AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 24th day of October, 1997 BETWEEN:
(1) XXXXX INTERNATIONAL INC. (the "Company") whose registered office is at
0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000; and
(2) XXXXXXX X. XXXXXXXX (the "Executive") of 00 Xxxx Xxxxx, Xxxxxxxxxxxxx,
Xxx Xxxxxx 00000.
WHEREAS, the Company and the Executive have entered into an Employment
Agreement dated as of the 1st day of March, 1996 (the "Original Employment
Agreement"); and
WHEREAS, the Company and the Executive now wish to amend and restate
the terms of the Original Employment Agreement as set forth hereinbelow;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein set forth, the parties hereto do hereby amend and restate the Original
Employment Agreement, effective as of the date first above written, to read in
its entirety as follows:
1. COMMENCEMENT AND TERM
1.1 The Company shall employ the Executive upon and subject to the terms
and conditions set forth in this Agreement.
1.2 The employment of the Executive shall (subject to the provisions of
Clause 11) be for an indefinite term.
2. OBLIGATIONS DURING EMPLOYMENT
2.1 The Executive shall during the continuance of his employment:
2.1.1 serve the Company to the best of his ability in the capacity of Vice
President, General Counsel and Secretary; and
2.1.2 faithfully and diligently perform such duties and exercise such powers
consistent with such office, subject to the direction and supervision
of the Chief Executive Officer and the Board of Directors; and
2.1.3 if and so long as the Chief Executive Officer or the Board of
Directors so directs, perform and exercise the said duties and powers
on behalf of any Associated Company and act as a director or other
officer of any Associated Company; and
2.1.4 unless prevented by sickness, injury or otherwise agreed by the Chief
Executive Officer, devote his full time and attention and abilities
during his hours of work (which shall be normal business hours and
such additional hours as may be necessary for the proper performance
of his duties) to the performance of his duties under this Agreement;
and
2.1.5 promptly give to the Chief Executive Officer or the Board of Directors
(in writing if so requested) all such information, explanations and
assistance as he or it may require in connection with the business and
affairs of the Company and any Associated Company.
3. REMUNERATION
3.1 The Company shall pay to the Executive during the continuance of his
employment a salary at the rate of $171,600 per year and an automobile
allowance at the rate of $630 per month. The salary shall be payable
in equal semi-monthly installments in arrears or as otherwise
determined by the Company on a company-wide basis.
3.2 During the continuance of his employment the Executive shall be
entitled to an annual bonus based upon the achievement of performance
criteria established by the Company. The target amount for the
achievement of 100% of targeted performance will not be less than 25%
of the Executive's then annual salary.
3.3 The salary and bonus shall be reviewed from time to time and the rates
thereof may be increased by the Company with effect from any such
review date.
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3.4 Notwithstanding anything to the contrary contained in the terms of any
stock option granted to the Executive under the Stock Option, all
stock options granted to the Executive by the Company shall vest and
become fully exercisable upon the occurrence of a Change in Control,
as defined herein.
4. INSURANCE, PENSION PLAN AND OTHER BENEFITS
4.1 The Executive shall be entitled to participate in any Benefit Plans
(including any medical expense insurance and permanent health and
accident insurance and travel insurance plans) of the Company enjoyed
by or made available to other senior executive officers of the Company
to the extent that the Executive qualifies under the eligibility
provisions of any such plan, as presently in effect or as they may be
modified from time to time.
5. EXPENSES
5.1 The Company shall reimburse the Executive in respect of all reasonable
and appropriate travel, accommodation, entertainment and other similar
out-of-pocket expenses actually incurred or expended by him in the
performance of his duties hereunder.
5.2 Except where specified to the contrary all expenses shall be
reimbursed on a monthly basis subject to the Executive providing
appropriate authorized evidence (including receipts, invoices, tickets
and/or vouchers as may be appropriate) of the expenditure in respect
of which he claims reimbursement.
6. HOLIDAYS
6.1 The Executive shall (in addition to the usual public and bank
holidays) be entitled during the continuance of his employment to 22
working days' paid holiday in each holiday year of the Company, which
shall be the calendar year.
6.2 Without the consent of the Chief Executive Officer, the Executive
shall not be entitled to carry forward any of his annual holiday
entitlement from one holiday year to the next.
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7. INCAPACITY
7.1 Subject to his complying with the Company's procedures relating to the
notification and certification of periods of absence from work, the
Executive shall continue to be paid his salary (inclusive of any
statutory sick pay or social security benefits to which he may be
entitled under applicable law) during any periods of absence from work
due to sickness, injury or other incapacity up to a maximum of 26
weeks in aggregate in any period of 52 consecutive weeks.
7.2 If the Executive shall have been absent from work due to sickness,
injury or other incapacity for a continuous period of 26 weeks or more
then he shall receive such benefits (if any) as are available to him
under the terms of the applicable plan referred to in Clause 4.1 or if
no such benefits are available such sum (if any) as the Company may in
its absolute discretion decide.
8. INTELLECTUAL PROPERTY
8.1 Subject to applicable law, if at any time in the course of his
employment the Executive makes or discovers or participates in the
making or discovery of any Intellectual Property relating to or
capable of being used in the business of the Company or any Associated
Company he shall immediately disclose full details of such
Intellectual Property to the Company and at the request and expense of
the Company he shall do all things which may be necessary or desirable
for obtaining appropriate forms of protection for the Intellectual
Property in such parts of the world as may be specified by the Company
and for vesting all rights in the same in the Company or its nominee.
