Exhibit 10.22
IMS HEALTH INCORPORATED
--------------------------------------------------------------------------------
Employment Agreement for Xxxxxx X. Xxxxxxxx
--------------------------------------------------------------------------------
IMS HEALTH INCORPORATED
--------------------------------------------------------------------------------
Employment Agreement for Xxxxxx X. Xxxxxxxx
--------------------------------------------------------------------------------
Page
1. Employment.......................................................... 1
2. Term................................................................ 1
3. Offices and Duties.................................................. 2
(a) Generally..................................................... 2
(b) Place of Employment........................................... 2
(c) Rank of Executive Within Company.............................. 2
4. Salary and Annual Incentive Compensation............................ 2
(a) Base Salary................................................... 2
(b) Annual Incentive Compensation................................. 3
5. Long Term Compensation, Including Stock Options, and Benefits, Deferred
Compensation, and Expense Reimbursement........................... 3
(a) Executive Compensation Plans.................................. 3
(b) Employee and Executive Benefit Plans.......................... 3
(c) Acceleration of Awards Upon a Change in Control .............. 4
(d) Deferral of Compensation...................................... 4
(e) Company Registration Obligations.............................. 4
(f) Reimbursement of Expenses..................................... 5
6. Termination Due to Retirement, Death, or Disability................. 5
(a) Retirement.................................................... 5
(b) Death......................................................... 5
(c) Disability.................................................... 6
(d) Other Terms of Payment Following Retirement, Death, or Disability.. 7
7. Termination of Employment For Reasons Other Than Retirement,
Death, or Disability.............................................. 8
(a) Termination by the Company for Cause.......................... 8
(b) Termination by Executive Other Than For Good Reason........... 8
(c) Termination by the Company Without Cause Prior to or More than Two
Years After a Change in Control............................. 8
(d) Termination by Executive for Good Reason Prior to or More than Two
Years After a Change in Control............................. 10
(e) Termination by the Company Without Cause Within Two Years After
a Change in Control......................................... 12
(f) Termination by Executive for Good Reason Within Two Years After
a Change in Control......................................... 14
(g) Other Terms Relating to Certain Terminations of Employment.... 17
8. Definitions Relating to Termination Events.......................... 17
(a) "Cause"....................................................... 17
(b) "Change in Control"........................................... 17
(c) "Compensation Accrued at Termination"......................... 18
(d) "Disability".................................................. 19
(e) "Good Reason"................................................. 19
(f) "Potential Change in Control"................................. 20
9. Rabbi Trust Obligation Upon Potential Change in Control; Excise
Tax Related Provisions............................................ 21
(a) Rabbi Trust Funded Upon Potential Change in Control........... 21
(b) Gross-up If Excise Tax Would Apply............................ 21
10. Non-Competition and Non-Disclosure; Executive Cooperation;
Non-Disparagement................................................. 23
(a) Non-Competition............................................... 23
(b) Non-Disclosure; Ownership of Work............................. 23
(c) Cooperation With Regard to Litigation......................... 24
(d) Non-Disparagement............................................. 24
(e) Release of Employment Claims.................................. 24
(f) Forfeiture of Outstanding Options............................. 24
(g) Survival...................................................... 25
11. Governing Law; Disputes; Arbitration................................ 25
(a) Governing Law................................................. 25
(b) Reimbursement of Expenses in Enforcing Rights................. 25
(c) Arbitration................................................... 25
(d) Interest on Unpaid Amounts.................................... 25
12. Miscellaneous....................................................... 26
(a) Integration................................................... 26
(b) Successors; Transferability................................... 26
(c) Beneficiaries................................................. 26
(d) Notices....................................................... 26
(e) Reformation................................................... 27
(f) Headings...................................................... 27
(g) No General Waivers............................................ 27
(h) No Obligation To Mitigate..................................... 27
(i) Offsets; Withholding.......................................... 27
(j) Successors and Assigns........................................ 27
(k) Counterparts.................................................. 27
13. Indemnification..................................................... 28
IMS HEALTH INCORPORATED
--------------------------------------------------------------------------------
Employment Agreement for Xxxxxx X. Xxxxxxxx
--------------------------------------------------------------------------------
THIS EMPLOYMENT AGREEMENT by and between IMS HEALTH INCORPORATED, a
Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxxxx ("Executive") shall
become effective as of July 1, 1998 (the "Effective Date").
WITNESSETH
WHEREAS, Executive has served the Company and its predecessors in the
position of Chairman of the Board and Chief Executive Officer since April 1995,
and in senior executive capacities since January 1985;
WHEREAS, the Company desires to continue to employ Executive as Chairman
of the Board and Chief Executive Officer of the Company, and Executive desires
to accept such employment on the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
contained herein, and other good and valuable consideration the receipt and
adequacy of which the Company and Executive each hereby acknowledge, the Company
and Executive hereby agree as follows:
1. Employment.
The Company hereby agrees to employ Executive as its Chairman of the
Board and Chief Executive Officer, and Executive hereby agrees to accept such
employment and serve in such capacities, during the Term as defined in Section 2
(subject to Section 7(c) and
7(e)) and upon the terms and conditions set forth in this Employment Agreement
(the "Agreement").
2. Term.
The term of employment of Executive under this Agreement (the "Term")
shall be the period commencing on the Effective Date and ending on June 30, 2001
and any period of extension thereof in accordance with this Section 2, except
that the Term will end at a date, prior to the end of such period or extension
thereof, specified in Section 6 or 7 in the event of termination of Executive's
employment. The Term, if not previously ended, shall be extended automatically
without further action by either party by one additional year (added to the end
of the Term) first on June 30, 2001 (extending the Term to June 30, 2002) and on
each succeeding June 30 thereafter, unless either party shall have served
written notice in accordance with Section 12(d) upon the other party on or
before the December 31 preceding a June 30 extension date electing not to extend
the Term further as of that June 30 extension date, in which case employment
shall terminate on that June 30 and the Term shall end at that date, subject to
earlier termination of employment and earlier termination of the Term in
accordance with Section 6 or 7. The foregoing notwithstanding, in the event
there occurs a Potential Change in Control during the period of 180 days prior
to the June 30 on which the Term will terminate as a result of notice given by
Executive hereunder, the Term shall be extended automatically at that June 30 by
an additional period such that the Term will extend until the 180th day
following such Potential Change in Control.
3. Offices and Duties.
The provisions of this Section 3 will apply during the Term, except as
otherwise provided in Section 7(c) and 7(e):
(a) Generally. Executive shall serve as the Chief Executive Officer and
Chairman of the Board of the Company and, if elected, shall serve as a member of
the Board of Directors of the Company (the "Board") and, for so long as he is
serving on the Board, Executive agrees to serve as a member of any Board
committee if the Board shall elect Executive to such committee. In any and all
such capacities, Executive shall report only to the Board of Directors of the
Company. Executive shall have and perform such duties, responsibilities, and
authorities as are customary for the chairman of the board and chief executive
officer of a publicly held corporation of the size, type, and nature of the
Company as they may exist from time to time and consistent with such position
and status, but in no event shall such duties, responsibilities, and authorities
be reduced from those of Executive at the Effective Date. Executive shall devote
his full business time and attention, and his best efforts, abilities,
experience, and talent, to the positions of Chairman of the Board and Chief
Executive Officer and for the businesses of the Company without commitment to
other business endeavors, except that Executive (i) may make personal
investments which are not in conflict with his duties to the Company and manage
personal and family financial and legal affairs, (ii) may serve as a member of
the board of directors of each of State Street Corporation, Gartner Group, Inc.,
and the New York Stock Exchange, Inc., (iii) undertake public speaking
engagements, and (iv) serve as a director of (or similar position with) any
other business or an
-2-
educational, charitable, community, civic, religious, or similar type of
organization with the approval of the Board of Directors of the Company, so long
as such activities (i.e., those listed in clauses (i) through (iv)) do not
preclude or render unlawful Executive's employment or service to the Company or
otherwise materially inhibit the performance of Executive's duties under this
Agreement or materially impair the business of the Company or its subsidiaries.
(b) Place of Employment. Executive's principal place of employment shall
be at the Corporate Offices of the Company which shall be in (i) New York City,
(ii) Westchester County, New York, (iii) Fairfield County, Connecticut (iv)
Xxxxxxxxxx County, Pennsylvania, (v) Passaic County, New Jersey, or (vi) London,
England.
(c) Rank of Executive Within Company. As Chairman of the Board and Chief
Executive Officer of the Company, Executive shall be the highest-ranking
executive of the Company.
4. Salary and Annual Incentive Compensation.
As partial compensation for the services to be rendered hereunder by
Executive, the Company agrees to pay to Executive during the Term the
compensation set forth in this Section 4.
(a) Base Salary. The Company will pay to Executive during the Term a base
salary at the initial annual rate of $775,000, payable in cash in substantially
equal semi-monthly installments commencing at the beginning of the Term, and
otherwise in accordance with the Company's usual payroll practices with respect
to senior executives (except to the extent deferred under Section 5(d)).
Executive's annual base salary shall be reviewed by the Compensation and
Benefits Committee of the Board (the "Committee") at least once in each calendar
year and may be increased above, but may not be reduced below, the then-current
rate of such base salary. For purposes of this Agreement, "Base Salary" means
Executive's then-current base salary.
