of such Termination (the "Severance Payments") for the
period of time specified therein (the "Severance Period"):
(a) Death. If the Executive's employment shall be
terminated pursuant to Section 5(a)(i), the Company shall pay the
Executive's personal representative his Salary payable pursuant to
Section 4(a) through the Date of Termination. At the Executive's own
expense, the Executive's dependents shall also be entitled to any
continuation of health insurance coverage rights under any applicable
law.
(b) Disability. If the Executive's employment shall be
terminated by reason of disability pursuant to Section 5(a)(ii), the
Executive shall receive his Salary payable pursuant to Section 4(a) up
to the Date of Termination and for 30 days thereafter; provided that
payments so made to the Executive during the disability shall be
reduced by the sum of the amounts, if any, payable to the Executive at
or prior to the time of any such payment under any disability benefit
plan of the Company. At the Executive's own expense, the Executive and
his dependents shall also be entitled to any continuation of health
insurance coverage rights under any applicable law.
(c) Cause. If the Executive's employment shall be
terminated for Cause pursuant to Section 5(a)(iii) hereof, the Company
shall pay the Executive his Salary then payable pursuant to Section
4(a) through the Date of Termination. At the Executive's own expense,
the Executive and his dependents shall also be entitled to any
continuation of health insurance coverage rights under any applicable
law.
(d) Voluntary Resignation. If the Executive terminates his
employment with the Company pursuant to Section 5(a)(vi) hereof, the
Company shall have no obligation to compensate the Executive following
the Date of Resignation, except for the payment of accrued and unpaid
salary pursuant to Section 4(a) through the Date of Resignation. In
any event, at the Executive's own expense, the Executive and his
dependents shall be entitled to any continuation of health insurance
coverage rights under any applicable law.
(e) Termination Without Cause by Company and Termination
For Good Reason by Executive. If the Company terminates Executive's
employment with the Company pursuant to Section 5(a)(iv) or the
Executive terminates his employment with the Company pursuant to
Section 5(a)(vi) hereof, the Company shall pay to Executive all Salary
payable pursuant to Section 4(a), as Severance Payments through a
period ending twelve (12) months following the Date of Termination.
Further beginning one month after the Date of Termination the Company
shall pay to Executive in six monthly installments an amount equal to
the average of all annual bonuses paid or payable to Executive during
the Term of this agreement prior to the Date of Termination. In
addition for the period that the Severance Payments are being paid to
the Executive, the Executive and the Executive's family shall be
entitled to receive welfare plan benefits (other than continued group
long-term disability coverage) generally available to executives of
the Company with comparable
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responsibilities or positions at the same cost to the Executive as is
charged to such similar executives from time to time for comparable
coverage. The Company shall have no other obligation to compensate the
Executive following the Date of Termination.
(f) Any Severance Payments made pursuant to this Section 6
shall be payable in accordance with the Company's regular payroll
practices. The obligation of the Company to make the Severance
Payments to the Executive is expressly conditioned upon the Executive
complying and continuing to comply with his obligations and covenants
under Sections 5(d), 7 and 8 of this Agreement following termination
of his employment with the Company.
7. Confidentiality and Non-Solicitation Covenants.
(a) Confidentiality. In addition to the agreements set
forth in Section 5(e), the Executive hereby agrees that the Executive
will not, during the Employment Period or at any time thereafter
directly or indirectly disclose or make available to any person, firm,
corporation, association or other entity for any reason or purpose
whatsoever, any Confidential Information (as defined below). The
Executive agrees that, upon Termination of his employment with the
Company, all Confidential Information in his possession that is in
written or other tangible form (together with all copies or duplicates
thereof, including computer files) shall be returned to the Company
and shall not be retained by the Executive or furnished to any third
party, in any form except as provided herein; provided, however, that
the Executive shall not be obligated to treat as confidential, or
return to the Company copies of any Confidential Information that (i)
was publicly known at the time of disclosure to the Executive, (ii)
becomes publicly known or available thereafter, but prior to the Date
of Termination, other than by any means in violation of this Agreement
or any other duty owed to the Company by any person or entity or (iii)
is lawfully disclosed to the Executive by a third party. As used in
this Agreement the term "Confidential Information" means: information
disclosed to the Executive or known by the Executive as a consequence
of or through his relationship with the Company, about the directors,
officers, shareholders, customers, employees, investors, business
methods, public relations methods, organization, procedures or
finances, including, without limitation, information of or relating to
shareholder , customer or investor lists of the Company and any
affiliate.
