EXHIBIT 10.1
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EMPLOYMENT AGREEMENT
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THIS AGREEMENT, dated as of June 2, 1997, between DENDRITE INTERNATIONAL,
INC., a New Jersey Corporation ("Dendrite"), having its principal place of
business at 0000 Xx. Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, and Xxxxxx
Xxxxxx ("Employee'), having an address at 000 Xxxxxxxxx Xxxx, Xxxx Xxxx,
Xxxxxxxxxxxx 00000.
WHEREAS, Dendrite, its affiliates, and subsidiaries develop and own what is
referred to as Territory Management Systems and related hardware and equipment;
WHEREAS, Employee is or desires to be employed by Dendrite and Dendrite
desires to employ Employee; and
WHEREAS, Dendrite is willing to provide certain confidential and
proprietary information to Employee for the limited purpose of enabling Employee
to carry out duties in connection with his employment by Dendrite.
RECITAL:
NOW, THEREFORE, it is agreed as follows:
1. EMPLOYMENT AT WILL
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Dendrite hereby employs Employee, and Employee hereby accepts such
employment, as Senior Vice President and Chief Financial Officer of Dendrite.
Dendrite hereby employs Employee as an at-will employee. This employment may be
terminated at any time for any reason with or without "Cause" (as defined below)
by Dendrite. Employee agrees to provide two (2) weeks notice to Dendrite before
terminating his employment.
2. DUTIES
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Employee shall perform those duties as may from time to time be assigned to
him and shall carry out any assignments related to Dendrite or its affiliates as
directed. With the Employee's agreement, this may involve rendering services at
various locations throughout the world. In addition, Employee shall be required
to attend all meetings of the Board of Directors of Dendrite (the "Board").
Employee shall devote his full time attention, energy, knowledge, skill and best
efforts solely and exclusively to the duties assigned to him which he shall
faithfully and diligently perform. Employee shall report to Dendrite as may be
required and will fully account for all records, data, materials or other
property belonging to
Dendrite or its customers of which he is given custody. Dendrite may, from time
to time, establish rules and Employee shall faithfully observe these in the
performance of his duties. Employee shall further comply with all policies and
directives of Dendrite.
3. COMPENSATION
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(i) Base Salary. Dendrite shall pay Employee for his services a base
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salary at a rate of $300,000 per annum to be paid on a semi- monthly basis in
accordance with Dendrite's regular payroll practices.
(ii) Bonus. Commencing on the completion of the third fiscal quarter
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of 1997, Employee shall be eligible to receive a quarterly bonus (the "Bonus")
of $50,000 per quarter, payable in the next payroll period occurring at least
two weeks after Dendrite publicly discloses its financial results in such fiscal
quarter; provided, however, that the payment of the Bonus is subject to: (a)
Dendrite's achievement of quarterly financial goals as set forth in the Board
approved annual business plan, (b) such other objectives as mutually agreed
upon, and (c) Employee remaining in the employ of Dendrite as of the end of any
such quarter. Subject to the foregoing conditions, Employee shall also be
eligible to receive a bonus of $16,667 for the second fiscal quarter of 1997.
(iii) Stock Options
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(a) Pursuant to Dendrite's 1992 Stock Plan (the "Stock Plan"), upon
the execution of this Agreement, Dendrite shall give Employee an option to
purchase 200,000 shares of the common stock of Dendrite. Upon the first
anniversary of this Agreement, Dendrite shall give Employee an option to
purchase an additional 40,000 shares of the common stock of Dendrite, provided
that Employee remains in the full-time employment of Dendrite on such date.
Upon the second anniversary of this Agreement, Dendrite shall give Employee an
option to purchase an additional 25,000 shares of the common stock of Dendrite,
provided that Employee remains in the full-time employment of Dendrite on such
date. The price for such options shall be determined by the Option Committee
and Compensation Committee of the Board. Employee's entitlement to such options
shall be subject to (i) a four year vesting schedule, (ii) approval by the
Board, (iii) Employee's execution of a definitive option agreement in form and
substance satisfactory to Dendrite and (iv) in all instances subject to the
terms and conditions of the Stock Plan. Notwithstanding anything to the
contrary, in the event of a "Change of Control" (as defined below), if Employee
is not retained in a similar position or no similar position is offered to
Employee following a Change of Control, all of Employee's options owned by him
at the time of such event shall immediately vest.