(b) Annual Incentive Compensation. The Company will pay to Executive
during the Term annual incentive compensation which shall offer to Executive an
opportunity to earn additional compensation based upon performance in amounts
determined by the Committee in accordance with the applicable plan and
consistent with past practices of the Company; provided, however, that the
annual target incentive opportunity shall be not less than the greater of 100%
of Base Salary or the annual target incentive opportunity for the prior year for
achievement of target level performance, with the nature of the performance and
the levels of performance triggering payments of such annual target incentive
compensation for each year to be established and communicated to Executive
during the first quarter of such year by the Committee. In addition, the
Committee (or the Board) may determine, in its discretion, to increase the
Executive's annual target incentive opportunity or provide an additional annual
incentive opportunity, in excess of the annual target incentive opportunity,
payable for performance in excess of or in addition to the performance required
for payment of the annual target incentive amount. Any annual incentive
compensation payable to Executive shall be paid in accordance with the Company's
usual practices with respect to payment of incentive
-3-
compensation to senior executives (except to the extent deferred under Section
5(d)).
5. Long-Term Compensation, Including Stock Options, and Benefits,
Deferred Compensation, and Expense Reimbursement
(a) Executive Compensation Plans. Executive shall be entitled during the
Term to participate, without discrimination or duplication, in all executive
compensation plans and programs intended for general participation by senior
executives of the Company, as presently in effect or as they may be modified or
added to by the Company from time to time, subject to the eligibility and other
requirements of such plans and programs, including without limitation any stock
option plans, plans under which restricted stock/restricted stock units,
performance-based restricted stock/restricted stock units ("PERS") or
performance-accelerated restricted stock/restricted stock units ("PARS") may be
awarded, other annual and long-term cash and/or equity incentive plans, and
deferred compensation plans; provided, however, that such plans and programs, in
the aggregate, shall provide Executive with compensation and incentive award
opportunities substantially no less favorable than those provided by the Company
to Executive under such plans and programs as in effect on the Effective Date.
(b) Employee and Executive Benefit Plans. Executive shall be entitled
during the Term to participate, without discrimination or duplication, in all
employee and executive benefit plans and programs of the Company, as presently
in effect or as they may be modified or added to by the Company from time to
time, to the extent such plans are available to other senior executives or
employees of the Company, subject to the eligibility and other requirements of
such plans and programs, including without limitation plans providing pensions,
supplemental pensions, supplemental and other retirement benefits, medical
insurance, life insurance, disability insurance, and accidental death or
dismemberment insurance, as well as savings, profit-sharing, and stock ownership
plans; provided, however, that such benefit plans and programs, in the
aggregate, shall provide Executive with benefits and compensation substantially
no less favorable than those provided by the Company to Executive under such
plans and programs as in effect on the Effective Date. The foregoing
notwithstanding, Executive shall not be eligible to participate or receive
benefits under the Company's Employee Protection Plan.
In furtherance of and not in limitation of the foregoing, during the
Term:
(i) Executive will participate as Chief Executive Officer in all
executive and employee vacation and time-off programs;
(ii) The Company will provide Executive with coverage as Chief
Executive Officer with respect to long-term disability insurance
and benefits substantially no less favorable (including any
required contributions by Executive) than such insurance and
benefits in effect on the Effective Date;
(iii) Executive will be covered by Company-paid group and individual
term life insurance providing a death benefit no less than the
death benefit provided under Company-paid insurance in effect at
the Effective Date; provided,
-4-
however, that, with the consent of Executive, such insurance may
be combined with a supplementary retirement funding vehicle;
(iv) Executive will be entitled to retirement benefits substantially no
less favorable than those under the defined benefit pension plans
and programs of the Company, including the IMS Health Incorporated
Supplemental Executive Retirement Plan (the "SERP"), as in effect
on the Effective Date; and
(v) The Company will provide Executive with health and medical
benefits consistent with its policies for other senior executives.
Any provision to the contrary contained in this Agreement
notwithstanding, unless Executive is terminated by the Company for "Cause" (as
defined in Section 8(a)) or Executive terminates voluntarily and not for "Good
Reason" (as defined in Section 8(e)), Executive may elect continued
participation after termination of employment in the Company's health and
medical coverage for himself and his spouse and dependent children after such
coverage would otherwise end until such time as Executive becomes eligible for
similar coverage with a subsequent employer or other entity to which Executive
provides services or becomes eligible for Medicare (under rules in effect at the
Effective Date hereof); provided, however, that in the event of such election,
Executive shall pay the Company each year an amount equal to the then-current
annual COBRA premium being paid (or payable) by any other former employee of the
Company, unless otherwise provided under Section 6 or 7.
(c) Acceleration of Awards Upon a Change in Control. In the event of a
Change in Control (as defined in Section 8(b)), all outstanding stock options
and restricted stock then held by Executive shall become vested and exercisable.
(d) Deferral of Compensation. If the Company has in effect or adopts any
deferral program or arrangement permitting executives to elect to defer any
compensation, Executive will be eligible to participate in such program on terms
no less favorable than the terms of participation of any other executive officer
of the Company.
(e) Company Registration Obligations. The Company will use its best
efforts to file with the Securities and Exchange Commission and thereafter
maintain the effectiveness of one or more registration statements registering
under the Securities Act of 1933, as amended (the "1933 Act"), the offer and
sale of shares by the Company to Executive pursuant to stock options or other
equity-based awards granted to Executive under Company plans or otherwise or, if
shares are acquired by Executive in a transaction not involving an offer or sale
to Executive but resulting in the acquired shares being "restricted securities"
for purposes of the 1933 Act, registering the reoffer and resale of such shares
by Executive.
(f) Reimbursement of Expenses. The Company will promptly reimburse
Executive for all reasonable business expenses and disbursements incurred by
Executive in the performance of Executive's duties during the Term in accordance
with the Company's reimbursement policies as in effect from time to time.
-5-
6. Termination Due to Retirement, Death, or Disability.
(a) Retirement. Executive may elect to terminate employment hereunder by
retirement at or after age 55 or at such earlier age as may be approved by the
Board (in either case, "Retirement"). At the time Executive's employment
terminates due to Retirement, the Term will terminate, all obligations of the
Company and Executive under Sections 1 through 5 of this Agreement will
immediately cease except for obligations which expressly continue after
termination of employment due to Retirement, and the Company will pay Executive,
and Executive will be entitled to receive, the following:
(i) Executive's Compensation Accrued at Termination (as defined in
Section 8(c));
(ii) In lieu of any annual incentive compensation under Section 4(b)
for the year in which Executive's employment terminated, an amount
equal to the portion of annual incentive compensation that would
have become payable in cash to Executive (i.e., excluding the
portion payable in PERS or in other non-cash awards) for that year
if his employment had not terminated, based on performance
actually achieved in that year (determined by the Committee
following completion of the performance year), multiplied by a
fraction the numerator of which is the number of days Executive
was employed in the year of termination and the denominator of
which is the total number of days in the year of termination;
(iii) The vesting and exercisability of stock options held by Executive
at termination and all other terms of such options shall be
governed by the plans and programs and the agreements and other
documents pursuant to which such options were granted (subject to
Section 10(f) hereof); and
(iv) All restricted stock and deferred stock awards, including
outstanding PERS awards, all other long-term incentive awards, and
all deferral arrangements under Section 5(d), shall be governed by
the plans and programs under which the awards were granted or
governing the deferral, and all rights under the SERP and any
other benefit plan shall be governed by such plan.
(b) Death. In the event of Executive's death which results in the
termination of Executive's employment, the Term will terminate, all obligations
of the Company and Executive under Sections 1 through 5 of this Agreement will
immediately cease except for obligations which expressly continue after death,
and the Company will pay Executive's beneficiary or estate, and Executive's
beneficiary or estate will be entitled to receive, the following:
(i) Executive's Compensation Accrued at Termination;
(ii) In lieu of any annual incentive compensation under Section 4(b)
for the year in which Executive's death occurred, an amount equal
to the portion of annual incentive compensation that would have
become payable in cash to Executive
-6-
(i.e., excluding the portion payable in PERS or in other non-cash
awards) for that year if his employment had not terminated, based
on performance actually achieved in that year (determined by the
Committee following completion of the performance year),
multiplied by a fraction the numerator of which is the number of
days Executive was employed in the year of his death and the
denominator of which is the total number of days in the year of
death;
(iii) The vesting and exercisability of stock options held by Executive
at death and all other terms of such options shall be governed by
the plans and programs and the agreements and other documents
pursuant to which such options were granted; and
(iv) All restricted stock and deferred stock awards, including
outstanding PERS awards, all other long-term incentive awards, and
all deferral arrangements under Section 5(d), shall be governed by
the plans and programs under which the awards were granted or
governing the deferral, and all rights under the SERP and any
other benefit plan shall be governed by such plan.
