EXHIBIT 10.22
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of June 21, 2002,
is made by and between Inveresk Research International Limited, a company
organized under the laws of Scotland under the Companies Acts (Company Number
91725) and having its registered office at Elphinstone Research Centre, Tranent,
EH33 2NE (the "Company"), and D. J. Xxxx X. Xxxxx (the "Executive").
BACKGROUND
WHEREAS, the Executive currently serves as the Chief Financial Officer
of the Company;
WHEREAS, Inveresk Research Group Limited, a company organized under the
laws of Scotland under the Companies Acts (Company Number SC091725) and having
its registered office at Elphinstone Research Centre, Tranent, EH33 2NE (the
"Parent"), owns all of the issued and outstanding shares of capital stock of the
Company;
WHEREAS, all of the shareholders of the Parent are parties to that
certain Exchange Agreement by Declaration of Trust, dated as of April 2, 2002
(as the same may be amended from time to time, the "Exchange Agreement"), among
such shareholders, D. J. Xxxx X. Xxxxx, as escrow agent, and Inveresk Research
Group, Inc., a Delaware corporation ("New Holdco");
WHEREAS, upon consummation of the transactions contemplated by the
Exchange Agreement, the Parent will be a direct wholly-owned subsidiary of New
Holdco and the Company will be an indirect wholly-owned subsidiary of New
Holdco;
WHEREAS, New Holdco intends to sell shares of its common stock by means
of an initial public offering (the "IPO");
WHEREAS, this Agreement is being executed in anticipation of the
consummation of the IPO;
WHEREAS, the Company and New Holdco desire that the Executive continue
to be employed by the Company and render services to the Company and New Holdco,
in accordance with the terms and conditions set forth in this Agreement;
WHEREAS, the Executive desires to be employed by the Company and to
render services to the Company and New Holdco pursuant to the terms of this
Agreement;
WHEREAS, the services of the Executive are of a special, unique and
unusual character which gives them distinctive value; and
WHEREAS, in consideration of the benefits to be derived by the
Executive under this Agreement, the Executive is willing to undertake certain
restrictions on the Executive's business activities from and after the effective
date of this Agreement upon the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties to this Agreement, intending to be legally bound, agree as follows:
Section 1. Term. The Company hereby employs the Executive
pursuant to the terms set forth in this Agreement and the Executive hereby
accepts employment with the Company pursuant to the terms set forth in this
Agreement. The Executive's employment with the Company pursuant to this
Agreement shall commence as of the date on which the IPO is consummated and
shall continue until this
Agreement is terminated in accordance with the provisions of Section 5 (the
"Term"). The date on which the Executive's period of continuous employment with
the Company began was February 1, 2002.
Section 2. Duties. The Executive shall continue to serve as
Chief Financial Officer of the Company and shall also serve as the Chief
Financial Officer, Secretary and Treasurer of New Holdco and, in his capacity as
such, shall faithfully perform for the Company and New Holdco the duties
normally associated with said offices, unless otherwise specified by the Chief
Executive Officer of New Holdco (the "CEO"), and shall perform such other duties
of an executive, managerial or administrative nature as shall be specified and
designated from time to time by the CEO. The Executive shall devote
substantially all of his business time and effort to the performance of his
duties under this Agreement. The Executive's normal hours of work are from 9.00
a.m. to 5.00 p.m. (Monday to Friday) inclusive of 45 minutes for lunch daily.
The Executive is expected to work reasonable overtime when necessary for the
performance of his duties without any entitlement to additional compensation.
The Executive's principal place of work will be the Inveresk Research North
Carolina facility but the Executive will also work in the Inveresk Research
Tranent facility and be expected to travel, both within the U.S., the U.K., and
overseas, on Company business (without any entitlement to additional
compensation).
Section 3. Other Conditions.
3.1. Standard Conditions. The Executive's employment with the
Company shall be subject to the Company's Standard Conditions of Employment, as
in effect from time to time (the "Standard Conditions"), provided that if any
conflict arises between this Agreement and the Standard Conditions, this
Agreement shall control. The Standard Conditions may be modified from time to
time by the Company, provided that the Standard Conditions may not be modified
in any manner that would adversely affect the Executive without the consent of
the Executive.
3.2. Disciplinary/Grievance Procedure. The Company's grievance
procedure from time to time in effect and any disciplinary rules applicable to
the Executive will be set out in notices displayed at his place of work or will
otherwise be obtainable from the Company.
Section 4. Compensation.
