SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
TO
FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
--- (Mark one)
/ X / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
--- EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 1998
OR
--- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
/ / EXCHANGE ACT OF 1934
---
For the transition period from to
Commission file number: 01-9723
PHARMACEUTICAL MARKETING SERVICES INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 51-0335521
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
45 Rockefeller Plaza, Suite 912, New York, NY 10111
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 841-0610
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
(Title of Class)
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PART III
Item 10. Directors and Executive Officers of the Registrant.
Set forth below is certain information with respect to each director
and each other executive officer of PMSI:
Carolyn K. Davis, 66, has served as a director of PMSI and as a member
of the Organization and Compensation Committee since February 1992. She served
as a member of the Audit Committee from February 1992 until January 1998. Dr.
Davis has been, since 1985, a national and international healthcare consultant.
From February 1981 until August 1985, Dr. Davis served as Administrator of the
Health Care Financing Administration, Department of Health and Human Services,
where she oversaw the Medicare and Medicaid programs. She also has served as
Dean of the School of Nursing and Associate Vice President for academic affairs
at the University of Michigan. In addition, she has served on the board of
trustees of Johns Hopkins University. Dr. Davis serves as a director of Beckman
Instruments, Merck Inc. and The Prudential Insurance Company of America. She is
also a member of the National Academy of Sciences, Institute of Medicine, and a
trustee of the National Museum of Health and Medicine.
Robert J. Frattaroli, 57, has served as a director of PMSI since
February 1995 and served as President from February 1995 to October 1997. He is
currently a member of the Audit Committee. Mr. Frattaroli was also Chief
Operating Officer of PMSI until September 1996 when he relinquished those
responsibilities to concentrate on PMSI's program to divest its communications
businesses. From 1993 until immediately prior to joining PMSI, Mr. Frattaroli
served as Deputy Chief Executive Officer of the Reed Elsevier Medical Group, a
global medical publishing and communications business. From 1988 until February
1993, he was President of Excerpta Medica Inc., the medical publishing
subsidiary of the Reed Elsevier Group. Prior to joining Reed Elsevier, Mr.
Frattaroli was a Vice President and General Manager of the Fine Chemicals Group
of Hoffmann-LaRoche, Inc.
Carlos A. Gonzalez, 47, has been a director of PMSI since January
1998. He has also served as a member of the Audit Committee since that time.
Mr. Gonzalez is a partner of Tanaka Capital Management with more than 20 years
of investment experience with special expertise in energy, financial services
and healthcare companies. Prior to joining Tanaka in 1995, he was Senior Vice
President at Desai Capital. In the early 1980s, he was an investment analyst and
portfolio manager at Mackay-Shields Financial Corp. and Morgan Guaranty Trust
Company where his responsibilities included monitoring of the pharmaceutical
industry. He has served on the boards of privately-held portfolio companies,
including Walsh International Inc. ("Walsh"), Au Bon Pain and Intercontinental
Television Group. Mr. Gonzalez received a B.A. from Harvard College (1972) and
an M.B.A. from Harvard Business School (1976) and is a Chartered Financial
Analyst.
Frederick W. Kyle, 66, has served as a director of PMSI since November
1992. From October 1996 through September 1997, Mr. Kyle served as Vice
Chairman, responsible for PMSI's worldwide commercial operations. Mr. Kyle was a
member of the PMSI Organization and Compensation Committee from March 1993 until
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September 1996 when he assumed operating responsibilities. He joined the Audit
Committee and resumed his position on the Organization and Compensation
Committee in October 1997. Prior to March 1993, Mr. Kyle was a managing director
of Finisterre Capital Partners, L.P., an investment fund specializing in the
pharmaceutical, medical device and diag- nostic industries. From December 1991
until December 1993, Mr. Kyle was Senior Vice President of the American Red
Cross. Prior to joining the American Red Cross, Mr. Kyle was employed at
SmithKline Beecham Pharmaceuticals since 1981, most recently as President of
Commercial Operations, a position he held from June 1990. He also served as a
director of SmithKline Beecham plc. from July 1989 to December 1991. Mr. Kyle is
also a director of Virus Research Institute Inc. and Cytomed Inc. and serves as
a trustee of the National Blood Foundation.