(b) For purposes of this Agreement, "Change in Control" means 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 Exchange Act of 1934 (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% 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
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(i) shall not be deemed to be a Change in Control by virtue of any of the
following acquisitions: (A) by Dendrite or any of its subsidiaries, (B) by
any employee benefit plan sponsored or maintained by Dendrite or any of its
subsidiaries, (C) by any underwriter temporarily holding securities
pursuant to an offering of such securities, (D) pursuant to a Non-
Qualifying Transaction (as defined in paragraph (iii)), (E) pursuant to any
acquisition by Employee or any group of persons including Employee or any
entity controlled by Employee or such group ("Employee Holders"), or (F) a
transaction (other than one described in paragraph (iii) below) in which
Dendrite Voting Securities are acquired from Dendrite, if a majority of the
Board approves a resolution providing expressly that the acquisition
pursuant to this clause (F) does not constitute a Change in Control under
this paragraph (i). Notwithstanding the foregoing, a transaction that would
otherwise be considered a Change in Control but for the operation of
clauses D or F of this paragraph (i) will be deemed a Change in Control if
Xxxx Xxxxxx immediately after the consummation of such a transaction is
neither Chairman, President or Chief Executive Officer (or holds a position
comparable to the foregoing positions) of Dendrite or any successor
corporation to Dendrite as a result of such Change in Control transaction;
(ii) individuals who, on June 2, 1997, constituted the Board (the
"Incumbent Directors") cease for any reason to constitute at least a
majority thereof, provided that any person becoming a director subsequent
to June 2, 1997, whose election or nomination for election was approved by
a vote of at least a majority of the Incumbent Directors then on the 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 an Incumbent Director; provided,
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however, that no individual elected or nominated as a director of Dendrite
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initially as a result of an actual or threatened election contest with
respect to directors or as a result of 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 an Incumbent Director;
(iii) the consummation of a merger, consolidation, share exchange or
similar form of corporate reorganization (other than a transaction with
Employee, any group of persons including Employee or any entity controlled
by Employee or such a group
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of persons) involving Dendrite or any of its subsidiaries that requires the
approval of Dendrite's stockholders whether for such transaction or the
issuance of securities in connection with the transaction or otherwise, (a
"Business Combination"), unless immediately following such Business
Combination: (A) more than 50% of the total voting power of (x) the
corporation resulting from such Business Combination (the "Surviving
Corporation"), or (y) if applicable, the ultimate parent corporation that
directly or indirectly has beneficial ownership of 100% of the voting
securities eligible to elect directors of the Surviving Corporation (the
"Parent Corporation"), is represented by Dendrite Voting Securities that
were outstanding immediately prior to the consummation of such Business
Combination (or, if applicable, is represented by shares into which such
Dendrite Voting Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Dendrite
Voting Securities among the holders thereof immediately prior to the
Business Combination, (B) no person (other than the Employee Holders or any
employee benefit plan sponsored or maintained by the Surviving Corporation
or the Parent Corporation), is or becomes the beneficial owner, directly or
indirectly, of 33% or more of the total voting power of the outstanding
voting securities eligible to elect directors of the Parent Corporation
(or, if there is no Parent Corporation, the Surviving Corporation) and (C)
at least a majority of the members of the board of directors of the Parent
Corporation (or if there is no Parent Corporation, the Surviving
Corporation) were Incumbent Directors at the time of the Board's approval
of the execution of the initial agreement providing for such Business
Combination (any Business Combination which satisfies all of the criteria
specified in (A), (B) and (C) above shall be deemed to be a "Non-Qualifying
Transaction"); or
(iv) the stockholders of Dendrite approve a sale of all or
substantially all of the 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% 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
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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 increase the
percentage of outstanding Dendrite Voting Securities beneficially owned by such
person, then a Change in Control of Dendrite shall occur.