(b) Non-Solicitation. In addition, the Executive hereby
agrees that during the Employment Period, and for a period of one (1)
year thereafter, regardless of the reason or circumstances of
Termination of employment with the Company, the Executive will not,
directly or indirectly, solicit or attempt to solicit away from
Company any of its officers or employees or offer employment to any
person who, at any time during the six (6) months immediately
preceding the Date of Termination, is or was an officer or employee of
Company.
8. Covenant Not to Compete. The Executive agrees that during the
Employment Period he will devote full-time to the business of the Company and
not engage in any type of business which engages in the medical internet,
online pharmacy and information services or any other related businesses,
including but not limited to all aspects of the Business. Subject to such
full-time requirement and the restrictions set forth below in this Section 8
and Section 3(c) above, the Executive shall be permitted to continue his
existing business investments and activities and may pursue additional business
investments; provided that the Executive not serve as a director or
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officer of any public company resulting from such business investments. The
Executive agrees that, from the end of the Employment Period through a one (1)
year period thereafter, he shall not, within the Protected Territory (as
defined hereinafter), (i) invest in, manage, consult or participate in any way
in any other business in competition with the Business (in either an active or
passive manner), (ii) participate in or advise any business which has business
activities similar to the Business, or (iii) act for or on behalf of any
business that intends to enter or participate in any business which has any
business activities similar to the Business, in each case unless the
independent members of the Company's Board determines that such action is in
the best interests of the Company. Notwithstanding the foregoing, the Executive
may purchase stock as a stockholder in any publicly traded company, including
any company which is involved in the development or operation of a medical
internet site in the Protected Territory; provided that the Executive does not
own (together or separately or through his affiliates) more than five percent
(5%) of any company (other than the Company) engaged in a business which is
competitive with the Business of the Company within the Protected Territory. In
addition, the Executive shall not invest (directly or indirectly) in any
business which is competitive with the Business operating within the Protected
Territory unless the independent members of the Company's Board determines that
such an investment is in the best interests of the Company. For purposes of
this Agreement, the "Protected Territory" shall mean that area within a one
hundred (100) mile radius of the principal offices of the Company at the Date
of Termination.
9. Injunctive Relief and Enforcement. In the event of breach by
the Executive of the terms of Sections 5(d), 7 or 8, if the Company believes it
is suffering irreparable injury, then the Company shall, notwithstanding the
requirement of final and binding arbitration contemplated in Section 16 below,
be entitled to institute legal proceedings to enforce the specific performance
of this Agreement by the Executive and to enjoin the Executive from any further
violation of Sections 5(d), 7 or 8 and to exercise such remedies cumulatively
or in conjunction with all other rights and remedies provided by law and not
otherwise limited by this Agreement. The Executive acknowledges, however, that
the remedies at law for any breach by him of the provisions of Sections 5(d), 7
or 8 may be inadequate. In addition, in the event the covenants set forth in
Sections 5(d), 7 or 8 shall be determined by any court of competent
jurisdiction to be unenforceable by reason of extending for too great a period
of time or over too great a geographical area, by reason of being too
restrictive or expansive, or by constituting an unlawful restraint of trade in
any other respect, each such covenant shall be interpreted to extend over the
maximum period of time and over a maximum geographical area for which it may be
enforceable, and to the maximum extent in all other respects as to which it may
be enforceable, and enforced as so interpreted, all as determined by such court
in such action.