(c) Disability. The Company may terminate the employment of Executive
hereunder due to the Disability (as defined in Section 8(d)) of Executive. Such
employment shall terminate at the expiration of the 30-day period referred to in
the definition of Disability set forth in Section 8(d), unless Executive has
returned to service and presented to the Company a certificate of good health
prior to such termination as specified in Section 8(d). Upon termination of
employment, the Term will terminate, all obligations of the Company and
Executive under Sections 1 through 5 of this Agreement will immediately cease
except for obligations which expressly continue after termination of employment
due to Disability, and the Company will pay Executive, and Executive will be
entitled to receive, the following:
(i) Executive's Compensation Accrued at Termination;
(ii) In lieu of any annual incentive compensation under Section 4(b)
for the year in which Executive's employment terminated, an amount
equal to the portion of annual incentive compensation that would
have become payable in cash to Executive (i.e., excluding the
portion payable in PERS or in other non-cash awards) for that year
if his employment had not terminated, based on performance
actually achieved in that year (determined by the Committee
following completion of the performance year), multiplied by a
fraction the numerator of which is the number of days Executive
was employed in the year of termination and the denominator of
which is the total number of days in the year of termination;
(iii) Stock options held by Executive at termination, if not then vested
and exercisable, will become fully vested and exercisable at the
date of such termination, and, in other respects (including the
period following termination during which such options may be
exercised), such options shall be governed by the plans and
programs and the agreements and other documents pursuant to
-7-
which such options were granted;
(iv) Any performance objectives upon which the earning of
performance-based restricted stock and deferred stock awards,
including outstanding PERS awards, and other long-term incentive
awards is conditioned shall be deemed to have been met at target
level at the date of termination, and restricted stock and
deferred stock awards, including outstanding PERS awards, and
other long-term incentive awards (to the extent then or previously
earned, in the case of performance-based awards) shall become
fully vested and non-forfeitable at the date of such termination,
and, in other respects, such awards shall be governed by the plans
and programs and the agreements and other documents pursuant to
which such awards were granted;
(v) Disability benefits shall be payable in accordance with the
Company's plans, programs and policies (including the SERP), and
all deferral arrangements under Section 5(d) will be settled in
accordance with the plans and programs governing the deferral; and
(vi) For the period extending from the date of termination due to
Disability until the date Executive reaches age 65, Executive
shall continue to participate in those employee and executive
benefit plans and programs under Section 5(b) to the extent such
plans and programs provide medical insurance, disability insurance
and life insurance benefits (but not other benefits, such as
pension and retirement benefits, provided under Section 5(b)) in
which Executive was participating immediately prior to
termination, the terms of which allow Executive's continued
participation, as if Executive had continued in employment with
the Company during such period or, if the terms of such plans or
programs do not allow Executive's continued participation,
Executive shall be paid a cash payment equivalent on an after-tax
basis to the value of the additional benefits (of the type
described in this Section 6(c)(vi)) Executive would have received
under such plans or programs had Executive continued to be
employed during such period following Executive's termination
until age 65, with such benefits provided by the Company at the
same times and in the same manner as such benefits would have been
provided to Executive under such plans and programs (it being
understood that the value of any insurance-provided benefits will
be based on the premium cost to Executive, which shall not exceed
the highest risk premium charged by a carrier having an investment
grade or better credit rating); provided, however, that Executive
must continue to satisfy the conditions set forth in Section 10 in
order to continue receiving the benefits provided under this
Section 6(c)(vi).
(d) Other Terms of Payment Following Retirement, Death, or Disability.
Nothing in this Section 6 shall limit the benefits payable or provided In the
event Executive's employment terminates due to Retirement, death, or Disability
under the terms of plans or programs of the Company more favorable to the
Executive (or his beneficiaries) than the benefits payable or provided under
this Section 6 (except in the case of annual incentives in lieu
-8-
of which amounts are paid hereunder), including plans and programs adopted after
the date of this Agreement. Amounts payable under this Section 6 following
Executive's termination of employment, other than those expressly payable
following determination of performance for the year of termination for purposes
of annual incentive compensation or otherwise expressly payable on a deferred
basis, will be paid as promptly as practicable after such termination of
employment.
7. Termination of Employment For Reasons Other Than Retirement,
Death, or Disability.
(a) Termination by the Company for Cause. The Company may terminate the
employment of Executive hereunder for Cause (as defined in Section 8(a)) at any
time. At the time Executive's employment is terminated for Cause the Term will
terminate, all obligations of the Company and Executive under Sections 1 through
5 of this Agreement will immediately cease, and the Company will pay Executive,
and Executive will be entitled to receive, the following:
(i) Executive's Compensation Accrued at Termination (as defined in
Section 8(c));
(ii) All stock options, restricted stock and deferred stock awards,
including outstanding PERS awards, and all other long-term
incentive awards will be governed by the terms of the plans and
programs under which the awards were granted; and
(iii) All deferral arrangements under Section 5(d) will be settled in
accordance with the plans and programs governing the deferral, and
all rights under the SERP and any other benefit plan shall be
governed by such plan.
(b) Termination by Executive Other Than For Good Reason. Executive may
terminate his employment hereunder voluntarily for reasons other than Good
Reason (as defined in Section 8(e)) at any time. An election by Executive not to
extend the Term pursuant to Section 2 hereof shall be deemed to be a termination
of employment by Executive for reasons other than Good Reason at the date of
expiration of the Term, unless a Change in Control (as defined in Section 8(b))
occurs prior to, and there exists Good Reason at, such date of expiration. At
the time Executive's employment is terminated by Executive other than for Good
Reason the Term will terminate, all obligations of the Company and Executive
under Sections 1 through 5 of this Agreement will immediately cease, and the
Company will pay Executive, and Executive will be entitled to receive, the
following:
(i) Executive's Compensation Accrued at Termination;
(ii) All stock options, restricted stock and deferred stock awards,
including outstanding PERS awards, and all other long-term
incentive awards will be governed by the terms of the plans and
programs under which the awards were granted; and
-9-
(iii) All deferral arrangements under Section 5(d) will be settled in
accordance with the plans and programs governing the deferral, and
all rights under the SERP and any other benefit plan shall be
governed by such plan.
(c) Termination by the Company Without Cause Prior to or More than Two
Years After a Change in Control. The Company may terminate the employment of
Executive hereunder without Cause, if at the date of termination no Change in
Control has occurred or such date of termination is at least two years after the
most recent Change in Control, upon at least 90 days' written notice to
Executive. The foregoing notwithstanding, the Company may elect, by written
notice to Executive, to terminate Executive's positions specified in Sections 1
and 3 and all other obligations of Executive and the Company under Section 3 at
a date earlier than the expiration of such 90-day period, if so specified by the
Company in the written notice, provided that Executive shall be treated as an
employee of the Company (without any assigned duties) for all other purposes of
this Agreement, including for purposes of Sections 4 and 5, from such specified
date until the expiration of such 90-day period. An election by the Company not
to extend the Term pursuant to Section 2 hereof shall be deemed to be a
termination of Executive's employment by the Company without Cause at the date
of expiration of the Term and shall be subject to this Section 7(c) if at the
date of such termination no Change in Control has occurred or such date of
termination is at least two years after the most recent Change in Control;
provided, however, that, if Executive has attained age 65 at such date of
termination, such termination shall be deemed a Retirement of Executive. At the
time Executive's employment is terminated by the Company (i.e., at the
expiration of such notice period), the Term will terminate, all remaining
obligations of the Company and Executive under Sections 1 through 5 of this
Agreement will immediately cease (except as expressly provided below), and the
Company will pay Executive, and Executive will be entitled to receive, the
following:
(i) Executive's Compensation Accrued at Termination;
(ii) Cash in an aggregate amount equal to two times the sum of (A)
Executive's Base Salary under Section 4(a) immediately prior to
termination plus (B) an amount equal to the greater of (x) the
portion of Executive's annual target incentive compensation
potentially payable in cash to Executive (i.e., excluding the
portion payable in PERS or in other non-cash awards) for the year
of termination or (y) the portion of Executive's annual incentive
compensation that became payable in cash to Executive (i.e.,
excluding the portion payable in PERS or in other non-cash awards)
for the latest year preceding the year of termination based on
performance actually achieved in that latest year. The amount
determined to be payable under this Section 7(c)(ii) shall be
payable in monthly installments over the 24 months following
termination, without interest, except the Company may elect to
accelerate payment of the remaining balance of such amount and to
pay it as a lump sum, without discount;
(iii) In lieu of any annual incentive compensation under Section 4(b)
for the year in which Executive's employment terminated, an amount
equal to the portion of Executive's annual target incentive
compensation potentially payable in cash to
-10-
Executive (i.e., excluding the portion payable in PERS or in other
non-cash awards) for the year of termination, multiplied by a
fraction the numerator of which is the number of days Executive
was employed in the year of termination and the denominator of
which is the total number of days in the year of termination;
(iv) Stock options held by Executive at termination, if not then vested
and exercisable, will become fully vested and exercisable at the
date of such termination, and, in other respects (including the
period following termination during which such options may be
exercised), such options shall be governed by the plans and
programs and the agreements and other documents pursuant to which
such options were granted;
(v) Any performance objectives upon which the earning of
performance-based restricted stock and deferred stock awards,
including outstanding PERS awards, and other long-term incentive
awards is conditioned shall be deemed to have been met at target
level at the date of termination, and restricted stock and
deferred stock awards, including outstanding PERS awards, and
other long-term incentive awards (to the extent then or previously
earned, in the case of performance-based awards) shall become
fully vested and non-forfeitable at the date of such termination,
and, in other respects, such awards shall be governed by the plans
and programs and the agreements and other documents pursuant to
which such awards were granted;
(vi) All deferral arrangements under Section 5(d) will be settled in
accordance with the plans and programs governing the deferral;
(vii) For a period of two years after such termination (but not after
Executive attains age 65), Executive shall continue to participate
in those employee and executive benefit plans and programs under
Section 5(b) to the extent such plans and programs provide medical
insurance, disability insurance and life insurance benefits (but
not other benefits, such as pension and retirement benefits,
provided under Section 5(b)) in which Executive was participating
immediately prior to termination, the terms of which allow
Executive's continued participation, as if Executive had continued
in employment with the Company during such period; provided,
however, that such participation shall terminate, or the benefits
under such plans and programs shall be reduced, if and to the
extent Executive becomes covered (or is eligible to become
covered) by plans of a subsequent employer or other entity to
which Executive provides services during such period providing
comparable benefits. If the terms of the Company plans and
programs referred to in this Section 7(c)(vii) do not allow
Executive's continued participation, Executive shall be paid a
cash payment equivalent on an after-tax basis to the value of the
additional benefits described in this Section 7(c)(vii) Executive
would have received under such plans or programs had Executive
continued to be employed during such period, with such benefits
provided by the Company at the same times and in the same manner
as such benefits would
-11-
have been provided to Executive under such plans and programs (it
being understood that the value of any insurance-provided benefits
will be based on the premium cost to Executive, which shall not
exceed the highest risk premium charged by a carrier having an
investment grade or better credit rating); provided, however, that
Executive must continue to satisfy the conditions set forth in
Section 10 in order to continue receiving the benefits provided
under this Section 7(c)(vii). Executive agrees to promptly notify
the Company of any employment or other arrangement by which
Executive provides services during the benefits-continuation
period and of the nature and extent of benefits for which
Executive becomes eligible during such period which would reduce
or terminate benefits under this Section 7(c)(vii); and the
Company be entitled to recover from Executive any payments and the
fair market value of benefits previously made or provided to
Executive hereunder which would not have been paid under this
Section 7(c)(vii) if the Company had received adequate prior
notice as required by this sentence.
