EMPLOYMENT AGREEMENT
Exhibit
10.41
Execution Copy
This EMPLOYMENT AGREEMENT (the “Agreement”) entered into as of January 10, 2007 (the
“Effective Date”), by and between Xxxxx X. Xxxxxxxxx (the “Executive”) and PharmaNet
Development Group, Inc., a Delaware corporation (the “Company”).
WHEREAS, in its business, the Company has acquired and developed certain trade secrets,
including but not limited to proprietary processes, sales methods and techniques, and other like
confidential business and technical information, including, but not limited to, technical
information, design systems, proprietary assays, pricing methods, pricing rates or discounts,
process, procedure, formula, design of computer software or improvement of any portion or phase
thereof, whether patented or not, that is of any value whatsoever to the Company, as well as
certain unpatented information relating to the Services (as defined below) information concerning
proposed new services, market feasibility studies, proposed or existing marketing techniques or
plans (whether developed or produced by the Company or by any other entity for the Company), other
Confidential Information (as defined below) and information about the Company’s employees,
officers, and directors, which necessarily will be communicated to the Executive by reason of his
or her employment with the Company;
WHEREAS, the Company has strong and legitimate business interests in preserving and protecting
its investment in the Executive, its trade secrets and Confidential Information, and its
substantial relationships with suppliers, and Clients (as defined below), actual and prospective;
and
WHEREAS, the Company desires to preserve and protect its legitimate business interests further
by restricting competitive activities of the Executive during the term of employment and following
(for a reasonable time) termination of employment;
WHEREAS, the Company’s Board of Directors (the “Board”) considers it essential to and
in the best interests of the Company’s direct and indirect holders of ownership interests
(collectively, the “Stockholders”) to xxxxxx the continued employment of the Executive and
has approved the severance arrangement set forth in this Agreement;
WHEREAS, the Company desires to employ the Executive and to ensure the continued availability
to the Company of the Executive’s services, and the Executive is willing to accept such employment
and render such services, all upon and subject to the terms and conditions contained in this
Agreement;
WHEREAS, the Executive was previously a party to that certain Employment Agreement dated
November 2, 2004 by and between the applicable subsidiary of the Company and the Executive (the
“Previous Employment Agreement”) and by executing this Agreement, the Executive hereby
agrees that this Agreement supersedes any prior employment arrangement set forth in the Previous
Employment Agreement;
WHEREAS, the Executive was previously a party to that certain Severance Agreement dated
October 31, 2004 by and between a subsidiary of the Company and the Executive (the “Previous
Severance Agreement”) and by executing this Agreement, the Executive hereby agrees that this
Agreement supersedes any prior employment arrangement set forth in the Previous Severance
Agreement; and
WHEREAS, the Executive acknowledges and agrees that the payments, benefits, promises and
undertakings performed, and to be performed, as set forth herein exceed and are greater than the
payments, benefits, promises and undertakings to which Employee would have been entitled had
Executive not executed this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth in this
Agreement, and intending to be legally bound, the Company and the Executive agree as follows:
1. Representations and Warranties. The Executive hereby represents and warrants to
the Company that he or she is not subject to any written nonsolicitation or noncompetition
agreement affecting his or her employment with the Company (other than any prior agreement with the
Company or its Affiliate (as defined below)), (b) is not subject to any written confidentiality or
nonuse/nondisclosure agreement affecting his or her employment with the Company (other than any
prior agreement with the Company or its Affiliate), and (c) has not brought to the Company any
trade secrets, confidential business information, documents, or other personal property of a prior
employer.
2. Term of Employment.
(a) Term. Subject to Section 6 hereof, the Company hereby employs the Executive, and
the Executive hereby accepts employment with the Company, for a period commencing on the Effective
Date and ending three (3) years from the Effective Date (the “Employment Term”).
(b) Continuing Effect. Notwithstanding any termination of employment, at the end of
the Employment Term or otherwise, the provisions of Sections 7 and 8 shall remain in full force and
effect and the provisions of Section 8 shall be binding upon the legal representatives, successors
and assigns of the Executive.
3. Duties.
(a) General Duties. The Executive shall serve as the Senior Vice President, Human
Resources, with duties and responsibilities that are customary for such position. The Executive
shall use his or her best efforts to perform his or her duties and discharge his or her
responsibilities pursuant to this Agreement competently, carefully and faithfully. During the
Employment Term, the Executive shall be deemed an officer (but not an executive officer) and a
member of the Executive Committee of the Company. In addition, Executive may be required to
execute and deliver to the Company, on a timely basis, quarterly certifications or
sub-certifications in order to permit Company to comply with its reporting obligations, including
those under the Xxxxxxxx-Xxxxx Act of 2002.
(b) Devotion of Time. The Executive shall devote the amount of time and attention to
the business and affairs of the Company that are reasonably necessary to competently perform his or
her duties. The Executive shall not enter the employ of or serve as a consultant to, or in any way
perform any services with or without compensation to, any other persons, business or organization
without the prior written consent of the board of directors of the Company. Notwithstanding the
foregoing, the Executive shall be permitted, subject to the first sentence of this Section 3(b) and
Sections 7, 8, 9 and 10 hereof, to (i) serve on corporate, advisory, civic or charitable boards or committees, (ii) deliver lectures, fulfill speaking engagements or teach at educational
institutions and (iii) manage personal investments.