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4. SEVERANCE
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(a) Upon Employee's termination of employment by Dendrite for any reason
other than termination by Dendrite for Cause (as defined below), Disability (as
defined below) or upon Employee's death, Employee shall solely be entitled to
(subject to any applicable off-sets) applicable payments and benefits in Section
4(b), his base salary through the date of his termination, and payment for any
unused but accrued vacation through the date of termination.
(b) If Employee's employment hereunder is terminated by Dendrite for any
reason other than death, Cause, or Disability, then Employee shall be entitled
to receive severance payments in an aggregate amount equal to the annual rate of
Employee's base salary in effect as of the date of termination. The severance
payments to be paid to Employee under this Section 4(b) shall be referred to
herein as the "Severance Payment". Employee's 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 Severance Payment. In the event of a termination of
Employee's employment described in this Section 4(b), 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 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.
(c) The making of any Severance Payment under Section 4(b) hereunder 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 Sections 7, 8, 9 or 11 of this
Agreement, in addition to any other remedies at law or in equity, Dendrite may
cease making any Severance Payment or any payments for COBRA coverage otherwise
due under Section 4(b). Nothing herein shall affect any of Employee's
obligations or Dendrite's rights under this Agreement.
(d) 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
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reputation, business or business relationships of Dendrite, including without
limitation, a breach of Sections 7, 8 or 11 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.
(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 period of
six (6) months (excluding permitted vacation time), which need not be
consecutive, during any single twelve (12) month period.
(g) In the event Employee terminates his employment with Dendrite or
Dendrite terminates Employee's employment with Dendrite for "Cause" or
Employee's employment ends as a result of his death or becoming "Disabled," it
is understood and agreed that Dendrite's only obligation is to pay Employee any
unused but accrued vacation days and his base salary through the date of his
termination.
5. BENEFITS
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Dendrite shall provide Employee:
(i) Vacation. Four weeks vacation per annum in accordance with Dendrite
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policy in effect from time to time.
(ii) Business Expenses. Reimbursement for all reasonable travel,
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entertainment and other reasonable and necessary out-of-pocket expenses incurred
by Employee in connection with the performance of his duties, including first
class airline travel. Reimbursement will be made upon the submission by the
Employee of appropriate documentation and verification of the expenses.
(iii) Relocation Expenses. In connection with Employee's moving from
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either Kansas City or Philadelphia, Dendrite will reimburse Employee for all
reasonable relocation expenses incurred in connection with such relocation
including closing costs, realtor fees, legal fees, out-of-pocket expenses,
temporary living arrangements, freight and other costs associated with
Employee's relocation. Such amounts will be reimbursed to Employee on an after
tax basis. Reimbursement will be made upon the submission by the Employee of
appropriate documentation and verification of such relocation expenses.
(iv) Other. Dendrite will provide Employee other benefits to the same
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extent as may be provided to other employees generally in accordance with
Dendrite policy in effect from time to time and subject to the terms and
conditions of such benefit plans.
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6. INFORMATION AND BUSINESS OPPORTUNITY
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During Employee's employment with Dendrite, Employee may acquire knowledge
of (i) information that is relevant to the business of Dendrite or its
affiliates or (ii) knowledge of business opportunities pertaining to the
business in which Dendrite or its affiliates are engaged. Employee shall
promptly disclose to Dendrite that information or business opportunity but shall
not disclose it to anyone else without Dendrite's written consent.
7. DENDRITE CONFIDENTIAL INFORMATION
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The Employee will, as a result of his employment with Dendrite, acquire
information which is proprietary and confidential to Dendrite. This information
includes, but is not limited to, technical and commercial information, customer
lists, financial arrangements, salary and compensation information, competitive
status, pricing policies, knowledge of suppliers, technical capabilities,
discoveries, algorithms, concepts, software in any stage of development,
designs, drawings, specifications, techniques, models, data, technical manuals,
research and development materials, processes procedures, know-how and other
business affairs relating to Dendrite. Confidential information also includes
any and all technical information involving Dendrite's work. Employee will keep
all such information confidential and will not reveal it at any time without the
express written consent of Dendrite. This obligation is to continue in force
after employment terminates for whatever reason.
