EMPLOYMENT AGREEMENT
Exhibit 10.4
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made as of April 26, 2007, by and between
Cross Shore Acquisition Corporation t/b/k/a ReSearch Pharmaceutical Services, Inc., a Delaware
corporation (together with its Affiliates, successors and assigns, the “Company”), and Xxxxxx X.
Xxxxxxx (“Employee”). Any capitalized terms used herein and otherwise not defined shall have the
meanings assigned to them in Section 15 of this Agreement.
In consideration of the mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. Employment. The Company shall employ Employee, and Employee hereby accepts
employment with the Company, upon the terms and conditions set forth in this Agreement for the
period beginning on the Effective Date (as defined in Section 24 of this Agreement) and ending as
provided in Section 4 of this Agreement (the “Term”).
2. Position and Duties.
(a) Employee shall serve as the Chairman and Chief Executive Officer of the Company and each
of its Subsidiaries and shall have the normal duties, responsibilities and authority of the
Chairman and Chief Executive Officer, subject to the overall discretion and authority of the Board.
(b) Employee shall report to Board, and Employee shall devote his best efforts and his full
business time and attention (except for permitted vacation periods and reasonable periods of
illness or other incapacity) to the business and affairs of the Company and its Subsidiaries and
Affiliates. Employee shall perform his duties and responsibilities to the best of his abilities in
a diligent and businesslike manner.
(c) Notwithstanding the provisions of Section 2(b) above, Employee may continue to manage his
and his family’s respective investments and serve on the board of directors or similar body of
other organizations, including publicly owned corporations or other entities, philanthropic
organizations and organizations in which Employee has made an investment, provided that (i)
Employee’s activities with respect to all of the foregoing do not, individually or in the
aggregate, in any significant way, interfere with, detract from, or affect the performance of his
duties to the Company under this Agreement, (ii) Employee notifies the Board prior to assuming a
position on the board of directors or similar body of another organization, and (iii) Employee may
not serve on the board of directors or similar body of another organization that is a competitor of
the Company.
3. Compensation.
(a) During the Term, Employee shall be entitled to (i) receive a base salary of $400,000 per
annum or such other higher rate as the Board may designate from time to time (the “Base Salary”),
which shall be payable in regular installments in accordance with the Company’s general payroll
practices and shall be subject to customary withholding and (ii) participate in all benefit plans,
including medical, dental, retirement, short- and long-term
disability and other such plans established by the Company from time to time for executives or
employees of the Company generally. In addition, Employee shall be eligible to receive an annual
target bonus equal to sixty percent (60%) of Base Salary with the actual amount of any bonus based
on achieving the Company’s business and financial objectives as determined by the Board or the
compensation committee thereof (if any) for the Company’s fiscal year. If the Company’s fiscal
year is the calendar year, such bonus shall be paid in the calendar year following the fiscal year
to which the bonus relates, and all such payments shall be completed by March 15 of the payment
year. If the Company’s fiscal year is other than a calendar year, all such payments shall be
completed by December 31 of the calendar year in which the Company’s fiscal year ends.
(b) On the Effective Date, Employee shall be granted that number of Parent Options set forth
on Exhibit A. Exhibit A also sets forth the exercise price of Employee’s Parent
Options and the number of vested and unvested Parent Options which will be held by Employee as of
the Effective Date. Employee’s unvested Parent Options will vest as provided for on Exhibit
A, and in accordance with Section 5(b) if this Agreement, and will be treated to the maximum
extent possible as incentive stock options under Section 422 of the Internal Revenue Code of 1986,
as amended (the “Code”). Following the Effective Date, Employee will be eligible to receive grants
of Parent Options under the Parent Stock Option Plan as determined from time to time by the Board
or the committee appointed by the Board to administer the Parent Stock Option Plan. The Parent
Options issued by the Company to Employee shall contain terms and conditions consistent with any
requirements for such Parent Options that are set forth in this Agreement.
(c) The Company shall reimburse Employee for all reasonable expenses incurred by him in the
course of performing his duties under this Agreement which are consistent with the Company’s
policies in effect from time to time with respect to travel, entertainment and other business
expenses, subject to the Company’s requirements with respect to reporting and documentation of such
expenses. Such reimbursements shall be made in accordance with the Company’s general payroll
practices.
(d) Employee shall be entitled during his employment hereunder to participate in such of the
Company’s cash incentive plans and programs as may from time to time be provided by Company for its
executive officers, in each case as determined by the Board or the compensation committee thereof
(if any).
(e) Employee shall be entitled, during his employment hereunder, to participate in such of
Company’s equity incentive plans and programs as may from time to time be provided by Company for
its executive officers at such level as shall be determined by the Board or the compensation
committee thereof (if any).
(f) Employee shall be entitled to direct the Company to pay a portion of his Base Salary for
automobile payments and expenses, including, but not limited to, insurance and maintenance. The
Company shall pay the amount of such automobile payments and expenses directly to the provider as
directed by Employee.
(g) The Company shall obtain and maintain a life insurance policy(s) (that is a
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death benefit plan for purposes of Treas. Reg. Section 1.409A-1(a)(5)) covering the life of
Employee with death benefits in an aggregate amount of not less than $4,000,000, with the
beneficiaries of such policy(ies) to be selected by Employee.
(h) During the Term, Employee shall be entitled to paid vacation of 25 days during each
calendar year or such additional number of days as is provided in the employee handbook published
from time to time by the Company (the “Company Employee Handbook”). Employee’s right to carry
forward unused vacation days for a calendar year to any future calendar year shall be governed by
the Company’s Employee Handbook as in effect from time to time.
