EXHIBIT 10.6
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made this 13th day of
February, 1998, by Health Products Research, Inc., a New Jersey corporation with
its principal place of business at 0000 Xxxxx 00X, Xxxxx Xxxxxx, Xxx Xxxxxx
00000 (the "Employer"), and Xx. Xxxxxx Xxxxx, an individual residing at 00
Xxxxxxxx Xxxxx, Xxxxxxxxx Xxxxxxxx, Xxx Xxxxxx 00000 (the "Executive").
WHEREAS, the parties wish to set forth the terms and conditions upon which
the Employer will employ the Executive;
NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
agree as follows:
1. Term of Employment; Title; Duties; Authority.
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The Employer hereby employs the Executive, and the Executive hereby accepts
employment with the Employer, upon the terms set forth in this Agreement,
effective beginning on the date hereof (the "Effective Date") and ending on the
third anniversary of the Effective Date. The Executive shall serve as the
President and Chief Operating Officer of the Employer during the term of his
employment under this Agreement. The Executive shall report to the person
designated by the Chairman and Chief Executive Officer of Xxxxxx Communications,
Inc. ("Xxxxxx") and the Executive shall perform such services consistent with
his position as may be reasonably assigned to him from time to time by such
person.
2. Extent of Services.
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The Executive agrees to devote his entire business time and attention to
the performance of his duties under this Agreement. He shall perform his duties
to the best of his ability and shall use his best efforts to further the
interest of the Employer. The Executive represents and warrants to the Employer
that he is able to enter into this Agreement and that his ability to enter into
this Agreement and to fully perform his duties hereunder are not limited to or
restricted by any agreements or understandings between the Executive and any
other person. For the purposes of this Agreement, the term "person" means any
natural person, corporation, partnership, limited liability partnership, limited
liability company, or any other entity of any nature.
3. Base Salary
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The Employer shall pay the Executive a base annual salary of $210,000
subject to such increases as may be approved by the Board of Directors of the
Employer (the "Base Salary"). The salary shall be payable periodically in
accordance with the Employer's policies for executive personnel, less such
deductions as may be required by law or reasonably requested by the Executive.
The Employer will review the Executive's base salary to determine whether such
base salary should be increased (but not decreased) no less often than annually
in conjunction with its regular review of executive salaries.
4. Stock Option.
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(a) On the Effective Date, as an inducement to enter into this
employment agreement and in consideration of the Executive's services hereunder
and including the Executive's obligations pursuant to Sections 8 and 9 hereof,
Xxxxxx will grant the Executive options to acquire 100,000 shares of Xxxxxx
common stock under and governed by the Xxxxxx 1996 Stock Incentive Plan (the
"Plan") at an exercise price equal to the closing sale price of Xxxxxx'x common
stock on the New York Stock Exchange on the date hereof. The options so granted
shall vest and become exercisable over a four year period with 25% being
exercisable at the end of each completed year of service during such period,
provided that in the event the Executive is terminated by the Employer without
cause prior to the first anniversary of the Effective Date, then 25% of the
options shall vest upon such termination. If the Executive's employment is
terminated for any reason other than death, then that portion of the options
granted to the Executive under this Section 4 which is vested at the time of
such termination may be exercised by the Executive within 90 days of such
termination, and any vested portion which is not timely exercised shall be
forfeited by the Executive and his estate. Any options which have not vested as
of the date of termination of the Executive's employment with the Company for
any reason, including death or disability, shall terminate and be forfeited by
the Executive.
(b) Subject to earlier termination as provided in the Plan or this
Agreement, all options granted pursuant to Section 4(a) shall expire on the
tenth anniversary of the Effective Date.
5. Severance.
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(a) The Executive is an employee "at will" and may be terminated by the
Employer at any time with or without cause.
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(b) If the Executive is terminated by the Employer without cause or
leaves voluntarily for "good reason" (as defined below) at any time during the
term hereof or in the event that, while the Executive is employed by the
Employer, the Employer is sold, whether through merger, sale of substantially
all of its assets, stock transfer or otherwise, during the two year term of this
Agreement (an "HPR Divestiture"), the Executive shall receive from the Employer
a severance payment equal to one-half the annual Base Salary then in effect
within ten (10) days of the date of his termination minus such deductions as may
be required by law or reasonably requested by the Executive (the "Severance
Payment"); provided, however, that the Employer shall have no obligation to make
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the Severance Payment to the Executive if, as a result of the HPR Divestiture,
the Executive becomes an employee of the purchaser of the Employer.
(c) For the purposes of this Agreement, "cause" shall mean any of the
following: (i) gross negligence or willful misconduct in the performance of
the Executive's duties hereunder; (ii) conviction of any felony, or any
misdemeanor involving dishonesty, fraud, or moral turpitude; (iii) physical or
mental incapacity for a period of five (5) consecutive months (such period of
incapacity shall be deemed to be continuously consecutive unless Executive has
returned to work on a full-time basis for eight (8) consecutive weeks); (iv) the
occurrence of any wrongful and intentional act or omission by Executive which
has a material adverse impact on the business, properties, results of
operations, condition (financial or otherwise) or prospects of the Employer; or
(v) the failure of the Executive, for any reason, to devote his full time and
efforts in a diligent manner to the performance of his duties and
responsibilities hereunder.
