EMPLOYMENT AGREEMENT
EXHIBIT 10.2
This EMPLOYMENT AGREEMENT (the “Agreement”) entered into as of January 10, 2007, by
and between Xxxxx Xxxxx (the “Executive”) and PharmaNet Development Group, Inc., a Delaware
corporation (the “Company”). The effective date of the Agreement shall be August 24, 2006
(the “Effective Date”).
WHEREAS, the Executive was previously a party to that certain Employment Agreement dated May
20, 2005 by and between the Company and the Executive, as amended (the “Previous Employment
Agreement”) and by executing this Agreement, the Executive hereby agrees that this Agreement
supersedes any prior employment arrangement set forth in the Previous Employment Agreement;
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office is changed by senior management to an area outside of Miami-Dade or Broward Counties,
the Executive may terminate this Agreement for “Good Reason” as defined in Section 6(a).
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“Cause” means that the Executive has: (i) been convicted of a felony involving any
subject matter; (ii) been charged with a felony, by a government agency, relating to the business
of the Company or any Affiliate; (iii) been convicted of a misdemeanor directly involving the
Executive’s employment that directly affects the business of the Company; (iv) been found after an
internal investigation to have engaged in sexual misconduct which is related to the Executive’s
employment or the business of the Company and/or violated the Company’s sexual harassment policy;
(v) failed to carry out the duties and responsibilities assigned to Executive which are consistent
with the terms of this Agreement; (vi) misappropriated the Company funds or otherwise defrauds the
Company; (vii) breached his or her fiduciary duty to the Company resulting in profit to him or her,
directly or indirectly; (viii) been found to have committed any act or failed to take any action
which results in the common stock of the Company (the “Common Stock”) being delisted for
trading on its principal trading market or exchange; (ix) been convicted of illegal possession or
illegal use of a controlled substance; (x) engaged in chronic drinking or the use of illegal drugs,
chemicals or controlled substances or the abuse of otherwise legal drugs or chemicals or controlled
substances that affects the performance of his or her duties as reasonable determined by the
Company; (xi) failed or refused to cooperate in any official investigation conducted by or on
behalf of the Company; (xii) breached any material provision of this Agreement, including Section
3(d) herein, after notice and a reasonable opportunity to cure such behavior (if the behavior is of
the nature that it can be cured); (xiii) intentionally or willfully failed to comply with the
reasonable directives of the Board or the CEO of the Company; (xiv) committed an act or omission
constituting gross negligence or willful misconduct which causes, at least in part, the Company to
restate its financial statements for a completed fiscal
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period after having filed such financial statements with the Securities and Exchange
Commission; or (xv) been found by a court, the Securities and Exchange Commission or any state
governmental authority which regulates or enforces such state’s securities laws, in a final
determination, to have violated any applicable securities laws, whether such finding was after a
hearing or trial or on consent without admitting or denying any allegations of wrongdoing.
“Disability” means the occurrence of either of the following circumstances: (i) if
Executive is deemed disabled for purposes of any long-term disability insurance policy paid for by
the Company and in effect at such time, or (ii) if in the exercise of the reasonable judgment of
the Company, due to accident, mental or physical illness, or any other reason, Executive has become
physically or mentally incapable of performing, with or without reasonable accommodation, the
essential functions of his or her employment for a period of more than one hundred twenty (120)
consecutive days or for one hundred eighty (180) days within a three hundred and sixty-five (365)
day period.
“Effective Date of Termination” with respect to any purported termination of the
Executive’s employment, shall mean (i) if the Executive’s employment is terminated by his or her
death, the date of his or her death, (ii) if the Executive’s employment is terminated for Cause or
without Cause, the date specified in the Notice of Termination, (iii) if the Executive’s employment
is terminated as a result of a Disability, the date on which it is finally determined that the
Executive is Disabled and (iv) if Executive terminates his or her employment for Good Reason or
otherwise voluntarily terminates his or her employment, the date specified in the Notice of
Termination.
“Good Reason” means the material breach of any of the material terms or conditions of
this Agreement by the Company.
“Notice of Termination” means a notice indicating the specific termination provision
in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment with the Company under the
provision so indicated.
“Person” shall have the meaning ascribed thereto in Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended, as modified, applied and used in Sections 13(d) and 14(d)
thereof; provided, however, a Person shall not include (i) the Company, (ii) a
trustee or other fiduciary holding securities under an employee benefit plan of the Company (in its
capacity as such), (iii) an underwriter temporarily holding securities pursuant to an offering of
such securities, or (iv) a corporate entity owned, directly or indirectly, by the Stockholders in
substantially the same character and proportions as their ownership of interests in the Company.
