exv10w42



 





Exhibit 10.42




eResearchTechnology, Inc.




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 January 1, 2008 and will
continue from year to year unless terminated.
	 
	5.	 	COMPENSATION






	 	a.	 	Salary shall be $196,851/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.
	 
	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.
	 
	 	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 therefore 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.
	 
	 	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, upon the first occurrence of a Trigger Event (as hereafter defined), the
Employee shall be entitled to receive (i) severance equal to 2.6 times of his/her
then-current 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
six months; 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 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/her 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 of Control.
	 
	 	 	 	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






	 	 a.	 	This Agreement and any disputes arising here from 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.
	 
	 	c.	 	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, MD	 	 	 	   /s/ Richard Baron	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	February 28, 2008
 

	 	 
	 	Date:
	 	February 28, 2008