AMENDMENT
January 25, 2000
THIS AMENDMENT modifies and amends the Employment Agreement (the
"Agreement") by and between DENDRITE INTERNATIONAL, INC. ("Dendrite") and Xxxxx
Xxxxxxx ("Employee"). Unless otherwise defined herein, capitalized terms used
herein shall have their respective meanings set forth in the Agreement.
The parties hereby agree as follows:
1. The Agreement is hereby modified to include the following:
26. VESTING OF STOCK OPTIONS UPON "CHANGE IN CONTROL"
Notwithstanding anything to the contrary, in the event of a "Change in
Control" (as defined below), all of Employee's options owned by him at the time
of such event shall immediately vest. For the purposes of this Agreement,
"Change in Control" shall mean the occurrence of any one of the following
events:
(i) any "person" (as such term is defined in Section 3(a)(9) of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), and as
used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a
"beneficial owner" (as defined in Rule l3d-3 under the Exchange Act), directly
or indirectly, of securities of Dendrite representing 33-1/3% or more of the
combined voting power of Dendrite's then outstanding securities eligible to vote
for the election of the Board (the "Dendrite Voting Securities"); provided,
however, that the event described in this paragraph (i) shall not be deemed to
be a Change in Control by virtue of any of the following acquisitions: (A) by
Dendrite or any subsidiary, (B) by any employee benefit plan sponsored or
maintained by Dendrite or any subsidiary, (C) by any underwriter temporarily
holding securities pursuant to an offering of such securities, (D) pursuant to a
Non-Control Transaction (as defined in paragraph (iii)), or (E) a transaction
(other than one described in (iii) below) in which Dendrite Voting Securities
are acquired from Dendrite, if a majority of the Incumbent Board (as defined
below) approves a resolution providing expressly that the acquisition pursuant
to this clause (E) does not constitute a Change in Control under this paragraph
(i);
(ii) individuals who, on the effective date of this Agreement,
constitute the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority thereof, provided that any person becoming a director
subsequent to the Effective Date, whose election or nomination for election was
approved by a vote of at least two-thirds of the directors comprising the
Incumbent Board (either by a specific vote or by approval of the proxy statement
of Dendrite in which such person is named as a nominee for director, without
objection to such nomination) shall be considered a member of the Incumbent
Board; provided, however, that no individual initially elected or nominated as a
director of Dendrite as a result of an actual or threatened election contest
with respect to directors or any other actual or threatened solicitation of
proxies or consents by or on behalf of any person other than the Board shall be
deemed to be a member of the Incumbent Board;
(iii) the shareholders of Dendrite approve a merger, consolidation,
share exchange or similar form of corporate reorganization of Dendrite or any
such type of transaction involving Dendrite or any of its subsidiaries (whether
for such transaction or the issuance of securities in the transaction or
otherwise) (a "Business Combination"), unless immediately following such
Business Combination: (A) more than 50% of the total voting power of the
publicly traded corporation resulting from such Business Combination (including,
without limitation, any corporation which directly or indirectly has beneficial
ownership of 100% of Dendrite Voting Securities or all or substantially all of
the assets of Dendrite and its subsidiaries) eligible to elect directors of such
corporation would be represented by shares that were Dendrite Voting Securities
immediately prior to such Business Combination (either by remaining outstanding
or being converted), and such voting power would be in substantially the same
proportion as the voting power of such Dendrite Voting Securities immediately
prior to the Business Combination, (B) no person (other than any publicly traded
holding company resulting from such Business Combination, any employee benefit
plan sponsored or maintained by Dendrite (or the corporation resulting from such
Business Combination), or any person which beneficially owned, immediately prior
to such Business Combination, directly or indirectly, 33-1/3% or more of
Dendrite Voting Securities (a "Dendrite 33-1/3% Stockholder")) would become the
beneficial owner, directly or indirectly, of 33-1/3% or more of the total voting
power of the outstanding voting securities eligible to elect directors of the
corporation resulting from such Business Combination and no Dendrite 33-1/3%
Stockholder would increase its percentage of such total voting power, and (C) at
least a majority of the members of the board of directors of the corporation
resulting from such Business Combination would be members of the Incumbent Board
at the time of the Board's approval of the execution of the initial agreement
providing for such Business Combination (a "Non-Control Transaction"); or
(iv) the shareholders of Dendrite approve a plan of complete
liquidation or dissolution of Dendrite or the sale or disposition of all or
substantially all of Dendrite's assets.
Notwithstanding the foregoing, a Change in Control of Dendrite shall
not be deemed to occur solely because any person acquires beneficial ownership
of more than 33-1/3% of Dendrite Voting Securities as a result of the
acquisition of Dendrite Voting Securities by Dendrite which, by reducing the
number of Dendrite Voting Securities outstanding, increases the percentage of
shares beneficially owned by such person; provided, that if a Change in Control
of Dendrite would occur as a result of such an acquisition by Dendrite (if not
for the operation of this sentence), and after Dendrite's acquisition such
person becomes the beneficial owner of additional Dendrite Voting Securities
that increases the percentage of outstanding Dendrite Voting Securities
beneficially owned by such person, then a Change in Control of Dendrite shall
occur.