(d) For the purposes of this Agreement, "good reason" shall mean any of
the following: (i) any material breach by the Employer of its obligations under
this Agreement, which continues without cure for a period of 30 days after
written notice thereof is given by Employee to Employer; or (ii) the imposition
on the Employee of duties and responsibilities without his consent which are
both (i) a substantial alteration of the Employee's current duties and
responsibilities and (ii) inconsistent with the Employee's position with the
Company, except under circumstances which would constitute cause for termination
under clause (c).
6. Fringe Benefits.
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(a) The Executive shall be entitled to all benefits generally available
to employees of the Employer of similar levels of authority.
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(b) The Executive shall be eligible to receive annual discretionary
bonuses determined by the Board of Directors of Employer based on the
Executive's performance.
(c) The Executive shall be entitled to five (5) weeks of vacation during
each year of employment. Such vacation shall be taken at such times as the
Executive and his designated superior shall agree. The Executive shall be
entitled to sick leave and holidays in accordance with the policy of the
Employer as to its executive employees.
7. Reimbursement of Business Expenses.
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The Employer shall reimburse the Executive in accordance with Employer's
policies for all reasonable out-of-pocket costs incurred or paid by the
Executive in connection with, or related to, the performance of his duties,
responsibilities or services under this Agreement, upon presentation by the
Executive of documentation, expense statements, vouchers, and/or such other
supporting information as the Employer may reasonably request.
8. Non-Solicitation and Non-Competition.
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(a) The Executive agrees that while the Executive is employed pursuant
to this Agreement and for a period of two years following termination of the
Executive's employment by the Employer for any reason (the "Non-Competition
Period"), whether by action of the Executive or the Employer, the Executive will
not, except as otherwise provided herein, engage or participate, directly or
indirectly, as principal, agent, executive, director, proprietor, joint
venturer, trustee, employee, employer, consultant, stockholder, partner or in
any other capacity whatsoever, in the conduct or management of, or own any stock
or any other equity investment in or debt of, any business which is competitive
with any business conducted by the Employer, including without limitation any
business involving marketing consulting to, or contract sales, detailing and
marketing support or any other marketing services for, pharmaceutical companies
(collectively, "Employer's Current Business"); it being agreed that employment
directly by a pharmaceutical company shall not violate the provisions of this
Section 8(a).
(b) During the Non-Competition Period, the Executive will not, for his
own benefit or for the benefit of any person or entity other than the Employer,
(i) solicit, or assist any person or entity other than the Employer to solicit,
any officer, director, executive or employee of the Employer to leave his
employment, (ii) hire or cause to be hired any present or former officer,
director, executive or employee of the Employer, or (iii)
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engage any present or former officer, director, executive or employee of the
Employer as a partner, contractor, sub-contractor, employee, or consultant.
(c) During the Non-Competition Period, the Executive will not knowingly
and willfully (i) solicit, or assist any person or entity other than the
Employer to solicit, any person or entity that is a client of the Employer, or
has been a client of the Employer during the prior twelve (12) months, to
furnish marketing consulting services or contract sales, detailing and marketing
support or any other marketing services for pharmaceutical companies or any
other products or services the Employer provides to a client, or (ii) interfere
with any of Employer's business relationships.
(d) The Executive acknowledges that (i) the markets served by the
Employer are national in scope and are not dependent on the geographic location
of the executive personnel or the businesses by which they are employed; and
(ii) the above covenants are manifestly reasonable on their face, and the
parties expressly agree that such restrictions have been designed to be
reasonable and no greater than is required for the protection of the Employer.
(e) Nothing in this Agreement shall be deemed to prohibit the Executive
from owning, solely as an investment, securities of any person which are traded
on a national securities exchange or quoted on a inter-dealer quotation system,
provided that such securities constitute two percent (2%) or less of the
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outstanding equity securities of any such person and the Executive is not a
controlling person of, or a member of a group which controls, such person.
9. Confidential Information.
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(a) The Executive shall not (for his own benefit or the benefit of any
person or entity other than the Employer) use or disclose any of the Employer's
trade secrets or other confidential information. The term "trade secrets or
other confidential information" includes, by way of example, matters of a
technical nature, "know-how," computer programs (including documentation of such
programs), research projects, and matters of a business nature, such as
proprietary information about costs, profits, markets, sales, lists of
customers, and other information of a similar nature to the extent not available
to the public and to the extent not independently generated by the Executive or
others without any reference to any of the Employer's trade secrets or other
confidential information, and such materials constituting plans for future
development. After termination of this Agreement, the Executive shall not use
or disclose trade secrets or other confidential information unless such
information becomes a part of the public domain other than through
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a breach of this Agreement or is disclosed to the Executive by a third party who
is entitled to receive and disclose such information or such disclosure is
required by law.