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(c) Location of Office. The Executive’s principal business office shall be at the
Company’s office location in Princeton, New Jersey as it may be changed from time to time by the
senior management of the Company; provided, however, that the Executive’s job
responsibilities shall include all business travel reasonably necessary to such requirements.
(d) Adherence to Inside Information Policies. The Executive acknowledges that the
Company is publicly-held and, as a result, has implemented inside information policies designed to
preclude its employees and those of its subsidiaries from violating the federal securities laws by
trading on material, non-public information or passing such information on to others in breach of
any duty owed to the Company or any third party. The Executive shall promptly execute any
agreements generally distributed by the Company to its employees requiring such employees to abide
by its inside information policies.
4. Compensation and Expenses.
(a) Annual Base Salary. For the services of the Executive to be rendered under this
Agreement, during the Employment Term the Company shall pay the Executive an annual base salary
equivalent to $210,000 per annum provided, however, that effective as of January 1, 2007 the annual
base salary will be $262,000 (the “Annual Base Salary”). Commencing January 1, 2008, the Annual
Base Salary shall be adjusted annually on a compounded basis on such Executive’s employment
anniversary date (as such date has been, or may in the future be, modified) at the greater of (i)
four (4%), (ii) an amount approved by the Compensation Committee of the Company’s Board of
Directors or (iii) the Consumer Price Index in accordance with the formula attached hereto as
Exhibit A. The Annual Base Salary shall be payable in accordance with the Company’s normal
payroll practices.
(b) Annual (Cash) Incentive. In addition to any other compensation received pursuant
to this Agreement, the Executive shall be eligible to participate in the same Company cash
incentive plan or plans that the members of the Company’s Executive Committee are eligible to
participate.
(c) Long-Term Incentive. The Executive shall be eligible to participate in all
long-term incentive plan or plans that the members of the Company’s Executive Committee are
eligible to participate.
(d) Expenses. In addition to any compensation received pursuant to this Section 4,
the Company shall reimburse or advance funds to the Executive for reasonable travel, entertainment,
professional dues and miscellaneous expenses incurred in connection with the performance of his or
her duties under this Agreement and in accordance with the Company’s policies relating to travel
and expenses, subject to receipt by the Company of evidence of such expenses. The Executive must
submit all required receipts and documentation for each such reimbursable expense within sixty (60)
days following the last day of the month of the incurrence of that expense.
5. Benefits.
(a) Vacation. During each year of employment, the Executive shall be entitled to
twenty (20) business days of vacation (or such longer period as may be provided for under the
Company’s written policies) without loss of compensation or other benefits to which he or she is
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entitled under this Agreement, such vacation to be taken at such times as the Executive may select
and the affairs of the Company may permit.
(b) Employee Benefit Programs. The Executive is entitled to participate in any
pension, 401(k), medical insurance, disability insurance, life insurance or other employee benefit
plan that is maintained by the Company, including reimbursement of membership fees in professional
organizations, subject to the eligibility requirements of these specific plans.
(c) Insurance. The Company shall pay the cost of all insurance premiums in connection
with the insurance or benefit programs referred to in Section 5(b) in which the Executive chooses
to participate, except to the extent any benefit program is funded by deferrals from the
Executive’s compensation. In addition, the Company shall include the Executive in the Company’s
D&O (director and officer) liability insurance policy as an additional insured for the benefit of
the Executive.
(d) Transportation Benefit. The Executive shall be entitled to receive a per month
motor vehicle allowance equivalent to one thousand dollars ($1,000) per month. For the purposes of
clarity, the Company shall not reimburse the Executive for any applicable tax the Executive may
incur as a result of his or her receipt of this monthly motor vehicle allowance.
6. Termination; Severance.
(a) Certain Definitions. For purpose of this Agreement:
“Cause” means that the Executive has: (i) been convicted of a felony involving any
subject matter; (ii) been charged with a felony, by a government agency, relating to the business
of the Company or any Affiliate; (iii) been convicted of a misdemeanor directly involving the
Executive’s employment that directly affects the business of the Company; (iv) been found after an
internal investigation to have engaged in sexual misconduct which is related to the Executive’s
employment or the business of the Company and/or violated the Company’s sexual harassment policy;
(v) failed to carry out the duties and responsibilities assigned to Executive which are consistent
with the terms of this Agreement; (vi) misappropriated the Company funds or otherwise defrauds the
Company; (vii) breached his or her fiduciary duty to the Company resulting in profit to him or her,
directly or indirectly; (viii) been found to have committed any act or failed to take any action
which results in the common stock of the Company (the “Common Stock”) being delisted for
trading on its principal trading market or exchange; (ix) been convicted of illegal possession or
illegal use of a controlled substance; (x) engaged in chronic drinking or the use of illegal drugs,
chemicals or controlled substances or the abuse of otherwise legal drugs or chemicals or controlled
substances that affects the performance of his or her duties as reasonable determined by the
Company; (xi) failed or refused to cooperate in any official investigation conducted by or on
behalf of the Company; (xii) breached any material provision of this Agreement, including Section
3(d) herein, after notice and a reasonable opportunity to cure such behavior (if the behavior is of
the nature that it can be cured); (xiii) intentionally or willfully failed to comply with the reasonable directives of the Board or the
CEO of the Company; (xiv) committed an act or omission constituting gross negligence or willful
misconduct which causes, at least in part, the Company to restate its financial statements for a
completed fiscal period after having filed such financial statements with the Securities and
Exchange Commission; or (xv) been found by a court, the Securities and Exchange Commission or any
state governmental
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authority which regulates or enforces such state’s securities laws, in a final determination, to have violated any applicable securities laws, whether such finding was after a
hearing or trial or on consent without admitting or denying any allegations of wrongdoing.