8.2 The Executive hereby irrevocably appoints the Company to be his
attorney-in-fact in his name and on his behalf to sign, execute or do
any instrument or thing and generally to use his name for the purpose
of giving to the Company or its nominee the full benefit of the
provisions of this Clause, and in favor of any third party a
certificate in writing signed by any director or the secretary of the
Company that any instrument or act falls within the authority
conferred by this Clause shall be conclusive evidence that such is the
case.
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8.3 If and to the extent applicable to the Executive, the Executive hereby
waives all of his moral rights (as defined in the Copyright Designs
and Patents Xxx 0000 of the United Kingdom) and/or any similar rights
under the laws of any other jurisdiction in respect of any acts of the
Company or any acts of third parties done with the Company's authority
in relation to any Intellectual Property which is the property of the
Company by virtue of Clause 8.1.
8.4 All rights and obligations under this Clause 8 in respect of
Intellectual Property made or discovered by the Executive during his
employment shall continue in full and force and effect after the
termination of his employment and shall be binding upon the
Executive's personal representatives.
9. CONFIDENTIALITY
9.1 Except as necessary or appropriate to the proper performance of his
duties, or with the prior written consent of the Company, or as
ordered by a court of competent jurisdiction, the Executive shall not
at any time either during the continuance of his employment or after
its termination disclose or communicate to any person or use for his
own benefit or the benefit of any person other than the Company or any
Associated Company any information relating to the Company or any
Associated Company that is not generally known to the public
("Confidential Information") which may come to his knowledge in the
course of his employment and the Executive shall during the
continuance of his employment use his best endeavors to prevent the
unauthorized publication or misuse of any Confidential Information
provided that such restrictions shall cease to apply to any
Confidential Information which may enter the public domain other than
through the default of the Executive.
9.2 All notes and memoranda of any trade secret or other Confidential
Information concerning the business of the Company and the Associated
Companies or any of its or their suppliers, agents, distributors,
clients, customers or others which shall have been acquired, received
or made by the Executive during the course of his employment shall be
the property of the Company and shall be surrendered by the Executive
to someone
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duly authorized in that behalf at the termination of his employment or
at the request of the Board of Directors at any time during the course
of his employment.
10. TERMINATION OF EMPLOYMENT
10.1 Termination by the Company Without Cause; Termination by the Executive
for Good Reason. The Company may terminate the employment of the
Executive at any time without Cause (i) by giving the Executive a
Notice of Termination in accordance with Clause 14.2 hereof at least
12 months prior to the effective date of such termination specified in
such notice (a "Notice Period Termination"), or (ii) if the Company
should so elect in its absolute discretion, with immediate effect upon
delivery of a Notice of Termination in accordance with Clause 14.2
hereof, in which case the effective date of termination shall be the
date of personal delivery of such Notice of Termination to the
Executive (an "Immediate Termination"). In addition to the
requirements of Clause 14.2 hereof, a Notice of Termination delivered
by the Company pursuant to the immediately preceding sentence shall
specify whether it is effecting a Notice Period Termination or an
Immediate Termination. The Executive may terminate his employment by
the Company at any time for Good Reason by giving a Notice of
Termination to the Company in accordance with Clause 14.2 hereof, and
the effective date of such termination shall be determined in
accordance with Clause 10.1.4.
10.1.1 Except as provided in Clause 10.1.3, in the event of a Notice Period
Termination, the Company shall vest as of the effective date of such
termination all options granted to the Executive under the Stock
Option Plan and allow the Executive a period of 12 months following
such effective date within which to exercise such options.
10.1.2 Except as provided in Clause 10.1.3, in the event of an Immediate
Termination:
(a) the Company shall pay to the Executive, on the effective date of
such termination, a lump-sum cash amount equal to the Executive's
annual salary for the year in which such termination occurs
(without giving effect to any reduction thereto unless such
reduction was made with the Executive's prior written consent);
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(b) the Company shall provide continued coverage at the levels of
coverage in effect on the effective date of such termination at
no direct cost to the Executive under the Company's medical and
life insurance plans until the earlier of (i) the date that is 12
months after such effective date or (ii) the date on which the
Executive becomes covered under another employer's group health
plan;
(c) if such effective date occurs within 90 days before the end of a
fiscal year, the Executive shall also be entitled to a bonus for
that year under Clause 3, equal to 25% of his then annual salary
(irrespective of whether performance objectives have been
achieved), but prorated from the beginning of such year through
such effective date, provided, however, that in the event of a
termination for Good Reason pursuant to Clause 16.1.8(b), the
annual salary used for computation under this Clause 10.1.2(c)
shall be the one in effect prior to the reduction referred to in
Clause 16.1.8(b); and
(d) the Company shall vest as of the effective date of such
termination all options granted to the Executive under the Stock
Option Plan and allow the Executive a period of 12 months
following such effective date within which to exercise such
options.