27. SEVERANCE FOLLOWING TERMINATION OF EMPLOYMENT FOLLOWING A "CHANGE IN
CONTROL" "WITHOUT CAUSE" OR FOR "GOOD REASON"
(a) The following severance payment only applies in the event of a
Change in Control. If Employee's employment hereunder is terminated within one
(1) year following a Change in Control (i) by Dendrite for any reason other than
death, Cause, or Disability (each as defined below) or (ii) by Employee for Good
Reason (as defined below), the Employee -shall be entitled to receive severance
payments in an aggregate amount equal to the sum of twelve (12) months base
salary (calculated at the rate of base salary then being paid to Employee as of
the date of termination). The severance payments to be paid to Employee under
this Section shall be referred to herein as the "Change in Control Severance
Payment". Employee's Change In Control Severance Payment shall be paid by
Dendrite in cash in twelve (12) consecutive equal monthly payments commencing
not later than thirty (30) days after the effective date of the termination of
Employee's employment. No interest shall accrue or be payable on or with respect
to any Change in Control Severance Payment. In the event of a termination of
Employee's employment described in this Section, Employee shall be provided
continued "COBRA" coverage pursuant to Sections 601 et seq. of ERISA under
Dendrite's group medical and dental plans. During the period which Employee
receives the Change in Control Severance Payment, Employee's cost of COBRA
coverage shall be the same as the amount paid by employees of Dendrite for the
same coverage under Dendrite's group health and dental plans. Notwithstanding
the foregoing, in the event Employee becomes re-employed with another employer
and becomes eligible to receive health coverage from such employer, the payment
of COBRA coverage by Dendrite as described herein shall cease. In the event
Employee is entitled to the Change in Control Severance Payment as set forth in
this Section, Employee shall not be entitled to any other severance payments
from Dendrite.
(b) The making of any Change in Control Severance Payment under this
Section is conditioned upon the signing of a general release in form and
substance satisfactory to Dendrite under which Employee releases Dendrite and
its affiliates together with their respective officers, directors, shareholders,
employees, agents and successors and assigns from any and all claims, he may
have against them. In the event Employee breaches any of the covenants or
agreements contained in this Agreement, in addition to any other remedies at law
or in equity, Dendrite may cease making any Change in Control Severance Payment
otherwise due under this Section. Nothing herein shall affect any of Employee's
obligations or Dendrite's rights under this Agreement.
(c) For purposes of this Agreement, "Cause" as used herein shall mean
(i) any gross misconduct on the part of Employee with respect to his duties
under this Agreement, (ii) the engaging by Employee in an indictable offense
which relates to Employee's duties under this Agreement or which is likely to
have a material adverse effect on the business of Dendrite, (iii) the commission
by Employee of any willful or intentional act which injures in any material
respect or could reasonably be expected to injure in any material respect the
reputation, business or business relationships of Dendrite, including without
limitation, a breach of any of his covenants or agreements of this Agreement, or
(iv) the engaging by Employee through gross negligence in conduct which injures
materially or could reasonably be expected to injure materially the business or
reputation of Dendrite.
(d) For purposes of this Agreement, "Good Reason" as used herein shall
mean, without Employee's express written consent, concurrently with or within
one (1) year following a "Change in Control" (as defined above), the occurrence
of any of the following events which is not corrected within ten (10) days
following notice of such event given by Employee to Dendrite:
(i) the assignment to Employee of any duties or
responsibilities materially and adversely inconsistent with Employee's position
(including any material diminution of such duties or responsibilities) or a
material and adverse change in Employee's reporting responsibilities, titles or
offices with Dendrite;
(ii) any material breach by Dendrite of this Agreement with
respect to the making of any compensation payments;
(iii) any requirement of Dendrite that Employee be based
anywhere other than in a thirty-five (35) mile radius of the Dendrite office
Employee is based in on the date of consummation of the Change in Control;
(iv) the failure of Dendrite to continue in effect any
employee benefit plan, compensation plan, welfare benefit plan or fringe benefit
plan (such plans being referred to herein as "Welfare Plans") in which Employee
is participating as of the effective date of this Agreement (or as such benefits
and compensation may be increased from time to time), or the taking of any
action by Dendrite which would materially and adversely affect Employee's
participation in or materially reduce Employee's benefits under such Welfare
Plans (other than an across-the-board reduction of such benefits affecting
senior executives of Dendrite) unless (i) Employee is permitted to participate
in other plans providing Employee with substantially comparable benefits (at
substantially comparable cost with respect to the Welfare Plans), (ii) any such
Welfare Plan does not provide material benefits to Employee (determined in
relation to Employee's compensation and benefits package), (iii) such failure or
action is taken at the direction of Employee or with his consent, or (iv) such
failure or action is required by law; or
(v) the failure of Dendrite to obtain an agreement from a
successor employer to assume Dendrite's obligations under this Agreement in the
event of a "Change in Control."
Employee must notify Dendrite of any event constituting Good Reason within
ninety (90) days following Employee's knowledge of its existence, it being
understood that Employee's failure to do so shall deem such event not to
constitute Good Reason under this Agreement.
(e) For purposes of this Agreement, "Disabled" as used herein shall
have the same meaning as that term, or such substantially equivalent term, has
in any group disability policy carried by Dendrite. If no such policy exists.,
the term "Disabled" shall mean the occurrence of any physical or mental
condition which materially interferes with the performance of Employee's
customary duties in his capacity as an employee where such disability has been
in effect for a consecutive six (6) month period (excluding permitted vacation
time), the existence of which is supported by credible medical evidence.
2. Except as expressly modified by this Amendment, all of the terms and
conditions of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have signed this Amendment as of the
first date written above.
DENDRITE INTERNATIONAL, INC.
XXXXXX XXXXXX
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Name: Xxxxxx Xxxxxx
Title:
XXXXXXXX XXXXXXX
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Xxxxxxxx Xxxxxxx