4.1. Salary. As consideration for the services that the Executive
shall render to the Company and New Holdco under this Agreement, the Company
shall pay the Executive a salary of L150,000 per year (the "Annual Salary"),
which shall be payable in equal monthly installments in accordance with the
customary payroll practices of the Company applicable to executive officers. The
Annual Salary shall be reviewed no less frequently than annually by the Board of
Directors of New Holdco (the "Board"). The Annual Salary may, in the discretion
of the Board, be increased (but not decreased) at any time and from time to time
by action of the Board. Once increased, any reference to Annual Salary in this
Agreement shall be a reference to such increased amount.
4.2. Bonuses. For each fiscal year of the Company ending during the
Term, the Executive shall have the opportunity to receive an annual bonus in an
amount of up to 33 percent of Annual Salary, as determined by the Board.
4.3. Benefits. The Executive shall have the right to participate in
all benefit programs and/or plans granted to senior executives of the Group
Companies, in accordance with the actual programs or plans that the Board may
institute from time to time or as otherwise required under any applicable law.
The Executive has elected not to participate in the Inveresk Research Inc.
Pension and Life Assurance Plan and therefore is not eligible to participate in
such plan, unless the Board otherwise agrees. The Company shall contribute 15%
of Annual Salary to the Executive's personal pension arrangements, details of
which shall be provided by the Executive to the Company.
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4.4. Vacation. In addition to four public holidays for each fiscal
year of the Company (other than the fiscal year ended December 31, 2002, for
which the Executive will be entitled to five public holidays), the Executive
shall be entitled to vacation in each fiscal year in accordance with the table
set forth below, to be taken at such time or times as the Company may approve:
Number of Vacation Days Per Year
(exclusive of Saturdays and
Year of Service Sundays)
Less than 8 28
More than 7 but less than 8 29
More than 8 but less than 9 30
More than 9 but less than 10 31
More than 10 33
4.5. Sick Pay. Without prejudice to the Company's rights under
Section 5 below, during any period of absence from work due to sickness or
accident, the Executive shall (after giving the Company when required evidence
satisfactory to the Company of incapacity and continuing incapacity to work) be
entitled to receive all Annual Salary and other benefits due to such Employee
under this Agreement during the first twenty-eight weeks of such absence. The
Company shall offset against any such payments made by the Company to the
Executive all statutory sick pay or other similar government benefit to which
the Executive is entitled by virtue of his employment with the Company and any
payments made to the Executive pursuant to Section 4.10; provided, that after
twenty-eight weeks the payment of Annual Salary to the Executive shall be at the
discretion of the Company.
4.6. Expenses. The Executive shall be entitled to reimbursement for
all business expenses incurred by him in the performance of his duties under
this Agreement in accordance with the standard practices of the Company as in
effect from time to time.
4.7. Automobile. The Company will provide the Executive, at the
option of the Executive, either an automobile in accordance with the Company's
Company Car Policy, as in effect from time to time, or a yearly allowance of
L7,452 for the use of an automobile. Currently the Company Car Policy provides
that the automobile shall be replaced on the earlier of every four years or
after 80,000 miles and provides for payment by the Company of motor tax,
insurance, servicing, repairs and replacements. The Company's Company Car Policy
shall be reviewed annually by the Board. The Company will also provide the
Executive with a fuel card for payment of all fuel used by the Executive within
the United Kingdom (including fuel for private use).
4.8. Business Clothing Allowance: Telephone Allowance. The Company
will provide the Executive with a business clothing allowance of L220, plus
Value Added Tax, per annum, subject to increase or decrease by the Board from
time to time in its sole discretion but no less than annually. In addition, the
Company will provide the Executive with a telephone allowance of L40 per month,
subject to increase or decrease by the Board from time to time in its sole
discretion but no less than annually, payable simultaneously with the payment of
Annual Salary.
4.9. Life Insurance. During the Term, the Company shall provide the
Executive with term life insurance with a death benefit of at least four times
Annual Salary, subject to the Inland Revenue Earnings Cap Regulations in effect
from time to time. The Company shall pay all premiums with respect to such life
insurance. Such life insurance may be provided either through the Company's
group life insurance programs, by an individual policy, or by a combination of
both group and individual policies.
4.10. Permanent Health Insurance. If the Executive is absent from
work through illness or injury for a continuous period of more than 26 weeks,
the Executive will be entitled to receive a monthly payment (each, a "PHI
Payment") equal to 65% of his pre-disability pensionable salary, less the
monthly
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single person's long term state incapacity benefit to which the Executive is
entitled at such time. The Executive shall be entitled to receive PHI Payments
until the earlier of the Executive's return to work, retirement or death and PHI
Payments shall be increased by 5% each year during the period that they are
being paid to the Executive. While the Executive is receiving PHI Payments the
Executive will continue to be a member of the Scheme and the Company will
continue to make contributions to the Scheme on behalf of the Executive. At any
time that the Executive becomes entitled to receive PHI Payments the Company
shall determine a notional salary for the Executive for pension plan purposes,
which notional salary will be reviewed by the Board in January of each year.