(i) Either the Company or the Executive, in his, her or its sole discretion, may terminate the
Executive’s employment without Cause at any time upon thirty (30) days written notice. Upon the
Effective Date of Termination, whether with or without Cause, the Executive shall have no right to
compensation or reimbursement under Section 4 (except for compensation earned or reimbursable
expenses incurred through the Effective Date of Termination) or to participate in any employee
benefit programs under Section 5 for any period subsequent to the Effective Date of
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Termination, except as provided for by law or this Agreement. On or before the Effective Date
of Termination or prior to receiving any final compensation or expenses due him or her, the
Executive shall (a) return to the Company’s headquarters at the Company’s cost, (b) participate in
an exit interview, and (c) execute a “Certificate of Conclusion of Employment,” certifying that he
has complied with his or her obligations and acknowledging his or her continuing obligations under
this Agreement. The Executive’s failure to comply with the requirements of this Section shall
constitute a material breach of this Agreement. For clarity, if the Executive’s employment is
terminated by the Company for any reason other than Cause, he shall be entitled to the Severance
Payments set forth below.
(ii) The Company may terminate the Executive’s employment pursuant to the terms of this
Agreement at any time for Cause (as defined above) by giving written notice of termination. The
Executive shall have thirty (30) days from the date of the notice to provide the Company CEO with
evidence that the Company is mistaken as to Cause and that the Executive’s behavior does not meet
the criteria for Cause. During such thirty (30) day period, the Executive shall be suspended
without pay; provided, however, that if employment is reinstated then the Executive
shall be paid for such thirty (30) day period or if the termination is upheld, the Effective Date
of Termination shall be deemed to be the date of receipt by the Executive of the written notice of
termination. Upon any such termination for Cause, the Executive shall have no right to
compensation or reimbursement under Section 4 (except for compensation earned or reimbursable
expenses incurred through the Effective Date of Termination), or to participate in any employee
benefit programs under Section 5 for any period subsequent to the Effective Date of Termination,
except as provided by law.
(i) In lieu of any further salary payments to the Executive for periods subsequent to the
Effective Date of Termination, the Company shall cause an aggregate severance payment to be made to
the Executive, in cash, equal to two (2) times such Executive’s Annual Base Salary (the “Cash
Severance Payment”) and payable in twenty-four (24) equal monthly installments.
(ii) For a twenty-four (24) month period after the Effective Date of Termination, the Company
shall arrange to provide the Executive with life, disability, accident and health insurance
benefits substantially similar to those which the Executive is receiving immediately prior to the
Effective Date of Termination. To the extent such benefits are provided under insured arrangements,
the Company shall pay each applicable insurance premium (net of any payment required of the
Executive) on the specified due date for that premium (which shall not be less frequently than
annually); provided, however, that in the event any such premium payment cannot be made by the
Company on the applicable due by reason of the restrictions set forth in subparagraph 1(f) of this
Section, the Executive shall make such premium payment and the Company shall promptly reimburse the
Executive for that payment upon the conclusion of the six (6)-month deferral period set forth in
subparagraph (f). In addition, benefits otherwise receivable by the Executive pursuant to this
Section
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shall be reduced to the extent comparable benefits are actually received by or made available
to the Executive without cost during such period following the Executive’s termination of
employment (and any such benefits actually received by the Executive shall be reported to the
Company by the Executive).
(iii) All unvested long-term incentive grants, if any, outstanding on the Effective Date of
Termination shall immediately vest.
(iv) To the extent the Executive is, on the Effective Date of Termination, participating in
one or more deferred compensation arrangements subject to Section 409A of the Internal Revenue Code
(the “Code”), the payments and benefits provided under those arrangements shall continue to be
governed by, and to become due and payable in accordance with, the specific terms and conditions
of those arrangements, and nothing in this Agreement shall be deemed to modify or alter those terms
and conditions.
(i) Should a reduction in benefits be required to satisfy the benefit limit of this subsection
(d), then the portion of any parachute payment otherwise payable in cash to Executive shall be
reduced to the extent necessary to comply with such benefit limit. Should such benefit limit still
be exceeded following such reduction, then the number of shares which would otherwise vest on an
accelerated basis under each of the Executive’s options or other equity awards (based on the amount
of the parachute payment attributable to each such option or equity award under Code Section 280G)
shall be reduced to the extent necessary to eliminate such excess.
(i) In the event the Treasury Regulations under Code Section 280G (or applicable judicial
decisions) specifically address the status of any such payment or benefit or the method of
valuation therefor, the characterization afforded to such payment or benefit by the Regulations (or
such decisions) will, together with the applicable valuation methodology, be controlling.