10. Notice. For the purposes of this Agreement, notices, demands
and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when personally delivered when
transmitted by telecopy with written confirmation of transmission and receipt,
three (3) days after deposit in the U.S. mail, first class, with adequate
postage thereon, or one (1) day after delivery to an overnight air courier
guaranteeing next day delivery, addressed as follows:
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If to the Executive: Mr. TIMOTHY S. HEYERDAHL
2340 Blackheath Trace
Alpharetta, Georgia 30005
If to the Company: eMD.COM
5655 Peachtree Parkway
Norcross, Georgia 30093
Attention: President
With a copy to: Schreeder, Wheeler & Flint, LLP
1600 Candler Building
127 Peachtree Street, N.E.
Atlanta, Georgia 30303-1845
Attention: Edward H. Brown, Esq.
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt as provided above.
11. Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect; provided, however, that if any one or more of the terms
contained in Sections 5(d), 7 or 8 hereto shall for any reason be held by any
court of competent jurisdiction to be unenforceable by reason of extending for
too great a period of time or over too great a geographical area, by reason of
being too restrictive or expansive, or by constituting an unlawful restraint of
trade in any other respect, then such covenant shall not be deleted but shall
be reformed and constructed in a manner to enable it to be enforced to the
extent compatible with applicable law.
12. Assignment. This Agreement may not be assigned by the
Executive, but may be assigned by the Company to any successor to its business
and will inure to the benefit and be binding upon any such successor.
13. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
14. Headings. The headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
15. Choice of Law. This Agreement shall be construed, interpreted
and the rights of the parties determined in accordance with the laws of the
State of Georgia (without reference to the choice of law provisions of
Georgia), except with respect to matters of law concerning the internal
corporate affairs of any corporate entity which is a party to or the subject of
this Agreement, and as to those matters the law of the jurisdiction under which
the respective entity derives its powers shall govern.
16. Arbitration. Absent any irreparable injury being suffered by
the Company entitling the Company to seek injunctive relief against the
Executive pursuant to Section 9 hereof, in the
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event there shall be a dispute among the parties arising out of or relating to
this Agreement, or the breach thereof, the parties agree that such dispute shall
be resolved by final and binding arbitration in Atlanta, Georgia under the rules
of the American Arbitration Association. Any award issued as a result of such
arbitration shall be final and binding between the parties thereto, and shall be
enforceable by any court having jurisdiction over the party against whom
enforcement is sought. The fees and expenses relating to such arbitration (with
the exception of the Executive's attorneys' fees, if any) or any action to
enforce an arbitration award shall be shared equally by the Company and the
Executive.
15. Entire Agreement. This Agreement contains the entire
agreement and understanding between the Company and the Executive with respect
to the employment of the Executive by the Company as contemplated hereby, and
no representations, promises, agreements or understandings, written or oral,
not herein contained shall be of any force or effect. This Agreement shall not
be changed unless in writing and signed by both the Executive and the Board of
the Company.
18. Board Approval. In any case in which this Agreement provides
for the approval, review or determination of the Board in connection with the
Executive's compensation, benefits, termination or compliance with restrictive
covenants herein expressed, then such approval, review or determination shall
be deemed a "Director's conflicting interest transaction", subject to the
procedures required by O.C.G.A. ss. 14-2-860 et seq.
19. The Executive's Acknowledgment. The Executive acknowledges he
has had the opportunity to consult with independent counsel
of his own choice concerning this Agreement, and he has read
and understands the Agreement, is fully aware of its legal
effect, and has entered into it freely based on his own
judgment.
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the date and year first above written.
ELECTRONIC MEDICAL DISTRIBUTION, INC.
d/b/a eMD.com
By: /s/ Jacques Elfersy
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Title: Date: November 17, 1999
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/s/ Timothy S. Heyerdahl Date: November 17, 1999
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TIMOTHY S. HEYERDAHL
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