(i) The Company shall maintain disability insurance (that provides disability pay for purposes
of Treas. Reg. Section 1.409A-1(a)(5)) covering Employee which shall pay Employee at least sixty
percent (60%) of his Base Salary.
4. Term.
(a) The term shall end three (3) years from the Effective Date (the “Initial Term”), except
that at the end of the Initial Term, the term shall be automatically renewed for successive one (1)
year periods (each a “Renewal Term” and together with the Initial Term, the “Term”), after the
Initial Term unless terminated in writing by either the Company or Employee at least one (1) year
prior to the end of the Initial Term or any Renewal Term; provided that (i) the Term and
Employee’s employment shall terminate prior to such date upon Employee’s death or permanent
Disability and (ii) Employee’s employment may be terminated by the Company or Employee at any time
prior to such date subject to the terms and conditions of this Agreement.
(b) If Employee’s employment is terminated by the Company without Cause or Employee voluntary
resigns for Good Reason during the Term of this Agreement, Employee shall be entitled to receive
from the Company (in one lump sum payment within ten (10) days of such termination or resignation),
at Employee’s option, either: (A) (i) an amount equal to 2.99 times his then-applicable Base
Salary, plus (ii) the pro rata portion (based on the number of full months of service by Employee
in the year in which Employee’s employment is terminated) of any bonus to which Employee is
entitled for the year in which Employee’s employment is terminated plus (iii) if Employee elects
coverage under the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended, payment as
and when due of Employee’s premiums for a period of eighteen (18) months following such termination
or resignation; provided that, if Employee elects the severance payments and benefits
provided for in Section 4(b)(A)(i)-(iii) of this Agreement, Employee agrees to be bound by the
terms of Section 10 (Non-compete) and Section 11 (Non-solicitation) of this Agreement for a period
of eighteen (18) months from the date of such termination or resignation, or (B) (i) an amount
equal to one (1) times his then-applicable Base Salary, plus (ii) the pro rata portion (based on
the number of full months of service by Employee in the year in which Employee’s employment is
terminated) of any bonus to which Employee is entitled for the year in which Employee’s employment
is terminated plus (iii) if Employee elects coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1986, as amended, payment as and when due of Employee’s premiums for a period
of eighteen (18) months following such termination or resignation; provided that, if
Employee elects the severance payments and benefits provided for in Section 4(b)(B)(i)-(iii) of
this Agreement,
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Employee shall not be bound by Section 10 (Non-compete) and Section 11 (Non-solicitation) of
this Agreement. As a condition to the Company’s obligations to make and provide the severance
payments and benefits pursuant to this Section 4(b), Employee shall execute and deliver a general
release in form and substance reasonably satisfactory to the Company.
(c) If Employee’s employment is terminated by the Company due to Employee suffering a
permanent Disability during the Term of this Agreement, Employee shall be entitled to receive from
the Company (i) in one lump sum payment within ten (10) days of such termination (A) an amount
equal to two (2) times his then-applicable Base Salary, plus (B) the pro rata portion (based on the
number of full months of service by Employee in the year in which Employee’s employment is
terminated) of any bonus to which Employee is entitled for the year in which Employee’s employment
is terminated, and (ii) if Employee elects coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1986, as amended, payment as and when due of Employee’s premiums for a period
of eighteen (18) months following termination. As a condition to the Company’s obligations to make
and provide the severance payments and benefits pursuant to this Section 4(c), Employee (or
Employee’s representative) shall execute and deliver a general release in form and substance
reasonably satisfactory to the Company.
(d) If Employee’s employment is terminated by the Company for Cause during the Term of this
Agreement, Employee shall, at Employee’s election: (A) be entitled to receive from the Company in
one lump sum payment within ten (10) days of such termination (1) an amount equal to one (1) times
his then-applicable Base Salary, plus (2) the pro rata portion (based on the number of full months
of service by Employee in the year in which Employee’s employment is terminated) of any bonus to
which Employee is entitled for the year in which Employee’s employment is terminated, and (3) if
Employee elects coverage under the Consolidated Omnibus Budget Reconciliation Act of 1986, as
amended, payment as and when due of Employee’s premiums for a period of twelve (12) months
following termination; provided that, Employee agrees to be bound by the terms of Section
10 (Non-compete) and Section 11 (Non-solicitation) of this Agreement for a period of one (1) year
from the date of such termination, or (B) not be entitled to receive any severance payments and
benefits from the Company; provided that, if Employee elects not to receive any severance
payments and benefits from the Company, Employee shall not be bound by Section 10 (Non-compete) and
Section 11 (Non-solicitation) of this Agreement. As a condition to the Company’s obligations to
make and provide the severance payments and benefits pursuant to this Section 4(d), if applicable,
Employee shall execute and deliver a general release in form and substance reasonably satisfactory
to the Company.
(e) If Employee voluntarily resigns his employment without Good Reason during the Term of this
Agreement, and a Change of Control has not occurred prior to such resignation, the Company shall,
within five (5) days of Employee’s resignation, pay to Employee any and all compensation accrued by
Employee through the date of such resignation and Employee shall be bound by the terms of Section
10 (Non-compete) and Section 11 (Non-solicitation) of this Agreement for a period of one (1) year
from the date of such resignation.
(f) If Employee dies during the Term of this Agreement, Employee’s estate shall not be
entitled to receive any compensation or benefits from the Company, except (i) as provided for in
Section 3(g) of this Agreement and (ii) the Company shall, within five (5) days of
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Employee’s death, pay to Employee’s estate any and all compensation (and reimbursements)
accrued for the benefit of Employee through the date of his death.