Robert A. Schwed, 49, has been a director of the Company since January
1998. Since 1982, Mr. Schwed has been a partner in Reboul, MacMurray, Hewitt,
Maynard & Kristol, a New York law firm specializing in the venture capital
industry. Mr. Schwed has acted as counsel to PMSI, Walsh and Source Informatics
Inc., a spin-off of Walsh ("Source"), since the inception of such companies and
has represented various other healthcare and biotechnology companies, including
representing several of such companies in their initial public offerings and in
merger and acquisition transactions. A member of the New York State Bar, he
majored in economics at Williams College and graduated magna cum laude from
Harvard Law School in 1974. During the period between July 1, 1997 and October
31, 1998, Reboul, MacMurray, Hewitt, Maynard & Kristol represented PMSI in
connection with various corporate and securities laws matters. During such
period, PMSI paid approximately $1 million in fees to such firm.
Dennis M.J. Turner, 56, has served as a director and as PMSI's Chief
Executive Officer since its inception in July 1991 and as President of PMSI
during the period from inception through December 31, 1991. Mr. Turner has
served as Chairman of PMSI since August 1998. Mr. Turner also served as Chief
Executive Officer and a director of Source from the spin-off of Source from
Walsh until the sale of Source to National Data Corporation ("NDC") in December
1997. From late 1986 through April 1996, he was Chief Executive Officer of Walsh
and its predecessor company. Until September 1986, he was Joint Managing
Director of SMS International N.V., which marketed hospital computer systems.
Mr. Turner is a director of International Biotechnology Trust plc.
Of the six current members of the Board of Directors, one is an
officer of PMSI who does not receive additional compensation for his Board
service. The remaining directors receive an annual retainer of $10,000 and are
reimbursed for their expenses; however, for the period from October 1996 through
September 1997, when Mr. Kyle acted as a consultant to PMSI and provided certain
management services to PMSI and received a fee of $75,000 per annum, he did not
receive a retainer.
Executive Officers
Raymund M. Davies, 59, has been Chief Financial Officer of PMSI since
July 1997. Mr. Davies provides his services to PMSI pursuant to a consulting
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agreement. For several years prior to joining PMSI, Mr. Davies undertook various
consultancy assignments. From 1987 through 1989 he served as a director of the
European group of Revlon Incorporated and for approximately 18 years through
1987 Mr. Davies served as a director of a subsidiary of the Beecham Group prior
to its merger with SmithKline Beckman Corporation.
Joy Scott, 48, is an Executive Vice President of PMSI and the Chief
Executive Officer of PMSI-Scott-Levin Inc., a subsidiary of PMSI. Ms. Scott was
a co-founder in 1982 of Scott-Levin and has been an Executive Vice President of
PMSI since November 1997. She has been instrumental in the development of the
various products and services offered by Scott-Levin. Ms. Scott majored in
mathematics at and graduated summa cum laude from Temple University. She was
awarded a graduates fellowship in advanced mathematics at Harvard University and
received her MBA from Rider University. She is a member of several business
associations including the Healthcare Marketing and Communications Council, the
Healthcare Businesswomen's Association, the Group Health Association of America
and the Pharmaceutical Marketing Science Association.
Warren J. Hauser, 54, has served as Vice President, General Counsel
and Secretary of PMSI since its inception. He served as Vice President, General
Counsel and Secretary of Walsh from April 1989 until April 1996 and served in
the same capacity at Source from the spin-off of Source from Walsh until the
sale of Source to NDC. Before joining Walsh, Mr. Hauser was employed for 19
years by SmithKline Beckman Corporation (now SmithKline Beecham) where, for the
last nine years, he served as Vice President, Legal Affairs, for that company's
international operations.
To PMSI's knowledge, all statements of beneficial ownership required
to be filed with the Securities and Exchange Commission (the "Commission")
during the 1998 fiscal year have been timely filed.
Item 11. Executive Compensation.
