EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the first day of July, 1996 BETWEEN:
PHARMACEUTICAL MARKETING SERVICES INC. (the "Company"), a Delaware Corporation
with offices at 00 Xxxxxxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx, and XXXXXX
X. XXXXXX, an individual residing at 000 Xxxxxxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxxxx (the "Executive").
WHEREAS, the Company wishes to assure itself of the services of the
Executive in the capacity of Vice President, Secretary and General Counsel of
the Company and to that end desires to enter into an employment agreement with
Executive upon the terms and conditions set forth herein; and
WHEREAS, Executive is willing to enter into such an agreement of
employment under the terms and conditions stated hereinafter.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein set forth, the parties hereto mutually covenant and agree as follows:
1. COMMENCEMENT AND TERM
1.1 The Company shall employ the Executive in the capacity of Vice
President, Secretary and General Counsel under and subject to the terms
and conditions set forth in this Agreement.
1.2 The employment of the Executive shall be for an indefinite term,
provided that the employment of Executive may be terminated by the
Company at any time in accordance with Clause 9 hereinafter.
1.3 This Agreement has been entered into as of the date first above written
but, for purposes of determining Executive's length of service, the
Executive shall be credited with his employment with the Company's
predecessor-in-interest, Xxxxx International Inc., which began on April
17, 1989 and continued until April 16, 1996 and his employment with an
associated company, Source Informatics Inc., which commenced on April
16, 1996 and continued thereafter until the commencement of Executive's
employment with the Company.
2. OBLIGATIONS DURING EMPLOYMENT
2.1 The Executive shall during the continuance of his employment:
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2.1.1 Serve the Company to the best of his ability in the capacity of Vice
President, Secretary and General Counsel and manage the legal affairs of
the Company and its subsidiaries in accordance with the policies and
procedures established by the Chief Executive Officer of the Company, to
whom the Executive shall report; 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 of the Company; and
2.1.3 If and so long as the Chief Executive Officer so directs, perform and
exercise the said duties and powers on behalf of any Associated Company
and act as an 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 including all
authority levels and procedures from time to time specified by the Chief
Executive Officer; and
2.1.6 Promptly give to the Chief Executive Officer (in writing if so
requested) all such information, explanations and assistance as he 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, devote the whole of
his time, atten- tion 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 Work at such offices of the Company as the Company may direct and travel
from time to time as may be required in connection with the business of
the Company and any Associated Company for which he is required to
perform duties.
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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
$227,000 per annum. The salary shall be payable in equal bi-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. The amount of the bonus for the achievement
of 100% of targeted performance will not be less than thirty percent
(30%) of the Executive's then annual base 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.
4. INSURANCE, PENSION SCHEME AND OTHER BENEFITS
4.1 At all times during the term of this Agreement, the Company shall
provide Executive with health insurance (including any medical expense
insurance, permanent health and accident insurance, and travel
insurance), life insurance, the opportunity to participate in a 401(k)
Savings Plan, and such other benefits 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.
4.2 The Company shall establish a pension plan covering Executive and make
appropriate payments into said plan on behalf of Executive or, at
Executive's option, make payment into a private pension plan, in either
case said pension payments shall be in an aggregate amount equal to
fifteen percent (15%) of the Executive's aggregate annual compen- sation
with effect from January 1, 1991. In the event that, at the date of
execution of this Agreement, Execu- tive's pension has not been fully
funded from January 1, 1991, as aforesaid, the Company shall make
payments into the Company pension plan or into the Executive's private
pension plan, as the case may be, in such amounts as to ensure that said
pension is fully funded on or before June 30, 1998.
5. EXPENSES
5.1 The Company shall during the continuance of his employment reimburse the
Executive in respect of all reasonable and appropriate travel,
accommodations, business entertainment and other similar out-of-pocket
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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
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 twenty-five (25)
working days' paid holiday in each calendar year.
6.2 The Executive shall not be permitted to carry forward any accumulated,
unused vacation entitlement in excess of twenty-five (25) days from one
calendar year to the next.
6.3 Upon the termination of his employment, the Executive's entitlement to
accrued holiday pay (which accrues at the rate of two days per month)
shall be 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 to the Executive; provided that
if the Executive shall have taken more days' holiday than his accrued
entitlement, the Company is hereby authorized to make an appropriate
deduction from the Executive's final salary payment.