“Disability” means the occurrence of either of the following circumstances: (i) if
Executive is deemed disabled for purposes of any long-term disability insurance policy paid for by
the Company and in effect at such time, or (ii) if in the exercise of the reasonable judgment of
the Company, due to accident, mental or physical illness, or any other reason, Executive has become
physically or mentally incapable of performing, with or without reasonable accommodation, the
essential functions of his or her employment for a period of more than one hundred twenty (120)
consecutive days or for one hundred eighty (180) days within a three hundred and sixty-five (365)
day period.
“Effective Date of Termination” with respect to any purported termination of the
Executive’s employment, shall mean (i) if the Executive’s employment is terminated by his or her
death, the date of his or her death, (ii) if the Executive’s employment is terminated for Cause or
without Cause, the date specified in the Notice of Termination, (iii) if the Executive’s employment
is terminated as a result of a Disability, the date on which it is finally determined that the
Executive is Disabled and (iv) if Executive terminates his or her employment for Good Reason or
otherwise voluntarily terminates his or her employment, the date specified in the Notice of
Termination.
“Good Reason” means the material breach of any of the material terms or conditions of
this Agreement by the Company.
“Notice of Termination” means a notice indicating the specific termination provision
in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment with the Company under the
provision so indicated.
“Person” shall have the meaning ascribed thereto in Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended, as modified, applied and used in Sections 13(d) and 14(d)
thereof; provided, however, a Person shall not include (i) the Company, (ii) a
trustee or other fiduciary holding securities under an employee benefit plan of the Company (in its
capacity as such), (iii) an underwriter temporarily holding securities pursuant to an offering of
such securities, or (iv) a corporate entity owned, directly or indirectly, by the Stockholders in
substantially the same character and proportions as their ownership of interests in the Company.
(b) Termination.
(i) Either the Company or the Executive, in his, her or its sole discretion, may terminate the
Executive’s employment without Cause at any time upon thirty (30) days written notice. Upon the
Effective Date of Termination, whether with or without Cause, the Executive shall have no right to compensation or reimbursement under Section 4 (except for compensation earned
or reimbursable expenses incurred through the Effective Date of Termination) or to participate in
any employee benefit programs under Section 5 for any period subsequent to the Effective Date of
Termination, except as provided for by law or this Agreement. On or before the Effective Date of
Termination or prior to receiving any final compensation or expenses due him or her, the Executive
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shall (a) return to the Company’s headquarters, (b) participate in an exit interview, and (c)
execute a “Certificate of Conclusion of Employment,” certifying that he or she has complied with
his or her obligations and acknowledging his or her continuing obligations under this Agreement.
The Executive’s failure to comply with the requirements of this Section shall constitute a material
breach of this Agreement. For clarity, if the Executive’s employment is terminated by the Company
for any reason other than Cause, he or she shall be entitled to the Severance Payments set forth
below.
(ii) The Company may terminate the Executive’s employment pursuant to the terms of this
Agreement at any time for Cause (as defined above) by giving written notice of termination. The
Executive shall have thirty (30) days from the date of the notice to provide the Company CEO with
evidence that the Company is mistaken as to Cause and that the Executive’s behavior does not meet
the criteria for Cause. During such thirty (30) day period, the Executive shall be suspended
without pay; provided, however, that if employment is reinstated then the Executive
shall be paid for such thirty (30) day period or if the termination is upheld, the Effective Date
of Termination shall be deemed to be the date of receipt by the Executive of the written notice of
termination. Upon any such termination for Cause, the Executive shall have no right to
compensation or reimbursement under Section 4 (except for compensation earned or reimbursable
expenses incurred through the Effective Date of Termination), or to participate in any employee
benefit programs under Section 5 for any period subsequent to the Effective Date of Termination,
except as provided by law.
(c) Severance. In the event that the Executive executes and does not revoke a written
release upon termination of employment, in substantially the form attached hereto as Exhibit
B, the Company shall cause the payments and benefits described in this Section (the
“Severance Payments”) to be made upon the termination of the Executive’s employment with
the Company during the Employment Term unless such termination is (i) by the Company for Cause,
death or Disability, or (ii) by the Executive without Good Reason. Severance Payments due and
payable to the Executive by the Company in accordance with this Section shall be determined as
follows:
(i) In lieu of any further salary payments to the Executive for periods subsequent to the
Effective Date of Termination, the Company shall cause an aggregate severance payment to be made to
the Executive, in cash, equal to two (2) times such Executive’s Annual Base Salary (the “Cash
Severance Payment”) and payable in twenty-four (24) equal monthly installments.