Summary Compensation Table
The following table sets forth certain compensation information with
respect to the Chief Executive Officer and the four highest paid executive
officers of PMSI (together with the Chief Executive Officer, the "Named
Executive Officers") for each of the fiscal years ended June 30, 1996, 1997 and
1998. Through December 14, 1997 Messrs. Turner and Evans served in their
respective capacities pursuant to a Management and Executive Services Agreement
among PMSI and Source and several of its subsidiaries, pursuant to which they
provided to PMSI, as appropriate, executive management on a part-time basis. The
Management and Executive Services Agreement was terminated as part of the
transactions with NDC pursuant to which PMSI sold to NDC PMSI's Over-the-Counter
business and its interest in a joint venture in the US with Source and received
Sources' interest in a joint venture with PMSI in Europe, 1,084,950 shares of
NDC and $6.5 million in cash (the "NDC Transactions"). The extent of such
services has varied from time to time, but, in general, the time commitment
required of Messrs. Turner and Evans through December 14, 1997 was substantial.
Through December 14, 1997, Source paid the salaries of Messrs. Turner
and Evans and PMSI paid a fee to Source for the aggregate services rendered to
PMSI. The management fees were calculated in accordance with a formula set forth
in the
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Management and Executive Services Agreement. In addition, Source provided
certain management services covering executive management, accounting, legal and
other services for and on behalf of PMSI, principally in the United States,
where comprehensive database contracts had been negotiated, and in the United
Kingdom. Under this agreement, the services were provided for various periods
ranging to the closing of the NDC Transactions.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
(a) (b) (c) (d) (e) (f)
Securities
Underlying
Name and Options All Other(1) &
Principal Position Year Salary Bonus (no.) Compensation(2)
<S> <C> <C> <C> <C> <C>
Dennis M.J. Turner ................. 1998 390,000 228,000(3) 50,000 106,532(4)
Chief Executive Officer ......... 1997 370,500 n/a 50,000 91,600
1996 352,000 n/a -- 60,301
Handel Evans(5) .................... 1998 390,000 190,500(6) 50,000 96,847(7)
Chairman of the Board .......... 1997 370,000 n/a 50,000 87,600
1996 352,000 n/a -- 76,797
Raymund M. Davies(8) ............... 1998 293,000 0 0 0
Vice President and ............. 1997 n/a n/a n/a n/a
Chief Financial Officer ........ 1996 n/a n/a n/a n/a
Robert J. Frattaroli(9) ............ 1998 130,545 122,807 n /a 301,779(10)
Former Chief Operating
Officer ...................... 1997 238,226 20,000 -- 39,354
1996 245,000 30,000 10,000 43,469
Warren J. Hauser ................... 1998 231,333 152,000(11) 0 40,633(12)
Vice President, Secretary ...... 1997 224,000 -- 5,000 39,733
and General Counsel ............ 1996 214,250 n/a 3,000 5,560
</TABLE>
(1) No pay-outs pursuant to long-term incentive plans have been made since
the inception of PMSI.
(2) Amounts shown do not include options shown in column (e), which become
fully vested and immediately exercisable upon a change in control. For
Messrs. Turner and Evans, the amounts shown for 1996 and 1997 were paid
by Source.
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(3) The amount shown is the contractual contribution by PMSI towards the
transaction bonus paid by Source upon completion of the NDC
Transactions on December 15, 1997.
(4) Includes a $34,650 car allowance, $60,697 of contributions to the
individual's pension plan, $9,685 for life insurance premiums and
$1,500 for health insurance premiums.
(5) Mr. Evans resigned as Chairman of the Board of PMSI effective August 5,
1998.
(6) Includes (i) $105,000 annual bonus and (ii) $85,500 paid by PMSI to
Source as a contractual contribution towards the transaction bonus paid
by Source upon completion of the NDC Transactions on December 15, 1997.
(7) Includes a $34,650 car allowance, $60,697 of contributions to the
individual's pension plan and $1,500 for health insurance premiums.
(8) Mr. Davies serves as Vice President and Chief Financial Officer of PMSI
pursuant to a consultancy agreement. Salary amount shown is a
consultancy fee and includes costs of employment, including benefits.
(9) As of September 30, 1996, Mr. Frattaroli relinquished his
responsibilities as Chief Operating Officer but continued to act as a
consultant and advisor to PMSI with respect to the sale of the Dutch
and Japanese publishing businesses. For 1998, the salary amount shown
is a consultancy fee and the bonus shown is a transaction bonus awarded
upon the sale of the Bugamor publishing business in July 1997.
(10) Includes severance payments of $289,620, $7,994 of contributions to the
individual's pension plan and $4,165 for health insurance premiums.