10.1.3 Notwithstanding the other provisions of this Clause 10.1, in the event
that (x) the Company terminates the Executive's employment without
Cause in anticipation of, or pursuant to a Notice of Termination
delivered to the Executive within two years after, a Change in
Control, or (y) the Executive terminates his employment for Good
Reason pursuant to a Notice of Termination delivered to the Company in
anticipation of, or within two years after, a Change in Control:
(a) the Company shall pay to the Executive, within 30 days after the
Notice of Termination is given, a lump-sum cash amount equal to
(i) two times the sum of (A) his then current annual salary under
Clause 3 and (B) 25% of his then current annual salary under
Clause 3 (representing his annual bonus for the achievement of
100% of performance
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objectives, irrespective of whether performance objectives have
been achieved), plus (ii) a bonus for the then current year equal
to 25% of his then annual salary under Clause 3, (irrespective of
whether performance objectives have been achieved), provided,
however, that in the event of a termination for Good Reason
pursuant to Clause 16.1.8(b), the annual salary used for
computation under this Clause 10.1.3(a) shall be the one in
effect prior to the reduction referred to in Clause 16.1.8(b);
(b) for a period of 36 months after the effective date of such
termination, the Company shall provide the Executive with pension
contributions, health and other insurance benefits for the
Executive and his dependents under the Benefit Plans, at the
respective levels of coverage in effect at the time the Notice of
Termination is given, and the automobile allowance to which the
Executive is then entitled hereunder, or the cash equivalents of
the foregoing on a monthly basis (less the monthly payroll
deduction, if any, charged to the Executive immediately prior to
such effective date in respect of any such benefits);
(c) the Company shall vest as of the time of such Change in Control
all options granted to the Executive under the Stock Option Plan
and allow the Executive a period ending three years after the
effective date of the termination of his employment within which
to exercise such options; and
(d) in the event of a dispute between the Executive and the Company
with respect to any of the Executive's rights under this
Agreement, the Company shall reimburse the Executive for any and
all legal fees and disbursements incurred by him in connection
with enforcing such rights, at the time such fees and
disbursements are incurred (but in no event more frequently than
monthly); provided, however, that if the Executive's claim is
found by a court of competent jurisdiction to have
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been frivolous, the Executive shall reimburse the Company for all
amounts paid by the Company pursuant to this Clause 10.1.3(d).
10.1.4 Except as provided in Clause 10.1.3, in the event that the Executive
terminates his employment for Good Reason, he shall have the rights
and receive the benefits to which he would be entitled if the Company
had terminated his employment without Cause by delivering a Notice of
Termination under Clause 10.1.1 on the day on which the Executive
delivers his Notice of Termination pursuant to Clause 10.1.1 (the
"Company Reference Termination"). The Executive shall have the
option, in his absolute discretion, to elect whether the Company
Reference Termination shall be a Notice Period Termination or an
Immediate Termination, and the Executive's Notice of Termination
pursuant to Clause 10.1.1 shall specify whether he has elected the
rights and benefits relating to a Notice Period Termination or an
Immediate Termination. The effective date of a termination by the
Executive pursuant to this Clause 10.1 shall be the date that would
have been the effective date of the Company Reference Termination.
10.2 Termination by the Company for Cause; Termination by the Executive
Without Good Reason. The Company may at any time terminate the
Executive's employment for Cause by giving the Executive a Notice of
Termination in accordance with Clause 14.2 and, if applicable, after
complying with Clause 16.1.5 hereof. The Executive may at any time
terminate his employment with the Company without Good Reason by
giving a Notice of Termination to the Company in accordance with
Clause 14.2 hereof at least six months prior to the effective date of
such termination specified in such notice. In the event of a
termination by the Company for Cause or by the Executive without Good
Reason, the Executive shall be entitled to receive any unpaid amount
of his then current salary through the effective date of such
termination, as well as any other benefits which shall have vested
and become payable to him under the Benefit Plans as of such
effective date.
10.3 Retirement. The employment of the Executive shall terminate
automatically upon his Retirement. "Retirement" shall mean a
termination of the Executive's employment initiated by the Executive,
other than for Good Reason, whereby the Executive is entitled
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to receive an immediately payable benefit, including any applicable
early retirement benefit, under any other pension or retirement plan
then generally applicable to its salaried employees or under any
retirement arrangement established with respect to the Executive with
his prior written consent; in either case, whether or not the
Executive commences to receive such benefit at the time of such
termination. In the event of the termination of the Executive's
employment pursuant to his Retirement, the Executive shall be
entitled to any other benefits which shall have vested and become
payable to him under the Benefit Plans as of the effective date of
such Retirement or to which the Executive is otherwise entitled upon
his Retirement under any Benefit Plan or other policy or program of
the Company or any Associated Company in accordance with the
respective terms of such Benefit Plan, policy or program.
10.4 Death or Disability.
10.4.1 Disability. Subject to the requirements of the Americans with
Disabilities Act of 1990, as amended, the Family and Medical Leave
Act of 1993, as amended, and/or any other legislation applicable to
the Executive's employment by the Company, the Company may terminate
the employment of the Executive, by giving him a Notice of
Termination not less than six months prior to the effective date of
such termination specified in such notice, if the Executive shall
have been absent from work due to sickness, injury or other
incapacity for more than 183 days in the aggregate during any period
of 12 consecutive months or if, in the opinion of a physician or
other appropriate expert selected by the Company, the Executive is
likely to be unable to perform his duties for more than 183 days in
the aggregate during any period of 12 consecutive months; provided,
that the Company shall withdraw such notice if during its pendency
the Executive fully resumes his performance hereunder and provides
the Company with a certificate from a physician or other appropriate
expert reasonably acceptable to the Company certifying the
Executive's ability to perform his duties hereunder, and provided
further that if the Executive returns to work after a period of
absence which would have entitled the Company to terminate his
employment the Company shall, after he has completed a period of
three consecutive months at work without further absence due to such
sickness, injury or other incapacity, be deemed to have waived its
rights to terminate his
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employment based on such previous period of absence. Circumstances
justifying termination of the Executive's employment by the Company
pursuant to this Clause 10.4.1 are referred to herein as
"Disability." Any refusal by the Executive to submit to a medical
examination by a physician or other appropriate expert selected by
the Company for the purposes of certifying his ability to perform his
duties and responsibilities hereunder shall, at the option of the
Company, be deemed to constitute conclusive evidence of the
Executive's inability to perform such duties and responsibilities.
10.4.2 Death. The employment of the Executive by the Company shall terminate
automatically upon his death.