7. INTELLECTUAL PROPERTY
7.1 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.
7.2 The Executive hereby irrevocably appoints the Company to be his attorney
and in his name and on his behalf to execute any instrument or do any
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.
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7.3 All rights and obligations under this Clause 7 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.
8. CONFIDENTIALITY
8.1 The Executive shall not (other than in the proper performance of his
duties or with the prior written consent of the Company or unless
ordered by a court of competent jurisdiction) 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
confidential information relating to the Company or any Associated
Company 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 however that such restrictions shall
cease to apply to any confidential information which may enter the
public domain other than through the fault of the Executive.
8.2 All notes and memoranda of any trade secret or 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 a person duly
authorized by the Company at the termination of his employment or
earlier at the request of the President of the Company at any time
during the course of his employment.
9. TERMINATION OF EMPLOYMENT
9.1 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 13.2 hereof at least 18 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 13.2 hereof, and the effective date of such
termination shall be determined in accordance with Clause 9.1.3.
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9.1.1 Except as provided in Clause 9.1.2, in the event that the Executive's
employment is terminated by the Company Without Cause:
(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) one and a half times the sum of (A) his then current annual
salary under Clause 3 and (B) 30% 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) an
additional amount of salary equal to all of the Executive's
accrued unused vacation entitlement up to a maximum of
twenty-five (25) days; plus (iii) the cash equivalent of all
emoluments specified hereinabove (except those the Company shall
continue to provide pursuant to Clause 9.1.2(b) during the
period of eighteen (18) months following the effective date of
such termination; provided, however, that Executive shall have
the right to request and receive the aggregate lump sum payment
comprising subclauses (i), (ii), and (iii) hereinabove in
installments designated by Executive paid over the calendar year
of the effective date of termination and the subsequent two
calendar years;
(b) for a period of eighteen (18) months after the effective date of
such termination, the Company shall provide the Executive with
pension contributions, life, health, disability 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, or the
cash equivalents of the foregoing on a monthly basis (less any
monthly contribution to such benefits plans made through a
payroll deduction charged to the Executive immediately prior to
such effective date in respect of any such benefits), provided,
however, that nothing contained herein is intended to affect
Executive's eligibility for COBRA coverage upon termination of
his employment with the Company;
(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 eighteen months after
the effective date of the termination of his employment within
which to exercise such options;
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(d) the Company shall use its best efforts to cause the similar
vesting of all stock options granted to Executive under the
stock option plans of any Associated Company, as hereinafter
defined; and
(e) the Company shall provide outplacement services to Executive,
for a period not to exceed twelve (12) months following the
effective date of termination, with a nationally-recognized
outplacement firm selected by the Company.
9.1.2 Notwithstanding the other provisions of this Clause 9.1, in the event
that 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:
(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) 30% 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) an
additional amount of salary equal to all of the Executive's
accrued unused vacation entitlement up to a maximum of
twenty-five (25) days; plus (iii) the cash equivalent of all
emoluments specified herein above (except those the Company
shall continue to provide pursuant to Clause 9.1.2(b) during the
period of twenty-four (24) months following the effective date
of such termination; and provided further that in the event of a
termination for Good Reason pursuant to Clause 15.1.8(b), the
annual salary used for computation under this Clause 9.1.2(a)
shall be the one in effect prior to the reduction referred to in
Clause 15.1.8(b); provided, however, that Executive shall have
the right to request and receive the aggregate lump sum payment
comprising subclauses (i), (ii), and (iii) herein above in
installments designated by Executive paid over the calendar year
of the effective date of termination and the subsequent two
calendar years;
(b) for a period of twenty four (24) months after the effective date
of such termination, the Company shall provide the Executive
with pension contributions, life, health, disability 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, or the
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nation is given, or the cash equivalents of the foregoing on a
monthly basis (less any monthly contribution to such benefits
plans made through a payroll deduction charged to the Executive
immediately prior to such effective date in respect of any such
benefits); provided, however, that nothing contained herein is
intended to affect Executive's eligibility for COBRA coverage
upon termination of his employment with the Company;
(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 twenty-four months after
the effective date of the termination of his employment within
which to exercise such options; and;
(d) the Company shall use its best efforts to cause the similar
vesting of all stock options granted to Executive under the
stock option plans of any Associated Company, as hereinafter
defined; and
(e) the Company shall provide outplacement services to Executive,
for a period not to exceed eighteen (18) months following the
effective date of termination, with a nationally-recognized
outplacement firm selected by the Company.