(d) Termination by Executive for Good Reason Prior to or More than Two
Years After a Change in Control. Executive may terminate his employment
hereunder for Good Reason, prior to a Change in Control or after the second
anniversary of the most recent Change in Control, upon 90 days' written notice
to the Company; provided, however, that, if the Company has corrected the basis
for such Good Reason within 30 days after receipt of such notice, Executive may
not terminate his employment for Good Reason, and therefore Executive's notice
of termination will automatically become null and void. At the time Executive's
employment is terminated by Executive for Good Reason (i.e., at the expiration
of such notice period), the Term will terminate, all obligations of the Company
and Executive under Sections 1 through 5 of this Agreement will immediately
cease (except as expressly provided below), and the Company will pay Executive,
and Executive will be entitled to receive, the following:
(i) Executive's Compensation Accrued at Termination;
(ii) Cash in an aggregate amount equal to two times the sum of (A)
Executive's Base Salary under Section 4(a) immediately prior to
termination plus (B) an amount equal to the greater of (x) the
portion of Executive's annual target incentive compensation
potentially payable in cash to Executive (i.e., excluding the
portion payable in PERS or in other non-cash awards) for the year
of termination or (y) the portion of Executive's annual incentive
compensation that became payable in cash to Executive (i.e.,
excluding the portion payable in PERS or in other non-cash awards)
for the latest year preceding the year of termination based on
performance actually achieved in that latest year. The amount
determined to be payable under this Section 7(d)(ii) shall be
payable in monthly installments over the 24 months following
termination, without interest, except the Company may elect to
accelerate payment of the remaining balance of such amount and to
pay it as a lump sum, without discount;
(iii) In lieu of any annual incentive compensation under Section 4(b)
for the year in
-12-
which Executive's employment terminated, an amount equal to the
portion of Executive's annual target incentive compensation
potentially payable in cash to Executive (i.e., excluding the
portion payable in PERS or in other non-cash awards) for the year
of termination, multiplied by a fraction the numerator of which is
the number of days Executive was employed in the year of
termination and the denominator of which is the total number of
days in the year of termination;
(iv) Stock options held by Executive at termination, if not then vested
and exercisable, will become fully vested and exercisable at the
date of such termination, and, in other respects (including the
period following termination during which such options may be
exercised), such options shall be governed by the plans and
programs and the agreements and other documents pursuant to which
such options were granted;
(v) Any performance objectives upon which the earning of
performance-based restricted stock and deferred stock awards,
including outstanding PERS awards, and other long-term incentive
awards is conditioned shall be deemed to have been met at target
level at the date of termination, and restricted stock and
deferred stock awards, including outstanding PERS awards, and
other long-term incentive awards (to the extent then or previously
earned, in the case of performance-based awards) shall become
fully vested and non-forfeitable at the date of such termination,
and, in other respects, such awards shall be governed by the plans
and programs and the agreements and other documents pursuant to
which such awards were granted;
(vi) All deferral arrangements under Section 5(d) will be settled in
accordance with the plans and programs governing the deferral;
(vii) For a period of two years after such termination (but not after
Executive attains age 65), Executive shall continue to participate
in those employee and executive benefit plans and programs under
Section 5(b) to the extent such plans and programs provide medical
insurance, disability insurance and life insurance benefits (but
not other benefits, such as pension and retirement benefits,
provided under Section 5(b)) in which Executive was participating
immediately prior to termination, the terms of which allow
Executive's continued participation, as if Executive had continued
in employment with the Company during such period; provided,
however, that such participation shall terminate, or the benefits
under such plans and programs shall be reduced, if and to the
extent Executive becomes covered (or is eligible to become
covered) by plans of a subsequent employer or other entity to
which Executive provides services during such period providing
comparable benefits. If the terms of the Company plans and
programs referred to in this Section 7(d)(vii) do not allow
Executive's continued participation, Executive shall be paid a
cash payment equivalent on an after-tax basis to the value of the
additional benefits described in this Section 7(d)(vii) Executive
would have received under such plans or programs had Executive
-13-
continued to be employed during such period, with such benefits
provided by the Company at the same times and in the same manner
as such benefits would have been provided to Executive under such
plans and programs (it being understood that the value of any
insurance-provided benefits will be based on the premium cost to
Executive, which shall not exceed the highest risk premium charged
by a carrier having an investment grade or better credit rating);
provided, however, that Executive must continue to satisfy the
conditions set forth in Section 10 in order to continue receiving
the benefits provided under this Section 7(d)(vii). Executive
agrees to promptly notify the Company of any employment or other
arrangement by which Executive provides services during the
benefits-continuation period and of the nature and extent of
benefits for which Executive becomes eligible during such period
which would reduce or terminate benefits under this Section
7(d)(vii); and the Company shall be entitled to recover from
Executive any payments and the fair market value of benefits
previously made or provided to Executive hereunder which would not
have been paid under this Section 7(d)(vii) if the Company had
received adequate prior notice as required by this sentence.
If any payment or benefit under this Section 7(d) is based on Base Salary or
other level of compensation or benefits at the time of Executive's termination
and if a reduction in such Base Salary or other level of compensation or benefit
was the basis for Executive's termination for Good Reason, then the Base Salary
or other level of compensation in effect before such reduction shall be used to
calculate payments or benefits under this Section 7(d).
(e) Termination by the Company Without Cause Within Two Years After a
Change in Control. The Company may terminate the employment of Executive
hereunder without Cause, simultaneously with or within two years after a Change
in Control, upon at least 90 days' written notice to Executive. The foregoing
notwithstanding, the Company may elect, by written notice to Executive, to
terminate Executive's positions specified in Sections 1 and 3 and all other
obligations of Executive and the Company under Section 3 at a date earlier than
the expiration of such 90-day notice period, if so specified by the Company in
the written notice, provided that Executive shall be treated as an employee of
the Company (without any assigned duties) for all other purposes of this
Agreement, including for purposes of Sections 4 and 5, from such specified date
until the expiration of such 90-day period. An election by the Company not to
extend the Term pursuant to Section 2 hereof shall be deemed to be a termination
of Executive's employment by the Company without Cause at the date of expiration
of the Term and shall be subject to this Section 7(e) if the date of such
termination coincides with or is within two years after a Change in Control;
provided, however, that, if Executive has attained age 65 at such date of
termination, such termination shall be deemed a Retirement of Executive. At the
time Executive's employment is terminated by the Company (i.e., at the
expiration of such notice period), the Term will terminate, all remaining
obligations of the Company and Executive under Sections 1 through 5 of this
Agreement will immediately cease (except as expressly provided below), and the
Company will pay Executive, and Executive will be entitled to receive, the
following:
(i) Executive's Compensation Accrued at Termination;
-14-
(ii) Cash in an aggregate amount equal to three times the sum of (A)
Executive's Base Salary under Section 4(a) immediately prior to
termination plus (B) an amount equal to the greater of (x) the
portion of Executive's annual target incentive compensation
potentially payable in cash to Executive (i.e., excluding the
portion payable in PERS or in other non-cash awards) for the year
of termination or (y) the portion of Executive's annual incentive
compensation that became payable in cash to Executive (i.e.,
excluding the portion payable in PERS or in other non-cash awards)
for the latest year preceding the year of termination based on
performance actually achieved in that latest year. The amount
determined to be payable under this Section 7(e)(ii) shall be paid
by the Company not later than 15 days after Executive's
termination;
(iii) In lieu of any annual incentive compensation under Section 4(b)
for the year in which Executive's employment terminated, an amount
equal to the portion of Executive's annual target incentive
compensation potentially payable in cash to Executive (i.e.,
excluding the portion payable in PERS or in other non-cash awards)
for the year of termination, multiplied by a fraction the
numerator of which is the number of days Executive was employed in
the year of termination and the denominator of which is the total
number of days in the year of termination;
(iv) Stock options held by Executive at termination, if not then vested
and exercisable, will become fully vested and exercisable at the
date of such termination, and any such options granted on or after
the date hereof shall remain outstanding and exercisable until the
stated expiration date of the Option as though Executive's
employment did not terminate, and, in other respects, such options
shall be governed by the plans and programs and the agreements and
other documents pursuant to which such options were granted;
(v) Any performance objectives upon which the earning of
performance-based restricted stock and deferred stock awards,
including outstanding PERS awards, and other long-term incentive
awards is conditioned shall be deemed to have been met at target
level at the date of termination, and restricted stock and
deferred stock awards, including outstanding PERS awards, and
other long-term incentive awards (to the extent then or previously
earned, in the case of performance-based awards) shall become
fully vested and non-forfeitable at the date of such termination,
and, in other respects, such awards shall be governed by the plans
and programs and the agreements and other documents pursuant to
which such awards were granted;
(vi) All deferral arrangements under Section 5(d) will be settled in
accordance with the plans and programs governing the deferral;
(vii) For purposes of the SERP, Executive shall be credited with
additional years of age and/or years of Service (as defined in the
SERP) if and to the extent
-15-
required so that Executive's termination will qualify as a
"Retirement" within the meaning of the SERP and so that Executive
will be entitled the maximum "Retirement Benefit" in accordance
with Section 3.1 of the SERP.