(11) Represents a transaction bonus paid upon the completion of the NDC
Transactions on December 15, 1997.
(12) Includes $34,500 of contributions to the individual's pension plan,
$605 for life insurance premiums and $5,528 for disability insurance
premiums.
In the 1998 fiscal year, the Board of Directors made the following
stock option grants to the Named Executive Officers.
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Options Granted in 1998 Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock
Individual Grants Price Appreciation for Option
Term
(a) (b) (c) (d) (e) (f) (g)
% of Total
Number of Options
Securities Granted to
Underlying Employees Exercise
Options in Fiscal Price Expiration
Name Granted(1)(#) Year ($/SH) Date 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
Dennis M.J. Turner 50,000 10.2 % $9.00 2/03/08 $283,008 $717,184
Handel E. Evans 50,000 10.2 % $9.00 8/5/98(2) n/a(2) n/a(2)
Raymund M. Davies 0 n/a n/a n/a n/a n/a
Robert J. Frattaroli 12,000 2.5% $11.125 10/31/07 $83,957 $212,765
Warren J. Hauser 0 n/a n/a n/a n/a n/a
</TABLE>
(1) Messrs. Turner and Evans' stock options were granted in fiscal 1998
pursuant to the Stock Option and Restricted Stock Purchase Plan of PMSI and
its Subsidiaries at an option price equal to the fair market value of the
Common Stock at the date of grant. Mr. Evans' options were cancelled on
August 5, 1998. See footnote 2. 20% of Mr. Turner's 1998 options vested
immediately upon grant with the remaining becoming exercisable in 25%
increments after each successive anniversary of the date of grant. Mr.
Frattaroli's options were granted pursuant to Non-Employee Directors' Stock
Option Plan of PMSI and they vest ratably over three years from the date of
grant. Options become immediately exercisable upon a change in control. A
change in control is deemed to have occurred if (i) any person (other than
any subsidiary of PMSI or any of their respective affiliates) acquires more
than 50% of the voting power of PMSI's securities; (ii) there is a sale or
disposition of all or substantially all the assets of PMSI, or (iii) PMSI
is merged or consolidated with another corporation (other than or any
subsidiary of PMSI or any of their respective affiliates). The option price
may be paid by delivery of already owned shares, subject to certain
conditions.
(2) Mr. Evans resigned his position as Chairman of the Board of PMSI effective
August 5, 1998. Upon his resignation all his options to purchase PMSI
Common Stock were canceled.
Aggregated Option Exercises in 1998 Fiscal Year and
Fiscal Year End Option Values
The following table sets forth the number of options exercised and the
estimated grant date present value for the Named Executive Officers during the
fiscal year ended June 30, 1998:
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<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Fiscal Options at Fiscal
Year End(#) Year End($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise(#) Realized($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Dennis M.J. Turner 0 0 270,000/80,000 1,557,500/380,000
Handel E. Evans(1) 0 0 n/a n/a
Raymund M. Davies 0 0 n/a n/a
Robert J. Frattaroli 0 0 88,000/34,000 455,500/139,500
Warren J. Hauser 0 0 22,700/10,800 33,025/36,100
</TABLE>
(1) Mr. Evans resigned his position as Chairman of the Board of PMSI effective
August 5, 1998. Upon his resignation all his options to purchase PMSI
Common Stock were canceled.
On August 5, 1998, PMSI entered into employment agreements with Dennis
Turner, the Chairman and Chief Executive Officer of PMSI, and Joy Scott, an
Executive Vice President of PMSI and the Chief Executive Officer of Scott-Levin.
In addition, Warren Hauser, Vice President, Secretary and General Counsel, is a
party to an employment agreement with PMSI dated July 1, 1996. These employment
agreements are collectively referred to as the "Employment Agreements." Each of
the Employment Agreements is for an indefinite term (subject to the termination
provisions described below). Mr. Turner's agreements provide for an annual
salary of $400,000 and a bonus not to exceed 75% of such salary upon
achievement of performance criteria set by the Board of Directors. Ms. Scott's
agreement provides for an annual salary of $265,000 and a bonus of at least 40%
of such salary upon achievement of performance criteria set by the Chief
Executive Officer. Mr. Hauser's agreement provides for an annual salary of
$240,000 and a bonus of at least 30% of such salary upon achievement of
performance criteria set by the Chief Executive Officer. The respective salaries
and bonuses of these officers are reviewed and may be increased from time to
time by PMSI. Each of these officers is entitled to health and life insurance
and other benefits provided by PMSI to senior officers in general.