(b) Upon the effective date of notice of the Executive's or the
Employer's election to terminate this Agreement, or at any time upon the request
of the Employer, the Executive (or his heirs or personal representatives) shall
deliver to the Employer all documents and materials containing trade secrets and
confidential information relating to the Employer's business and all documents,
materials, and other property belonging to the Employer, which in either case
are in the possession or under the control of the Executive (or his heirs or
personal representatives).
(c) All discoveries and works made or conceived by the Executive
during and in the course of his employment by the Employer, jointly or with
others, that relate to the Employer's activities shall be owned by the Employer.
The terms "discoveries and works" include, by way of example, inventions,
computer programs (including documentation of such programs), technical
improvements, processes, drawings, and works or authorship, including materials
which relate to direct sales, telemarketing, wall media products,
sampling/comparing or services. The Executive shall promptly notify and make
full disclosure to, and execute and deliver any documents requested by, the
Employer to evidence or better assure title to such discoveries and works by the
Employer, assist the Employer in obtaining or maintaining for itself at its own
expense United States and foreign patents, copyrights, trade secret protection
and other protection of any and all such discoveries and works, and promptly
execute, whether during his employment or thereafter, all applications or other
endorsements necessary or appropriate to maintain patents and other rights for
the Employer and to protect its title thereto. Any discoveries and works which,
within six months after the termination of the Executive's employment by the
Employer, are made, disclosed, reduced to a tangible or written form or
description, or are reduced to practice by the Executive and which pertain to
work performed by the Executive while with, and in his capacity as an employee
of, the Employer shall, as between the Executive and the Employer, be presumed
to have been made during the Executive's employment by the Employer.
10. Enforcement.
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The parties to this Agreement mutually agree that, in recognition of
Employer's dependence on Executive's experience to carry out its business plan
and Executive's senior and key position in the Employer, the restrictions
detailed in Sections 8 and 9 of this Agreement are necessary and appropriate to
give effect to the intended relationships of the parties. Executive agrees that
because damages arising from violations of
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Sections 8 and 9 of this Agreement are extremely difficult to quantify with
certainty, injunctive relief will be necessary to effect the intent of such
Sections. Accordingly, Executive hereby consents to the imposition of a
preliminary or permanent injunction as a remedy to his breach of Sections 8 and
9 of this Agreement.
It is the desire and intent of the parties hereto that the restrictions set
forth in Sections 8 and 9 of this Agreement shall be enforced and adhered to in
every particular, and in the event that any provision, clause or phrase shall be
declared by a court of competent jurisdiction to be judicially unenforcable
either in whole or in part -- whether the fault be in duration, geographic
coverage or scope of activities precluded -- the parties agree that they will
mutually petition the court to sever or limit the unenforcable provision so as
to retain and effectuate to the greatest extent legally permissible the intent
of the parties as expressed in Sections 8 and 9 of this Agreement.
11. Miscellaneous.
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(a) All notices required or permitted under this Agreement shall be in
writing and shall be deemed effective upon personal delivery or upon deposit
with the United States Postal Service, by registered or certified mail, postage
prepaid, addressed to the other party at the address shown above, or at such
other address or addresses as either party shall designate to the other in
writing from time to time.
(b) Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular forms of nouns and pronouns shall include the plural, and vice
versa.
(c) This Agreement constitutes the entire agreement between the parties
and supercedes all prior agreements and understandings, whether written or oral,
relating to the subject matter of this Agreement.
(d) This Agreement may be amended or modified only by a written
instrument executed by both the Employer and the Executive.
(e) This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of New Jersey, without regard to its
conflicts or laws principles.
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(f) This Agreement shall be binding upon and inure to the benefit of both
parties and their respective successors and assigns; provided, however, that the
obligations of the Executive are personal and shall not be assigned or delegated
by him.
(g) No delays or omission by the Employer or the Executive in exercising
any right under this Agreement shall operate as a waiver of that or any other
right. A waiver or consent given by the Employer or the Executive on any one
occasion shall be effective only in that instance and shall not be construed as
a bar or waiver of any right on any other occasion.
(h) The captions appearing in this Agreement are for convenience of
reference only and in no way define, limit or affect the scope or substance of
any section of this Agreement.
(i) In case any provision of this Agreement shall be held by a court with
jurisdiction over the parties to this Agreement to be invalid, illegal or
otherwise unenforceable, the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
(j) The Employer shall indemnify the Employee to the fullest extent
permitted under New Jersey law for claims arising from his service as an officer
and/or director of the Employer or any of its subsidiaries.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
EMPLOYER EXECUTIVE
HEALTH PRODUCTS RESEARCH, INC.
By:
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Name: XXXXXX XXXXX
Title:
AGREED:
XXXXXX COMMUNICATIONS, INC.
By:
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Name:
Title:
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