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(ii) In the event Treasury Regulations (or applicable judicial decisions) do not address the
status of any payment in dispute, the matter will be submitted for resolution to independent
auditors selected and paid for by the Company. The resolution reached by the independent auditors
will be final and controlling; provided, however, that if in the judgment of the independent
auditors, the status of the payment in dispute can be resolved through the obtainment of a private
letter ruling from the Internal Revenue Service, a formal and proper request for such ruling will
be prepared and submitted by the independent auditors, and the determination made by the Internal
Revenue Service in the issued ruling will be controlling. All expenses incurred in connection with
the preparation and submission of the ruling request shall be shared equally by the Executive and
the Company.
(iii) In the event Treasury Regulations (or applicable judicial decisions) do not address the
appropriate valuation methodology for any payment in dispute, the present value thereof will, at
the independent auditor’s election, be determined through an independent third-party appraisal, and
the expenses incurred in obtaining such appraisal shall be shared equally by the Executive and the
Company.
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(a) Confidential Information. “Confidential Information” includes, but is not
limited to, trade secrets (as defined by the common law and statute in Florida or New Jersey or any
future Florida or New Jersey statute), processes, policies, procedures, techniques (including
recruiting techniques), designs, drawings, know-how, show-how, technical information,
specifications, computer software and source code, information and data relating to the
development, research, testing, costs, marketing and uses of the Services, the Company’s budgets
and strategic plans, and the identity and special needs of Clients, databases, data, all technology
relating to the Company’s businesses, systems, methods of operation, Client lists, Client
information, solicitation leads, marketing and advertising materials, methods and manuals and
forms, all of which pertain to the activities or operations of the Company, names, home addresses
and all telephone numbers and e-mail addresses of the Company’s
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employees, former employees, clients and former clients. In addition, Confidential Information
also includes the identity of Clients and the identity of and telephone numbers, e-mail addresses
and other addresses of employees or agents of Clients who are the persons with whom the Company’s
employees and agents communicate in the ordinary course of business. For purposes of this
Agreement, the following will not constitute Confidential Information: (i) information which is or
subsequently becomes generally available to the public through no act of the Executive, (ii)
information set forth in the written records of the Executive prior to disclosure to the Executive
by or on behalf of the Company, and (iii) information which is lawfully obtained by the Executive
in writing from a third party (excluding any Affiliates of the Executive) who did not acquire such
confidential information or trade secret, directly or indirectly, from the Executive or the
Company. As used herein, the term “Services” shall include the providing of early and late
stage clinical drug development services, clinical trials management services and other services
engaged in by the Company during the Employment Term.
(d) References to the Company in this Section 8 shall include the Company’s Affiliates.
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(a) The Company and the Executive recognize that the services to be rendered under this
Agreement by the Executive are special, unique and of extraordinary character, and that in the
event of the breach by the Executive of the terms and conditions of this Agreement or if the
Executive, shall cease to be an employee of the Company for any reason and take any action in
violation of Section 7 and/or Section 8, the Company shall be entitled to institute and prosecute
proceedings in any court of competent jurisdiction referred to in Section 9(b) below to enjoin the
Executive from breaching the provisions of Section 7 or Section 8. In such action, the Company
shall not be required to plead or prove irreparable harm or lack of an adequate remedy at law or
post a bond or any security.
(b) Any action between the Company and Executive must be commenced in Xxxxxx County, New
Jersey. The Executive and the Company irrevocably and unconditionally submit to the exclusive
jurisdiction of such courts and agree to take any and all future action necessary to submit to the
jurisdiction of such courts. The Executive and the Company irrevocably waive any objection that
they now have or hereafter irrevocably waive any objection that they now have or hereafter may have
to the laying of venue of any suit, action or proceeding brought in any such court and further
irrevocably waive any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. Final judgment against the Executive or the Company in any
such suit shall be conclusive and may be enforced in other jurisdictions by suit on the judgment, a
certified or true copy of which shall be conclusive evidence of the fact and the amount of any
liability of the Executive or the Company therein described, or by appropriate proceedings under
any applicable treaty or otherwise.
(a) participate as an individual in any way in the benefits of transactions with any of the
Company suppliers or Clients, including, without limitation, having a financial interest in the
Company’s suppliers or Clients, or making loans to, or receiving loans from, the Company’s
suppliers or Clients;
(b) realize a personal gain or advantage from a transaction in which the Company has an
interest or use information obtained in connection with the Executive’s employment with the Company
for the Executive’s personal advantage or gain; or
(c) accept any offer to serve as an officer, director, partner, consultant, manager with, or
to be employed in a technical capacity by, a person or entity that does business with the Company.