(ii) For a twenty-four (24) month period after the Effective Date of Termination, the Company
shall arrange to provide the Executive with life, disability, accident and health insurance
benefits substantially similar to those which the Executive is receiving immediately prior to the
Effective Date of Termination. To the extent such benefits are provided under insured arrangements,
the Company shall pay each applicable insurance premium (net of any payment required of the
Executive) on the specified due date for that premium (which shall not be less frequently than
annually); provided, however, that in the event any such premium payment cannot be made by the
Company on the applicable due by reason of the restrictions set forth in subparagraph (f) of this
Section, the Executive shall make such premium payment and the Company shall promptly reimburse
the Executive for that payment upon the conclusion of the six (6)-month deferral period set
forth in subparagraph (f). In addition, benefits otherwise receivable by the Executive pursuant to
this Section shall be reduced to the extent comparable benefits are actually received by or made
available to the Executive without cost during such period following the Executive’s termination of
employment (and
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any such benefits actually received by the Executive shall be reported to the Company by the Executive).
(iii) All unvested long-term incentive grants, if any, outstanding on the Effective Date of
Termination shall immediately vest.
(iv) To the extent the Executive is, on the Effective Date of Termination, participating in
one or more deferred compensation arrangements subject to Section 409A of the Internal Revenue Code
(the “Code”), the payments and benefits provided under those arrangements shall continue to be
governed by, and to become due and payable in accordance with, the specific terms and conditions
of those arrangements, and nothing in this Agreement shall be deemed to modify or alter those terms
and conditions.
(d) Benefit Limit.
(i) In the event that any payments or benefits to which Executive becomes entitled in
accordance with the provisions of this Agreement (or any other agreement with the Company or other
Affiliated Company) would otherwise constitute a parachute payment under Code Section 280G(b)(2),
then such payments and/or benefits will be subject to reduction to the extent necessary to assure
that the Executive receives only the greater of (i) the amount of those payments which would not
constitute such a parachute payment or (ii) the amount which yields Executive the greatest
after-tax amount of benefits after taking into account any excise tax imposed under Code Section
4999 on the payments and benefits provided Executive under this Agreement (or on any other payments
or benefits to which the Executive may become entitled in connection with any change in control or
ownership of the Company or the subsequent termination of his employment with the Company).
(ii) Should a reduction in benefits be required to satisfy the benefit limit of this
subparagraph (d), then the portion of any parachute payment otherwise payable in cash to Executive
shall be reduced to the extent necessary to comply with such benefit limit. Should such benefit
limit still be exceeded following such reduction, then the number of shares which would otherwise
vest on an accelerated basis under each of the Executive’s options or other equity awards (based on
the amount of the parachute payment attributable to each such option or equity award under Code
Section 280G) shall be reduced to the extent necessary to eliminate such excess.
(e) Resolution Procedures. In the event there is any disagreement between the
Executive and the Company as to whether one or more payments or benefits to which the Executive
becomes entitled in connection with the Change in Control or his subsequent termination of
employment constitute a parachute payment under Code Section 280G or as to the determination of the
present value thereof, such dispute will be resolved as follows:
(i) In the event the Treasury Regulations under Code Section 280G (or applicable judicial
decisions) specifically address the status of any such payment or benefit or the method of
valuation therefor, the characterization afforded to such payment or benefit by the Regulations (or
such decisions) will, together with the applicable valuation methodology, be controlling.
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(ii) In the event Treasury Regulations (or applicable judicial decisions) do not address the
status of any payment in dispute, the matter will be submitted for resolution to independent
auditors selected and paid for by the COmpany. The resolution reached by the independent auditors
will be final and controlling; provided, however, that if in the judgment of the independent
auditors, the status of the payment in dispute can be resolved through the obtainment of a private
letter ruling from the Internal Revenue Service, a formal and proper request for such ruling will
be prepared and submitted by the independent auditors, and the determination made by the Internal
Revenue Service in the issued ruling will be controlling. All expenses incurred in connection with
the preparation and submission of the ruling request shall be shared equally by the Executive and
the Company.
(iii) In the event Treasury Regulations (or applicable judicial decisions) do not address the
appropriate valuation methodology for any payment in dispute, the present value thereof will, at
the independent auditor’s election, be determined through an independent third-party appraisal, and
the expenses incurred in obtaining such appraisal shall be shared equally by the Executive and the
Company.
(f) Date of Payment. The Cash Severance Payment shall be made on the fifteenth day of
each of the twenty-four (24) months immediately following the month in which the Effective Date of
Termination occurs or (if later) the month in which the date of the Executive’s “separation from
service” with the Company (as such term is defined in Treasury Regulations issued under Code
Section 409(A) occurs. At the time that payments are made under this Section, the Company shall
provide the Executive with a detailed written statement setting forth the manner in which such
payments were calculated and the basis for such calculations. Notwithstanding the foregoing, Cash
Severance Payments shall immediately cease and no longer be payable if Executive violates any of
the terms set forth in Sections 7 or 8 hereof. Such remedy shall be in addition to any and all
other remedies available by law or equity.