(viii) For a period of three years after such termination (but not after
Executive attains age 65), Executive shall continue to participate
in those employee and executive benefit plans and programs under
Section 5(b) to the extent such plans and programs provide medical
insurance, disability insurance and life insurance benefits (but
not other benefits, such as pension and retirement benefits,
provided under Section 5(b)) in which Executive was participating
immediately prior to termination, the terms of which allow
Executive's continued participation, as if Executive had continued
in employment with the Company during such period; provided,
however, that such participation shall terminate, or the benefits
under such plans and programs shall be reduced, if and to the
extent Executive becomes covered (or is eligible to become
covered) by plans of a subsequent employer or other entity to
which Executive provides services during such period providing
comparable benefits. If the terms of the Company plans and
programs referred to in this Section 7(e)(viii) do not allow
Executive's continued participation, Executive shall be paid a
cash payment equivalent on an after-tax basis to the value of the
additional benefits described in this Section 7(e)(viii) Executive
would have received under such plans or programs had Executive
continued to be employed during such period, with such benefits
provided by the Company at the same times and in the same manner
as such benefits would have been provided to Executive under such
plans and programs (it being understood that the value of any
insurance-provided benefits will be based on the premium cost to
Executive, which shall not exceed the highest risk premium charged
by a carrier having an investment grade or better credit rating);
provided, however, that Executive must continue to satisfy the
conditions set forth in Section 10 in order to continue receiving
the benefits provided under this Section 7(e)(viii). Executive
agrees to promptly notify the Company of any employment or other
arrangement by which Executive provides services during the
benefits-continuation period and of the nature and extent of
benefits for which Executive becomes eligible during such period
which would reduce or terminate benefits under this Section
7(e)(viii); and the Company shall be entitled to recover from
Executive any payments and the fair market value of benefits
previously made or provided to Executive hereunder which would not
have been paid under this Section 7(e)(viii) if the Company had
received adequate prior notice as required by this sentence.
(f) Termination by Executive for Good Reason Within Two Years After a
Change in Control. Executive may terminate his employment hereunder for Good
Reason, simultaneously with or within two years after a Change in Control, upon
90 days' written notice to the Company; provided, however, that, if the Company
has corrected the basis for such Good Reason within 30 days after receipt of
such notice, Executive may not terminate his employment for Good Reason, and
therefore Executive's notice of termination will automatically become null and
void. At the time Executive's employment is terminated by Executive for Good
-16-
Reason (i.e., at the expiration of such notice period), the Term will terminate,
all obligations of the Company and Executive under Sections 1 through 5 of this
Agreement will immediately cease (except as expressly provided below), and the
Company will pay Executive, and Executive will be entitled to receive, the
following:
(i) Executive's Compensation Accrued at Termination;
(ii) Cash in an aggregate amount equal to three times the sum of (A)
Executive's Base Salary under Section 4(a) immediately prior to
termination plus (B) an amount equal to the greater of (x) the
portion of Executive's annual target incentive compensation
potentially payable in cash to Executive (i.e., excluding the
portion payable in PERS or in other non-cash awards) for the year
of termination or (y) the portion of Executive's annual incentive
compensation that became payable in cash to Executive (i.e.,
excluding the portion payable in PERS or in other non-cash awards)
for the latest year preceding the year of termination based on
performance actually achieved in that latest year. The amount
determined to be payable under this Section 7(f)(ii) shall be paid
by the Company not later than 15 days after Executive's
termination;
(iii) In lieu of any annual incentive compensation under Section 4(b)
for the year in which Executive's employment terminated, an amount
equal to the portion of Executive's annual target incentive
compensation potentially payable in cash to Executive (i.e.,
excluding the portion payable in PERS or in other non-cash awards)
for the year of termination, multiplied by a fraction the
numerator of which is the number of days Executive was employed in
the year of termination and the denominator of which is the total
number of days in the year of termination;
(iv) Stock options held by Executive at termination, if not then vested
and exercisable, will become fully vested and exercisable at the
date of such termination, and any such options granted on or after
the date hereof shall remain outstanding and exercisable until the
stated expiration date of the Option as though Executive's
employment did not terminate, and, in other respects, such options
shall be governed by the plans and programs and the agreements and
other documents pursuant to which such options were granted;
(v) Any performance objectives upon which the earning of
performance-based restricted stock and deferred stock awards,
including outstanding PERS awards, and other long-term incentive
awards is conditioned shall be deemed to have been met at target
level at the date of termination, and restricted stock and
deferred stock awards, including outstanding PERS awards, and
other long-term incentive awards (to the extent then or previously
earned, in the case of performance-based awards) shall become
fully vested and non-forfeitable at the date of such termination,
and, in other respects, such awards shall be governed by the plans
and programs and the agreements and other documents pursuant to
which such awards were granted;
-17-
(vi) All deferral arrangements under Section 5(d) will be settled in
accordance with the plans and programs governing the deferral;
(vii) For purposes of the SERP, Executive shall be credited with
additional years of age and/or years of Service (as defined in the
SERP) if and to the extent required so that Executive's
termination will qualify as a "Retirement" within the meaning of
the SERP and so that Executive will be entitled the maximum
"Retirement Benefit" in accordance with Section 3.1 of the SERP.
(viii) For a period of three years after such termination (but not after
Executive attains age 65), Executive shall continue to participate
in those employee and executive benefit plans and programs under
Section 5(b) to the extent such plans and programs provide medical
insurance, disability insurance and life insurance benefits (but
not other benefits, such as pension and retirement benefits,
provided under Section 5(b)) in which Executive was participating
immediately prior to termination, the terms of which allow
Executive's continued participation, as if Executive had continued
in employment with the Company during such period; provided,
however, that such participation shall terminate, or the benefits
under such plans and programs shall be reduced, if and to the
extent Executive becomes covered (or is eligible to become
covered) by plans of a subsequent employer or other entity to
which Executive provides services during such period providing
comparable benefits. If the terms of the Company plans and
programs referred to in this Section 7(f)(viii) do not allow
Executive's continued participation, Executive shall be paid a
cash payment equivalent on an after-tax basis to the value of the
additional benefits described in this Section 7(f)(viii) Executive
would have received under such plans or programs had Executive
continued to be employed during such period, with such benefits
provided by the Company at the same times and in the same manner
as such benefits would have been provided to Executive under such
plans and programs (it being understood that the value of any
insurance-provided benefits will be based on the premium cost to
Executive, which shall not exceed the highest risk premium charged
by a carrier having an investment grade or better credit rating);
provided, however, that Executive must continue to satisfy the
conditions set forth in Section 10 in order to continue receiving
the benefits provided under this Section 7(f)(viii). Executive
agrees to promptly notify the Company of any employment or other
arrangement by which Executive provides services during the
benefits-continuation period and of the nature and extent of
benefits for which Executive becomes eligible during such period
which would reduce or terminate benefits under this Section
7(f)(viii); and the Company shall be entitled to recover from
Executive any payments and the fair market value of benefits
previously made or provided to Executive hereunder which would not
have been paid under this Section 7(f)(viii) if the Company had
received adequate prior notice as required by this sentence.
If any payment or benefit under this Section 7(f) is based on Base Salary or
other level of
-18-
compensation or benefits at the time of Executive's termination and if a
reduction in such Base Salary or other level of compensation or benefit was the
basis for Executive's termination for Good Reason, then the Base Salary or other
level of compensation in effect before such reduction shall be used to calculate
payments or benefits under this Section 7(f).
(g) Other Terms Relating to Certain Terminations of Employment. Whether a
termination is deemed to be at or within two years after a Change in Control for
purposes of Sections 7(c), (d), (e), or (f) is determined at the date of
termination, regardless of whether the Change in Control had occurred at the
time a notice of termination was given. In the event Executive's employment
terminates for any reason set forth in Section 7(b) through (f), Executive will
be entitled to the benefit of any terms of plans or agreements applicable to
Executive which are more favorable than those specified in this Section 7
(except in the case of annual incentives in lieu of which amounts are paid
hereunder). Amounts payable under this Section 7 following Executive's
termination of employment, other than those expressly payable on a deferred
basis, will be paid as promptly as practicable after such a termination of
employment, and such amounts payable under Section 7(e) or 7(f) will be paid in
no event later than 15 days after Executive's termination of employment unless
not determinable within such period.
8. Definitions Relating to Termination Events.
(a) "Cause." For purposes of this Agreement, "Cause" shall mean
Executive's
(i) willful and continued failure to substantially perform his duties
hereunder (other than any such failure resulting from incapacity
due to physical or mental illness or disability or any failure
after the issuance of a notice of termination by Executive for
Good Reason) which failure is demonstrably and materially damaging
to the financial condition or reputation of the Company and/or its
subsidiaries, and which failure continues more than 48 hours after
a written demand for substantial performance is delivered to
Executive by the Board, which demand specifically identifies the
manner in which the Board believes that Executive has not
substantially performed his duties hereunder and the demonstrable
and material damage caused thereby; or
(ii) the willful engaging by Executive in conduct which is demonstrably
and materially injurious to the Company, monetarily or otherwise.