If the executive's employment is terminated (i) by PMSI for "cause" or
by the executive for other than "good reason" (each as defined in the Employment
Agreements), the executive is entitled to any unpaid amounts of salary and other
benefits through the termination date, or (ii) by death, the executive's
beneficiaries are entitled to any unpaid amounts of salary and other benefits
through the termination date plus an additional three months' salary. With
respect to each of Ms. Scott and Mr. Hauser, if employment is terminated by
disability, he or she is entitled to salary and bonus (at an assumed full
achievement of performance targets) and other benefits for an additional six
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months plus the accelerated vesting of all stock options with an 18-month
exercise period. With respect to Mr. Turner, if his employment is terminated by
disability, he is entitled to salary and bonus (at an assumed full achievement
of performance targets) and other benefits for an additional 12 months plus the
accelerated vesting of all stock options with an 24-month exercise period. In
addition, in the event of termination due to disability, PMSI is obligated to
arrange for the continuation of payment to Mr. Turner after the 12-month
period of disability benefits of 60% of his then applicable base salary and to
continue pension plan contributions.
If the executive's employment is terminated (i) by PMSI other than for
cause or (ii) by the executive for good reason (including as a result of a
change of control, as defined in the Employment Agreements), (i) in the case of
Mr. Turner and Ms. Scott, he or she, as the case may be, is entitled to three
times his or her base salary and bonus; and (ii) in the case of Mr. Hauser, he
is entitled to twice his base salary and bonus. In all cases full performance
targets are assumed to have been achieved and the bonus deemed to be at the
percentage specified above. In addition, the executives are entitled to payments
in respect of unused vacation time and the cash value of other benefits to the
extent not continued for a period of three (or in the case of Mr. Hauser, two)
years following termination.
Each of these executives is prohibited from disclosing confidential
information and is subject to non-competition covenants under specified
conditions and for specified periods.
In addition to the terms described above, each of Messrs. Turner and
Hauser's Employment Agreements provide for an annual contribution by PMSI to
Messrs. Turner's and Hauser's pension plans of not less than 15% of his
respective aggregate cash compensation. PMSI is required to maintain life
insurance on Mr. Turner in the amount of $1 million. Mr. Turner and Ms. Scott
are entitled to company cars.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Set forth below is certain information with respect to the beneficial
ownership of PMSI Common Stock as of September 30, 1998 by (i) each executive
officer of PMSI, (ii) each director of PMSI, (iii) each beneficial owner of more
than 5% of PMSI Common Stock and (iv) all executive officers and directors as a
group. Unless otherwise noted, each of the stockholders named below has sole
voting and investment power with respect to the shares shown as being owned
beneficially by him or her.
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Percentage of
Name Shares Owned Outstanding
Carolyne K. Davis 24,000(1) *
Robert J. Frattaroli 90,000(1) *
Carlos A. Gonzalez 0 0
Frederick W. Kyle 57,334(1) *
Robert A. Schwed 0 0
Dennis M.J. Turner 414,902(2) 3.0
Raymund M. Davies 16,900 *
Joy Scott 55,200(3) *
Warren J. Hauser 30,800(4) *
Welsh, Carson, Anderson &
Stowe V, L.P.(5) 746,215 5.6
All executive officers and
directors as a group (9 persons) 689,136(6) 5
* Less than 1%.
- --------
(1) Represents shares issuable upon the exercise of currently vested
stock options and options that will vest within the next 60 days.
(2) Includes (i) 280,000 shares issuable upon the exercise of
currently vested stock options and options that will vest within the next 60
days, (ii) 55,952 shares owned by Mr. Turner and (iii) 78,950 shares owned by a
trust administered for the benefit of Mr. Turner's family over which the trustee
has voting power.
(3) Includes 54,700 shares issuable upon the exercise of currently
vested stock option and options that will vest within the next 60 days.
(4) Includes 27,800 shares issuable upon the exercise of currently
vested stock options and options that will vest within the next 60 days.
(5) