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) XXXXXX XXXXXXXX (the "Executive") of Xxx Xxxxxxxxxx, Xxxxxx Xxxx,
Xxxxxxxxxxxxx, Xxxxxxxxx, Xxxx XX00 0XX, Xxxxxxx.
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 Executive's employment began on 1 June 1988 and the Executive's
period of continuous employment for all relevant purposes began on 1
June 1988.
1.3 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 and Chief Financial Officer; 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 do all in his power to protect, promote, develop, and extend the
business interests and reputation of the Group; and
2.1.5 at all times and in all respects conform to and comply with the lawful
and reasonable directions of the Chief Executive Officer or the Board
of Directors including all authority levels and procedures from time to
time specified by the Chief Executive Officer or the Board of
Directors; and
2.1.6 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; and
2.1.7 unless prevented by sickness, injury or other incapacity or as
otherwise agreed by the Chief Executive Officer or the Board of
Directors, devote the whole of his time, 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 and the business and affairs
of the Company and any Associated Company for which he is required to
perform duties; and
2.1.8 at such times as the Chief Executive Officer or the Board of Directors
may reasonably request and at the expense of the Company undergo a
medical examination by a doctor of the Company's choice.
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3. REMUNERATION
3.1 The Company shall pay to the Executive during the continuance of his
employment a salary (which shall accrue from day to day) at the rate of
(pound)110,700 per annum. The salary shall be payable in equal monthly
installments in arrears or as otherwise determined by the Company on a
company-wide basis.
3.2 As further remuneration the Executive shall be entitled to an annual
bonus based upon the achievement of performance criteria established by
the Chief Executive Officer or the Board of Directors. The amount of
the bonus for the achievement of 100% of targeted performance will not
be less than 35% 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.
3.4 Notwithstanding anything to the contrary contained in the terms of any
stock option granted to the Executive under the Stock Option Plan, 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. COMPANY CAR
5.1 The Company shall provide the Executive with a car of such make and
model as the Company shall decide is suitable for him and compatible
with his status in the Company
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for his sole use during the continuance of his employment in respect of
which the Company shall pay or reimburse the Executive all standing and
running costs including the cost of fuel consumed by the car in the
course of private journeys undertaken by the Executive. Alternatively,
the Executive may opt for the Company's cash alternative scheme.
5.2 The Company shall replace the car with another of an equivalent make
and model/value not more than once every three years (subject to
modification of the replacement period from time to time as determined
by the Company).
5.3 The Executive shall at all times and in all respects conform to and
comply with any policy which may from time to time be made by the
Company in relation to cars provided by it for the use of its
employees, and without limiting the foregoing, the Executive:
5.3.1 shall ensure that at all times when the car is driven on a public
highway it is in the state and condition, and has all necessary
registrations and certificates, required under applicable law and
regulations; and
5.3.2 shall at all times be the holder of a current driving license entitling
him to drive motor cars in the jurisdiction(s) where he lives and works
and shall produce it to the Company upon request.
5.4 For the avoidance of doubt, the Company shall be entitled at its
absolute discretion to withdraw its permission for the Executive to
operate the car provided pursuant to this Clause if the Executive is
disqualified from holding a valid current driving license.
5.5 For all purposes connected with or relating to the employment of the
Executive, the benefit of the private use of the car(s) provided
pursuant to this Agreement shall be calculated in accordance with the
applicable IRS or Inland Revenue scales in force from time to time.
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6. EXPENSES
6.1 The Company shall during the continuance of his employment 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.
6.2 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.
7. HOLIDAYS
7.1 The Executive shall (in addition to the usual public and bank holidays)
be entitled during the continuance of his employment to 25 working
days' paid holiday in each holiday year of the Company, which shall be
the calendar year.
7.2 The Executive shall not be entitled to carry forward any of his annual
holiday entitlement from one holiday year to the next.
8. INCAPACITY
8.1 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.
8.2 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
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in Clause 4.1 or if no such benefits are available such sum (if any) as
the Company may in its absolute discretion decide.
9. INTELLECTUAL PROPERTY
9.1 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.
9.2 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.
9.3 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 9.1.
9.4 All rights and obligations under this Clause 9 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.
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10. CONFIDENTIALITY
10.1 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.
10.2 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 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.
11. TERMINATION OF EMPLOYMENT
11.1 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 by giving the Executive a Notice of
Termination in accordance with Clause 15.2 hereof at least 12 months
prior to the effective date of such termination specified in such
notice. 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 15.2 hereof, and the effective date
of such termination shall be determined in accordance with Clause
11.1.3.
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11.1.1 Except as provided in Clause 11.1.2, in the event that the Executive's
employment is terminated by the Company without Cause:
(a) 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; and
(b) 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 35% 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 17.1.8(b), the
annual salary used for computation under this Clause 11.1.1(b)
shall be the one in effect prior to the reduction referred to in
Clause 17.1.8(b).
11.1.2 Notwithstanding the other provisions of this Clause 11.1, 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) three times the sum of (A) his then current annual salary
under Clause 3 and (B) 35% of his then current annual salary under
Clause 3, (representing his annual bonus for the achievement of
100% of performance objectives, irrespective of whether
performance objectives have been achieved), plus (ii) a bonus for
the then current year equal to 35% of his then current annual
salary (irrespective of whether performance objectives have been
achieved), provided, however, that in the event of a termination
for Good Reason pursuant to Clause 17.1.8(b), the annual salary
used for computation under this Clause 11.1.2(a) shall be the one
in effect prior to the reduction referred to in Clause 17.1.8(b);
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(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 (provided, however, that if
the Company has provided the Executive with a car pursuant to
Clause 5, the Executive shall be entitled to the amount he would
then be entitled under the Company's cash alternative scheme as
though he had opted for such scheme instead of a car and shall not
be entitled to the car, or the use thereof), 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 been frivolous,
the Executive shall reimburse the Company for all amounts paid by
the Company pursuant to this Clause 11.1.2(d).