4.11. Private Medical Insurance. The Company shall pay the premiums
and other costs associated with the provision of private medical insurance for
the Executive and his immediate family at a level which is in accordance with
Company policy as in effect from time to time.
4.12. Relocation Expenses.
(a) Subject to Section 4.12(b), the Company shall
reimburse the Executive, upon the Executive's submission of proof of such
expenses, for the following costs of relocating from London to the Edinburgh
area: (i) survey fees incurred in respect of properties investigated by the
Executive in the Edinburgh area; (ii) stamp duty incurred in respect of the
purchase of a new residence in the Edinburgh area; (iii) the provision of
temporary housing in the Edinburgh area; (iv) the actual move from London to the
Edinburgh area, including, without limitation, insurance for the removal of
furniture and personal effects, provided that at least two estimates for the
moving costs have been obtained by the Executive, of which at least one must
have been from a list of removal firms provided by the Company and these
estimates have been approved by the Company prior to the relocation; and (v)
assistance with legal and estate agent's fees incurred in respect of the sale of
the Executive's current residence and the purchase of a new residence in the
Edinburgh area, provided that, with respect to the reimbursement of solicitor's
fees, the Company has approved the solicitor engaged by the Executive prior to
such solicitor's engagement (collectively, "Relocation Costs"). Notwithstanding
the foregoing, the Company shall not be obligated to reimburse the Executive for
Relocation Costs (A) that were not incurred in connection with a relocation by
the Executive from a property that is outside a 36 mile radius from the primary
location where the Executive will perform his duties under this Agreement to a
property that is within a 36 mile radius of such location, (B) that have been
previously reimbursed by the Company or any of its subsidiaries pursuant to an
agreement or arrangement between the Executive and the Company or any of its
subsidiaries in effect prior to the date of this Agreement or (C) to the extent
the requested reimbursement would cause the aggregate of all such reimbursements
of Relocation Costs by the Company and its subsidiaries, pursuant to this
Agreement or otherwise, to exceed L30,000. The Executive shall be liable for any
income taxes due on amounts in excess of L8,000 payable by the Company pursuant
to the provisions of this Section 4.12.
(b) If the Executive terminates his employment with the
Company on or prior to the second anniversary of the date on which the Company
receives the invoice with respect to the final Relocation Cost paid by the
Company (the "Final Invoice Date"), the Executive must repay Relocation Costs
previously paid to the Executive by the Company pursuant to Section 4.12(a) in
accordance with the following schedule:
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Date of Termination of Employment Percentage of Relocation
Costs to be Repaid by Executive
Less than 12 months after Final Invoice Date 100%
More than 12 but less than 18 months after 60%
Final Invoice Date
More than 18 but less than 24 months after 40%
Final Invoice Date
Any repayment of Relocation Costs required to be made by the Executive
to the Company pursuant to this Section 4.12(b) must be made on or prior to the
last date on which the Executive is employed by the Company. Pursuant to Section
13 of the Employment Rights Xxx 0000, the Executive hereby authorizes the
Company to deduct from any amounts payable by the Company to the Executive under
this Agreement any such relocation Costs (or portion thereof) repayable by the
Executive pursuant to this Section 4.12(b).
4.13. No Other Compensation. Except as provided in this Section 4,
the Executive shall be entitled to no other compensation for the services
provided by him to the Company and New Holdco under this Agreement.
Section 5. Termination.
(a) The Executive's employment under this Agreement may
be terminated at any time (i) by the Company or the Executive upon one year's
prior written notice (or any shorter period mutually agreed upon by the parties)
or (ii) by the Company upon payment of one year's Annual Salary in lieu of
notice and it is expressly agreed that payment in lieu of the applicable notice
period shall not constitute a repudiation of this Agreement by the Company.
(b) Upon termination of the Executive's employment, in
addition to Annual Salary which the Company may elect to pay in lieu of notice,
the Executive shall be entitled to receive any Annual Salary and other benefits
(including bonus) earned and accrued under this Agreement prior to the
expiration of the termination notice period and to be reimbursed, in accordance
with Section 4.6, for any business expenses incurred prior to such date. The
Executive shall have no further rights to any other compensation or benefits
under this Agreement on or after the termination of employment.
