Exhibit 10.4
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EMPLOYMENT AGREEMENT
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Employment Agreement, dated the 4th day of December, 1996 by and between
Xxxxxxx X. XxXxxx (the "Employee") and Boron, XxXxxx & Associates, Inc., a
Delaware corporation (the "Company").
W I T N E S S E T H:
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WHEREAS, the Employee is a senior officer of the Company; and
WHEREAS, reference is made to that certain Preferred Stock Purchase
Agreement (the "Stock Purchase Agreement") dated as of December 4, 1996 pursuant
to which the Company will issue shares of Convertible Participating Preferred
Stock in consideration of capital contributions aggregating $12.5 million, and
that certain Stock Redemption Agreement dated as of December 4, 1996 (the
"Redemption Agreement") pursuant to which the Company will redeem certain of its
shares of its Common Stock held by the Employee and agree to make certain
deferred compensation payments to the Employee; and
WHEREAS, the parties hereto desire to assure that the Employee's knowledge
and experience will continue to be available after the above-described
transactions.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:
1. Employment. Subject to the provisions of Section 6, the Company hereby
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employs the Employee and the Employee accepts such employment upon the terms and
conditions hereinafter set forth.
2. Term of Employment. Subject to the provisions of Section 6, the term
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of the Employee's employment pursuant to this Agreement shall commence on and as
of the date hereof (the "Effective Date") and shall terminate on the third
anniversary of the Effective Date; provided, however, that this Agreement shall
be extended automatically for successive one-year periods ending on the relevant
anniversary of Effective Date unless either party gives the other notice not
less than 180 days prior to the scheduled termination date (i.e., the third
anniversary of the Effective Date or any later anniversary) of his or its
determination not to extend this Agreement, whereupon it shall terminate as of
such anniversary date. The period during which the Employee serves as an
employee of the Company in accordance with and subject to the provisions of this
Agreement is referred to in this Agreement as the "Term of Employment."
3. Duties.
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During the Term of Employment, the Employee (a) shall serve as an
employee of the Company with the title and position of Chairman, President and
Chief Executive Officer, reporting to the Board of Directors of the Company, (b)
shall have general supervisory responsibility in such capacity over all aspects
of the business of the Company, as well as such other responsibilities as may be
specified from time to time by the Board of Directors of the Company, consistent
with the Employee's position and general area of experience and skills, provided
that, in all cases the Employee shall be subject to the oversight and
supervision of the Board of Directors of the Company in the performance of his
duties, (c) upon the request of the Board of Directors of the Company, shall
serve as an officer and/or director of any of the Company's subsidiaries, and
(d) shall render all services reasonably incident to the foregoing. The Employee
hereby accepts such employment, agrees to serve the Company in the capacities
indicated, and agrees to use his best efforts in, and shall devote his full
working time, attention, skill and energies to, the advancement of the interests
of the Company and its subsidiaries and the performance of his duties and
responsibilities hereunder.
4. Salary and Bonus.
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(a) During the Term of Employment, the Company shall pay the Employee
a salary at the annual rate of $315,000 per annum (the "Base Salary"). Such Base
Salary shall be subject to withholding under applicable law, shall be pro rated
for partial years and shall be payable in periodic installments not less
frequently than monthly in accordance with the Company's usual practice for
executive officers of the Company as in effect from time to time.
(b) The Employee shall not receive a bonus in respect of the year
ending December 31, 1996, except as contemplated by the Redemption Agreement.
For each calendar year or portion thereof thereafter during the Term of
Employment (including any extensions thereof) and prior to an initial public
offering, the Employee shall be eligible to participate in the Company's
Incentive Bonus Plan - 1997 (the "Incentive Plan") in the form attached hereto
as Exhibit A, subject to the terms and conditions thereof.
5. Benefits.
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(a) During the Term of Employment, the Employee shall be entitled to
participate in any and all medical, pension, profit sharing, dental and life
insurance plans and disability income plans, retirement arrangements and other
employment benefits as in effect from time to time for executive officers of the
Company generally. Such participation shall be subject to (i) the terms of the
applicable plan documents (including, as applicable, provisions granting
discretion to the Board of Directors of the Company or any administrative or
other committee provided for therein or contemplated thereby) and (ii) generally
applicable policies of the Company.