11.1.3 Except as provided in Clause 11.1.2, 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 Section 11.1.1 on the day on which the Executive
delivered his Notice of Termination pursuant to Clause 11.1.1 (the
"Company
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Reference Termination"). The effective date of the Executive's
termination of his employment pursuant to this Clause 11.1 shall be the
date that would have been the effective date of the Company Reference
Termination.
11.2 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 15.2 and, if applicable, after
complying with Clause 17.1.5 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 15.2
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.
11.3 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 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.
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11.4 Death or Disability.
11.4.1 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 returns to full-time work and provides the
Company with a certificate from a physician or other appropriate expert
reasonably acceptable to the Company stating that he has fully
recovered and that no recurrence of such incapacity may reasonably be
anticipated, 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 employment based on such previous period of
absence. Circumstances justifying termination of the Executive's
employment by the Company pursuant to this Clause 11.4.1 are referred
to herein as "Disability."
11.4.2 Death. The employment of the Executive by the Company shall terminate
automatically upon his death.
11.4.3 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
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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.
11.5 Upon the termination of his employment the Executive shall be entitled
to accrued holiday pay (which accrues at the rate of 2.1 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.
11.6 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 11, the Company shall not be under any 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 17.1.8 (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
12
Company (but without claim to 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.
11.7 The Executive shall have no obligation to take any action to mitigate
or offset any amounts payable by the Company pursuant to this Clause
11, 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.
11.8 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 6, 9 though 12, and 14 through 18, inclusive,
of this Agreement, all of which shall survive the effective date of
such termination of employment in accordance with their respective
terms.
11.9 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.
12. EXECUTIVE'S COVENANTS
12.1 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
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Clause 10.2 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 12.2 and 12.3 in order
to provide the Company and its Associated Companies with what he
considers to be reasonable protection for those interests.
12.2 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.
12.3 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:
12.3.1 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 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
12.3.2 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
12.3.3 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
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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
12.3.4 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
12.3.5 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 employment (whether or not such person would
commit a breach of his contract of employment by so doing).
12.4 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 12.3 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.
12.5 Notwithstanding the generality of the covenants contained in Clause
12.3.1 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
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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, except with the prior consent of the Chief Executive Officer
or the Board of Directors or as the result of a merger, consolidation,
sale of stock or assets or other business combination between such
entity and the Company or an Associated Company.
12.6 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.
12.7 The covenants contained in Clauses 12.3.1, 12.3.2, 12.3.3, 12.3.4 and
12.3.5 are intended to be separate and severable and enforceable as
such.
12.8 In the event of a breach of Clauses 12.3.1, 12.3.2, 12.3.3, 12.3.4, or
12.3.5, 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.
13. DISCIPLINARY AND GRIEVANCE PROCEDURES
13.1 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.
13.2 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.
13.3 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.
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14. ASSIGNMENT
14.1 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.
14.2 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.
14.3 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.
15. NOTICES
15.1 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.
15.2 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 15.1 above and the relevant provisions of Clause 11. A
Notice of Termination shall identify the specific termination
17
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.
16. MISCELLANEOUS
16.1 Golden Parachute Tax
16.1.1 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 16.1, 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 16.1.3), 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, within 15 days
following the determination described in Clause 16.1.2 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.
16.1.2 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
18
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 16.1.3 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.
16.1.3 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,
(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
19
result of such representation and payment of costs and expenses.
Without limiting the foregoing provisions of this Clause 16.1.3, 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
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.
16.1.4 If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Clause 16.1.3, 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
16.1.3) 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 16.1.3, 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
20
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.
16.2 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.
16.3 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.
16.4 Except as expressly provided in this Clause 16, 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.
16.5 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.
16.6 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.
16.7 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
21
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.
17. DEFINITIONS AND INTERPRETATION
17.1 In this Agreement unless the context otherwise requires or as otherwise
defined herein the following expressions have the following meanings:
17.1.1 "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.
17.1.2 "BENEFIT PLANS"
The 401(k) plan and other pension, retirement, life insurance, medical,
health, accident,
22
disability, welfare, savings, deferred compensation or similar plans of
the Company and its Associated Companies.
17.1.3 "THE BOARD OF DIRECTORS"
The Board of Directors for the time being of the Company including any
duly appointed committee thereof.
17.1.4 "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.
17.1.5 "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 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 (other
than an offense under road traffic legislation in the United
Kingdom or elsewhere for which a non-custodial penalty is
imposed); or
23
(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.
17.1.6 "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
24
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 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.
17.1.7 "THE CHIEF EXECUTIVE OFFICER"
The Chief Executive Officer of the Company.
17.1.8 "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
25
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 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.
17.1.9 "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.
17.1.10 "IRS"
The United States Internal Revenue Service, or any successor agency of
the United States Government.
17.1.11 "GROUP"
The Company and the Associated Companies.
17.1.12 "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.
17.2 The headings in this Agreement are for convenience only and shall not
affect its construction or interpretation.
17.3 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
17.4 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.
17.5 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.
17.6 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.
17.7 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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17.8 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.
18. EFFECTIVENESS
18.1 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/
----------------------------------
Xxxxxx 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