10.4.3 Benefits Upon Death or Disability. In the event of a termination of
employment due to the Disability or death of the Executive, he or his
legal representatives shall be entitled to receive any unpaid amount
of his then current salary through the effective date of such
termination, as well as any other benefits which may be payable to
him pursuant to Clause 8 hereof (in the case of his Disability only)
or which shall have vested and become payable to him under the
Benefit Plans as of such effective date or to which the Executive is
otherwise entitled upon his Disability or death (as the case may be)
under any Benefit Plan or other policy or program of the Company or
any Associated Company in accordance with the respective terms of
such Benefit Plan, policy or program.
10.5 Upon the termination of his employment the Executive shall be
entitled to accrued holiday pay (which accrues at the rate of 1.83
days per month) calculated on a pro rata basis in respect of each
completed month of service in the holiday year in which his
employment terminates and the appropriate amount shall be paid in
cash to the Executive provided that if the Executive shall have taken
more days than his accrued entitlement the Company is hereby
authorized to make an appropriate deduction from the Executive's
final salary payment.
10.6 Notwithstanding the terms of Clause 2 or any other provision of this
Agreement, during any period between the giving of a Notice of
Termination and the effective date of termination in accordance with
this Clause 10, the Company shall not be under any
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obligation to provide the Executive with any work and the Company may
at any time during such notice period without further notice suspend
the Executive and/or exclude him from all or any premises of the
Company or any Associated Company, provided, however, that,
throughout such notice period, the Company shall not make or give
effect to any change in the terms and conditions of the Executive's
employment as in effect immediately prior to the Reference Time (as
defined below) that would constitute Good Reason under any of
paragraphs (b) through (g) of Clause 16.1.8 (regardless of whether
his employment is terminated for Good Reason), and the Executive's
salary and other contractual benefits shall continue to be paid or
provided by the Company in the manner in effect at the Reference
Time, "Reference Time" means the time immediately prior to (i) in the
case of a termination for Good Reason, the occurrence that
constitutes such Good Reason, or (ii) in all other cases, the giving
of the Notice of Termination. At any time during such notice period
the Executive shall at the request of the Company immediately resign
from office as a Director of the Company and any Associated Company
and from other office held by him in the Company or any Associated
Company (but without claim for compensation other than as provided
under this Agreement) and in the event of his failure to do so the
Company is hereby irrevocably authorized to appoint some person in
his name and on his behalf to sign and deliver such resignations to
the Company.
10.7 The Executive shall have no obligation to take any action to mitigate
or offset any amounts payable by the Company pursuant to this Clause
10, by seeking other employment or otherwise, nor shall the amount of
any payment provided for in this Agreement be reduced by any
compensation earned by the Executive as the result of employment by
another employer after the date of termination of the Executive's
employment or otherwise.
10.8 The termination of the Executive's employment for any reason
whatsoever shall not operate to terminate this Agreement as an
entirety or to adversely affect the respective continuing rights and
obligations of the parties under Clauses 5, 8 though 11, and 13
through 17, inclusive, of this Agreement, all of which shall survive
the effective date of such termination of employment in accordance
with their respective terms.
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10.9 The Executive acknowledges that the Company may have in effect from
time to time a written severance plan or policy, which plan or policy
is or may be subject to change at the discretion of the Company. The
Executive shall not be entitled to any notice, payment in lieu of
notice or other severance payments under such plan or policy, but if
the notice period (or payment) to which the Executive would have been
entitled under such plan or policy as it may then exist is greater
than the notice period (or payment in lieu of such notice) to which
the Executive would be entitled under this Agreement, then the notice
period (and payment in lieu thereof) for termination hereunder shall
be deemed to be such greater amounts.
11. EXECUTIVE'S COVENANTS
11.1 The Executive acknowledges that during the course of his employment
with the Company he will receive and have access to Confidential
Information of the Company and its Associated Companies (including
without limitation those matters specified in Clause 9.2 of this
Agreement, as well as detailed client/customer lists and information
relating to the operations and business requirements of those
clients/customers) and accordingly he is willing to enter into the
covenants described in Clauses 11.2 and 11.3 in order to provide the
Company and its Associated Companies with what he considers to be
reasonable protection for those interests.
11.2 The Executive hereby covenants with the Company that during the term
of his employment he will not either directly or indirectly engage or
participate in any activity competitive with or adverse to the
business or interests of the Company or any of its Associated
Companies.
11.3 The Executive hereby covenants with the Company that he will not for
the period of 12 months after the Executive's last active day of
employment without prior written consent of the Chief Executive
Officer or the Board of Directors, directly or indirectly:
11.3.1 carry on or set up or be employed or engaged by or otherwise assist in
or be interested in any capacity (including without limitation as a
shareholder) in any line of business in competition with any line of
business which is part of the Business of the Group with
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which the Executive has had involvement and which the Company or any
Associated Company is carrying on during the 12 months preceding the
Executive's last active day of employment; or
11.3.2 carry on or set up or be employed or engaged by or otherwise assist in
or be interested in any capacity (including without limitation as a
shareholder) a business which competes or will compete with any
business of the Company or any Associated Company which is planned or
contemplated at the date of the Executive's last active day of
employment in any country in which the business is planned or
contemplated to operate and which plans the Executive has been
involved with to a material extent; or
11.3.3 in connection with the carrying on of any business which is in
competition with the Business of the Group canvass, solicit or
approach or cause to be canvassed or solicited or approached for
orders in respect of any services provided and/or any goods sold by
the Company or any Associated Company any person, firm or company who
or which at the date of the Executive's last active day of employment
or at any time during the period of 12 months prior to that date is a
supplier, customer or client of the Company or any Associated Company
and with whom or which the Executive shall have had dealings during
the course of his employment; or
11.3.4 in connection with the carrying on of any business in competition with
the Business of the Group do business with any person, firm or company
who or which has at any time during the period of 12 months
immediately preceding the date of the Executive's last active day of
employment done business with the Company or any Associated Company as
a supplier, customer or client or distributor or consultant and with
whom or which the Executive shall have had dealings during the course
of his employment; or
11.3.5 solicit, entice away or hire or endeavor to solicit or entice away
from the Company or any Associated Company any person who at the date
of the Executive's last active day of employment or at any time during
the period of six months prior to that date is employed or engaged by
the Company or any Associated Company as a head of any function, the
direct report of such function head, or in any other key technical,
marketing or sales position and with whom the Executive shall have had
contact during the course of his
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employment (whether or not such person would commit a breach of his
contract of employment by so doing).