9.1.3 Except as provided in Clause 9.1.2, 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 9.1.1 (the "Company Reference Termina-
tion"). The effective date of the Executive's termination of his
employment pursuant to this Clause 9.1.3 shall be the date specified in
Executive's Notice of Termination; provided, however, that, under no
circumstances shall the Executive specify an effective date less than
one hundred twenty (120) days after the date of such notice. In such
event, the Executive shall receive the benefits provided in Clause 9.1.1
on the effective date of termination of his employment.
9.1.4 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
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have been frivolous, the Executive shall reimburse the Company for all
amounts paid by the Company pursuant to this Clause 9.1.4.
9.2 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 13.2 and, if applicable, after
complying with Clause 15.1.5 hereof. The Executive may at any time
terminate his employment with the Company in accordance with Clause 13.2
hereof at least 3 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 (except in the case
where the Executive so terminates his employment within two years after
a Change in Control, as provided in Clause 9.1.2), the Executive shall
be entitled to receive any unpaid amount of this then current salary
(including unused vacation entitlements pursuant to Clause 6.3) 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.
9.3 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.
9.4 Death or Disability
9.4.1 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
employment of the Executive, by giving him a Notice of Termination
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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 material 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 9.4.1 are referred to
herein as "Disability".
9.4.2 Death. The employment of the Executive by the Company shall terminate
automatically upon his death.
9.4.3 Benefits upon Disability. In the event of termination of employment due
to Disability the Company shall continue to pay Executive's salary and
bonus for achieving 100% of his performance objectives under Clause 3
and provide the other emoluments and benefits specified hereinabove,
including contributions to the pension plan designated by the Executive
at the full rate for a period of six (6) months from the date of
termination hereunder; and cause the vesting of all of the stock options
granted to Executive under the Stock Option Plan and allow the Executive
a period of eighteen (18) months from the effective date of termination
within which to exercise such options.
9.4.4 Benefits upon Death. In the event of a termination of employment due to
death of the Executive, his legal representatives shall be entitled to
receive any unpaid amount of his then current salary through the
effective date of such termination plus a further three months base
salary, as well as any other benefits 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 death under any
Benefit Plan or other policy or program of the Company or any associated
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Company in accordance with the respective terms of such Benefit Plan,
policy or program.
9.5 Upon the termination of his employment the Executive shall be entitled
to accrued vacation pay pursuant to clause 6.3.
9.6 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 the
Clause 9, 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 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 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.
9.7 The Executive shall have no obligation to take any action to mitigate or
offset any amounts payable by the Company pursuant to this Clause 9, 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.
9.8 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, 7 through 10, and 12 through 16, inclusive,
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of this Agreement, all of which shall survive the effective date of such
termination of employment in accordance with their respective terms.
9.9 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.
10. EXECUTIVES COVENANTS
10.1 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 8.2 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 10.2 and 10.3 in order to provide the Company and its Associated
Companies with what he considers to be reasonable protection for those
interests.
10.2 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.
10.3 The Executive hereby covenants with the Company that he will not for the
period of 24 months after the Executive's last active day of employment
without prior written consent of the Chief Executive Officer, directly
or indirectly:
10.3.1 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
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10.3.2 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 complete 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 employ-
ment 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
10.3.3 in connection with the carrying on of any businesses 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
10.3.4 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 date 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
10.3.5 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 business unit, the
direct report of such business unit head, or 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 a
person would commit a breach of his contract of employment by so doing).
10.4 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 10.3 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
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require for the protection of its legitimate business interests.
10.5 Notwithstanding the generality of the covenants contained in Clause
10.3.1 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 24-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 Cognizant Corporation,
or any of its direct or indirect subsidiaries, wherever located, except
with the prior consent of the Chief Executive Officer 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.
10.6 Nothing contained 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 or shares.
10.7 The covenants contained in Clauses 10.3.1, 10.3.2, 10.3.3, 10.3.4 and
10.3.5 are intended to be separate and severable and enforceable as
such.
10.8 In the event of a breach of Clauses 10.3.1, 10.3.2, 10.3.3, 10.3.4, or
10.3.5, 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.
11. DISCIPLINARY AND GRIEVANCE PROCEDURES
11.1 For 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.
11.2 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 Board of Directors whose decision shall be final.