(g) If Employee’s employment is terminated by, or if Employee resigns his employment with, the
Company or any entity that is in the same controlled group as the Company for purposes of Sections
414(b) or 414(c) of the Code, Employee’s employment shall also automatically be terminated by, or
Employee shall also automatically resign his employment with, the Company and all entities that are
in the same controlled group as the Company for purposes of Sections 414(b) or 414(c) of the Code.
(h) Notwithstanding the preceding subsections, if the Employee is a “specified employee,” as
defined in Treas. Reg. Section 1.409A-1(i), on the date his employment is terminated, (i) any lump
sum payments due under this Section 4 will be made on the first day of the seventh month following
the month of such termination or resignation, and (ii) any periodic payments due for the period
after termination or resignation and before payment begins will be made on the first day of the
seventh month following the month of such termination or resignation, and the remainder will be
payable at such times as such amounts would have been payable had the Employee not terminated his
employment.
5. Change of Control.
(a) If, during the Term, there should be a Change of Control (as defined herein), and within
six (6) months before such Change of Control or twelve (12) months thereafter either (1) Employee’s
employment shall be terminated by the Company for any reason other than for death, Disability or
Cause or (2) Employee resigns for any reason, at Employee’s option:
(i) the Company shall, within five (5) days of such termination or resignation, pay to
Employee all amounts (including salary, bonuses, vacation pay, expense reimbursement, etc.), that
have been fully earned by, but not yet paid to, Employee under this Agreement as of such
termination or resignation plus a lump sum cash payment equal to 2.99 times (x) Employee’s then
current annual Base Salary plus (y) Employee’s bonus for the prior annual period; provided
that, if Employee elects to receive from the Company the payment set forth in this Section
5(a)(i) and the benefits set forth in Section 5(a)(iii) below, Employee agrees to be bound by the
terms of Section 10 (Non-compete) and Section 11 (Non-solicitation) of this Agreement for a period
of eighteen (18) months from the date of such termination or resignation; or
(ii) the Company shall, within five (5) days of such termination or resignation, pay to
Employee all amounts (including salary, bonuses, vacation pay, expense reimbursement, etc.), that
have been fully earned by, but not yet paid to, Employee under this Agreement as of such
termination or resignation plus a lump sum cash payment equal to 1 times (x) Employee’s then
current annual Base Salary plus (y) Employee’s bonus for the prior annual period; provided
that, if Employee elects to receive from the Company the payment set forth in this Section
5(a)(ii) and the benefits set forth in Section 5(a)(iv) below, Employee shall not be bound by
Section 10 (Non-compete) and Section 11 (Non-solicitation) of this Agreement.
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(iii) In the event Employee makes the election provided for in Section 5(a)(i) of this
Agreement, Employee shall be entitled to continue, for three (3) years, from the later of the
Change of Control or Employee’s termination or resignation, to receive medical benefits coverage
for Employee and Employee’s spouse and dependents (if any), to the extent Employee was so entitled
prior to such termination or resignation, at the Company’s expense if and to the extent the Company
was paying for such benefits to Employee and Employee’s spouse and dependents at the time of such
termination or resignation, except that, if the Company’s medical benefits plans do not permit the
foregoing for the full three (3) years, in lieu thereof, the Company shall pay to Employee within
ten (10) days after the date of the termination or resignation, in one lump sum, an amount equal to
the aggregate amount that that the Company would have paid for such coverage over the three (3)
year period had such coverage been permitted. Employee and his spouse and dependents shall be
entitled to such rights as he or they may have to continue coverage at his sole expense as are then
accorded under COBRA for the COBRA coverage period following the expiration of the period during
which Employee and his spouse and dependents (if any) continue to receive such medical benefits
coverage.
(iv) In the event Employee makes the election provided for in Section 5(a)(ii) of this
Agreement, Employee shall be entitled to continue, for one (1) year, from the later of the Change
of Control or Employee’s termination or resignation, to receive medical benefits coverage for
Employee and Employee’s spouse and dependents (if any), to the extent Employee was so entitled
prior to such termination or resignation, at the Company’s expense if and to the extent the Company
was paying for such benefits to Employee and Employee’s spouse and dependents at the time of such
termination or resignation, except that, if the Company’s medical benefits plans do not permit the
foregoing for the full one (1) period, in lieu thereof, the Company shall pay to Employee within
ten (10) days after the date of the termination or resignation, in one lump sum, an amount equal to
the aggregate amount that that the Company would have paid for such coverage for the one (1) year
period had such coverage been permitted. Employee and his spouse and dependents shall be entitled
to such rights as he or they may have to continue coverage at his sole expense as are then accorded
under COBRA for the COBRA coverage period following the expiration of the period during which
Employee and his spouse and dependents (if any) continue to receive such medical benefits coverage.
(b) Anything to the contrary in any other agreement or document now or hereafter existing
notwithstanding, upon a Change of Control and without regard to whether Employee’s employment is
thereafter terminated, Employee shall become fully vested as of the time immediately before such
Change of Control in all then existing stock grants, each stock option previously issued to him
thereupon shall become immediately vested and exercisable, without regard to continued employment
or performance-based vesting standards, and each NQSO shall remain exercisable until the earlier of
(i) the later of 180 days after the Change of Control or the period following a Change of Control
that is set forth in the relevant stock option agreement or (ii) the scheduled expiration date of
such option. The exercise period of any ISO granted to Employee before, on or after the date
hereof shall be governed by the terms of the relevant ISO Agreement.