As used in Section 10(a), (b) or (c), references to the Company also includes its Affiliates.
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shall be disclosed in writing promptly to the Company and shall be the sole and exclusive
property of the Company. An invention, idea, process, program, software, or design (including an
improvement) shall be deemed related to the business of the Company if (x) it was made with the
Company’s equipment, supplies, facilities, or Confidential Information, (y) results from work
performed by the Executive for the Company, or (z) pertains to the current business or demonstrably
anticipated research or development work of the Company. The Executive shall cooperate with the
Company and its attorneys in the preparation of patent and copyright applications for such
developments and, upon request, shall promptly assign all such inventions, ideas, processes, and
designs to the Company. The decision to file for patent or copyright protection or to maintain
such development as a trade secret shall be in the sole discretion of the Company, and the
Executive shall be bound by such decision.
(a) The Executive expressly agrees that the character, duration and geographical scope of the
non-competition provisions set forth in this Agreement are reasonable in light of the circumstances
as they exist on the date hereof. Should a decision, however, be made at a later date by a court
of competent jurisdiction that the character, duration or geographical scope of such provisions is
unreasonable, then it is the intention and the agreement of the Executive and the Company that this
Agreement shall be construed by the court in such a manner as to impose only those restrictions on
the Executive’s conduct that are reasonable in the light of the circumstances and as are necessary
to assure to the Company the benefits of this Agreement. If, in any judicial proceeding, a court
shall refuse to enforce all of the separate covenants deemed included herein because taken together
they are more extensive than necessary to assure to the Company the intended benefits of this
Agreement, it is expressly understood and agreed by the parties hereto that the provisions of this
Agreement that, if eliminated, would permit the remaining separate provisions to be enforced in
such proceeding shall be deemed eliminated, for the purposes of such proceeding, from this
Agreement.
(b) If any provision of this Agreement otherwise is deemed to be invalid or unenforceable or
is prohibited by the laws of the state or jurisdiction where it is to be performed, this Agreement
shall be considered divisible as to such provision and such provision shall be inoperative in such
state or jurisdiction and shall not be part of the consideration moving from either of the parties
to the other. The remaining provisions of this Agreement shall be valid and binding and of like
effect as though such provision were not included and the invalid or unenforceable provision shall
be substituted with a provision which most closely approximates the intent and the economic effect
of the invalid or unenforceable provision and which would be enforceable to the maximum extent
permitted in such jurisdiction or in such case.
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To the Company:
|
PharmaNet Development Group, Inc. | |
| 000 Xxxxxxxx Xxxxxx | ||
| Xxxxxxxxx, XX 00000 | ||
| Fax: (000)000-0000 | ||
| Attn: Chief Financial Officer | ||
With a copy to:
|
Xxxxxx Xxxxx & Bockius, LLP | |
| 000 Xxxxxxxx Xxxxxx | ||
| Xxxxxxxxx, XX 00000 | ||
| Fax: (000)000-0000 | ||
| Attn: Xxxxx Xxxxxx, Esq. | ||
To the Executive:
|
Xxxxx Xxxxx | |
| 0000 X.X. 00xx Xxxxx | ||
| Xxxxxxxx, XX 00000 |
or to such other address as either of them, by notice to the other may designate from time to time.
The transmission confirmation receipt from the sender’s facsimile machine shall be evidence of
successful facsimile delivery. Time shall be counted to, or from, as the case may be, the delivery
in person or by mailing.
17. Governing Law. This Agreement and any dispute, disagreement, or issue of
construction or interpretation arising hereunder whether relating to its execution, its validity,
the obligations provided therein or performance shall be governed or interpreted according to the
internal laws of the State of New Jersey without regard to choice of law considerations.