(g) Delayed Commencement Date. Notwithstanding any provision to the contrary in this
Agreement, no payment or benefit to which the Executive otherwise becomes entitled under this
Section shall be made, paid or provided prior to the earlier of (i) the expiration of the
six (6) month period measured from the date of the Executive’s “separation from service” with the
Company (as such term is defined in Treasury Regulations issued under Code Section 409(A) or (ii)
the date of the Executive’s death, if the Executive is deemed at the time of such separation from
service to be a “key employee” within the meaning of that term under Code Section 416(i) and such
delayed commencement is otherwise required in order to avoid a prohibited distribution under Code
Section 409A(a)(2). Upon the expiration of the applicable Code Section 409A(a)(2) deferral period,
all payments and benefits deferred pursuant to this subparagraph (f), whether they would have
otherwise been payable in a single sum or in installments in the absence of such deferral, shall be
paid or reimbursed to the Executive in a lump sum, and any remaining payments and benefits due
under this Section 6 shall be paid or provided in accordance with the normal payment dates specified for
them herein.
(h) Notice of Termination. Any purported termination of the Executive’s employment
with the Company (other than by reason of death) shall be communicated by written Notice of
Termination from one party hereto to the other party hereto in accordance with Section 14.
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7. Non-Competition Agreement.
(a) Competition with the Company. During the Employment Term and for twenty-four (24)
months after the Effective Date of Termination, the Executive, directly or indirectly or, in
association with or as a stockholder, director, officer, consultant, employee, partner, joint
venturer, member or otherwise of or through any person, firm, corporation, partnership, association
or other entity (any of the foregoing, an “Affiliated Entity”) shall not act as an
executive officer or provide Services (as such term is defined in Section 8 hereof) to any entity
which competes with the Company or its Affiliates, within any metropolitan area in the United
States or elsewhere in which the Company or its subsidiaries or affiliates (collectively, the
“Affiliates”), if applicable, is then engaged in the offer and sale of competitive Services
(the “Prohibited Business”); provided, the foregoing shall not prohibit Executive
from owning up to five percent (5%) of the securities of any publicly-traded enterprise that
engages in the Prohibited Business provided the Executive is not an employee, director, officer,
consultant to such enterprise or otherwise reimbursed for services rendered to such enterprise. In
addition, during the period commencing on the Effective Date of Termination and continuing for
twenty-four (24) months thereafter, the Executive may not, directly or indirectly, including
through any Affiliated Entity, seek Prohibited Business from any Client (as defined a) on behalf of
any enterprise or business other than the Company, refer Prohibited Business generated from any
Client to any enterprise or business other than the Company, cause any Client to cancel or reduce
any existing contract for services it may have with the Company or receive commissions based on
sales or otherwise relating to the Prohibited Business from any Client, enterprise or business
other than the Company. For purposes of this Agreement, the term “Client” means any person,
firm, corporation, limited liability company, partnership, association or other entity (i) to which
the Company sold or provided Services in excess of $100,000 during the twenty-four (24) month
period prior to the Effective Date of Termination, or (ii) who or which has been approached by an
employee of the Company for the purpose of soliciting business for the Company and which business
was reasonably expected to generate revenue in excess of $100,000.
(b) No Payment. The Executive acknowledges and agrees that no separate or additional
payment will be required to be made to him or her in consideration of his or her undertakings in
this Section 7.
(c) References. References to the Company in this Section 7 shall include the
Company’s Affiliates.
8. Non-Disclosure of Confidential Information.
(a) Confidential Information. “Confidential Information” includes, but is not
limited to, trade secrets (as defined by the common law and statute in Florida or New Jersey or any
future Florida or New Jersey statute), processes, policies, procedures, techniques (including
recruiting techniques), designs, drawings, know-how, show-how, technical information, specifications,
computer software and source code, information and data relating to the development, research,
testing, costs, marketing and uses of the Services, the Company’s budgets and strategic plans, and
the identity and special needs of Clients, databases, data, all technology relating to the
Company’s businesses, systems, methods of operation, Client lists, Client information, solicitation
leads, marketing and advertising materials, methods and manuals and forms, all of which pertain to
the activities or operations of the Company, names, home addresses and all telephone numbers and
e-mail addresses of the Company’s
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employees, former employees, clients and former clients. In addition, Confidential Information also includes the identity of Clients and the identity of and
telephone numbers, e-mail addresses and other addresses of employees or agents of Clients who are
the persons with whom the Company’s employees and agents communicate in the ordinary course of
business. For purposes of this Agreement, the following will not constitute Confidential
Information: (i) information which is or subsequently becomes generally available to the public
through no act of the Executive, (ii) information set forth in the written records of the Executive
prior to disclosure to the Executive by or on behalf of the Company, and (iii) information which is
lawfully obtained by the Executive in writing from a third party (excluding any Affiliates of the
Executive) who did not acquire such confidential information or trade secret, directly or
indirectly, from the Executive or the Company. As used herein, the term “Services” shall
include the providing of early and late stage clinical drug development services, clinical trials
management services and other services engaged in by the Company during the Employment Term.
(b) Legitimate Business Interests. The Executive recognizes that the Company has
legitimate business interests to protect and, as a consequence, the Executive agrees to the
restrictions contained in this Agreement because they further the Company’s legitimate business
interests. These legitimate business interests include, but are not limited to (i) trade secrets,
(ii) valuable confidential business or professional information that otherwise does not qualify as
trade secrets, including all Confidential Information, (iii) substantial relationships with
specific prospective or existing Clients or clients, (iv) Client goodwill associated with the
Company’s business and (v) specialized training relating to the Services and the Company’s
technology, methods and procedures.
(c) Confidentiality. The Confidential Information shall be held by the Executive in
the strictest confidence and shall not, without the prior written consent of the Company, be
disclosed to any person other than in connection with the Executive’s employment with the Company.
