AMENDED AND RESTATED EMPLOYMENT SEPARATION AGREEMENT
AMENDED AND RESTATED
EMPLOYMENT SEPARATION AGREEMENT
This
Amended and Restated Employment Separation Agreement (the “Agreement”), dated as
of December 31, 2008, is entered into by and between PDI, Inc., a Delaware
corporation (the “Company”), having its principal place of business at 0 Xxxxx
00 Xxxxx, Xxxxxx Xxxxx, Xxx Xxxxxx 00000, and Xxxxxx Xxxxxxx, residing
at (the
“Executive”).
WHEREAS,
the Company and Executive previously entered into an Employment Separation
Agreement, effective as of September 1, 2007 (the “Prior Agreement”);
and
WHEREAS,
the Company and Executive desire to amend and restate the Prior Agreement to
comply with the requirements of Section 409A of the Internal Revenue Code of
1986, as amended and the regulations promulgated thereunder (the “Code”), and to
make certain other clarifying changes, with this Agreement to supersede the
Prior Agreement in its entirety.
NOW,
THEREFORE, in consideration of the premises and mutual agreements herein
contained, the parties hereby agree as follows:
1. Employment. In
connection with the Executive’s continued employment and contingent upon the
Executive’s execution of the Company’s Confidentiality, Non-Solicitation and
Covenant Not to Compete Agreement, the Company shall employ the Executive as
President, Pharmakon, which employment shall terminate upon notice by either
party, for any reason. Executive
understands and agrees that Executive’s employment with the Company is at will
and can be terminated at any time by either party, and for any or no
reason.
2. Termination
Benefits.
a. In
further consideration for Executive’s continued employment and agreement to
execute the Company’s Confidentiality, Non-Solicitation and Covenant Not to
Compete Agreement, and provided that, as of the 30th day
following his termination date, Executive has executed the PDI Agreement and
General Release given to him upon termination which will be in substantially the
same form as the Agreement and General Release attached hereto (the “Release”),
any applicable revocation period has expired and Executive has not revoked the
Release during such revocation period, the Company agrees that if it terminates
the Executive’s employment without “Cause” or due to a “Change of Control”, or
if Executive resigns for “Good Reason,” as those terms are defined below, the
Company will provide the following compensation and benefits to
Executive:
i. The
Company will pay Executive a lump sum payment equal to the product of twelve
(12) times Executive’s Base Monthly Salary (excluding incentives, bonuses, and
other compensation), plus the average of the cash incentive compensation paid to
Executive during the three (3) years immediately preceding the termination
date. Subject to Section 2(e) below, such payment shall be made
within forty-five (45) days after Executive’s termination date.
ii. The
Company will reimburse Executive for the cost of the premiums for COBRA group
health continuation coverage under the Company’s group health plan paid by
Executive for coverage during the period beginning following Executive’s
termination date and ending on the earlier of either: (a) first anniversary of
Executive’s termination date; or (b) the date on which Executive becomes
eligible for other group health coverage, provided that no reimbursement shall
be paid unless and until Executive submits proof of payment acceptable to the
Company within 90 days after Executive incurs such expense. Any
reimbursements of the COBRA premium that are taxable to the Executive shall be
made on or before the last day of the year following the year in which the COBRA
premium was incurred, the amount of
the COBRA
premium eligible for reimbursement during one year shall not affect the amount
of COBRA premium eligible for reimbursement in any other year, and the right to
reimbursement shall not be subject to liquidation or exchange for another
benefit.
b. No
termination benefits will be paid if Executive resigns or terminates Executive’s
employment for any reason other than “Good Reason” or the Company terminates
Executive’s employment for “Cause” as determined by the Chief Executive Officer,
the President or the Board or its designee(s).
c. In
the event Executive’s employment with the Company is terminated by either party
for any reason, Executive shall continue to be bound by the Company’s
Confidentiality, Non-Solicitation and Covenant Not to Compete Agreement for the
periods set forth therein.