Section 6. Covenants of the Executive.
6.1. Noncompetition. In consideration of the salary and benefits to
be derived by the Executive under this Agreement, and to preserve the goodwill
associated with the business of the Company, during the period commencing on the
date of this Agreement and ending (i) if the Company terminates the Executive's
employment under this Agreement, on the date upon which the Executive shall
cease to be an employee of the Company or (ii) if the Executive terminates his
employment under this Agreement, one year following the date of the notice of
termination of the Executive's employment given pursuant to this Agreement, he
shall not for his own benefit or the benefit of any third party, directly or
indirectly, in any capacity, engage in or be financially interested in any
business operation or division of a business that competes, directly or
indirectly, with any material aspect of the Business in the Geographic Area. The
term "Business" means the provision of drug development services, and any and
all other business activities of any Group Company that after the date of this
Agreement become material to the Group Companies taken as a whole and in which
the Executive was actively involved in the course of his employment during the
one-year period prior to the date of termination of the Executive's employment
with the Company. The term "Geographic Area" means any area in North America and
the United
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Kingdom where any Group Company has performed services during the one-year
period prior to the date of termination of the Executive's employment with the
Company.
6.2. Nondisclosure. The Executive acknowledges that, by reason of
his employment by the Company, he will have access to confidential information
of the Group Companies, including, without limitation, information and knowledge
pertaining to trade know-how, proprietary computer programs, data, client lists,
marketing and other business strategies, methods of operation, sales and profit
figures, pricing information, personnel information, relationships between a
Group Company and those persons, entities and affiliates with which the Group
Companies have contracted and others who have business dealings with them and
other confidential property and information of the Group Companies
(collectively, the "Confidential Information"). The Executive acknowledges that
the Confidential Information is a valuable and unique asset of the Group
Companies and covenants that, during the period commencing on the date of this
Agreement and ending 36 months following the date on which the Executive shall
cease to be an employee of the Company, he will not use any Confidential
Information or disclose any Confidential Information to any person, firm or
corporation (except as his duties under this Agreement may require) and that all
such matters and properties shall be and shall remain the property of New
Holdco, the Company and/or a Group Company, as applicable, and/or their
customers. The obligation of confidentiality imposed by this Section 6.2 shall
not apply to information that (i) is required by law or by a governmental and/or
regulatory authority to be disclosed, (ii) otherwise becomes generally known
without any breach by the Executive of this Agreement, or (iii) is disclosed by
the Executive in a court or other proceeding against New Holdco or the Company
because such disclosure is reasonably required in order to enforce the
Executive's rights under this Agreement; provided, that in any case described in
clause (i) or clause (iii), the Executive shall, at the expense of the Company,
cooperate, if requested by the Company, in seeking a protective order with
respect to, and otherwise preventing further disclosure of, such information.
6.3. Nonsolicitation. During the period commencing on the date of
this Agreement and ending one year following the date upon which the Executive
shall cease to be an employee of this Company, the Executive shall not, directly
or indirectly, for himself or for any other person, firm or other entity,
solicit, interfere with or endeavor to entice away from any Group Company (i)
the customer of any person, firm or other entity that (A) at the date of
termination of the Executive's employment with the Company or during the
one-year period prior to the date of termination of the Executive's employment
with the Company was a customer or client of any Group Company or (B) to the
Executive's knowledge was negotiating with any Group Company in relation to any
part of its business or (ii) any director, employee or consultant of any Group
Company.
6.4. Company Information. All memoranda, notes, lists, records,
property and any other tangible product and documents (and all copies thereof),
whether visually perceptible, machine-readable or otherwise, made, produced or
compiled by the Executive or made available to the Executive concerning the
business of the Company or its affiliates, (i) shall at all times be the
property of the Company (and, as applicable, any affiliates) and shall be
delivered to the Company at any time upon its request, and (ii) upon the
Executive's termination of employment, shall be immediately returned to the
Company.
Section 7. Compliance With Other Agreements. The Executive
represents and warrants to the Company that the execution of this Agreement by
the Executive and the Executive's performance of the Executive's obligations
hereunder will not, with or without the giving of notice and/or the passage of
time, conflict with, result in the breach of any provision of or the termination
of, or constitute a default under, any agreement to which the Executive is a
party or by which the Executive is or may be bound.
Section 8. Assignment. Neither party shall have the right to
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the other party; provided, that a merger or consolidation of
the Company or a sale or transfer of all or substantially all of the shares or
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assets of the Company (and, in the case of such a sale of assets, a related
assignment of this Agreement) shall not be deemed an assignment in violation of
the terms of this Section 8.