8. CLIENT CONFIDENTIAL INFORMATION
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Dendrite may, from time to time, be furnished information and data which is
proprietary and confidential to its clients, customers or suppliers. Employee
will not, at any time for any reason, reveal any information provided by any of
Dendrite's clients, customers or suppliers to anyone, unless provided with prior
written consent by Dendrite or by the applicable client, customer or supplier.
This obligation is to continue in force after employment terminates for whatever
reason.
9. RETURN OF PROPERTY
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Upon termination of employment for any reason or upon the request of
Dendrite, Employee shall return to Dendrite all property which Employee received
or prepared or helped prepare in connection with his employment including, but
not limited to, all copies of any confidential information or material, disks,
notes, notebooks, blueprints, customer lists and any and all other papers or
material in any tangible media or computer readable form belonging to Dendrite
or to any of its customers, clients or suppliers, and Employee will not retain
any copies, duplicates, reproductions or excerpts thereof.
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10. INVENTIONS
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All work performed by Employee and all materials, products, deliverables,
inventions, software, ideas, disclosures and improvements, whether patented or
unpatented, and copyrighted material made or conceived by Employee, solely or
jointly, in whole or in part, during the term of Employee's employment by
Dendrite which (i) relate to methods, apparatus, designs, products, processes or
devices sold, licensed, used or under development by Dendrite, (ii) otherwise
relate to or pertain to the present, proposed or contemplated business,
functions or operations of Dendrite, (iii) relate to Dendrite actual or
anticipated research or development, (iv) involve the use of Dendrite's
equipment, supplies or facilities, or (v) result from access to any Dendrite
assets, information, inventions or the like are confidential information, are
the property of Dendrite and shall be deemed to be a work made for hire. To the
extent that title to any of the foregoing shall not, by operation of law, vest
in Dendrite, all right, title and interest therein are hereby irrevocably
assigned to Dendrite. Employee agrees to give Dendrite or any person or entity
designated by Dendrite reasonable assistance required to perfect its rights
therein.
If Employee conceives any idea, makes any discovery or invention within one
(1) year after the termination of employment with Dendrite that relate to any
matters pertaining to the business of Dendrite, it shall be deemed that it was
conceived while in the employ of Dendrite.
11. RESTRICTION ON FUTURE EMPLOYMENT
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Employee agrees that in the event employment with Dendrite is terminated,
for any reason, with or without Cause, Employee shall not for two (2) years
after termination of employment:
(i) Perform services that compete with the business or businesses
conducted by Dendrite or any of its affiliates or render services to any
organization or entity which competes with the business or businesses
conducted by Dendrite or any of its affiliates in any area of the United
States of America or elsewhere where Dendrite or any of its affiliates do
business;
(ii) Solicit any customers or potential customers of Dendrite with
whom Employee had contact while employed by Dendrite or who was a customer
of Dendrite at any time during the two (2) years immediately before
termination;
(iii) Request that any of Dendrite's customers or suppliers
discontinue doing business with it;
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(iv) Knowingly take any action which would disparage Dendrite or be to
its disadvantage; or
(v) Employ or attempt to employ or assist anyone else to employ any
employee or contractor of Dendrite or induce or attempt to induce any
employee or contractor of Dendrite to terminate their employment or
engagement with Dendrite.
For purposes of Section 11(i) "the business or businesses conducted by
Dendrite or any of its affiliates" means Electronic Territory Management Systems
used to manage, coordinate and control the activities of large sales forces and
complex selling environments and/or sales productivity tools of the type and
nature marketed by Dendrite or any of its affiliates and support services
related thereto as of the date of Employee's termination of employment (or which
Dendrite can at the time of Employee's termination of employment establish it
will likely market within one (1) year following the date of Employee's
termination).
12. OUTSIDE CONTRACTING
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Employee shall not enter into any agreements to provide programming or
other services to any company, person or organization outside of his employment
by Dendrite (an "Outside Agreement") without the prior written express consent
from Dendrite. Employee must notify Dendrite of his intent to enter into an
Outside Agreement specifying therein the other party to such Outside Agreement
and the type of programming and/or services to be provided by Employee.