11.4 The Executive hereby agrees that he will at the cost of the Company
enter into a direct agreement or undertaking with any Associated
Company whereby he will accept restrictions and provisions
corresponding to the restrictions and provisions in Clause 11.3 above
(or such of them as may be appropriate in the circumstances) in
relation to such activities and such country or countries as such
Associated Company may reasonably require for the protection of its
legitimate business interests.
11.5 Notwithstanding the generality of the covenants contained in Clause
11.3.1 those covenants shall apply only with respect to those
countries in which the Company or any Associated Company has
transacted any business during the 12 months prior to the date of
Executive's last active day of employment in which the Executive has
been involved, except that during the 12-month period after the
Executive's last active day of employment the Executive may not be
engaged or employed by or render any services to or for the benefit of
Dendrite International or Sales Technologies or any of their
respective affiliated companies wherever located.
11.6 Nothing herein shall prohibit the Executive from holding directly or
through nominees up to two percent of the outstanding stock of any
publicly held and traded company solely for investment purposes.
11.7 The covenants contained in Clauses 11.3.1, 11.3.2, 11.3.3, 11.3.4 and
11.3.5 are intended to be separate and severable and enforceable as
such.
11.8 In the event of a breach of Clauses 11.3.1, 11.3.2, 11.3.3, 11.3.4, or
11.3.5, the Executive acknowledges that in addition to any other
remedies available under law to the Company and any Associated
Company, the Company and any Associated Company may be entitled to an
injunction enjoining the Executive or any person or persons acting for
or with the Executive in any capacity whatsoever from violating any of
the terms thereof.
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12. DISCIPLINARY AND GRIEVANCE PROCEDURES
12.1 For any applicable statutory purposes, there is no formal disciplinary
procedure in relation to the Executive's employment. The Executive
shall be expected to maintain the highest standards of integrity and
behavior.
12.2 If the Executive is not satisfied with any disciplinary decision taken
in relation to him he may apply in writing within 14 days of that
decision to the Chief Executive Officer, whose decision shall be
final.
12.3 If the Executive has any grievance in relation to his employment he
may raise it in writing with the Chief Executive Officer, whose
decision shall be final.
13. ASSIGNMENT
13.1 The Company may assign its rights or delegate its performance, in
whole or in part, to any of its Associated Companies; provided that
any such assignment or delegation shall not affect the Executive's
position with the Company. This Agreement shall be binding upon and
shall inure to the benefit of the Company and any successor of the
Company.
13.2 This Agreement shall be binding upon and shall inure to the benefit of
Executive, his legal representatives, heirs, legatees, executors,
administrators and assigns, except that Executive's obligations to
perform services under this Agreement are personal and are expressly
declared to be nonassignable and nontransferable by him without the
consent in writing of the Company.
13.3 In the event of a Change in Control, the Company shall require the
successor to the Company as the Executive's employer (whether such
succession is direct or indirect, by purchase, merger, consolidation
or otherwise, to all or a substantial portion of the business and/or
assets of the Company) to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company
would be required to perform it if no such succession had taken place.
As used in this Agreement, the term "Company" shall mean the Company
as hereinbefore defined and any successor to all or a substantial
portion of its business and/or assets as aforesaid.
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14. NOTICES
14.1 Any notice to be given under this Agreement shall be given in writing
and shall be deemed to be sufficiently served by one party on the
other if it is delivered personally or is sent by facsimile
transmission, overnight service or registered or recorded delivery
prepaid post (air mail if overseas) addressed to either the Company's
registered office for the time being or the Executive's last known
address as the case may be.
14.2 Any purported termination of the Executive's employment by the Company
or by the Executive shall not be effective unless communicated by
written Notice of Termination to the other party hereto in accordance
with Clause 14.1 above and the relevant provisions of Clause 10. A
Notice of Termination shall identify the specific termination
provision of this Agreement relied upon, shall specify the intended
effective date of such termination (which date shall comply with the
notice period requirements of the provision so identified) and shall
set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination under the provision so identified.
15. MISCELLANEOUS
15.1 Golden Parachute Tax
15.1.1 Anything in this agreement to the contrary notwithstanding, in the
event that any payment by the Company to or for the benefit of the
Executive, whether paid or payable pursuant to the terms of this
Agreement or otherwise or any income realized upon the exercise of any
options granted by the Company to the Executive (such payment or
income, excluding any payment pursuant to this Clause 15.1, a
"Payment") is either reasonably determined by the Company to be
subject, or is subjected by the IRS (after exhaustion by the Company
of its remedies described in Clause 15.1.3), to the excise tax imposed
by Section 4999 of the Internal Revenue Code of 1986, as amended, (the
"Code") or any interest or penalties with respect to such excise tax
(such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the
Executive shall be entitled to receive from the Company,
17
within 15 days following the determination described in Clause 15.1.2
below, an additional payment (an "Excise Tax Adjustment Payment") in
an amount such that, after payment by the Executive of all applicable
U.S. federal, state and local taxes (computed at the maximum marginal
rates and including any interest or penalties imposed with respect to
such taxes) and the Hospital Insurance portion of FICA tax, including
any Excise Tax imposed upon the Excise Tax Adjustment Payment, the
Executive retains an amount of the Excise Tax Adjustment Payment equal
to the Excise Tax imposed upon the Payments.