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(c) If Employee’s employment is terminated by, or if Employee resigns his employment with, the
Company or any entity that is in the same controlled group as the Company for purposes of Sections
414(b) or 414(c) of the Code, Employee’s employment shall also automatically be terminated by, or
Employee shall also automatically resign his employment with, the Company and all entities that are
in the same controlled group as the Company for purposes of Sections 414(b) or 414(c) of the Code.
(d) Notwithstanding the preceding subsections, if the Employee is a “specified employee,” as
defined in Treas. Reg. Section 1.409A-1(i), on the date his employment is terminated, (i) any lump
sum payments due under this Section 5 will be made on the first day of the seventh month following
the month of such termination or resignation, and (ii) any periodic payments due for the period
after termination or resignation and before payment begins will be made on the first day of the
seventh month following the month of such termination or resignation, and the remainder will be
payable at such times as such amounts would have been payable had the Employee not terminated his
employment.
(e) In the event Employee receives the payments provided for in this Section 5, Employee shall
not be entitled to receive the payments provided for in Section 4 of this Agreement upon Employee’s
termination or resignation.
(f) A “Change of Control” of the Company shall mean:
(1) the acquisition by an individual, entity, or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”)
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
thirty five percent (35%) or more of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of directors (the “Outstanding
Shares”); provided, however, that the following acquisitions shall not constitute a Change of
Control: (i) any acquisition directly from the Company unless, in connection therewith, a majority
of the individuals who constitute the Board as of the date immediately preceding such transaction
cease to constitute at least a majority of the Board after such transaction, (ii) any acquisition
by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by Company or any entity controlled by the Company, (iv) any acquisition by any
individual, entity, or group in connection with a Business Combination (as defined below) that
fails to qualify as a Change of Control pursuant to paragraphs (3) or (4) below, or (v) any
acquisition by any Person entitled to file Form 13G under the Exchange Act with respect to such
acquisition; or
(2) individuals who, on the date following the Effective Date, constitute the Board cease for
any reason to constitute at least a majority of the Board; provided, however, that any individual
becoming a member of the Board subsequent to the date hereof whose appointment, election, or
nomination for election by the Company’s shareholders was approved by a vote of at least a majority
of the Board then comprising the Board or by a majority of the members of a committee authorized by
the Board to approve such appointment, election, or nomination (other than an appointment,
election, or nomination of an individual whose initial assumption of office is in connection with
an actual or threatened election contest relating to the
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election of directors of the Company) shall be, for purposes of this Agreement, considered as
though such person were a member of the Board; or
(3) completion by the Company of a reorganization, merger, or consolidation, or sale or other
disposition of all or substantially all of the assets of the Company (a “Business Combination”), in
each case, if, following such Business Combination all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding Shares immediately prior to such
Business Combination beneficially own, directly or indirectly, less than forty percent (40%) of,
respectively, the then outstanding shares of equity securities and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of directors, as the
case may be, of the entity resulting from such Business Combination (including, without limitation,
an entity which, as a result of such transaction, owns the Company or all or substantially all of
the Company’s assets either directly or through one or more subsidiaries); or
(4) completion by the Company of a Business Combination, if, following such Business
Combination all or substantially all of the Persons who were the beneficial owners of the
Outstanding Shares immediately prior to such Business Combination beneficially own, directly or
indirectly, forty percent (40%) or more but less than sixty percent (60%) of, respectively, the
then outstanding shares of equity securities and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as the case may be, of
the entity resulting from such Business Combination (including, without limitation, an entity
which, as a result of such transaction, owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries), and (i) any Person
(excluding any employee benefit plan (or related trust) of the Company or such entity resulting
from such Business Combination) beneficially owns, directly or indirectly, thirty percent (30%) or
more of, respectively, the then outstanding shares of equity securities of the entity resulting
from such Business Combination or the combined voting power of the then outstanding voting
securities of such entity except to the extent that such ownership existed prior to the Business
Combination, or (ii) at least a majority of the members of the board of directors of the entity
resulting from such Business Combination were not members of the Board at the time of the execution
of the initial agreement or of the action of the Board providing for such Business Combination, or
(iii) Employee is not appointed or elected to a comparable or higher position with the entity
resulting from such Business Combination, or (iv) the executive officers of Company holding the
title of Vice President or higher at the time of the execution of the initial agreement for such
Business Combination constitute less than a majority of the executive officers holding comparable
or higher titles of the entity resulting from such Business Combination; or
(5) a complete liquidation or dissolution of the Company.
The completion by the Company of a Business Combination following which all or substantially all of
the individuals and entities who were the beneficial owners of the Outstanding Shares immediately
prior to such Business Combination beneficially own, directly or indirectly, sixty percent (60%) or
more of, respectively, the then outstanding shares of equity securities and the combined voting
power of the then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such Business Combination
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(including, without limitation, an entity which, as a result of such transaction, owns the Company
or all or substantially all of the Company’s assets either directly or through one or more
subsidiaries) shall not constitute a “Change of Control” unless following such transaction the
provisions of paragraphs (1) or (2) are independently satisfied.
6. Possible Reduction in Payments. Following any Change of Control, if all or any
portion of the payments and other benefits provided to Employee under this Agreement, either alone
or together with other payments and benefits which Employee receives or is entitled to receive from
the Company, constitute an “excess parachute payment” within the meaning of Section 280G of the
Code and thus would result in the imposition of excise taxes on Employee under Section 4999 of the
Code, then the Employee may, in his sole discretion, direct the Company to reduce such payments and
benefits to the extent necessary to avoid the imposition of any such excise taxes. If the Employee
elects to direct the Company to reduce such payments and benefits, the Employee shall also
determine and direct the Company as to which and how much of the payments and benefits shall be
eliminated or reduced to avoid any excess parachute payment. All determinations required to be
made under this Section 6 and the assumptions to be utilized in arriving at such determinations
shall be made by an accounting firm engaged by Employee which shall provide detailed supporting
calculations both to the Company and Employee within fifteen (15) business days of the receipt of
notice from Employee or the Company that there is the possibility of an excess parachute payment.