Dendrite shall not unreasonably withhold permission to Employee to enter into
Outside Agreements unless such Outside Agreements (i) are with competitors or
potential competitors of Dendrite, or (ii) as determined in Dendrite's sole
discretion, shall substantially hamper or prohibit Employee from satisfactorily
carrying out all duties assigned to Employee by Dendrite.
13. AFTER-HOURS DEVELOPMENT
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In the event that Employee shall develop any software which, pursuant to
Section 10 herein, is not the property of Dendrite, Dendrite shall have a right
of first refusal to publish and/or purchase the rights to such software.
Employee shall notify Dendrite of any such After-Hours Development as soon as
reasonably possible before or during the development process including a
description of the intended functions of the After-Hours Development and the
estimated date of completion.
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14. PRIOR EMPLOYMENT
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Employee represents and warrants that Employee has not taken or otherwise
misappropriated and does not have in Employee's possession or control any
confidential and proprietary information belonging to any of Employee's prior
employers or connected with or derived from Employee's services to prior
employers. Employee represents and warrants that Employee has returned to all
prior employers any and all such confidential and proprietary information.
Employee further acknowledges, represents and warrants that Dendrite has
informed Employee that Employee is not to use or cause the use of such
confidential or proprietary information in any manner whatsoever in connection
with Employee's employment by Dendrite. Employee agrees, represents and
warrants that Employee will not use such information. Employee shall indemnify
and hold harmless Dendrite from any and all claims arising from any breach of
the representations and warranties in this Section.
15. REMEDIES
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The parties agree that in the event Employee breaches or threatens to
breach this Agreement, money damages may be an inadequate remedy for Dendrite
and that Dendrite will not have an adequate remedy at law. It is understood,
therefore, that in the event of a breach of this Agreement by Employee, Dendrite
shall have the right to obtain from a court of competent jurisdiction restraints
or injunctions prohibiting Employee from breaching or threatening to breach this
Agreement. In that event, the parties agree that Dendrite will not be required
to post bond or other security. It is also agreed that any restraints or
injunctions issued against Employee shall be in addition to any other remedies
which Dendrite may have available to it.
16. APPLICABLE LAW
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This Agreement shall be governed by and construed in accordance with the
laws of the State of New Jersey.
17. NOTICES
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In the event any notice is required to be given under the terms of this
Agreement, it shall be delivered in the English language, in writing, as
follows:
If to Employee: Xxxxxx Xxxxxx
000 Xxxxxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxxxx 00000
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If to Dendrite: Xxxxxxxxxxx Xxxxxx, Vice President, Legal Counsel
Dendrite International, Inc.
0000 Xx. Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
18. NON-ASSIGNABILITY
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Employee's rights or obligations under the terms of this Agreement or of
any other agreement with Dendrite may not be assigned. Any attempted assignment
will be void as to Dendrite. Dendrite may, however, assign its rights to any
affiliated or successor entity.
19. BINDING AGREEMENT
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This Agreement shall be binding upon and inure to the benefit of Employee's
heirs and personal representatives and to the successors and assigns of
Dendrite.
20. INTEGRATION
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This Agreement sets forth the entire agreement between the parties hereto
and fully supersedes any and all prior negotiations, discussions, agreements or
understandings between the parties hereto pertaining to the subject matter
hereof. No representations, oral or otherwise, with respect to the subject
matter of this Agreement have been made by either party.
21. WAIVER
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This Agreement may not be modified or waived except by a writing signed by
both parties. No waiver by either party of any breach by the other shall be
considered a waiver of any subsequent breach of the Agreement.
22. JURISDICTION
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The State of New Jersey shall have exclusive jurisdiction to entertain any
legal or equitable action with respect to this Agreement except that Dendrite
may institute suit against Employee in any jurisdiction in which Employee may be
at the time. In the event suit is instituted in New Jersey, it is agreed that
service of summons or other appropriate legal process may be effected upon any
party by delivering it to the address in this Agreement specified for that party
in Section 17.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the first
date written above.
DENDRITE INTERNATIONAL, INC.
/s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: President
/s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
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