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(b) Notwithstanding the foregoing, during the Term of Employment the
Company shall provide the Employee with or reimburse the Employee for a Company
automobile, tax and financial planning and club dues on a basis that is
consistent with and not less favorable in the aggregate than the Company's
practice at the date hereof.
(c) The Company shall promptly reimburse the Employee for all
reasonable business expenses incurred by the Employee during the Term of
Employment in accordance with the Company's practices for executive officers of
the Company with a similar level of responsibility, as in effect from time to
time.
(d) During the Term of Employment, the Employee shall receive paid
vacation annually in accordance with the Company's practices for executive
officers, as in effect from time to time, but in any event not less than four
(4) weeks per calendar year.
(e) Compliance with the provisions of this Section 5 shall in no way
create or be deemed to create any obligation, express or implied, on the part of
the Company or any of its affiliates with respect to the continuation of any
particular benefit or other plan or arrangement maintained by them or their
subsidiaries as of or prior to the date hereof or the creation and maintenance
of any particular benefit or other plan or arrangement at any time after the
date hereof, except as contemplated by Sections 5(b), 5(c) and 5(d) and except
as provided under the terms of the Incentive Plan.
6. Termination of Employment of the Employee. Prior to the expiration of
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the Term of Employment as provided in Section 2 hereof, this Agreement may or
shall (as applicable) be terminated as follows:
(a) At any time by the mutual consent of the Employee and the Company.
(b) At any time for "cause" by the Company upon written notice to the
Employee. For purposes of this Agreement, a termination shall be for
"cause" if:
(i) the Employee shall commit an act of fraud, embezzlement,
misappropriation or breach of fiduciary duty against the Company or any
of its subsidiaries, or shall be convicted by a court of competent
jurisdiction of, or shall plead guilty or nolo contendere to, any
felony or any crime involving moral turpitude; or
(ii) the Employee shall commit a breach of any of the covenants,
terms or provisions hereof, which breach has not been remedied within
thirty (30) days after delivery to the Employee by the Board of
Directors of the Company of written notice of the facts constituting
the breach; or
(iii) the Employee shall commit a breach of any of the covenants,
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terms or provisions of that certain Non-Competition Agreement of even date
herewith executed by the Employee and the Company, which breach has not
been remedied within thirty (30) days after delivery to the Employee by the
Company of written notice of the facts constituting the breach; or
(iv) the Employee shall have failed to comply with written
instructions from the Company's Board of Directors, which are reasonable
and consistent with Section 3, or shall have substantially failed to
perform the Employee's duties hereunder for a period of thirty (30) days
after written notice from the Company.
Upon termination for cause as provided in this Section 6(b), (A) all
obligations of the Company under this Agreement shall thereupon immediately
terminate other than any obligation of the Company with respect to earned but
unpaid Base Salary and benefits contemplated hereby to the extent then accrued
or vested, it being understood that upon any such termination (1) the Employee
shall not be entitled to receive any bonus or portion thereof from the Company
or any of its affiliates to the extent granted in the discretion of the Company
but not then paid with respect to any period during or after the Term of
Employment or (2) any continuation of benefits except as may be required by law,
and (B) the Company shall have any and all rights and remedies under this
Agreement and applicable law.
(c) Upon the death or upon the permanent disability (as defined below) of
the Employee continuing for a period in excess of one hundred eighty (180)
consecutive days. Upon any such termination of the Employee's employment as
provided in this Section 6(c), all obligations of the Company under this
Agreement shall thereupon immediately terminate other than any obligation of the
Company with respect to earned but unpaid Base Salary and benefits contemplated
hereby to the extent accrued or vested through the date of termination. As used
herein, the terms "permanent disability" or "permanently disabled" shall mean
the inability of the Employee, by reason of injury, illness or other similar
cause, to perform a major part of his duties and responsibilities in connection
with the conduct of the business and affairs of the Company, as determined
reasonably and in good faith by the Company.
(d) At any time by the Employee upon forty-five (45) days' prior written
notice to the Company. Upon termination by the Employee as provided in this
Section 6(d), all obligations of the Company under this Agreement thereupon
immediately shall terminate other than any obligation of the Company with
respect to earned but unpaid Base Salary and benefits contemplated hereby to the
extent accrued or vested through the date of termination, it being understood
that in the event of such a termination the Employee shall not be entitled to
receive any bonus not then paid from the Company or any of its affiliates with
respect to any period during or after the Term of Employment or any continuation
of benefits except to the extent required by law.