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[Remainder of Page Intentionally Left Blank; Signature Page Follows]
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| PharmaNet Development Group, Inc. |
||||
| By: | /s/ Xxxxxxx X. XxXxxxxx | |||
| Xxxxxxx X. XxXxxxxx | ||||
| President and Chief Executive Officer | ||||
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| IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the date set forth above. |
| Executive |
||||
| /s/ Xxxxx Xxxxx | ||||
| Xxxxx Xxxxx | ||||
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Exhibit A
CONSUMER PRICE INDEX FORMULA
Commencing January 1, 2008 and the beginning of each year thereafter during the term of this
Agreement, the Executive’s annual salary shall be adjusted in accordance with the Consumer Price
Index, all Urban Consumers issued by the Bureau of Labor Statistics of the U.S. Department of Labor
using the years 1982-84 as a base of 100 (the “Index”). At the commencement of January 1,
2008, and of each year thereafter, the Executive’s adjusted Annual Base Salary shall be multiplied
each year by a fraction, the numerator of which shall be the published Index number for the month
preceding the commencement of the new year (i.e., December 2007) and the denominator of
which shall be the published Index number for the preceding month of the preceding year
(i.e., November 2006). The resulting increase to the Executive’s Annual Base Salary shall
be added to the prior year’s Annual Base Salary and become a part thereof for the current year. In
the event that the Index herein referred to ceases to be published during the term of this
Agreement, or if a substantial change is made in the method of establishing such Index, then the
determination of the adjustment in the Executive’s compensation shall be made with the use of such
conversion factor, formula or table as may be published by the Bureau of Labor Statistics, or if
none is available, the parties shall accept comparable statistics on the cost of living in the
United States as shall then be computed and published by an agency of the United States, or if not
so computed or published, by a respected financial periodical selected by the Company.
Exhibit B
FORM
OF GENERAL RELEASE
THIS GENERAL RELEASE (“Release”) dated as of
is executed by Xxxxx Xxxxx (the “Executive”)
pursuant to Section 6 of the Employment Agreement dated as of
January 10, 2007 by and between
PharmaNet Development Group, Inc., a Delaware corporation (the “Company”) and the Executive
(the “Employment Agreement”).
WHEREAS, the Executive acknowledges that the consideration to be provided to the
Executive under the Employment Agreement is sufficient to support this Release; and
WHEREAS, the Executive understands that the Company regards the representations and covenants
by the Executive in the Employment Agreement and this Release as material and that the Company is
relying on such representations and covenants in paying amounts to the Executive pursuant to the
Employment Agreement.
1. The Executive shall receive the payments and benefits set forth in Section 6 (if
applicable) of the Employment Agreement in accordance with the terms and subject to the conditions
thereof.
2. The Executive, on behalf of himself or herself, his or her heirs, executors,
administrators, and/or assigns, does hereby RELEASE AND FOREVER DISCHARGE the Company, together
with its parents, subsidiaries, affiliates, partners, joint ventures, predecessor and successor
corporations and business entities, past, present and future, and its and their agents, directors,
officers, employees, shareholders, investors, insurers and reinsurers, representatives, attorneys,
and employee benefit plans (and the trustees or other individuals affiliated with such plans) past,
present and future (collectively, the “Releasees”), of and from any and all legally
waivable causes of action, suits, debts, complaints, claims and demands whatsoever in law or in
equity, whether known or unknown, suspected or unsuspected, which Executive, or his or her heirs,
executors, administrators, and/or assigns, ever had or now has against each or any of the
Releasees, from the beginning of time to the date of execution of this Agreement, including,
without limitation, any and all claims relating to Executive’s employment with Company or the
termination of that employment, including, without limitation, claims under the Age Discrimination
in Employment Act (“ADEA”), Title VII of the Civil Rights Act of 1964, Section 1981 of the
Civil Rights Act of 1870, the Americans with Disabilities Act, the Employee Retirement Income
Security Act, the Family and Medical Leave Act, the New Jersey Law Against Discrimination, the New
Jersey Conscientious Employee Protection Act, the New Jersey Family Leave Act, the New Jersey Wage
Payment Act, the New Jersey Wage and Hour Law, and any and all other applicable federal, state or
local constitutional, statutory or common
Page 1 of 2 - General Release
law claims, now or hereafter recognized, including but not limited to, any claim for severance
pay, bonus pay, sick leave, holiday pay, vacation pay, life insurance, health or medical insurance
or any other fringe benefit or disability, or any claims for economic loss, compensatory damages,
punitive damages, liquidated damages, attorneys’ fees, expenses and costs.
3. The Executive expressly represents and warrants that the Executive is the sole owner of the
actual and alleged claims, demands, rights, causes of action and other matters that are released
herein; that the same have not been transferred or assigned or caused to be transferred or assigned
to any other person, firm, corporation or other legal entity; and that the Executive has the full
right and power to grant, execute and deliver the general release, undertakings and agreements
contained herein.
5. This Release contains the entire agreement and understanding between the parties relating
to the subject matter hereof and supersedes any prior understandings, agreements or representations
by or between the parties, written or oral, relating to the subject matter hereof.
6. This Release shall be governed and construed in accordance with the laws of the State of
New Jersey without regard to principles of conflict of laws.
EXECUTIVE
| Date: |
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