All fees and expenses of such accounting firm shall be borne solely by the Company. Any
determination by the accounting firm shall be binding upon the Company and Employee.
7. Indemnification/Litigation Assistance. The Company shall indemnify and defend
Employee against all claims arising out of Employee’s activities as an officer, director or
employee of the Company or its Subsidiaries or Affiliates, or any of their respective predecessors,
to the fullest extent permitted by law and under Company’s Certificate of Incorporation and
By-laws. In addition to the foregoing, Employee shall, upon reasonable notice, furnish such
information and proper assistance to the Company as may reasonably be required by the Company in
connection with any litigation in which it or its Subsidiaries or Affiliates are, or may become,
parties. After termination or resignation of Employee’s employment, Employee shall be fairly
compensated for providing assistance to the Company that is more than incidental; provided,
however, that the failure of the Company and Employee to agree on such compensation shall not be
the basis on which Employee withholds any information or assistance
8. Confidential Information. Employee acknowledges that the information obtained by
him while employed by the Company and its Subsidiaries and Affiliates concerning the business or
affairs of the Company or any Subsidiary or Affiliate (“Confidential Information”) are the property
of the Company or such Subsidiary. Therefore, Employee agrees that he shall not disclose to any
unauthorized person or use for his own purposes any Confidential Information without the prior
written consent of the Board, unless and to the extent that the aforementioned matters become
generally known to and available for use by the public other than as a result of Employee’s acts or
omissions, or Employee disclosed Confidential Information in response to an order of any court,
governmental agency or adjudicative body; provided that Employee shall have promptly notified the
Company prior to any such disclosure and provided reasonable cooperation in the Company’s efforts,
if any, to contest or limit the
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scope of such disclosure, and provided further that if such disclosure is the subject of any
protective or similar order, such information will still be considered Confidential Information
except for the limited purpose of disclosure to such court, governmental agency or adjudicative
body. Employee shall deliver to the Company at the termination or resignation of his employment,
or at any other time the Company may request, all memoranda, notes, plans, records, reports,
computer tapes, printouts and software and other documents and data (and copies thereof) relating
to the Confidential Information, Work Product (as defined below) or the business of the Company or
any Subsidiary which he may then possess or have under his control.
9. Inventions and Patents. Employee acknowledges that all inventions, innovations,
improvements, developments, methods, designs, analyses, drawings, reports and all similar or
related information (whether or not patentable) which relate to the Company’s or any of its
Subsidiaries’ or Affiliates’ actual or anticipated business, research and development or existing
or future products or services and which are conceived, developed or made by Employee while
employed by the Company and its Subsidiaries and Affiliates (“Work Product”) belong to the Company
or such Subsidiary or Affiliate. Employee shall promptly disclose such Work Product to the Board
and perform all actions reasonably requested by the Board (whether during or after Employee’s
employment with the Company) to establish and confirm such ownership (including, without
limitation, assignments, consents, powers of attorney and other instruments).
10. Non-Compete. In further consideration of the compensation to be paid to Employee
hereunder, Employee acknowledges that in the course of his employment with the Company he shall
become familiar, and during his employment with the Company he has become familiar, with the
Company’s and its Subsidiaries’ and Affiliates’ trade secrets and with other Confidential
Information concerning the Company and its Subsidiaries and Affiliates and that his services have
been and shall be of special, unique and extraordinary value to the Company and its Subsidiaries.
Therefore, Employee agrees that:
(i) if he is terminated for Cause and he elects and receives the severance
payments and benefits provided for in Section 4(d)(A) of this Agreement, he shall
not for a period of one (1) year, directly or indirectly own any interest in,
manage, control, participate in, consult with, render services for, or in any manner
engage in any business which is involved (or has definite plans to get involved) in
business activities that engage in the business of contract research organization,
recruiting, staffing and placement of personnel in the areas of clinical research,
medical writing, biostatistics and programming. Nothing herein shall prohibit
Employee from being a passive owner of not more than 3% of the outstanding stock of
any class of a corporation which is publicly traded, so long as Employee has no
active participation in the business of such corporation, or
(ii) if he is terminated without Cause and he elects and receives the severance
payments and benefits provided for in Section 4(b)(A) of this Agreement, or he
terminates this Agreement for Good Reason and he elects and receives the severance
payments and benefits provided for in Section 4(b)(A) of this Agreement, he shall
not for a period of eighteen (18) months, directly or indirectly own any interest
in, manage, control, participate in, consult with, render services for, or in any
manner engage in any business which is involved (or has
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definite plans to get involved) in business activities that engage in the business
of contract research organization, recruiting, staffing and placement of personnel
in the areas of clinical research, medical writing, biostatistics and programming.