No act, or failure to act, on the part of Executive shall be deemed "willful"
unless done, or omitted to be done, by Executive not in good faith and without
reasonable belief that his action or omission was in the best interest of the
Company. Notwithstanding the foregoing, Executive shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
Executive a copy of the resolution duly adopted by the affirmative vote of not
less than three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board (after reasonable notice to Executive and an opportunity
for Executive, together with Executive's counsel, to be heard before the Board)
finding that, in the good faith opinion of the Board,
-19-
Executive was guilty of conduct set forth above in this definition and
specifying the particulars thereof in detail.
(b) "Change in Control." For purposes of this Agreement, a "Change in
Control" shall be deemed to have occurred if, during the term of this Agreement:
(i) any "Person," as such term is used for purposes of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the
Company, or any company owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions
as their ownership of stock of the Company), becomes the
"Beneficial Owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the
Company's then-outstanding securities;
(ii) during any period of twenty-four months (not including any period
prior to the effectiveness of this Agreement), individuals who at
the beginning of such period constitute the Board, and any new
director (other than (A) a director nominated by a Person who has
entered into an agreement with the Company to effect a transaction
described in Sections (8)(b)(i), (iii) or (iv) hereof, (B) a
director nominated by any Person (including the Company) who
publicly announces an intention to take or to consider taking
actions (including, but not limited to, an actual or threatened
proxy contest) which if consummated would constitute a Change in
Control or (C) a director nominated by any Person who is the
Beneficial Owner, directly or indirectly, of securities of the
Company representing 10% or more of the combined voting power of
the Company's securities) whose election by the Board or
nomination for election by the Company's stockholders was approved
in advance by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of
the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at
least a majority thereof;
(iii) the stockholders of the Company approve any transaction or series
of transactions under which the Company is merged or consolidated
with any other company, other than a merger or consolidation (A)
which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 66 2/3% of the
combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation and (B) after which no Person holds 20% or more of
the combined voting power of the then-outstanding securities of
the Company or such surviving entity;
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or
-20-
substantially all of the Company's assets; or
(v) the Board adopts a resolution to the effect that, for purposes of
this Agreement, a Change in Control has occurred.
(c) "Compensation Accrued at Termination." For purposes of this
Agreement, "Compensation Accrued at Termination" means the following:
(i) The unpaid portion of annual base salary at the rate payable, in
accordance with Section 4(a) hereof, at the date of Executive's
termination of employment, pro rated through such date of
termination, payable in accordance with the Company's regular pay
schedule;
(ii) All vested, nonforfeitable amounts owing or accrued at the date of
Executive's termination of employment under any compensation and
benefit plans, programs, and arrangements set forth or referred to
in Sections 4(b) and 5(a) and 5(b) hereof (including any earned
and vested annual incentive compensation and long-term incentive
award) in which Executive theretofore participated, payable in
accordance with the terms and conditions of the plans, programs,
and arrangements (and agreements and documents thereunder)
pursuant to which such compensation and benefits were granted or
accrued; and
(iii) Reasonable business expenses and disbursements incurred by
Executive prior to Executive's termination of employment, to be
reimbursed to Executive, as authorized under Section 5(f), in
accordance the Company's reimbursement policies as in effect at
the date of such termination.
(d) "Disability." For purposes of this Agreement, "Disability" means
Executive's absence from the full-time performance of Executive's duties
hereunder for six consecutive months as a result of his incapacity due to
physical or mental illness or disability, and, within 30 days after written
notice of termination is thereafter given by the Company, Executive shall have
not returned to the full-time performance of such duties.
(e) "Good Reason." For purposes of this Agreement, "Good Reason" shall
mean, without Executive's express written consent, the occurrence of any of the
following circumstances unless, in the case of subsections (i), (iv), (vi) or
(viii) hereof, such circumstances are fully corrected prior to the date of
termination specified in the notice of termination given in respect thereof:
(i) the assignment to Executive of duties inconsistent with
Executive's position and status hereunder, or an alteration,
adverse to Executive, in the nature of Executive's duties,
responsibilities, and authorities, Executive's positions or the
conditions of Executive's employment from those specified in
Section 3 or otherwise hereunder (other than inadvertent actions
which are promptly remedied); for this purpose, it shall
constitute "Good Reason" under this subsection (e)(i) if (A)
Executive shall be required to report to and take direction
-21-
from any person or body other than the Board of Directors of the
Company; and (B) if Executive shall be removed from the Board,
from the office of Chairman of the Board, or from any Board
committee on which Executive has served during the Term, or there
occurs any failure of Executive to be nominated, reappointed or
reelected as a member of the Board, as Chairman of the Board, or
as a member of any Board committee on which he has served during
the Term, including a failure of the Board or stockholders to take
such actions (notwithstanding their legal right to do so), except
the foregoing shall not constitute Good Reason if occurring in
connection with the termination of Executive's employment for
Cause, Disability, Retirement, as a result of Executive's death,
or as a result of action by or with the consent of Executive; for
purposes of this Section 8(e)(i), references to the Company (and
the Board and stockholders of the Company) refer to the ultimate
parent company (and its board and stockholders) succeeding the
Company following an acquisition in which the corporate existence
of the Company continues, in accordance with Section 12(b);
(ii) (A) a reduction by the Company in Executive's Base Salary, (B) the
setting of Executive's annual target incentive opportunity or
payment of earned annual incentive in amounts less than specified
under or otherwise not in conformity with Section 4 hereof, (C) a
change in compensation or benefits not in conformity with Section
5, or (D) a reduction, after a Change in Control, in perquisites
from the level of such perquisites as in effect immediately prior
to the Change in Control or as the same may have been increased
from time to time after the Change in Control except for
across-the-board perquisite reductions similarly affecting all
senior executives of the Company and all senior executives of any
Person in control of the Company;
(iii) the relocation of the principle place of Executive's employment
not in conformity with Section 3(b) hereof; for this purpose,
required travel on the Company's business will not constitute a
relocation so long as the extent of such travel is substantially
consistent with Executive's customary business travel obligations
in periods prior to the Effective Date;
(iv) the failure by the Company to pay to Executive any portion of
Executive's compensation or to pay to Executive any portion of an
installment of deferred compensation under any deferred
compensation program of the Company within seven days of the date
such compensation is due;
(v) the failure by the Company to continue in effect any material
compensation or benefit plan in which Executive participated
immediately prior to a Change in Control, unless an equitable
arrangement (embodied in an ongoing substitute or alternative
plan) has been made with respect to such plan, or the failure by
the Company to continue Executive's participation therein (or in
such substitute or alternative plan) on a basis not materially
less favorable, both in terms of the amounts of benefits provided
and the level of Executive's participation relative to
-22-
other participants, as existed at the time of the Change in
Control;
(vi) the failure of the Company to obtain a satisfactory agreement from
any successor to the Company to fully assume the Company's
obligations and to perform under this Agreement, as contemplated
in Section 12(b) hereof, in a form reasonably acceptable to
Executive;
(vii) any election by the Company not to extend the Term of this
Agreement at the next possible extension date under Section 2
hereof, unless Executive will have attained age 65 at or before
such extension date; or
(viii) any other failure by the Company to perform any material
obligation under, or breach by the Company of any material
provision of, this Agreement.
(f) "Potential Change in Control" For purposes of this Agreement, a
"Change in Control" shall be deemed to have occurred if, during the term of this
Agreement:
(i) the Company enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control;
(ii) any Person (including the Company) publicly announces an intention
to take or to consider taking actions which if consummated would
constitute a Change in Control; or
(iii) the Board adopts a resolution to the effect that, for purposes of
this Agreement, a Potential Change in Control has occurred.
9. Rabbi Trust Obligation Upon Potential Change in Control; Excise
Tax-Related Provisions.
(a) Rabbi Trust Funded Upon Potential Change in Control. In the event of
a Potential Change in Control, the Company shall, not later than 15 days
thereafter, have established one or more rabbi trusts and shall deposit therein
cash in an amount sufficient to provide for full payment of all potential
obligations of the Company that would arise assuming consummation of a Change in
Control and a subsequent termination of Executive's employment under Section
7(e) or 7(f). Such rabbi trust(s) shall be irrevocable and shall provide that
the Company may not, directly or indirectly, use or recover any assets of the
trust(s) until such time as all obligations which potentially could arise
hereunder have been settled and paid in full, subject only to the claims of
creditors of the Company in the event of insolvency or bankruptcy of the
Company; provided, however, that if no Change in Control has occurred within two
years after such Potential Change in Control, such rabbi trust(s) shall at the
end of such two-year period become revocable and may thereafter be revoked by
the Company.
(b) Gross-up If Excise Tax Would Apply. In the event Executive becomes
entitled to any amounts payable in connection with a Change in Control or other
change in control (whether or not such amounts are payable pursuant to this
Agreement) (the "Severance
-23-
Payments"), if any of such Severance Payments are subject to the tax (the
"Excise Tax") imposed by Section 4999 of the Code (or any similar federal, state
or local tax that may hereafter be imposed), the Company shall pay to Executive
at the time specified in Section 9(b)(iii) hereof an additional amount (the
"Gross-Up Payment") such that the net amount retained by Executive, after
deduction of any Excise Tax on the Total Payments (as hereinafter defined) and
any federal, state and local income tax and Excise Tax upon the payment provided
for by Section 9(b)(i), shall be equal to the Total Payments.