11.3 If the Executive has any grievance in relation to his employment he may
raise it in writing with the Board of Directors whose decision shall be
final.
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12. ASSIGNMENT
12.1 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. In the event of
any permitted assignment, the Company shall guarantee the performance of
this Agreement by the Associated Company.
12.2 This Agreement shall be binding upon and shall inure to the benefit of
Executive, his legal representatives and assigns, except that
Executive's obligations to perform services under this Agreement are
personal and are expressly declared to be non-assignable and
non-transferable by him without the consent in writing of the Company.
12.3 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.
13. NOTICES
13.1 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 delivery 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.
13.2 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 13.1 above and the relevant provisions of Clause 9. 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
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the facts and circumstances claimed to provide a basis for termination
under the provision so identified.
14. MISCELLANEOUS
14.1 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.
14.2 Any benefits provided by the Company to the Executive or his family which
are not expressly referred to in this Agreement or in a separate
agreement between Executive or the Company's subsidiary Source
Informatics Limited of even date herewith 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.
14.3 Except as expressly provided in this Clause 14, 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.
14.4 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.
14.5 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.
14.6 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
16
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.
15. DEFINITIONS AND INTERPRETATION
15.1 In this Agreement unless the context otherwise requires or as otherwise
defined herein the following expressions have the following meanings:
15.1.1 "Associated Company"
Source Informatics Inc. ("Source"), Xxxxx International Inc. ("Xxxxx") or
any company which is a direct or indirect subsidiary of Source, Xxxxx or
the Company.
15.1.2 "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.
15.1.3 "the Board of Directors"
The Board of Directors for the time being of the Company including any
duly appointed committee thereof.
15.1.4 "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.
15.1.5 "Cause"
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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) wilful 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 any other non-U.S.
jurisdiction that would constitute a felony under the laws of the
United States or the of the state of Delaware; or
(d) the Executive's illegal or immoderate use or abuse of alcoholic
beverages or drugs on a continuing basis 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.
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15.1.6 "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 January 28, 1998 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 of 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 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
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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.
15.1.7 "the Chief Executive Officer"
The Chief Executive Officer and member of the Board of Directors
of the Company.
15.1.8 "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 the position of the Vice President,
Secretary and General Counsel or the failure to elect the
Executive to the position of the Vice President, Secretary and
General Counsel 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 3.1 hereof (as the same may be
increased from time to time in accordance with Clause 3.3) 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 reduced or eliminated 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;
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(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' and
officers' insurance, 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 15 miles from the current address of
Executive set out at the beginning of this Agreement;
(g) the Company fails to pay the Executive any amount otherwise vested
and due hereinunder 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.
If the Executive delivers to the Company a Notice of Termination
in connection with an event described in Clauses (a) through (h)
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.
15.1.9 "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 non-public proprietary
information, know-how and rights of like nature arising or
subsisting anywhere in the world in relation to all
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of the foregoing whether registered or unregistered.
15.1.10 "IRS"
The United States Internal Revenue Service, or any successor
agency of the United States Government.
15.1.11 "Group"
The Company and the Associated Companies.
15.1.12 "Stock Option Plan"
The Pharmaceutical Marketing Services 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.
15.1.13 "Territory"
The counties of North America, Asia and the Far East and Continental
Europe, excluding the United Kingdom.
15.2 The headings in this Agreement are for convenience only and shall not
affect its construction or interpretation.
15.3 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.
15.4 This Agreement together with the Company plans, agreements and other
arrangements referred to herein contains the entire understanding between
the parties and supersedes 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 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.
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15.5 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 unenforcability
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.
15.6 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.
15.7 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.
15.8 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.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date first above written.
PHARMACEUTICAL MARKETING SERVICES INC.
By:/s/ Xxxxxx X.X. Xxxxxx
__________________________________
Xxxxxx X. Xxxxxx
Chief Executive Officer
EXECUTIVE
By:/s/ Xxxxxx X. Xxxxxx
__________________________________
Xxxxxx X. Xxxxxx
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SCHEDULE
BUSINESS OF THE GROUP
The Business of the Group consists of the provision of physician
targeting services, information services from pharmacy-derived prescriptions in
Europe, marketing research surveys and audits evaluating promotional
expenditure, physicians attitudes and behaviours and prescribing and related
consulting services to the pharmaceutical industry.
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