Section 9. Miscellaneous.
9.1. Survival. Anything contained in this Agreement to the contrary
notwithstanding, the provisions of Sections 6.1, 6.2, 6.3, 6.4 and 9 shall
survive termination of this Agreement and any termination of the Executive's
employment hereunder for the periods indicated therein.
9.2. Notices. All notices or communications hereunder shall be in
writing (including by facsimile transmission), addressed as follows:
(i) If to the Company to:
Inveresk Research International Limited.
Elphinstone Xxxxxxxx Xxxxxx
Xxxxxxx XX00 0XX
Xxxxxxxx
Facsimile: 1875 614 555
Attention: Chief Executive
With a copy to:
Inveresk Research Group, Inc.
00000 Xxxxxx Xxxxxxx
Xxxxx 000
Xxxx, Xxxxx Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: President and Chief Executive Officer
(ii) If to the Executive to him at the address set forth
on the signature page.
Any such notice shall be effective only if delivered personally, by facsimile or
if mailed (first class prepaid recorded delivery letter). All such notices,
requests and other communications will (i) if delivered by facsimile
transmission to the number as provided in this Section 9.2, be deemed given at
the time when the facsimile machine records delivery of such notice, (ii) if
delivered personally to the address as provided in this Section 9.2, be deemed
given upon delivery and (iii) if delivered by first class prepaid recorded
delivery letter to the address as provided in this Section 9.2, be deemed given
upon receipt. Any party from time to time may change its address or other
information for the purpose of notices to that party by giving notice specifying
such change to the other parties hereto.
9.3. Section Headings. The section and subsection headings used in
this Agreement are for reference and convenience only and shall not enter into
the interpretation of this Agreement.
9.4. No Waiver. Any term or condition of this Agreement may be
waived at any time by the party that is entitled to the benefit thereof, but no
such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver
by any party of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any
other term or condition of this Agreement on any future occasion.
9.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of Scotland.
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9.6. Entire Agreement. This Agreement and the Standard Conditions
supersede all prior discussions and agreements between the parties with respect
to the subject matter of this Agreement, and contain the sole and entire
agreement between the parties hereto with respect to the subject matter of this
Agreement.
9.7. Amendment. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of both
parties to this Agreement.
9.8. Withholding. The Company shall be entitled to withhold from
any payments or deemed payments any amount of tax withholding it determines to
be required by law.
9.9. No Third Party Beneficiaries. This Agreements is solely for
the benefit of the parties hereto and for the benefit of the Group Companies and
shall not be deemed to confer upon other third parties any remedy, claim,
liability, reimbursement, claim of action or other right, except as expressly
provided in this Agreement.
9.10. Gender and Person. Words used in this Agreement, regardless of
the number or gender specifically used, shall be deemed and construed to include
any other number, singular or plural, and any other gender, masculine, feminine
or neuter, as the context shall require.
9.11. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors, permitted
assigns, heirs, executors and legal representatives.
9.12. Interpretation. In this Agreement, words and phrases defined
in Section 736 of the Companies Act 1985 (as amended) shall have the meanings
given to them in that Act. The term "Group Companies" means New Holdco and its
subsidiaries from time to time and "Group Company" means any ones of them.
9.13. Employment Rights Act. The information contained in this
Agreement constitutes a written statement of the terms of the Executive's
employment in compliance with the provisions of the Employment Rights Xxx 0000.
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IN WITNESS WHEREOF, these presents consisting of this and the
eight preceding pages are executed as follows:
SIGNED on behalf of Inveresk
Research International Limited by
Xxx X. Sword, a director, on the
21st day of June 2002 before this
witness: /s/ Xxx X. Sword
-----------------------------
Director
/s/ Xxxx Xxxxxxxxx
-----------------------------
Xxxx Xxxxxxxx Xxxxxxxxx Full Name
-----------------------------
00 Xxxxxx Xxxxxx Address
-----------------------------
Edinburgh
-----------------------------
Solicitor Occupation
-----------------------------
SIGNED by the said D. J. Xxxx X. Xxxxx
on the 21st day of June 2002
before this witness:
/s/ Xxx X. Xxxxxxxxx /s/ D.J. Xxxx X. Xxxxx
------------------------------ -----------------------------
D.J. Xxxx X. Xxxxx
Xxx Xxxxxxxxx Full Name
------------------------------
000 Xxxx Xxxxxx Xxxxxxx
------------------------------
Xxx Xxxx, XX 00000
------------------------------
Attorney Occupation
------------------------------
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