(i) For purposes of determining whether any of the Severance Payments
will be subject to the Excise Tax and the amount of such Excise
Tax:
(A) any other payments or benefits received or to be received
by Executive in connection with a Change in Control or
Executive's termination of employment (whether pursuant to
the terms of this Agreement or any other plan, arrangement
or agreement with the Company, any Person whose actions
result in a Change in Control or any Person affiliated with
the Company or such Person) (which, together with the
Severance Payments, constitute the "Total Payments") shall
be treated as "parachute payments" within the meaning of
Section 280G(b)(2) of the Code, and all "excess parachute
payments" within the meaning of Section 280G(b)(1) of the
Code shall be treated as subject to the Excise Tax, unless
in the opinion of nationally-recognized tax counsel
selected by Executive such other payments or benefits (in
whole or in part) do not constitute parachute payments, or
such excess parachute payments (in whole or in part)
represent reasonable compensation for services actually
rendered within the meaning of Section 280G(b)(4) of the
Code in excess of the base amount within the meaning of
Section 280G(b)(3) of the Code, or are otherwise not
subject to the Excise Tax;
(B) the amount of the Total Payments which shall be treated as
subject to the Excise Tax shall be equal to the lesser of
(x) the total amount of the Total Payments and (y) the
amount of excess parachute payments within the meaning of
Section 280G(b)(1) of the Code (after applying Section
9(b)(i)(A) hereof); and
(C) the value of any non-cash benefits or any deferred payments
or benefit shall be determined by a nationally-recognized
accounting firm selected by Executive in accordance with
the principles of Sections 280G(d)(3) and (4) of the Code.
(ii) For purposes of determining the amount of the Gross-Up Payment,
Executive shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation in the calendar
year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the
state and locality of Executive's residence on the Date of
Termination, net of the maximum reduction in federal income taxes
which could
-24-
be obtained from deduction of such state and local taxes. In the
event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder at the time of
termination of Executive's employment, Executive shall repay to
the Company within ten days after the time that the amount of such
reduction in Excise Tax is finally determined the portion of the
Gross-Up Payment attributable to such reduction (plus the portion
of the Gross-Up Payment attributable to the Excise Tax and federal
and state and local income tax imposed on the Gross-Up Payment
being repaid by Executive if such repayment results in a reduction
in Excise Tax and/or federal and state and local income tax
deduction) plus interest on the amount of such repayment at the
rate provided in Section 1274(b)(2)(B) of the Code. In the event
that the Excise Tax is determined to exceed the amount taken into
account hereunder at the time of the termination of Executive's
employment (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Gross-Up
Payment), the Company shall make an additional gross-up payment in
respect of such excess within ten days after the time that the
amount of such excess is finally determined.
(iii) The payments provided for in this Section 9(b) shall be made not
later than the fifteenth day following the date of Executive's
termination of employment; provided, however, that if the amount
of such payments cannot be finally determined on or before such
day, the Company shall pay to Executive on such day an estimate,
as determined in good faith by the Company, of the minimum amount
of such payments and shall pay the remainder of such payments
(together with interest at the rate provided in Section
1274(b)(2)(B) of the Code) as soon as the amount thereof can be
determined but in no event later than the thirtieth day after the
date of Executive's termination of employment. In the event that
the amount of the estimated payments exceeds the amount
subsequently determined to have been due, such excess shall
constitute a loan by the Company to Executive, payable on the
fifteenth day after the demand by the Company (together with
interest at the rate provided in Section 1274(b)(2)(B) of the
Code).
(iv) All determinations under this Section 9(b) shall be made at the
expense of the Company by a nationally recognized public
accounting firm selected by Executive, and such determination
shall be binding upon Executive and the Company.
10. Non-Competition and Non-Disclosure; Executive Cooperation;
Non-Disparagement.
(a) Non-Competition. Without the consent in writing of the Board,
Executive will not, at any time during the Term and for a period of two years
following termination of Executive's employment for any reason, acting alone or
in conjunction with others, directly or indirectly (i) engage (either as owner,
investor, partner, stockholder, employer, employee, consultant, advisor, or
director) in any business in which he has been directly engaged on
-25-
behalf of the Company or any affiliate, or has supervised as an executive
thereof, during the last two years prior to such termination, or which was
engaged in or planned by the Company or an affiliate at the time of such
termination, in any geographic area in which such business was conducted or
planned to be conducted; (ii) induce any customers of the Company or any of its
affiliates with whom Executive has had contacts or relationships, directly or
indirectly, during and within the scope of her employment with the Company or
any of its affiliates, to curtail or cancel their business with the Company or
any such affiliate; (iii) induce, or attempt to influence, any employee of the
Company or any of its affiliates to terminate employment; or (iv) solicit, hire
or retain as an employee or independent contractor, or assist any third party in
the solicitation, hire, or retention as an employee or independent contractor,
any person who during the previous 12 months was an employee of the Company or
any affiliate; provided, however, that the limitation contained in clause (i)
above shall not apply if Executive's employment is terminated as a result of a
termination by the Company without Cause within two years following a Change in
Control or is terminated by Executive for Good Reason within two years following
a Change in Control; and provided further, that activities engaged in by or on
behalf of the Company are not restricted by this covenant. The provisions of
subparagraphs (i), (ii), (iii), and (iv) above are separate and distinct
commitments independent of each of the other subparagraphs. It is agreed that
the ownership of not more than one percent of the equity securities of any
company having securities listed on an exchange or regularly traded in the
over-the-counter market shall not, of itself, be deemed inconsistent with clause
(i) of this Section 10(a).
(b) Non-Disclosure; Ownership of Work. Executive shall not, at any time
during the Term and thereafter (including following Executive's termination of
employment for any reason), disclose, use, transfer, or sell, except in the
course of employment with or other service to the Company, any proprietary
information, secrets, organizational or employee information, or other
confidential information belonging or relating to the Company and its affiliates
and customers so long as such information has not otherwise been disclosed or is
not otherwise in the public domain, except as required by law or pursuant to
legal process. In addition, upon termination of employment for any reason,
Executive will return to the Company or its affiliates all documents and other
media containing information belonging or relating to the Company or its
affiliates. Executive will promptly disclose in writing to the Company all
inventions, discoveries, developments, improvements and innovations
(collectively referred to as "Inventions") that Executive has conceived or made
during the Term; provided, however, that in this context "Inventions" are
limited to those which (i) relate in any manner to the existing or contemplated
business or research activities of the Company and its affiliates; (ii) are
suggested by or result from Executive's work at the Company; or (iii) result
from the use of the time, materials or facilities of the Company and its
affiliates. All Inventions will be the Company's property rather than
Executive's. Should the Company request it, Executive agrees to sign any
document that the Company may reasonably require to establish ownership in any
Invention.
(c) Cooperation With Regard to Litigation. Executive agrees to cooperate
with the Company, during the Term and thereafter (including following
Executive's termination of employment for any reason), by making himself
available to testify on behalf of the Company or any subsidiary or affiliate of
the Company, in any action, suit, or proceeding, whether civil,
-26-
criminal, administrative, or investigative, and to assist the Company, or any
subsidiary or affiliate of the Company, in any such action, suit, or proceeding,
by providing information and meeting and consulting with the Board or its
representatives or counsel, or representatives or counsel to the Company, or any
subsidiary or affiliate of the Company, as requested. The Company agrees to
reimburse the Executive, on an after-tax basis, for all expenses actually
incurred in connection with his provision of testimony or assistance.
(d) Non-Disparagement. Executive shall not, at any time during the Term
and thereafter, make statements or representations, or otherwise communicate,
directly or indirectly, in writing, orally, or otherwise, or take any action
which may, directly or indirectly, disparage or be damaging to the Company or
any of its subsidiaries or affiliates or their respective officers, directors,
employees, advisors, businesses or reputations. Notwithstanding the foregoing,
nothing in this Agreement shall preclude Executive from making truthful
statements that are required by applicable law, regulation or legal process.
(e) Release of Employment Claims. Executive agrees, as a condition to
receipt of any termination payments and benefits provided for in Sections 6 and
7 herein (other than Compensation Accrued at Termination), that he will execute
a general release agreement, in a form satisfactory to the Company, releasing
any and all claims arising out of Executive's employment (other than enforcement
of this Agreement).
(f) Forfeiture of Outstanding Options. The provisions of Sections 6 and 7
notwithstanding, if Executive willfully and materially fails to substantially
comply with any restrictive covenant under this Section 10 or willfully and
materially fails to substantially comply with any material obligation under this
Agreement, all options to purchase Common Stock granted by the Company and then
held by Executive or a transferee of Executive shall be immediately forfeited
and thereupon such options shall be cancelled. Notwithstanding the foregoing,
Executive shall not forfeit any option unless and until there shall have been
delivered to him, within six months after the Board (i) had knowledge of conduct
or an event allegedly constituting grounds for such forfeiture and (ii) had
reason to believe that such conduct or event could be grounds for such
forfeiture, a copy of a resolution duly adopted by a majority affirmative vote
of the membership of the Board (excluding Executive) at a meeting of the Board
called and held for such purpose (after giving Executive reasonable notice
specifying the nature of the grounds for such forfeiture and not less than 30
days to correct the acts or omissions complained of, if correctable, and
affording Executive the opportunity, together with his counsel, to be heard
before the Board) finding that, in the good faith opinion of the Board,
Executive has engaged and continues to engage in conduct set forth in this
Section 10(f) which constitutes grounds for forfeiture of Executive's options;
provided, however, that if any option is exercised after delivery of such notice
and the Board subsequently makes the determination described in this sentence,
Executive shall be required to pay to the Company an amount equal to the
difference between the aggregate value of the shares acquired upon such exercise
at the date of the Board determination and the aggregate exercise price paid by
Executive. Any such forfeiture shall apply to such options notwithstanding any
term or provision of any option agreement.