d. Except
as may be provided under this Agreement, any benefits to which Executive may be
entitled pursuant to the plans, policies and arrangements of the Company shall
be determined and paid in accordance with the terms of such plans, policies and
arrangements, and Executive shall have no right to receive any other
compensation or benefits, or to participate in any other plan or arrangement,
following the termination of Executive’s employment by either party for any
reason.
e. Notwithstanding
anything herein to the contrary, if at the time of Executive’s termination of
employment with the Company, Executive is a “specified employee” within the
meaning of Code Section 409A and the regulations promulgated thereunder, then
the Company shall delay the commencement of such payments (without any
reduction) by a period of six (6) months after Executive’s termination of
employment. Any payments that would have been paid during such six
(6) month period but for the provisions of the preceding sentence shall be paid
in a lump sum to Executive six (6) months and one (1) day after Executive’s
termination of employment. The 6-month payment delay requirement of
this Section 2(e) shall apply only to the extent that the payments under this
Section 2 are subject to Code Section 409A. With respect to payments
or benefits under this Agreement that are subject to Code Section 409A, whether
Executive has had a termination of employment shall be determined in accordance
with Code Section 409A and applicable guidance issued thereunder.
f. All
amounts otherwise payable under this Agreement shall be subject to customary
withholding and other employment taxes and shall be subject to such other
withholding as may be required in accordance with the terms of this Agreement or
applicable law.
3. Definitions.
a. Cause
shall mean: (1) the failure of Executive to use Executive’s best efforts in
accordance with Executive’s position, skill and abilities to achieve Executive’s
goals as periodically set by the Company; (2) the failure by Executive to comply
with the reasonable instructions of the Chief Executive Officer and/or his
designee, provided that such instructions are consistent with Executive’s duties
and responsibilities hereunder, and which such refusal continues unremedied for
a period of ten (10) business days after the Chief Executive Officer and/or his
designee has given written notice to Executive specifying in reasonable detail
the instructions Executive has failed to comply with; (3) the failure by
Executive to adhere to the Company’s documented policies and procedures that
continues unremedied for a period of ten (10) business days after the Chief
Executive Officer and/or his designee has given written notice to Executive
specifying in reasonable detail Executive’s breach of such policies and/or
procedures; (4) the failure of Executive to adhere to moral and ethical business
principles consistent with the Company’s Code of Business Conduct and Guidelines
on Corporate Governance as in effect from time to time; (5) Executive's
conviction of any felony or any criminal offense involving fraud, deceit,
dishonesty or unethical behavior (including the entry of a nolo contendere plea); or (6)
any documented act of material dishonesty or fraud by the Executive in the
commission of his duties.
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b. Base
Monthly Salary shall mean an amount equal to one-twelfth of Executive’s
then current annual base salary. Base Monthly Salary shall not
include incentives, bonus(es), health and welfare benefits, car allowances, long
term disability insurance or any other compensation or benefit provided to
employees of the Company at the executive level.
c. Change of
Control shall mean: (1) any merger by the Company into another
corporation or corporations which results in the stockholders of the Company
immediately prior to such transaction owning less than 51% of the surviving
corporation; (2) any acquisition (by purchase, lease or otherwise) of all or
substantially all of the assets of the Company by any person, corporation or
other entity or group thereof acting jointly; (3) the acquisition of beneficial
ownership of voting securities of the Company (defined as common stock of the
Company or any securities having voting rights that the Company may issue in the
future) or rights to acquire voting securities of the Company (defined as
including, without limitation, securities that are convertible into voting
securities of the Company (as defined above) and rights, options, warrants and
other agreements or arrangements to acquire such voting securities) by any
person, corporation or other entity or group thereof acting jointly, in such
amount or amounts as would permit such person, corporation or other entity or
group thereof acting jointly to elect a majority of the members of the Board, as
then constituted; or (4) the acquisition of beneficial ownership, directly or
indirectly, of voting securities and rights to acquire voting securities having
voting power equal to 51% or more of the combined voting power of the Company’s
then outstanding voting securities by any person, corporation or other entity or
group thereof acting jointly. Notwithstanding the preceding sentence,
(i) any transaction that involves a mere change in identity form or place of
organization within the meaning of Section 368(a)(1)(F) of the Code, or a
transaction of similar effect, shall not constitute a Change of
Control.