Nothing herein shall prohibit Employee from being a passive owner of not more than
3% of the outstanding stock of any class of a corporation which is publicly traded,
so long as Employee has no active participation in the business of such corporation,
or
(iii) if Employee voluntarily resigns during the Term, without Good Reason,
and there has not been a Change of Control at the time of Employee’s resignation, he
shall not for a period of one (1) year, directly or indirectly own any interest in,
manage, control, participate in, consult with, render services for, or in any manner
engage in any business which is involved (or has definite plans to get involved) in
business activities that engage in the business of contract research organization,
recruiting, staffing and placement of personnel in the areas of clinical research,
medical writing, biostatistics and programming. Nothing herein shall prohibit
Employee from being a passive owner of not more than 3% of the outstanding stock of
any class of a corporation which is publicly traded, so long as Employee has no
active participation in the business of such corporation; or
(iv) if there is a Change of Control and Employee resigns for any reason or is
terminated other than for Cause or as a result of Employee’s death or Disability and
he elects and receives the payments and benefits set forth in Sections 5(a)(i) and
5(a)(iii) of this Agreement, he shall not for a period of eighteen (18) months,
directly or indirectly own any interest in, manage, control, participate in, consult
with, render services for, or in any manner engage in any business which is involved
(or has definite plans to get involved) in business activities that engage in the
business of contract research organization, recruiting, staffing and placement of
personnel in the areas of clinical research, medical writing, biostatistics and
programming. Nothing herein shall prohibit Employee from being a passive owner of
not more than 3% of the outstanding stock of any class of a corporation which is
publicly traded, so long as Employee has no active participation in the business of
such corporation.
11. Non-Solicitation. Employee agrees that:
(i) if he is terminated for Cause and he elects and receives the severance
payments and benefits provided for in Section 4(d)(A) of this Agreement, he shall
not for a period of one (1) year, he shall not for a period of one (1) year,
directly or indirectly through another entity (A) induce or attempt to induce any
employee of the Company or any Subsidiary or Affiliate to leave the employ of the
Company or such Subsidiary or Affiliate, or in any way interfere with the
relationship between the Company or any Subsidiary or Affiliate and any employee
thereof, (B) hire any person, who was an employee of the Company or any Subsidiary
or Affiliate at any time during the one (1) year immediately preceding Employee’s
termination or resignation, (C) induce or attempt to induce
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any customer, supplier, licensee, licensor, franchisee or other business relation of
the Company or any Subsidiary or Affiliate to cease doing business with the Company
or such Subsidiary or Affiliate, or in any way interfere with the relationship
between any such customer, supplier, licensee, licensor, franchisee or other
business relation and the Company or any Subsidiary or Affiliate (including, without
limitation, making any negative statements or communications about the Company or
its Subsidiaries or Affiliates) or (D) service (except in the capacity of an
employee) any customer, licensee, agent or franchisee of the Company or any
Subsidiary or Affiliate who was a customer, licensee, agent or franchisee of the
Company or any Subsidiary or Affiliate at any time during the one (1) year
immediately preceding Employee’s termination or resignation, or
(ii) if he is terminated without Cause and he elects and receives the severance
payments and benefits provided for in Section 4(b)(A) of this Agreement, or he
terminates this Agreement for Good Reason and he elects and receives the severance
payments and benefits provided for in Section 4(b)(A) of this Agreement, he shall
not for a period of eighteen (18) months, directly or indirectly through another
entity (A) induce or attempt to induce any employee of the Company or any Subsidiary
or Affiliate to leave the employ of the Company or such Subsidiary or Affiliate, or
in any way interfere with the relationship between the Company or any Subsidiary or
Affiliate and any employee thereof, (B) hire any person, who was an employee of the
Company or any Subsidiary or Affiliate at any time during the one (1) year
immediately preceding Employee’s termination or resignation, (C) induce or attempt
to induce any customer, supplier, licensee, licensor, franchisee or other business
relation of the Company or any Subsidiary or Affiliate to cease doing business with
the Company or such Subsidiary or Affiliate, or in any way interfere with the
relationship between any such customer, supplier, licensee, licensor, franchisee or
other business relation and the Company or any Subsidiary or Affiliate (including,
without limitation, making any negative statements or communications about the
Company or its Subsidiaries or Affiliates) or (D) service (except in the capacity of
an employee) any customer, licensee, agent or franchisee of the Company or any
Subsidiary or Affiliate who was a customer, licensee, agent or franchisee of the
Company or any Subsidiary or Affiliate at any time during the one (1) year
immediately preceding Employee’s termination or resignation; or
(iii) if Employee voluntarily resigns during the Term, without Good Reason, and
there has not been a Change of Control at the time of Employee’s resignation, he
shall not for a period of one (1) year, directly or indirectly through another
entity (A) induce or attempt to induce any employee of the Company or any Subsidiary
or Affiliate to leave the employ of the Company or such Subsidiary or Affiliate, or
in any way interfere with the relationship between the Company or any Subsidiary or
Affiliate and any employee thereof, (B) hire any person, who was an employee of the
Company or any Subsidiary or Affiliate at any time during the one (1) year
immediately preceding Employee’s termination or resignation, (C) induce or attempt
to induce any customer, supplier, licensee, licensor, franchisee or other business
relation of the Company or any Subsidiary
-12-
or Affiliate to cease doing business with the Company or such Subsidiary or
Affiliate, or in any way interfere with the relationship between any such customer,
supplier, licensee, licensor, franchisee or other business relation and the Company
or any Subsidiary or Affiliate (including, without limitation, making any negative
statements or communications about the Company or its Subsidiaries or Affiliates) or
(D) service (except in the capacity of an employee) any customer, licensee, agent or
franchisee of the Company or any Subsidiary or Affiliate who was a customer,
licensee, agent or franchisee of the Company or any Subsidiary or Affiliate at any
time during the one (1) year immediately preceding Employee’s termination or
resignation; or
(iv) if there is a Change of Control and Employee resigns for any reason or is
terminated other than for Cause or as a result of Employee’s death or Disability and
he elects and receives the payments and benefits set forth in Sections 5(a)(i) and
5(a)(iii) of this Agreement, he shall not for a period of eighteen (18) months,
directly or indirectly through another entity (A) induce or attempt to induce any
employee of the Company or any Subsidiary or Affiliate to leave the employ of the
Company or such Subsidiary or Affiliate, or in any way interfere with the
relationship between the Company or any Subsidiary or Affiliate and any employee
thereof, (B) hire any person, who was an employee of the Company or any Subsidiary
or Affiliate at any time during the one (1) year immediately preceding Employee’s
termination or resignation, (C) induce or attempt to induce any customer, supplier,
licensee, licensor, franchisee or other business relation of the Company or any
Subsidiary or Affiliate to cease doing business with the Company or such Subsidiary
or Affiliate, or in any way interfere with the relationship between any such
customer, supplier, licensee, licensor, franchisee or other business relation and
the Company or any Subsidiary or Affiliate (including, without limitation, making
any negative statements or communications about the Company or its Subsidiaries or
Affiliates) or (D) service (except in the capacity of an employee) any customer,
licensee, agent or franchisee of the Company or any Subsidiary or Affiliate who was
a customer, licensee, agent or franchisee of the Company or any Subsidiary or
Affiliate at any time during the one (1) year immediately preceding Employee’s
termination or resignation.