(g) Survival. The provisions of this Section 10 shall survive the
termination
-27-
of the Term and any termination or expiration of this Agreement.
11. Governing Law; Disputes; Arbitration.
(a) Governing Law. This Agreement is governed by and is to be construed,
administered, and enforced in accordance with the laws of the State of
Connecticut, without regard to conflicts of law principles, except insofar as
federal laws and regulations and the Delaware General Corporation Law may be
applicable. If under the governing law, any portion of this Agreement is at any
time deemed to be in conflict with any applicable statute, rule, regulation,
ordinance, or other principle of law, such portion shall be deemed to be
modified or altered to the extent necessary to conform thereto or, if that is
not possible, to be omitted from this Agreement. The invalidity of any such
portion shall not affect the force, effect, and validity of the remaining
portion hereof. If any court determines that any provision of Section 10 is
unenforceable because of the duration or geographic scope of such provision, it
is the parties' intent that such court shall have the power to modify the
duration or geographic scope of such provision, as the case may be, to the
extent necessary to render the provision enforceable and, in its modified form,
such provision shall be enforced.
(b) Reimbursement of Expenses in Enforcing Rights. All reasonable costs
and expenses (including fees and disbursements of counsel) incurred by Executive
in seeking to interpret this Agreement or enforce rights pursuant to this
Agreement shall be paid on behalf of or reimbursed to Executive promptly by the
Company, whether or not Executive is successful in asserting such rights;
provided, however, that no reimbursement shall be made of such expenses relating
to any unsuccessful assertion of rights if and to the extent that Executive's
assertion of such rights was in bad faith or frivolous, as determined by
arbitrators in accordance with Section 11(c) or a court having jurisdiction over
the matter.
(c) Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
Westport CT by three arbitrators in accordance with the rules of the American
Arbitration Association in effect at the time of submission to arbitration.
Judgment may be entered on the arbitrators' award in any court having
jurisdiction. For purposes of entering any judgment upon an award rendered by
the arbitrators, the Company and Executive hereby consent to the jurisdiction of
any or all of the following courts: (i) the United States District Court for the
District of Connecticut, (ii) any of the courts of the State of Connecticut, or
(iii) any other court having jurisdiction. The Company and Executive further
agree that any service of process or notice requirements in any such proceeding
shall be satisfied if the rules of such court relating thereto have been
substantially satisfied. The Company and Executive hereby waive, to the fullest
extent permitted by applicable law, any objection which it may now or hereafter
have to such jurisdiction and any defense of inconvenient forum. The Company and
Executive hereby agree that a judgment upon an award rendered by the arbitrators
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Subject to Section 11(b), the Company shall bear all
costs and expenses arising in connection with any arbitration proceeding
pursuant to this Section 11. Notwithstanding any provision in this Section 11,
Executive shall be entitled to seek specific performance of Executive's right to
be paid during the pendency of any dispute or controversy arising under or in
connection with this Agreement.
-28-
(d) Interest on Unpaid Amounts. Any amount which has become payable
pursuant to the terms of this Agreement or any decision by arbitrators or
judgment by a court of law pursuant to this Section 11 but which has not been
timely paid shall bear interest at the prime rate in effect at the time such
amount first becomes payable, as quoted by the Company's principal bank.
12. Miscellaneous.
(a) Integration. This Agreement cancels and supersedes any and all prior
agreements and understandings between the parties hereto with respect to the
employment of Executive by the Company, any parent or predecessor company, and
the Company's subsidiaries during the Term, except for contracts relating to
compensation under executive compensation and employee benefit plans of the
Company and its subsidiaries. The foregoing notwithstanding, Executive shall not
participate in the Company's Employee Protection Plan. This Agreement
constitutes the entire agreement among the parties with respect to the matters
herein provided, and no modification or waiver of any provision hereof shall be
effective unless in writing and signed by the parties hereto. Executive shall
not be entitled to any payment or benefit under this Agreement which duplicates
a payment or benefit received or receivable by Executive under such prior
agreements and understandings or under any benefit or compensation plan of the
Company.
(b) Successors; Transferability. The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise,
and whether or not the corporate existence of the Company continues) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise and, in the case of an acquisition of the Company in which the
corporate existence of the Company continues, the ultimate parent company
following such acquisition. Subject to the foregoing, the Company may transfer
and assign this Agreement and the Company's rights and obligations hereunder.
Neither this Agreement nor the rights or obligations hereunder of the parties
hereto shall be transferable or assignable by Executive, except in accordance
with the laws of descent and distribution or as specified in Section 12(c).
(c) Beneficiaries. Executive shall be entitled to designate (and change,
to the extent permitted under applicable law) a beneficiary or beneficiaries to
receive any compensation or benefits provided hereunder following Executive's
death.
(d) Notices. Whenever under this Agreement it becomes necessary to give
notice, such notice shall be in writing, signed by the party or parties giving
or making the same, and shall be served on the person or persons for whom it is
intended or who should be advised or notified, by Federal Express or other
similar overnight service or by certified or registered mail, return receipt
requested, postage prepaid and addressed to such party at the address set
-29-
forth below or at such other address as may be designated by such party by like
notice:
If to the Company:
IMS HEALTH INCORPORATED
000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
If to Executive:
Xxxxxx X. Xxxxxxxx
000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
If the parties by mutual agreement supply each other with telecopier numbers for
the purposes of providing notice by facsimile, such notice shall also be proper
notice under this Agreement. In the case of Federal Express or other similar
overnight service, such notice or advice shall be effective when sent, and, in
the cases of certified or registered mail, shall be effective two days after
deposit into the mails by delivery to the U.S. Post Office.
(e) Reformation. The invalidity of any portion of this Agreement shall
not deemed to render the remainder of this Agreement invalid.
(f) Headings. The headings of this Agreement are for convenience of
reference only and do not constitute a part hereof.
(g) No General Waivers. The failure of any party at any time to require
performance by any other party of any provision hereof or to resort to any
remedy provided herein or at law or in equity shall in no way affect the right
of such party to require such performance or to resort to such remedy at any
time thereafter, nor shall the waiver by any party of a breach of any of the
provisions hereof be deemed to be a waiver of any subsequent breach of such
provisions. No such waiver shall be effective unless in writing and signed by
the party against whom such waiver is sought to be enforced.
(h) No Obligation To Mitigate. Executive shall not be required to seek
other employment or otherwise to mitigate Executive's damages upon any
termination of employment; provided, however, that, to the extent Executive
receives from a subsequent employer health or other insurance benefits that are
substantially similar to the benefits referred to in Section 5(b) hereof, any
such benefits to be provided by the Company to Executive following the Term
shall be correspondingly reduced.
(i) Offsets; Withholding. The amounts required to be paid by the Company
to Executive pursuant to this Agreement shall not be subject to offset other
than with respect to any amounts that are owed to the Company by Executive due
to his receipt of funds as a result of his fraudulent activity. The foregoing
and other provisions of this Agreement notwithstanding, all payments to be made
to Executive under this Agreement, including under Sections 6 and 7, or
otherwise by the Company, will be subject to withholding to satisfy required
withholding taxes and other required deductions.
(j) Successors and Assigns. This Agreement shall be binding upon and
shall
-30-
inure to the benefit of Executive, his heirs, executors, administrators and
beneficiaries, and shall be binding upon and inure to the benefit of the Company
and its successors and assigns.
(k) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
13. Indemnification.
All rights to indemnification by the Company now existing in favor of the
Executive as provided in the Company's Certificate of Incorporation or By-laws
or pursuant to other agreements in effect on or immediately prior to the
Effective Date shall continue in full force and effect from the Effective Date
(including all periods after the expiration of the Term), and the Company shall
also advance expenses for which indemnification may be ultimately claimed as
such expenses are incurred to the fullest extent permitted under applicable law,
subject to any requirement that the Executive provide an undertaking to repay
such advances if it is ultimately determined that the Executive is not entitled
to indemnification; provided, however, that any determination required to be
made with respect to whether the Executive's conduct complies with the standards
required to be met as a condition of indemnification or advancement of expenses
under applicable law and the Company's Certificate of Incorporation, By-laws, or
other agreement shall be made by independent counsel mutually acceptable to the
Executive and the Company (except to the extent otherwise required by law).
After the date hereof, the Company shall not amend its Certificate of
Incorporation or By-laws or any agreement in any manner which adversely affects
the rights of the Executive to indemnification thereunder. Any provision
contained herein notwithstanding, this Agreement shall not limit or reduce any
rights of the Executive to indemnification pursuant to applicable law. In
addition, the Company will maintain directors' and officers' liability insurance
in effect and covering acts and omissions of Executive during the Term and for a
period of six years thereafter on terms substantially no less favorable than
those in effect on the Effective Date.
IN WITNESS WHEREOF, Executive has hereunto set his hand and the Company
has caused this instrument to be duly executed as of the day and year first
above written.
IMS HEALTH INCORPORATED
By:________________________________
Name:
Title:
EXECUTIVE
________________________________
Xxxxxx X. Xxxxxxxx
-31-