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(e) At any time without "cause" (as defined in Section 6(b)) by the
Company upon written notice to the Employee. In the event of termination of
the Employee by the Company pursuant to this Section 6(e), the Company
shall (i) continue to make Base Salary payments to the Employee from the
date of termination through (a) the later of the third anniversary of the
Effective Date or the first anniversary of the date on which such a
termination occurs, if such termination occurs prior to the third
anniversary of the Executive Date, or (b) the first anniversary of the date
on which such termination occurs, if such termination occurs on or after
during any extension year of the Term of Employment hereunder, in any such
case in the manner contemplated by Section 4(a), and (ii) continue the
benefit arrangements applicable to the Employee for as long as Base Salary
payments continue, with such amounts agreed by the parties hereto to be in
full satisfaction, compromise and release of any claims arising out of any
termination of the Employee's employment pursuant to this Section 6(e) or
Section 6(f), and in either case with such amounts to be contingent upon
the Employee's delivery of a general release of any and all claims (other
than those arising under this Agreement) upon termination of employment in
a form reasonably satisfactory to the Company, it being understood that no
severance benefits shall be provided unless and until the Employee
determines to execute and deliver such release.
(f) The Employee shall have the right to terminate his employment
hereunder in the event of a material default by the Company in the
performance of its obligations hereunder, after the Employee has given
written notice to the Company specifying such default by the Company and
giving the Company a reasonable time, not less than 30 days, to conform its
performance to its obligations hereunder. The rights and obligations of the
parties shall be as set forth in Section 6(e) in the event of any such
termination.
(g) In the event either party gives a notice of non-renewal to be
effective as of the third anniversary of the Effective Date or any
subsequent anniversary thereof, then all obligations of the parties
hereunder shall terminate as of the end of the Term of Employment except as
contemplated by Sections 6(h) and 7 hereof.
(h) Notwithstanding termination of this Agreement as provided in this
Section 6 or any other termination of the Employee's employment with the
Company, the Employee's obligations under Section 7 hereof and in the
Employee's Non-Competition Agreement of even date herewith shall survive
any termination of the Employee's employment with the Company at any time
and for any reason.
7. Confidentiality; Proprietary Rights.
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(a) In the course of performing services hereunder, on behalf of the
Company (for purposes of this Section 7 including all predecessors of the
Company) and its affiliates, the Employee has had and from time to time will
have access to confidential records,
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data, customer lists, trade secrets and other confidential information owned or
used in the course of business by the Company and its affiliates (the
"Confidential Information"). The Employee agrees (a) to hold the Confidential
Information in strict confidence, (b) not to disclose the Confidential
Information to any person (other than in the regular business of the Company or
its affiliates), and (c) not to use, directly or indirectly, any of the
Confidential Information for any competitive or commercial purpose other than on
behalf of the Company and its affiliates; provided, however, that the
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limitations set forth above shall not apply to any Confidential Information
which (i) is then generally known to the public; (ii) became or becomes
generally known to the public through no fault of the Employee; or (iii) is
disclosed in accordance with an order of a court of competent jurisdiction or
applicable law. Upon the termination of the Employee's employment with the
Company for any reason, all Confidential Information (including, without
limitation, all data, memoranda, customer lists, notes, programs and other
papers and items, and reproductions thereof relating to the foregoing matters)
in the Employee's possession or control, shall be immediately returned to the
Company or the applicable affiliate and remain in its or their possession.
(b) The Employee recognizes that the Company and its affiliates possess a
proprietary interest in all of the information described in Section 7(a) and
have the exclusive right and privilege to use, protect by copyright, patent or
trademark, or otherwise exploit the processes, ideas and concepts described
therein to the exclusion of the Employee, except as otherwise agreed between the
Company and the Employee in writing. The Employee expressly agrees that any
products, inventions, discoveries or improvements made by the Employee or his
agents or affiliates in the course of the Employee's employment, including any
of the foregoing which is based on or arises out of the information described in
Section 7(a), shall be the property of and inure to the exclusive benefit of the
Company. The Employee further agrees that any and all products, inventions,
discoveries or improvements developed by the Employee (whether or not able to be
protected by copyright, patent or trademark) during the course of his
employment, or involving the use of the time, materials or other resources of
the Company or any of its affiliates, shall be promptly disclosed to the Company
and shall become the exclusive property of the Company, and the Employee shall
execute and deliver any and all documents necessary or appropriate to implement
the foregoing.