The Executive further acknowledges that such Confidential Information as is acquired and used by
the Company is a special, valuable and unique asset. The Executive shall exercise all due and
diligence precautions to protect the integrity of the Company’s Confidential Information and to
keep it confidential whether it is in written form, on electronic media or oral. The Executive
shall not copy any Confidential Information except to the extent necessary to his or her employment
nor remove any Confidential Information or copies thereof from the Company’s premises except to the
extent necessary to his or her employment and then only with the authorization of an officer of the
Company. All records, files, materials and other Confidential Information obtained by the
Executive in the course of his or her employment with the Company are confidential and proprietary
and shall remain the exclusive property of the Company or its Clients, as the case may be. The
Executive shall not, except in connection with and as required by his or her performance of his or
her duties under this Agreement, for any reason use for his or her own benefit or the benefit of
any person or entity with which he or she may be associated or disclose any such Confidential
Information to any person, firm, corporation, association or other entity for any reason or purpose whatsoever without the prior written
consent of an officer of the Company (excluding the Executive, if applicable).
(d) References to the Company in this Section 8 shall include the Company’s Affiliates.
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9. Equitable Relief.
(a) The Company and the Executive recognize that the services to be rendered under this
Agreement by the Executive are special, unique and of extraordinary character, and that in the
event of the breach by the Executive of the terms and conditions of this Agreement or if the
Executive, shall cease to be an employee of the Company for any reason and take any action in
violation of Section 7 and/or Section 8, the Company shall be entitled to institute and prosecute
proceedings in any court of competent jurisdiction referred to in Section 9(b) below to enjoin the
Executive from breaching the provisions of Section 7 or Section 8. In such action, the Company
shall not be required to plead or prove irreparable harm or lack of an adequate remedy at law or
post a bond or any security.
(b) Any action between the Company and Executive must be commenced in Xxxxxx County, New
Jersey. The Executive and the Company irrevocably and unconditionally submit to the exclusive
jurisdiction of such courts and agree to take any and all future action necessary to submit to the
jurisdiction of such courts. The Executive and the Company irrevocably waive any objection that
they now have or hereafter irrevocably waive any objection that they now have or hereafter may have
to the laying of venue of any suit, action or proceeding brought in any such court and further
irrevocably waive any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. Final judgment against the Executive or the Company in any
such suit shall be conclusive and may be enforced in other jurisdictions by suit on the judgment, a
certified or true copy of which shall be conclusive evidence of the fact and the amount of any
liability of the Executive or the Company therein described, or by appropriate proceedings under
any applicable treaty or otherwise.
10. Conflicts of Interest. Except as otherwise set forth in Section 7(a), while
employed by the Company, the Executive shall not, directly or indirectly, unless approved by the
Board:
(a) participate as an individual in any way in the benefits of transactions with any of the
Company suppliers or Clients, including, without limitation, having a financial interest in the
Company’s suppliers or Clients, or making loans to, or receiving loans from, the Company’s
suppliers or Clients;
(b) realize a personal gain or advantage from a transaction in which the Company has an
interest or use information obtained in connection with the Executive’s employment with the Company
for the Executive’s personal advantage or gain; or
(c) accept any offer to serve as an officer, director, partner, consultant, manager with, or
to be employed in a technical capacity by, a person or entity that does business with the Company.
As used in Section 10(a), (b) or (c), references to the Company also includes its Affiliates.
11. Inventions, Ideas, Processes, and Designs. All inventions, ideas, processes,
programs, software, and designs (including all improvements) (a) conceived or made by the Executive
during the course of his or her employment with the Company (whether or not actually conceived
during regular business hours) and for a period of six (6) months subsequent to the Effective Date
of Termination or expiration of such employment with the Company and (b) related to the business of
the Company,
11
shall be disclosed in writing promptly to the Company and shall be the sole and
exclusive property of the Company. An invention, idea, process, program, software, or design
(including an improvement) shall be deemed related to the business of the Company if (x) it was
made with the Company’s equipment, supplies, facilities, or Confidential Information, (y) results
from work performed by the Executive for the Company, or (z) pertains to the current business or
demonstrably anticipated research or development work of the Company. The Executive shall
cooperate with the Company and its attorneys in the preparation of patent and copyright
applications for such developments and, upon request, shall promptly assign all such inventions,
ideas, processes, and designs to the Company. The decision to file for patent or copyright
protection or to maintain such development as a trade secret shall be in the sole discretion of the
Company, and the Executive shall be bound by such decision.
12. Assignability. The rights and obligations of the Company under this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of the Company. The
Executive’s obligations hereunder may not be assigned or alienated and any attempt to do so by the
Executive will be void.
13. Severability.
(a) The Executive expressly agrees that the character, duration and geographical scope of the
non-competition provisions set forth in this Agreement are reasonable in light of the circumstances
as they exist on the date hereof. Should a decision, however, be made at a later date by a court
of competent jurisdiction that the character, duration or geographical scope of such provisions is
unreasonable, then it is the intention and the agreement of the Executive and the Company that this
Agreement shall be construed by the court in such a manner as to impose only those restrictions on
the Executive’s conduct that are reasonable in the light of the circumstances and as are necessary
to assure to the Company the benefits of this Agreement. If, in any judicial proceeding, a court
shall refuse to enforce all of the separate covenants deemed included herein because taken together
they are more extensive than necessary to assure to the Company the intended benefits of this
Agreement, it is expressly understood and agreed by the parties hereto that the provisions of this
Agreement that, if eliminated, would permit the remaining separate provisions to be enforced in
such proceeding shall be deemed eliminated, for the purposes of such proceeding, from this
Agreement.
