AMENDMENT
November 8, 2001
THIS
AMENDMENT modifies and amends the Employment Agreement (the “Agreement”) by and
between DENDRITE INTERNATIONAL, INC. (“Dendrite”) and Xxxxx Xxxxxxxx (“Employee”).
Unless otherwise defined herein, capitalized terms used herein shall have their
respective meanings set forth in the Agreement.
The
parties hereby agree as follows:
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1.
The Agreement is hereby modified to include the following: |
| 26. |
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VESTING
OF STOCK OPTIONS UPON “CHANGE IN CONTROL” |
Notwithstanding
anything to the contrary, in the event of a “Change in Control”(as defined
below), all of Employee’s options owned by him at the time of such event shall
immediately vest. For the purposes of this Agreement, “Change in Control”shall
mean the occurrence of any one of the following events:
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(i)
any “person”(as such term is defined in Section 3(a)(9) of the Securities and
Exchange Act of 1934, as amended (the “Exchange Act”), and as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a “beneficial owner”(as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
Dendrite representing 33-1/3% or more of the combined voting power of Dendrite’s
then outstanding securities eligible to vote for the election of the Board (the “Dendrite
Voting Securities”); provided, however, that the event described in this paragraph
(i) shall not be deemed to be a Change in Control by virtue of any of the following
acquisitions: (A) by Dendrite or any subsidiary, (B) by any employee benefit plan
sponsored or maintained by Dendrite or any subsidiary, (C) by any underwriter temporarily
holding securities pursuant to an offering of such securities, (D) pursuant to a
Non-Control Transaction (as defined in paragraph (iii)), or (E) a transaction (other than
one described in (iii) below) in which Dendrite Voting Securities are acquired from
Dendrite, if a majority of the Incumbent Board (as defined below) approves a resolution
providing expressly that the acquisition pursuant to this clause (E) does not constitute
a Change in Control under this paragraph (i); |
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(ii)
individuals who, on the effective date of this Agreement, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority thereof, provided
that any person becoming a director subsequent to the Effective Date, whose election or
nomination for election was approved by a vote of at least two-thirds of the directors
comprising the Incumbent Board (either by a specific vote or by approval of the proxy
statement of Dendrite in which such person is named as a nominee for director, without
objection to such nomination) shall be considered a member of the Incumbent Board;
provided, however, that no individual initially elected or nominated as a director of
Dendrite as a result of an actual or threatened election contest with respect to
directors or any other actual or threatened solicitation of proxies or consents by or on
behalf of any person other than the Board shall be deemed to be a member of the Incumbent
Board; |
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(iii)
the shareholders of Dendrite approve a merger, consolidation, share exchange or similar
form of corporate reorganization of Dendrite or any such type of transaction involving
Dendrite or any of its subsidiaries (whether for such transaction or the issuance of
securities in the transaction or otherwise) (a “Business Combination”), unless
immediately following such Business Combination: (A) more than 50% of the total
voting power of the publicly traded corporation resulting from such Business Combination
(including, without limitation, any corporation which directly or indirectly has
beneficial ownership of 100% of Dendrite Voting Securities or all or substantially all of
the assets of Dendrite and its subsidiaries) eligible to elect directors of such
corporation would be represented by shares that were Dendrite Voting Securities
immediately prior to such Business Combination (either by remaining outstanding or being
converted), and such voting power would be in substantially the same proportion as the
voting power of such Dendrite Voting Securities immediately prior to the Business
Combination, (B) no person (other than any publicly traded holding company resulting from
such Business Combination, any employee benefit plan sponsored or maintained by Dendrite
(or the corporation resulting from such Business Combination), or any person which
beneficially owned, immediately prior to such Business Combination, directly or
indirectly, 33-1/3% or more of Dendrite Voting Securities (a “Dendrite 33-1/3%
Stockholder”)) would become the beneficial owner, directly or indirectly, of 33-1/3%
or more of the total voting power of the outstanding voting securities eligible to elect
directors of the corporation resulting from such Business Combination and no Dendrite
33-1/3% Stockholder would increase its percentage of such total voting power, and (C) at
least a majority of the members of the board of directors of the corporation resulting
from such Business Combination would be members of the Incumbent Board at the time of the
Board’s approval of the execution of the initial agreement providing for such
Business Combination (a “Non-Control Transaction”); or |
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(iv)
the shareholders of Dendrite approve a plan of complete liquidation or dissolution of
Dendrite or the sale or disposition of all or substantially all of Dendrite’s
assets. |
Notwithstanding
the foregoing, a Change in Control of Dendrite shall not be deemed to occur solely
because any person acquires beneficial ownership of more than 33-1/3% of Dendrite Voting
Securities as a result of the acquisition of Dendrite Voting Securities by Dendrite
which, by reducing the number of Dendrite Voting Securities outstanding, increases the
percentage of shares beneficially owned by such person; provided, that if a Change in
Control of Dendrite would occur as a result of such an acquisition by Dendrite (if not
for the operation of this sentence), and after Dendrite’s acquisition such person
becomes the beneficial owner of additional Dendrite Voting Securities that increases the
percentage of outstanding Dendrite Voting Securities beneficially owned by such person,
then a Change in Control of Dendrite shall occur.