12. Enforcement. If, at the time of enforcement of Sections 8, 9, 10 or 11 of this
Agreement, a court holds that the restrictions stated herein are unreasonable under circumstances
then existing, the parties hereto agree that the maximum period, scope or geographical area
reasonable under such circumstances shall be substituted for the stated period, scope or area. The
parties hereto agree that money damages would not be an adequate remedy for any breach of this
Agreement because the services provided by Employee pursuant to this Agreement are unique and
because Employee has access to Confidential Information and Work Product. As such, in the event a
breach or threatened breach of this Agreement the Company or its successors or assigns may, in
addition to other rights and remedies existing in their favor, apply to any court of competent
jurisdiction for specific performance and/or injunctive or other relief in order to enforce, or
prevent any violations of, the provisions hereof (without posting a bond or other security). In
addition, in the event of an actual breach or violation by Employee of
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Sections 10 or 11, the Non-Compete Period and the Non-Solicitation Period shall be tolled until
such breach or violation has been duly cured. Employee hereby acknowledges and agrees that the
restrictions contained in Sections 10 and 11 are reasonable.
13. Employee’s Representations. Employee hereby represents and warrants to the
Company that (i) the execution, delivery and performance of this Agreement by Employee do not and
shall not conflict with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which Employee is a party or by which he is bound, (ii)
Employee is not a party to or bound by any employment agreement, non-compete agreement or
confidentiality agreement with any other person or entity except the Prior Agreement, and (iii) as
of the Effective Date, this Agreement shall be the valid and binding obligation of Employee,
enforceable in accordance with its terms.
14. Company’s Representations. The Company hereby represents and warrants to Employee
that (i) the execution, delivery and performance of this Agreement by the Company does not and
shall not conflict with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which the Company or any of its Subsidiaries or Affiliates
is a party or by which it/they is/are bound, (ii) it has all requisite corporate power and
authority to enter into, execute and deliver this Agreement, and (iii) as of the Effective Date,
this Agreement shall be the valid and binding obligation of the Company, enforceable in accordance
with its terms. The Company further represents that it shall take all actions necessary to comply
with the AIM Rules for companies issued by the Alternative Investment Market of the London Stock
Exchange in connection with its obligations under this Agreement.
15. Definitions.
“Affiliates” shall mean any person or entity controlling, controlled by, or under common
control with, the Company. “Control,” as used in the definition of Affiliate, means the power to
direct the management and policies of a person or entity, directly or indirectly, whether through
the ownership of voting securities, by contract, or otherwise; the terms “controlling” and
“controlled” shall have correlative meanings. Further, any person or entity that owns
beneficially, either directly or through one or more intermediaries, more than ten percent (10%) of
the ownership interests in a specified entity shall be presumed to control such entity for purposes
of the definition of Affiliate
“Board” shall mean the board of directors of the Company.
“Cause” shall mean Employee’s (i) conviction of a felony, (ii) indictment for a felony
involving dishonesty or fraud or the commission of any act or omission involving dishonesty or
fraud, or (iii) gross negligence or willful misconduct with respect to the Company or any of its
Subsidiaries or Affiliates.
“Company Options” shall mean options to purchase shares of the Company’s common stock, no par
value, granted pursuant to the ReSearch Pharmaceutical Services, Inc. 2002 Equity Incentive Plan
effective as of June 6, 2002.
-14-
“Disability” (i) shall mean any physical or mental incapacitation which results in Employee’s
inability to perform his duties and responsibilities for the Company for a total of one hundred
twenty (120) days during any twelve (12)-month period, as determined by an Independent Medical
Doctor and (ii) shall be deemed to have occurred on the later of either the 120th day of such
inability to perform or the date on which the benefits under the Company’s long term disability
insurance become payable to Employee. For the purposes of this definition, an “Independent Medical
Doctor” shall be a medical doctor chosen in the following manner: Employee and the Board shall
each choose a medical doctor and such medical doctors, together, shall choose a third medical
doctor who shall be the Independent Medical Doctor.
“Good Reason” shall mean the following:
(i) a material breach of the Company’s obligations to Employee hereunder, provided that
Employee shall have given written notice thereof to the Company, and the Company shall have failed
to remedy the breach within 20 calendar days after such notice;
(ii) the relocation of Employee’s principal business office outside the metropolitan
Philadelphia area without the consent of Employee;
(iii) the Company materially changes the job description, office title and/or responsibilities
provided for in this Agreement, excluding promotions or increased responsibilities,
provided that Employee shall have given written notice thereof to the Company, and the
Company shall have failed to remedy the breach within 20 calendar days after such notice;
(iv) Employee is removed from the Board without Cause; or
(v) failure of the Company to nominate Employee as a candidate for election to the Board.
provided that in each such case, Good Reason shall be deemed to exist only if Employee
shall have resigned from the Company within one hundred twenty (120) days after the occurrence of
one of the events described above.