(b) If any provision of this Agreement otherwise is deemed to be invalid or unenforceable or
is prohibited by the laws of the state or jurisdiction where it is to be performed, this Agreement
shall be considered divisible as to such provision and such provision shall be inoperative in such
state or jurisdiction and shall not be part of the consideration moving from either of the parties
to the other. The remaining provisions of this Agreement shall be valid and binding and of like
effect as though such provision were not included and the invalid or unenforceable provision shall
be substituted with a provision which most closely approximates the intent and the economic effect
of the invalid or unenforceable provision and which would be enforceable to the maximum extent
permitted in such jurisdiction or in such case.
14. Notices and Addresses. All notices, offers, acceptance and any other acts under
this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered
to the addressees in person, by Federal Express or similar overnight delivery, or by facsimile
delivery followed by Federal Express or similar next business day delivery, as follows:
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| To the Company: | PharmaNet Development Group, Inc. 000 Xxxxxxxx Xxxxxx Xxxxxxxxx, XX 00000 Fax: (000)000-0000 Attn: Chief Executive Officer |
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| With a copy to: | Xxxxxx Xxxxx & Bockius, LLP 000 Xxxxxxxx Xxxxxx Xxxxxxxxx, XX 00000 Fax: (000)000-0000 Attn: Xxxxx Xxxxxx, Esq. |
|||||
| To the Executive: | Xxxxx X. Xxxxxxxxx Xxxxxxxxx, XX 00000 |
or to such other address as either of them, by notice to the other may designate from time to time.
The transmission confirmation receipt from the sender’s facsimile machine shall be evidence of
successful facsimile delivery. Time shall be counted to, or from, as the case may be, the delivery
in person or by mailing.
15. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the same
instrument. The execution of this Agreement may be by actual or facsimile signature.
16. Attorney’s Fees. In the event that there is any controversy or claim arising out
of or relating to this Agreement, or to the interpretation, breach or enforcement thereof, and any
action or proceeding is commenced to enforce the provisions of this Agreement, each party shall be
responsible for its own attorney’s fee, costs and expenses.
17. Governing Law. This Agreement and any dispute, disagreement, or issue of
construction or interpretation arising hereunder whether relating to its execution, its validity,
the obligations provided therein or performance shall be governed or interpreted according to the
internal laws of the State of New Jersey without regard to choice of law considerations.
18. Entire Agreement. This Agreement constitutes the entire agreement between the
parties and supersedes all prior oral and written agreements between the parties hereto with
respect to the subject matter hereof, including but not limited to, the Previous Employment
Agreement and the Previous Severance Agreement, each of which is terminated and no longer in force
and effect. Neither this Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally, except by a statement in writing signed by the party or parties against which,
enforcement or the change, waiver discharge or termination is sought.
19. Additional Documents. The parties hereto shall execute such additional
instruments as may be reasonably required by their counsel in order to carry out the purpose and
intent of this Agreement and to fulfill the obligations of the parties hereunder.
13
20. Section and Paragraph Headings. The section and paragraph headings in this
Agreement are for reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]
14
IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the date
set forth above.
| PharmaNet Development Group, Inc. |
||||
| By: | /s/ Xxxxxxx X. XxXxxxxx | |||
| Xxxxxxx X. XxXxxxxx | ||||
| Chief Executive Officer | ||||
| IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the date set forth above. |
| Executive |
||||
| /s/ Xxxxx X. Xxxxxxxxx | ||||
| Xxxxx X. Xxxxxxxxx | ||||
Exhibit A
CONSUMER PRICE INDEX FORMULA
Commencing January 1, 2008 and the beginning of each year thereafter during the term of this
Agreement, the Executive’s annual salary shall be adjusted in accordance with the Consumer Price
Index, all Urban Consumers issued by the Bureau of Labor Statistics of the U.S. Department of Labor
using the years 1982-84 as a base of 100 (the “Index”). At the commencement of January 1,
2008, and of each year thereafter, the Executive’s adjusted Annual Base Salary shall be multiplied
each year by a fraction, the numerator of which shall be the published Index number for the month
preceding the commencement of the new year (i.e., December 2007) and the denominator of
which shall be the published Index number for the preceding month of the preceding year
(i.e., November 2006). The resulting increase to the Executive’s Annual Base Salary shall
be added to the prior year’s Annual Base Salary and become a part thereof for the current year. In
the event that the Index herein referred to ceases to be published during the term of this
Agreement, or if a substantial change is made in the method of establishing such Index, then the
determination of the adjustment in the Executive’s compensation shall be made with the use of such
conversion factor, formula or table as may be published by the Bureau of Labor Statistics, or if
none is available, the parties shall accept comparable statistics on the cost of living in the
United States as shall then be computed and published by an agency of the United States, or if not
so computed or published, by a respected financial periodical selected by the Company.