15.1.2 In the event that as the result of a position taken by the Company or
the IRS, the Executive is required to make a payment of any Excise
Tax, the determination of the amount of the Excise Tax Adjustment
Payment shall be made by a nationally recognized accounting firm
acceptable to the Executive and the Company (the "Accounting Firm"),
which shall provide detailed supporting calculations to the Company
and the Executive. Subject to the provisions of Clause 15.1.3 below,
the amount of the Excise Tax Adjustment Payment shall be promptly paid
by the Company to or for the benefit of the Executive. The
determination of the Excise Tax Adjustment Payment by the Accounting
Firm shall be binding upon the Company and the Executive.
15.1.3 The Executive shall notify the Company in writing of any claim by the
IRS that, if successful, would require the payment by the Company of
the Excise Tax Adjustment Payment. Such notification shall be given as
soon as practicable but no later than 10 business days after the
Executive is informed in writing of such claim and shall apprise the
Company of the nature of such claim and the date on which such claim
is requested to be paid. The Executive shall not pay such claim prior
to the expiration of the 30-day period following the date on which it
gives such notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due). If
the Company notifies the Executive in writing prior to the expiration
of such period that it desires to contest such claim, the Executive
shall:
(a) give the Company any information reasonably requested by the
Company relating to such claim,
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(b) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by
the Company,
(c) cooperate with the Company in good faith in order effectively to
contest such claim, and
(d) permit the Company to participate in any proceedings relating to
such claim;
provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold
the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and
expenses. Without limiting the foregoing provisions of this Clause
15.1.3, the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at its
sole option, either direct the Executive to pay the tax claimed and
xxx for a refund or contest the claim in any permissible manner, and
the Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company
shall determine; provided, however, that if the Company directs the
Executive to pay such claim and xxx for a refund, the Company shall
advance the amount of such payment to the Executive on an
interest-free basis and shall indemnify and hold the Executive
harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the
taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be
limited to issues with respect to which an Excise Tax
19
Adjustment Payment would be payable hereunder and the Executive shall
be entitled to settle or contest, as the case may be, any other issue
raised by the IRS or any other taxing authority.
15.1.4 If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Clause 15.1.3, the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall
(subject to the Company's complying with the requirements of Clause
15.1.3) promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 15.1.3, a
determination is made that the Executive shall not be entitled to any
refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund
prior to the expiration of 30 days after such determination, then
such advance shall be forgiven and shall not be required to be repaid
and the amount of such advance shall offset, to the extent thereof,
the amount of Excise Tax Adjustment Payment required to be paid.
15.2 The Executive hereby warrants that by virtue of entering into this
Agreement he will not be in breach of any express or implied terms of
any court order, contract or of any other obligation legally binding
upon him.
15.3 Any benefits provided by the Company to the Executive or his family
which are not expressly referred to in this Agreement shall be
regarded as ex gratia benefits provided at the entire discretion of
the Company and shall not form part of the Executive's contract of
employment.
15.4 Except as expressly provided in this Clause 15, the Executive shall
be responsible for the payment of all individual taxes on all amounts
paid or benefits provided to him under this Agreement. All
compensation (including without limitation, salary and any severance
payments) paid to the Executive shall be subject to such deductions
as from time to time may be required by law or regulation or by
agreement with, or consent of the Executive.
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15.5 Any waiver by either party of any breach of any provision of this
Agreement must be set forth in a writing signed by such party, in
order for it to be effective, and no such waiver shall operate as a
waiver of any subsequent breach of that provision or any breach of
any other provision of this Agreement.
15.6 This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall
constitute one and the same instrument.
15.7 The Company will indemnify the Executive (and his legal
representatives, heirs, estate or other successors) to the fullest
extent permitted (including payment of expenses in advance of final
disposition of any proceeding) by the laws of the jurisdiction of the
incorporation of the Company as in effect at the time of the subject
act or omission, or by the certificate of incorporation and by-laws
of the Company as in effect at such time or on the date of this
Agreement, or by the terms of any indemnification agreement between
the Company and the Executive, whichever affords or afforded greatest
protection to the Executive, and the Executive shall be entitled to
the protection of any insurance policies the Company or any
Associated Company may elect to maintain generally for the benefit of
its directors and officers (and to the extent the Company or an
Associated Company maintains such an insurance policy or policies,
the Executive shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the
coverage available for a person serving or having served in the
positions and offices in which the Executive is serving or has
served), against all costs, charges and expenses whatsoever incurred
or sustained by him (or his legal representatives, heirs, estate or
other successors) at the time such costs, charges and expenses are
incurred or sustained, in connection with any action, suit or
proceeding to which he (or his legal representatives, heirs, estate
or other successors) may be made a party by reason of his being or
having been a director, officer or employee of the Company or any
Associated Company, or by reason of his serving or having served any
other enterprise as a director, officer or employee at the request of
the Company or any Associated Company.
21
16. DEFINITIONS AND INTERPRETATION
16.1 In this Agreement unless the context otherwise requires or as
otherwise defined herein the following expressions have the following
meanings:
16.1.1 "ASSOCIATED COMPANY"
Any corporation, limited liability company or other legal entity that,
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with the Company, where
"control" means the power to direct or cause the direction of the
management and policies of such entity, whether through ownership of
voting securities, by contract or otherwise.
