MEMORANDUM OF UNDERSTANDING
WHEREAS,
PDI, Inc. (“PDI” or “Employer”) and Xxxxx Xxxxx (“Xxxxx” or “Executive”) have
agreed that Executive's resignation from, and last day of employment with
Employer is December 31, 2005; and,
WHEREAS,
PDI and Xxxxx mutually wish to terminate the employment relationship and waive
any and all notice or cure requirements set forth in the Amended and Restated
Employment Agreement dated May 2, 2001 (“Employment Agreement”), in particular
Paragraphs 8(a) or (b), and, as applicable,12(i); and,
WHEREAS,
PDI and Xxxxx agree that the provisions of Paragraph 8(g) of the Employment
Agreement are not applicable to this mutual and voluntary decision to terminate
the employment relationship; and,
WHEREAS,
PDI and Xxxxx agree that the payments set forth below constitute PDI’s sole and
complete obligation to Xxxxx upon termination of his employment, notwithstanding
anything to the contrary as may be set forth in the Employment
Agreement:
1. |
Base
compensation through termination date (e.g, December 31, 2005) calculated
to be in the gross amount of approximately $82,223.45 (for the period
of
September 16, 2005 through December 31, 2005), less withholding for
applicable federal, state and local income and employment related taxes,
payable in equal installments pursuant to PDIs customary payroll
procedures in effect.
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2. |
Employee
will be entitled to continued participation in the employee benefits,
vacation (i.e., the current “bank of days” policy of PDI), automobile
expense and expense reimbursement programs as described in Section
4.6 of
the Employment Agreement through December 31, 2005 except as may be
limited or required by a benefit Plan.
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3. |
A
pro rata share of any incentive compensation as described in Section
3(b)
of the Employment Agreement, if any is awarded, for 2005. My Xxxxx
has
been advised by PDI that it expects that there will be no incentive
compensation for 2005.
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4. |
A
lump sum payment equivalent to 36 times the monthly salary amount defined
by the Employment Agreement; that is, $ 1,
435,230.00.
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5. |
Vested,
deferred compensation, which is presently (as of August 31, 2005)
calculated to be $796,106.74, less any withholdings as required by
federal, state or local income tax laws or
regulations.
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6. |
Accrued
but unused paid bank of days, if any, which will be reconciled as of
December 31, 2005. Such payment shall be subject to withholdings pursuant
to Employer’s regular payroll practices and applicable law or
regulation.
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7. |
Company
paid COBRA benefits commencing the day following the effective date
of
termination (e.g., January 1, 2006 or as otherwise determined or limited
by the Plan documents) and extending through 12 months after the effective
date of termination(e.g., December 31, 2006), or the economic equivalent
thereof—approximately $13,700.88—unless Executive obtains the same or
greater benefits through subsequent employment, at which time this
obligation is extinguished.
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8. |
Outstanding
equity/option grants, including the March 29, 2005 SARS equity option
grant, shall immediately vest upon termination of employment; provided,
however, all stock options then held by Executive will expire and/or
terminate 90 days after Executive’s effective date of termination (e.g.,
December 31, 2005), consistent with the Plan or controlling grant
agreement.
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9. |
To
continue to maintain directors and officers liability insurance covering
the Executive in a reasonable and adequate amount determined by the
Company through December 31, 2005 on the same terms as all other directors
and officers of PDI.
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10. |
To
reimburse Executive an amount equivalent to one-half of the reasonable
attorney’s fees incurred with respect to this memorandum of understanding
up to a maximum payment by PDI of $5,000.00 within 30 days following
presentment, review and approval of a statement of
services.
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And,
WHEREAS, Xxxxx acknowledges his continuing obligations to PDI under Sections
9
and 10(a)-(g) of the Employment Agreement, such provisions shall remain in
full
force and effect notwithstanding any express or implied limitation set forth
in
the Employment Agreement.
And,
WHEREAS it is the intention of the parties that his Memorandum of Understanding
hereby fully supersedes the Employment Agreement, which is hereby terminated
and
shall no longer be in effect, except
with respect to Sections 7(a)-(i), 8(e) & (h), 9, 10 (as discussed above),
12 (g), (h) and (i),
which
Employer and Executive hereby agree survive such termination and shall remain
in
full force and effect. In addition, to the extent other Sections of the
Employment Agreement are referenced herein, the parties agree that the language
of such sections in intended to apply to the extent and in the manner expressly
agreed herein. Employer shall provide Executive with a determination by the
Accounting Firm within fifteen (15) business days as set force in Section 8(e)
of the Employment Agreement.
And,
WHEREAS it is the intention of the parties that the compensation, benefits
and
other consideration set forth in paragraphs numbered 1-6, 9 and 10 above, shall
be paid or provided to Executive regardless of death, disability or PDI’s
determination to terminate for cause or otherwise accelerate Executive’s last
day of work, as if Executive’s effective date of termination was December 31,
2005 pursuant to this Memorandum of Understanding.