(c) The Employee agrees, while he is employed by the Company, to offer or
otherwise make known or available to it, as directed by the Board of Directors
of the Company and without additional compensation or consideration, any
business prospects, contracts or other business opportunities that he may
discover, find, develop or otherwise have available to him in the business of
providing marketing services to and performing related activities for
pharmaceutical companies and healthcare telemarketing, and further agrees that
any such prospects, contacts or other business opportunities shall be the
property of the Company.
(d) The Employee acknowledges that the Non-Competition Agreement executed
and delivered concurrently herewith is an integral part of his employment
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arrangements with the Company.
8. Specific Performance; Severability. It is specifically understood and
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agreed that any breach of the provisions of Section 7 hereof by the Employee is
likely to result in irreparable injury to the Company and/or its affiliates,
that the remedy at law alone will be an inadequate remedy for such breach and
that, in addition to any other remedy it may have, the Company shall be entitled
to enforce the specific performance of this Agreement by the Employee and to
seek both temporary and permanent injunctive relief (to the extent permitted by
law), without the necessity of posting a bond or proving actual damages. In
case any of the provisions contained in this Agreement shall for any reason be
held to be invalid, illegal or unenforceable in any respect, any such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement, but this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had been limited or modified (consistent with
its general intent) to the extent necessary to make it valid, legal and
enforceable, or if it shall not be possible to so limit or modify such invalid,
illegal or unenforceable provision or part of a provision, this Agreement shall
be construed as if such invalid, illegal or unenforceable provision or part of a
provision had never been contained in this Agreement.
9. Notices. All notices, requests, demands and other communications
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hereunder shall be in writing and shall be deemed to have been duly given if
faxed (with transmission acknowledgment received), delivered personally or
mailed by certified or registered mail (return receipt requested) as follows:
To the Company: Boron, XxXxxx & Associates, Inc.
00-00 Xxxxx 000 Xxxxx
Xxxx Xxxx, XX 00000
To the Employee: Xxxxxxx X. XxXxxx
c/o Boron, XxXxxx & Associates, Inc.
00-00 Xxxxx 000 Xxxxx
Xxxx Xxxx, XX 00000
or to such other address or fax number of which any party may notify the other
parties as provided above. Notices shall be effective as of the date of such
delivery, mailing or fax.
10. Miscellaneous. This Agreement shall be governed by and construed
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under the laws of the State of New Jersey, and shall not be amended, modified or
discharged in whole or in part except by an agreement in writing signed by both
of the parties hereto. The failure of either of the parties to require the
performance of a term or obligation or to exercise any right under this
Agreement or the waiver of any breach hereunder shall not prevent subsequent
enforcement of such term or obligation or exercise of such right or the
enforcement at any time of any other right hereunder or be deemed a waiver of
any subsequent breach of the provision so breached, or of any other breach
hereunder. This Agreement shall inure to the benefit of,
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and be binding upon and assignable to, successors of the Company by way of
merger, consolidation or sale and may not be assigned by the Employee. This
Agreement, together with the concurrently executed Non-Competition Agreement
supersedes and terminates all prior understandings and agreements between the
parties (or their predecessors) relating to the subject matter hereof. For
purposes of this Agreement, the term "person" means an individual, corporation,
partnership, association, trust or any unincorporated organization; a
"subsidiary" of a person means any corporation more than 50 percent of whose
outstanding voting securities, or any partnership, joint venture or other entity
more than 50 percent of whose total equity interest, is directly or indirectly
owned by such person; and an "affiliate" of a person shall mean, with respect to
a person or entity, any person or entity which directly or indirectly controls,
is controlled by, or is under common control with such person or entity.
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IN WITNESS WHEREOF, the parties have executed this Agreement under seal as
of the date first set forth above.
BORON, XXXXXX & ASSOCIATES, INC.
By:/s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: Chief Operating Officer
/s/ Xxxxxxx X. XxXxxx
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Xxxxxxx X. XxXxxx
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