16.1.2 "BENEFIT PLANS"
The 401(k) plan and other pension, retirement, life insurance,
medical, health, accident, disability, welfare, savings, deferred
compensation or similar plans of the Company and its Associated
Companies.
16.1.3 "THE BOARD OF DIRECTORS"
The Board of Directors for the time being of the Company including any
duly appointed committee thereof.
16.1.4 "THE BUSINESS OF THE GROUP"
The business of the Company and the Associated Companies as described
in the Schedule hereto and such other business or businesses as the
Company or any Associated Company may enter into from time to time of
which the Executive is aware.
16.1.5 "CAUSE"
Any of the following:
(a) the Executive's willful and continued failure substantially to
perform his duties hereunder (other than as a result of
sickness, injury or other physical or mental incapacity or as a
result of termination by the Executive for Good Reason);
provided, however, that such failure shall constitute "Cause"
only if (x) the Company delivers a written demand
22
for substantial performance to the Executive that specifies the
manner in which the Company believes the Executive has failed
substantially to perform his duties hereunder and (y) the
Executive shall not have corrected such failure within 10
business days after his receipt of such demand;
(b) willful misconduct by the Executive in the performance of his
duties hereunder that is demonstrably and materially injurious
to the Company or any Associated Company for which he is
required to perform duties hereunder;
(c) the Executive's conviction of (or plea of nolo contendere to) a
felony under the laws of the United States or any state thereof
or a criminal offense under the laws of the United Kingdom or
any other non-U.S. jurisdiction that would constitute a felony
under the laws of the United States or of the state of Delaware;
or
(d) the Executive's illegal or immoderate use or abuse of alcoholic
beverages or drugs in a manner that in the reasonable opinion of
the Company demonstrably and materially impairs the Executive's
ability to perform his duties under this Agreement or
demonstrably and materially adversely affects the Executive's or
the Company's reputation with customers or in the community as a
whole; provided, however, that this clause (d) shall not apply
to use of prescription drugs in the manner prescribed by a
physician or other duly licensed medical or health practitioner
authorized to issue prescriptions for such prescription drugs.
No action, or failure to act, shall be considered "willful" if
it is done by the Executive in good faith and with the
reasonable belief that his action or omission was in the best
interest of the Company.
23
16.1.6 "CHANGE IN CONTROL"
The occurrence of any of the following:
(a) any event pursuant to which any "Person" becomes an "Acquiring
Person" (as such terms are defined in that certain Agreement
dated as of October 14, 1997 between the Company and Xxxxxx
Trust Company of New York as Rights Agent, as such Agreement
initially entered into effect as of such date);
(b) a merger, consolidation, exchange, combination or other
transaction involving the Company and another entity (or the
securities of the Company and such other entity) as a result of
which the holders of all of the shares of Common Stock of the
Company outstanding prior to such transaction do not hold,
directly or indirectly, shares of the outstanding voting
securities of, or other voting ownership interests in, the
surviving, resulting or successor entity in such transaction in
substantially the same proportions as those in which they held
the outstanding shares of Common Stock of the Company
immediately prior to such transaction;
(c) the sale, transfer, assignment or other disposition by the
Company and/or one or more Associated Companies, in one
transaction or a series of transactions within any period of 18
consecutive calendar months (including, without limitation, by
means of the sale of capital stock of any subsidiary or
subsidiaries of the Company) of assets which account for an
aggregate of 50% or more of the consolidated revenues of the
Company and its subsidiaries, as determined in accordance with
U.S. generally accepted accounting principles, for the fiscal
year most recently ended prior to the date of such transaction
(or, in the case of a series of transactions as described above,
the first such transaction); provided, however, that no such
transaction shall be taken into account if substantially all the
proceeds thereof (whether in cash or in kind) are used after
such transaction in the ongoing conduct by the Company
24
and/or its subsidiaries of the business conducted by the Company
and/or its subsidiaries prior to such transaction;
(d) the Company is dissolved; or
(e) a majority of the directors of the Company are persons who were
not members of the Board of Directors as of the date (the
"Reference Date") which is the more recent of the date hereof
and the date which is two years prior to the date on which such
determination is made, unless the first election or appointment
(or the first nomination for election by the Company's
shareholders) of each director who was not a member of the Board
of Directors on the Reference Date was approved by a vote of at
least two-thirds of the Board of Directors in office prior to
the time of such first election, appointment or nomination.
16.1.7 "THE CHIEF EXECUTIVE OFFICER"
The Chief Executive Officer of the Company.