d. Good
Reason. Executive’s termination of employment with the Company
shall be for Good Reason if (i) Executive notifies the Company in writing that
one of the Good Reason Events (as defined below) has occurred, which notice
shall be provided within ninety (90) days after he first becomes aware of the
occurrence of such Good Reason Event, (ii) the Company fails to cure such Good
Reason Event within thirty (30) days after receipt of the written notice from
Executive (the “Cure Period”) and (iii) Executive resigns employment within
thirty (30) days following expiration of the Cure Period. For
purposes of this Agreement, a “Good Reason Event” shall mean any of the
following which occur without Executive’s consent: (1) the Company’s failure to
timely pay any material amount of compensation to Executive when due; (2) a
reduction in Executive’s annual base salary of more than 15% unless all
similarly situated executives receive a like reduction in base pay; (3) the
relocation of Executive’s principal place of employment to a location more than
50 miles from Executive’s current principal place of employment; and (4) a
material adverse change in the Executive's duties and
responsibilities.
4. Integration;
Amendment. This Agreement,
the Company’s Confidentiality, Non-Solicitation and Covenant Not to Compete
Agreement, and the Executive’s Individual Stock Agreement constitute the entire
agreement between the parties hereto with respect to the matters set forth
herein and supersede and render of no force and effect all prior understandings
and agreements between the parties with respect to the matters set forth
herein. No amendments or additions to such agreements shall be
binding unless in writing and signed by both parties.
5. Governing
Law; Headings. This Agreement
and its construction, performance and enforceability shall be governed by, and
construed in accordance with, the laws of the State of New Jersey, without
regard to its conflicts of law provisions. Headings and titles herein
are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.
6. Jurisdiction. Except as
otherwise provided for herein, each of the parties: (a) irrevocably submits to
the exclusive jurisdiction of any state court sitting in Bergen County, New
Jersey or federal court
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sitting
in New Jersey in any action or proceeding arising out of or relating to this
Agreement; (b) agrees that all claims in respect of the action or proceeding may
be heard and determined in any such court; and (c) agrees not to bring any
action or proceeding arising out of or relating to this Agreement in any other
court. Each of the parties waives any defense of inconvenient forum
to the maintenance of any action or proceedings so brought and waives any bond,
surety or other security that might be required of any other party with respect
thereto. Any party may make service on another party by sending or
delivering a copy of the process to the party to be served at the address set
forth above or such updated address as may be provided to the other
party. Nothing in this Section 6, however, shall affect the right of
any party to serve legal process in any other manner permitted by
law.
7. Prevailing
Party Provision. Each of the
parties agrees that it/he will not file any action alleging a breach of this
Agreement against the other without first providing the other party with ten
(10) business days’ notice, in writing, of the potential cause of
action. The parties agree and expect that during that notice period,
each will work in good faith to attempt to resolve the dispute and/or cure any
breach. In the event the parties cannot resolve any dispute and an
action is filed based on an alleged breach of the Agreement, the parties agree
that the prevailing party in such action shall receive reimbursement of its/her
reasonable attorneys’ fees and costs from the non-prevailing party.
IN WITNESS WHEREOF the parties
have duly executed this Agreement as of the date first above
written.
EXECUTIVE
By: /s/ Xxxxxx
Xxxxxxx
Xxxxxx Xxxxxxx
PDI, INC.
By: /s/ Xxxxx
Xxxxxx
Xxxxx
Xxxxxx
Chief Executive Officer
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