Exhibit B
GENERAL RELEASE
THIS GENERAL RELEASE (“Release”) is executed by Xxxxx X. Xxxxxxxxx (the
“Executive”) pursuant to Section 6 of the Employment Agreement dated as of December ___,
2006 by and between PharmaNet Development Group, Inc., a Delaware corporation (the
“Company”) and the Executive (the “Employment Agreement”).
WHEREAS, the Executive’s employment with the Company is terminating;
WHEREAS, the Executive has had 21 days (with 7 days to revoke after signing) to consider the
form of this Release;
WHEREAS, the Company advised the Executive in writing to consult with an attorney before
signing this Release;
WHEREAS, the Executive acknowledges that the consideration to be provided to the
Executive under the Employment Agreement is sufficient to support this Release; and
WHEREAS, the Executive understands that the Company regards the representations and covenants
by the Executive in the Employment Agreement and this Release as material and that the Company is
relying on such representations and covenants in paying amounts to the Executive pursuant to the
Employment Agreement.
THE EXECUTIVE THEREFORE AGREES AS FOLLOWS:
1. The Executive shall receive the payments and benefits set forth in Section 6 (if
applicable) of the Employment Agreement in accordance with the terms and subject to the conditions
thereof.
2. The Executive, on behalf of himself or herself, his or her heirs, executors,
administrators, and/or assigns, does hereby RELEASE AND FOREVER DISCHARGE the Company, together
with its parents, subsidiaries, affiliates, partners, joint ventures, predecessor and successor
corporations and business entities, past, present and future, and its and their agents, directors,
officers, employees, shareholders, investors, insurers and reinsurers, representatives, attorneys,
and employee benefit plans (and the trustees or other individuals affiliated with such plans) past,
present and future (collectively, the “Releasees”), of and from any and all legally
waivable causes of action, suits, debts, complaints, claims and demands whatsoever in law or in
equity, whether known or unknown, suspected or unsuspected, which Executive, or his or her heirs,
executors, administrators, and/or assigns, ever had or now has against each or any of the
Releasees, from the beginning of time to the date of execution of this Agreement, including,
without limitation, any and all claims relating to Executive’s employment with Company or the
termination of that employment, including, without limitation, claims under the Age Discrimination
in Employment Act (“ADEA”), Title VII of the Civil Rights Act of 1964, Section 1981 of the
Civil Rights Act of 1870, the Americans with Disabilities Act, the Employee Retirement Income
Security Act, the Family and Medical Leave Act, the New Jersey Law Against Discrimination, the New
Jersey Conscientious Employee Protection Act, the New Jersey Family Leave Act, the New Jersey Wage
Payment Act, the New Jersey Wage and Hour Law, and any and all other applicable federal, state or
local constitutional, statutory or common
Page 1 of 2 - General Release
law claims, now or hereafter recognized, including but not limited to, any claim for severance
pay, bonus pay, sick leave, holiday pay, vacation pay, life insurance, health or medical insurance
or any other fringe benefit or disability, or any claims for economic loss, compensatory damages,
punitive damages, liquidated damages, attorneys’ fees, expenses and costs.
3. The Executive expressly represents and warrants that the Executive is the sole owner of the
actual and alleged claims, demands, rights, causes of action and other matters that are released
herein; that the same have not been transferred or assigned or caused to be transferred or assigned
to any other person, firm, corporation or other legal entity; and that the Executive has the full
right and power to grant, execute and deliver the general release, undertakings and agreements
contained herein.
4. ACKNOWLEDGMENT BY EXECUTIVE. BY EXECUTING THIS RELEASE, THE EXECUTIVE EXPRESSLY
ACKNOWLEDGES THAT THE EXECUTIVE HAS READ THIS RELEASE CAREFULLY, THAT THE EXECUTIVE FULLY
UNDERSTANDS ITS TERMS AND CONDITIONS, THAT THE EXECUTIVE HAS BEEN ADVISED TO CONSULT WITH AN
ATTORNEY PRIOR TO EXECUTING THIS RELEASE, THAT THE EXECUTIVE HAS BEEN ADVISED THAT THE EXECUTIVE
HAS 21 DAYS WITHIN WHICH TO DECIDE WHETHER OR NOT TO EXECUTE THIS RELEASE AND THAT THE
EXECUTIVE INTENDS TO BE LEGALLY BOUND BY IT. DURING A PERIOD OF 7 DAYS FOLLOWING THE DATE
OF THE EXECUTIVE’S EXECUTION OF THIS RELEASE, THE EXECUTIVE SHALL HAVE THE RIGHT TO REVOKE THE
RELEASE OF CLAIMS. IF EXECUTIVE DOES NOT SO REVOKE, THIS RELEASE WILL BECOME A BINDING AGREEMENT
BETWEEN EXECUTIVE AND THE COMPANY UPON THE EXPIRATION OF SUCH 7 DAY REVOCATION PERIOD. THIS
RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE EXPIRATION OF SUCH 7 DAY REVOCATION
PERIOD.
5. This Release contains the entire agreement and understanding between the parties relating
to the subject matter hereof and supersedes any prior understandings, agreements or representations
by or between the parties, written or oral, relating to the subject matter hereof.
6. This Release shall be governed and construed in accordance with the laws of the State of
New Jersey without regard to principles of conflict of laws.
| EXECUTIVE |
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| Date: | |||||
Page 2 of 2 - General Release