16.1.8 "GOOD REASON"
The occurrence of any of the following (other than by reason of a
termination of the Executive for Cause or Disability):
(a) the position or responsibilities of the Executive are
significantly reduced, (including, without limitation, by reason
of the elimination of such position or the failure to elect the
Executive to such position or by reason of a change in the
reporting responsibilities to and of such position, or,
following a Change in Control, by reason of a substantial
reduction in the size of the Company or other substantial change
in the character or scope of the Company's operations), or the
Executive is assigned without his written consent to any duties
inconsistent with his positions, duties, responsibilities and
status with the Company immediately prior to such assignment;
(b) the salary provided in Clause 3 hereof (as the same may be
increased from time to time in accordance with said Clause 3) is
reduced (except
25
if such reduction occurs prior to a Change in Control and is
part of an across-the-board reduction applicable to all senior
level executives of the Group);
(c) the annual incentive compensation provided for in Clause 3.2
hereof is eliminated or reduced, or, if after a Change in
Control, the Executive's participation level is reduced or the
manner of assessing actual performance is changed in a manner
that results in the Executive earning less such compensation for
a given period than he would have for the same period absent
such change;
(d) the Executive's aggregate level of benefits under the Benefit
Plans is reduced, except if such reduction occurs prior to a
Change in Control and is part of an across-the-board reduction
in such benefits applicable to all senior level executives of
the Group;
(e) after a Change in Control, the Company fails to continue to
provide the Executive with benefits and perquisites which are
substantially similar in the aggregate to those to which the
Executive is entitled under the Company's Benefit Plans in which
the Executive was participating immediately prior to the Change
in Control, or fails to provide the Executive with directors' or
officers' insurance, as applicable, at least at the level
maintained immediately prior to the Change in Control;
(f) the Executive is required to change his regular work location to
a location that is more than 35 miles from his regular work
location prior to such change;
(g) the Company fails to pay the Executive any amount otherwise
vested and due hereunder or under any plan or policy of the
Company, or fails to comply with any other provision of or
perform any of its other obligations under this Agreement; or
(h) the Company fails to obtain from any successor and to deliver to
the Executive such successor's written agreement to assume and
agree to perform the Company's obligations under this Agreement.
26
If the Executive delivers to the Company a Notice of Termination in
connection with an event described in Clauses (a) through (g) above,
the Company shall have 10 business days from the date of receipt of
such notice to effect a cure of the event described therein, and upon
cure thereof by the Company to the Executive's reasonable
satisfaction, such event shall no longer constitute "Good Reason" for
purposes of this Agreement.
16.1.9 "INTELLECTUAL PROPERTY"
Letters patent, trademarks, trade names, service marks, designs,
copyrights, utility models, design rights, applications for
registration of any of the foregoing and the right to apply for them
in any part of the world, inventions, drawings, computer programs,
trade secrets and other nonpublic proprietary information, know-how
and rights of like nature arising or subsisting anywhere in the world
in relation to all of the foregoing whether registered or
unregistered.
16.1.10 "IRS"
The United States Internal Revenue Service, or any successor agency
of the United States Government.
16.1.11 "GROUP"
The Company and the Associated Companies.
16.1.12 "STOCK OPTION PLAN"
The Xxxxx International Inc. and its Subsidiaries Stock Option and
Restricted Stock Purchase Plan, as the same may be amended from time
to time, or any employee stock option plan that replaces, supersedes
or supplements such plan.
16.2 The headings in this Agreement are for convenience only and shall not
affect its construction or interpretation.
16.3 Any reference in this Agreement to a statutory provision shall be
deemed to include a reference to any statutory amendment,
modification or re-enactment of it or to any legislation that
supersedes it.
27
16.4 This Agreement together with the Company plans, agreements and other
arrangements referred to herein contains the entire understanding
between the parties and supersedes the Original Agreement and any
other prior agreements, arrangements and understandings (written or
oral) between the Company and the Executive relating to the
employment of the Executive with the Company or any Associated
Company which such agreements, arrangements and understandings shall
be deemed to have been terminated by mutual consent; provided,
however, that this Agreement shall not terminate any agreement in
effect on the date hereof between the Company and the Executive
granting or otherwise relating to any stock option, and any such
agreement shall be deemed to be modified and amended hereby to the
extent that the terms of such agreement are inconsistent with the
terms hereof. The Executive acknowledges that he has not entered into
this Agreement in reliance on any warranty, representation or
undertaking which is not contained in or specifically incorporated in
this Agreement.
16.5 The various Clauses of this Agreement are severable and if any Clause
or identifiable part thereof is held to be invalid or unenforceable by
any court of competent jurisdiction then such invalidity or
unenforceability shall not affect the validity or enforceability of
the remaining Clauses or identifiable parts thereof in this Agreement,
and the parties hereto agree that the portion so held invalid,
unenforceable or void shall, if possible, be deemed amended or reduced
in scope, or otherwise be stricken from this agreement, to the extent
required for the purposes of the validity and enforcement hereof.
16.6 Unless the context otherwise requires, any reference in this Agreement
to the employment of the Executive or the Executive's last day of
active employment refers to the Executive's employment with the
Company.
16.7 Unless the context otherwise requires, any reference herein to a
Benefit Plan or other plan, agreement, arrangement, policy or program
of the "Company," or to a benefit, payment or contribution provided or
to be provided to the Executive by the "Company" shall be understood
to include any Benefit Plan, plan, agreement, arrangement, policy or
program of any Associated Company, or any benefit, payment or
contribution provided or to be provided to the Executive by any
Associated Company, respectively.
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16.8 This Agreement is governed by and shall be construed in accordance
with the laws of the State of Delaware, and the parties to this
Agreement hereby submit to the nonexclusive jurisdiction of the
federal and state courts sitting in Wilmington, Delaware.
17. EFFECTIVENESS
17.1 The amendment and restatement of the Original Employment Agreement
pursuant to and in accordance with the terms hereof shall be effective
as of the date first above written. All references to the Original
Agreement in agreements, instruments and other documents in existence
on the date hereof shall from and after such date be deemed for all
purposes to refer to this Agreement, as so amended and restated.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
an authorized representative of the Company and by the Executive as of the date
first above written.
XXXXX INTERNATIONAL INC.
By: /s/
---------------------
Name:
Title:
EXECUTIVE:
/s/
------------------------
Xxxxxxx X. Xxxxxxxx
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SCHEDULE
BUSINESS OF THE GROUP
The Business of the Group consists of the provision of electronic
management systems, sales management information systems, medical professional
databases and services related to those databases, including direct marketing
and consulting, primarily to the pharmaceutical and healthcare industries.
30