“Parent Options” shall mean options to purchase shares of the common stock, par value $0.0001
per share, of Parent granted pursuant to the Parent Option Plan.
“Parent Option Plan” shall mean the [Parent Option Plan] substantially in the form attached
hereto as Exhibit B.
“Subsidiaries” shall mean any entity of which a majority of the securities or other ownership
interests are, at the time of determination, owned by the Company, directly or through one or more
Subsidiaries.
16. Survival. Sections 4, 5, 6, 7, 8, 9, 10, 11, 12, 15 and Sections 16 through 25
shall survive and continue in full force in accordance with their terms notwithstanding any
termination or resignation of Employee’s employment by the Company.
-15-
17. Notices. Any notice provided for in this Agreement shall be in writing and shall
be personally delivered, sent by facsimile (with hard copy to follow by regular mail) or mailed by
overnight courier (by a reputable courier service) or first class mail, return receipt requested,
to the recipient at the address below indicated:
Notices to Employee:
Xxxxxx X. Xxxxxxx
c/o ReSearch Pharmaceutical Services, Inc.
000 Xxxxxxxx Xxxxx
Xx. Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
c/o ReSearch Pharmaceutical Services, Inc.
000 Xxxxxxxx Xxxxx
Xx. Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Notices to the Company:
ReSearch Pharmaceutical Services, Inc.
000 Xxxxxxxx Xxxxx
Xx. Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: [ ]
000 Xxxxxxxx Xxxxx
Xx. Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: [ ]
With a copy to:
Chair, Compensation Committee
ReSearch Pharmaceutical Services, Inc.
000 Xxxxxxxx Xxxxx
Xx. Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
ReSearch Pharmaceutical Services, Inc.
000 Xxxxxxxx Xxxxx
Xx. Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
or such other address or to the attention of such other person as the recipient party shall have
specified by prior written notice to the sending party. Any notice under this Agreement shall be
deemed to have been given when so delivered, sent or mailed.
18. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision or any other jurisdiction, but this Agreement shall be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision
had never been contained herein.
19. Complete Agreement. This Agreement, those documents expressly referred to herein
and other documents of even date herewith embody the complete agreement and understanding between
the parties and supersede and preempt any prior understandings, agreements or representations by or
between the parties, written or oral, which may have related to the subject matter hereof in any
way including, without limitation, that certain Employment
-16-
Agreement, entered into in 2001, by and between ReSearch Pharmaceutical Services, Inc. and Employee
(the “Prior Agreement”).
20. No Strict Construction. The language used in this Agreement shall be deemed to be
the language chosen by the parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party.
21. Counterparts. This Agreement may be executed in separate counterparts (including
by facsimile signature pages), each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
22. Successors and Assigns. This Agreement is intended to bind and inure to the
benefit of and be enforceable by Employee, the Company and their respective heirs, successors and
assigns, except that Employee may not assign his rights or delegate his duties or obligations
hereunder without the prior written consent of the Company. Subject to Article 5 of this
Agreement, the Company may freely assign its rights and obligations hereunder (including by
operation of law), without the consent of, or notice to, Employee.
23. Choice of Law; Consent to Jurisdiction. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and the exhibits and
schedules hereto shall be governed by, and construed in accordance with, the laws of the
Commonwealth of Pennsylvania, without giving effect to any choice of law or conflict of law rules
or provisions (whether of the Commonwealth of Pennsylvania or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the Commonwealth of Pennsylvania.
In the case of any dispute under or in connection with this Agreement, Employee may only bring suit
against the Company in the Courts of the State of Pennsylvania in and for the County of Xxxxxxxxxx
or in the Federal District Court for such geographic location. Employee hereby consents to the
jurisdiction and venue of the courts of the Commonwealth of Pennsylvania in and for the County of
Xxxxxxxxxx or the Federal District Court for such geographic location, provided that such Federal
Court has subject matter jurisdiction over such dispute, and Employee hereby waives any claim he
may have at any time as to forum non conveniens with respect to such venue. The Company shall have
the right to institute any legal action arising out of or relating to this Agreement in any
appropriate court and in any jurisdiction. Any judgment entered against either of the parties in
any proceeding hereunder may be entered and enforced by any court of competent jurisdiction.
24. Effective Date. This Agreement will become effective on the date (the “Effective
Date”) on which the merger of Longxia Acquisition, Inc. (“Longxia”) with and into Research
Pharmaceutical Services, Inc. (“RPS”), pursuant to the Agreement and Plan of Merger by and among
the Company, Longxia, RPS, the RPS Securityholders named therein, and Xxxxxx X. Xxxxxxx and Xxxxxx
Xxxxxx as the RPS Securityholders Committee, (the “Merger”) is consummated. If for any reason the
Merger does not occur, then this Agreement will not be effective and will be of no force or effect.
-17-
25. Amendment and Waiver. The provisions of this Agreement may be amended or waived
only with the prior written consent of the Company and Employee, and no course of conduct or
failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding
effect or enforceability of this Agreement.
* * *
-18-
IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date
first written above.
| CROSS SHORE ACQUISITION CORPORATION |
||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Chief Executive Officer | |||
| /s/ Xxxxxx X. Xxxxxxx | ||||
| Xxxxxx X. Xxxxxxx | ||||
-19-