General
Release of Claim. Executive,
his heirs, executors, administrators, fiduciaries, successors and/or assigns,
knowingly and voluntary release (and forever give up, to the fullest extent
permitted by law) Employer, it’s past, present and future direct or indirect
parent organizations, subsidiaries, division, affiliated entities, and its
and
their partners, officers, directors, trustees, administrations, fiduciaries,
employment benefit plans and/or pension plans or funds, executors, attorneys,
employees, insurers, reinsurers and/or agents and their successors and assigns
individually and in their official capacities (collectively referred to herein
as “Released Parties” or “Released Party”), jointly and severally, of and from
all claims and discovery, known or unknown, that Employee has or may have
against Released Parties as of the date of execution of this Agreement,
including, but not limited to, any alleged violation of:
· |
The
National Labor Relations Act;
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· |
Title
VII of the Civil Rights Act;
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· |
Civil
Rights Act of 1991;
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· |
Sections
1981 through 1988 of Title 42 of the United States
Code;
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· |
The
Employee Retirement Income Security Act;
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· |
The
Fair Credit Reporting Act;
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· |
The
Immigration Reform Control Act;
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· |
The
Americans with Disabilities Act;
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· |
The
Rehabilitation Act;
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· |
The
Age Discrimination in Employment Act;
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· |
The
Occupational Safely and Health Act;
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· |
The
Family and Medical Leave Act;
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· |
The
Equal Pay Act;
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· |
The
Fair Labor Standards Act;
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· |
The
Uniformed Services Employment and Reemployment Rights
Act;
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· |
Worker
Adjustment and Retraining Notification
Act;
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· |
Employee
Polygraph Protection Act;
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· |
The
New Jersey Law Against Discrimination;
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· |
The
New Jersey Family Leave Act;
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· |
The
New Jersey State Wage and Hour Law;
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· |
The
New Jersey Conscientious Employee Protection
Act;
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· |
The
New Jersey Equal Pay Law;
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· |
The
New Jersey Occupational Safely and Health
Law;
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· |
The
New Jersey Smokers’ Rights Law;
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· |
The
New Jersey Genetic Privacy Act;
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· |
The
New Jersey Fair Credit Reporting Act;
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· |
The
New Jersey Statutory Provision Regarding Retaliation/Discrimination
for
Filing A Workers’ Compensation Claim;
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· |
The
New Jersey Public Employees’ Occupational Safely and Health
Act;
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· |
New
Jersey laws regarding Political Activities of Employees, Lie Detector
Tests, Jury Duty, Employment Protection, and
Discrimination;
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· |
any
other federal, state or local civil rights laws, whistle-blower or
any
other local, state or federal law, regulation or
ordinance;
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· |
any
public policy, contract (oral, written or implied), tort, constitution
or
common law;
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· |
any
claims for vacation, sick or personal leave or payment pursuant to
any
practice, policy, handbook or manual;
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· |
any
claims related to the Employment Agreement;
or
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· |
any
allegation for costs, fees, or other expenses including attorney’s
fees.
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Employer
hereby confirms that the Indemnification provisions of Section 7 of the
Employment Agreement are not waived, impacted, affected or modified in any
way
by this Memorandum and General Release. Executive also affirms that he has
not
complained of and is not aware of any fraudulent activity or any act(s) which
would form the basis of a claim of fraudulent or illegal activity of Employer.
Nothing in this General Release shall impair, affect, waive, alter or limit
the
benefits payable to Executive as set forth in this Memorandum of
Understanding.
Revocation.
Executive may revoke this Memorandum of Understanding for a period of seven(7)
calendar days following the day he executes this agreement. Any revocation
within this period must be submitted, in writing, to Xxxx Xxxxxxxx, General
Counsel, and state, “I hereby revoke my acceptance of our Agreement and General
Release: The revocation must be personally delivered to Xxxx Xxxxxxxx, General
Counsel or Xxxxx Xxxxxxx, Associate General Counsel, or mailed to PDI, Inc.,
1
Rough 17 South, Xxxxxx Xxxxx, XX 00000, Attn: Xxxx Xxxxxxxx, General Counsel
and
postmarked within seven (7) calendar days of execution of this Agreement. This
Agreement shall not become effective or enforceable until the revocation period
has expired. If the last day of the revocation period is a Saturday, or Sunday
or a legal holiday in New Jersey, then the revocation period shall not expire
until the next following day which is not a Saturday, Sunday or legal
holiday.
Confidentiality. To
the
extent permitted by law, Executive agrees not to disclose any information
regarding the existence or substance of this Memorandum of Understanding, except
to his spouse, tax advisor, or an attorney with whom he chooses to consult
regarding this agreement, each of whom shall likewise agree to keep the
information confidential. This Memorandum of Understanding shall not be filed
with any court and shall remain forever confidential expect in an action to
enforce or for breach of this agreement. If Executive asserts an action to
enforce, or for breach of, this agreement, he shall use his best effort to
maintain such confidentiality by whatever means necessary, including, but not
limited to, submitting the agreement to a court under confidential
seal.
EXECUTIVE
IS HEEREBY ADIVSED THAT HE HAS UP TO TWENTY-ONE (21) CALENDAR DAYS TO REVIEW
THIS MEMORANDUM OF UNDERSTANDING AND IS HEREBY ADVISED TO CONSULT WITH AN
ATTORNEY PRIOR TO SIGNING THIS AGREEMETN, EXECUTIVE AGREES THAT ANY
MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS MEMORANDUM OF UNDERSTAND
DO
NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL TWENTY-ONE(21) CALENDAR DAY
CONSIDERATION PERIOD.
HAVING
ELECTED TO EXECUTE THIS MEMORANDUM OF UNDERSTANDING, EXECUTIVE FREELY AND
KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMETN INTENTING
TO
WAIVE, SETTLE AND RELEASE ALL CLAIMS EXECTUIVE HAX OR MIGHT HAVE AGAINST RELASED
PARTIES AS OF THE DATE OF EXECUTIVE OF THIS AGREEMENT.
IN
WITNESS WHEREOF, the parties hereto knowingly and voluntarily executed this
Agreement and General Release as of the date set forth below:
Executive
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ON
BEHALF OF EMPLOYER AS DEFINED HEREIN
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By:
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Xxxxx
Xxxxx
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Xxxxxxx
X. Xxxxxxxxx
Chief
Executive Officer
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Date:
September ____, 2005
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Date:
September _____, 2005
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