| 27. |
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SEVERANCE
FOLLOWING TERMINATION OF EMPLOYMENT FOLLOWING A “CHANGE IN CONTROL” “WITHOUT CAUSE” OR
FOR “GOOD REASON” |
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(a)
The following severance payment only applies in the event of a Change in Control. If
Employee’s employment hereunder is terminated within one (1) year following a Change
in Control (i) by Dendrite for any reason other than Death, Cause, or Disability (each as
defined below) or (ii) by Employee for Good Reason (as defined below), the Employee shall
be entitled to receive severance payments in an aggregate amount equal to the sum of
twelve (12) months base salary (calculated at the rate of base salary then being paid to
Employee as of the date of termination). The severance payments to be paid to Employee
under this Section shall be referred to herein as the “Change in Control Severance
Payment”. Employee’s Change In Control Severance Payment shall be paid by
Dendrite in cash in twelve (12) consecutive equal monthly payments commencing not later
than thirty (30) days after the effective date of the termination of Employee’s
employment. No interest shall accrue or be payable on or with respect to any Change in
Control Severance Payment. In the event of a termination of Employee’s employment
described in this Section, Employee shall be provided continued “COBRA”coverage
pursuant to Sections 601 et seq. of ERISA under Dendrite’s group medical and dental
plans. During the period which Employee receives the Change in Control Severance Payment,
Employee’s cost of COBRA coverage shall be the same as the amount paid by employees
of Dendrite for the same coverage under Dendrite’s group health and dental plans.
Notwithstanding the foregoing, in the event Employee becomes re-employed with another
employer and becomes eligible to receive health coverage from such employer, the payment
of COBRA coverage by Dendrite as described herein shall cease. In the event Employee is
entitled to the Change in Control Severance Payment as set forth in this Section,
Employee shall not be entitled to any other severance payments from Dendrite. |
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(b)
The making of any Change in Control Severance Payment under this Section is conditioned
upon the signing of a general release. in form and substance satisfactory to Dendrite
under which Employee releases Dendrite and its affiliates together with their respective
officers, directors, shareholders, employees, agents and successors and assigns from any
and all claims he may have against them. In the event Employee breaches any of the
covenants or agreements contained in this Agreement, in addition to any other remedies at
law or in equity, Dendrite may cease making any Change in Control Severance Payment
otherwise due under this Section. Nothing herein shall affect any of Employee’s
obligations or Dendrite’s rights under this Agreement. |
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(c)
For purposes of this Agreement, “Cause”as used herein shall mean (i) any gross
misconduct on the part of Employee with respect to his duties under this Agreement, (ii)
the engaging by Employee in an indictable offense which relates to Employee’s duties
under this Agreement or which is likely to have a material adverse effect on the business
of Dendrite, (iii) the commission by Employee of any willful or intentional act which
injures in any material respect or could reasonably be expected to injure in any material
respect the reputation, business or business relationships of Dendrite, including without
limitation, a breach of any of his covenants or agreements of this Agreement, or (iv) the
engaging by Employee through gross negligence in conduct which injures materially or
could reasonably be expected to injure materially the business or reputation of Dendrite. |
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(d)
For purposes of this Agreement, “Good Reason”as used herein shall mean, without
Employee’s express written consent, concurrently with or within one (1) year
following a “Change in Control”(as defined above), the occurrence of any of the
following events which is not corrected within ten (10) days following notice of such
event given by Employee to Dendrite: |
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(i)
the assignment to Employee of any duties or responsibilities materially and adversely
inconsistent with Employee’s position (including any material diminution of such
duties or responsibilities) or a material and adverse change in Employee’s reporting
responsibilities, titles or offices with Dendrite; |
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(ii)
any material breach by Dendrite of this Agreement with respect to the making of any
compensation payments; |
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(iii)
any requirement of Dendrite that Employee be based anywhere other than in a thirty-five
(35) mile radius of the Dendrite office Employee is based in on the date of
consummation of the Change in Control; |
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(iv)
the failure of Dendrite to continue in effect any employee benefit plan, compensation
plan, welfare benefit plan or fringe benefit plan (such plans being referred to herein as
“Welfare Plans”) in which Employee is participating as of the effective date of
this Agreement (or as such benefits and compensation may be increased from time to time),
or the taking of any action by Dendrite which would materially and adversely affect
Employee’s participation in or materially reduce Employee’s benefits under such
Welfare Plans (other than an across-the-board reduction of such benefits affecting senior
executives of Dendrite) unless (i) Employee is permitted to participate in other plans
providing Employee with substantially comparable benefits (at substantially comparable
cost with respect to the Welfare Plans), (ii) any such Welfare Plan does not provide
material benefits to Employee (determined in relation to Employee’s compensation and
benefits package), (iii) such failure or action is taken at the direction of Employee or
with his consent, or (iv) such failure or action is required by law; or |
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(v)
the failure of Dendrite to obtain an agreement from a successor employer to assume
Dendrite’s obligations under this Agreement in the event of a “Change in Control”. |
Employee
must notify Dendrite of any event constituting Good Reason within ninety (90) days
following Employee’s knowledge of its existence, it being understood that Employee’s
failure to do so shall deem such event not to constitute Good Reason under this
Agreement.
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(e)
For purposes of this Agreement, “Disabled”as used herein shall have the same
meaning as that term, or such substantially equivalent term, has in any group disability
policy carried by Dendrite. If no such policy exists, the term “Disabled”shall
mean the occurrence of any physical or mental condition which materially interferes with
the performance of Employee’s customary duties in his capacity as an employee where
such disability has been in effect for a consecutive six (6) month period (excluding
permitted vacation time), the existence of which is supported by credible medical
evidence. |
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2.
Except as expressly modified by this Amendment, all of the terms and conditions of the
Agreement shall remain in full force and effect. |
IN
WITNESS WHEREOF, the parties have signed this Amendment as of the first date written
above.
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DENDRITE INTERNATIONAL, INC.
By: XXXXXXXXX X. XXXXXXXXXX
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Name: Xxxxxxxxx X. Xxxxxxxxxx
Title: V.P., General Counsel
and Secretary |
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By: XXXXX XXXXXXXX
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Xxxxx Xxxxxxxx |
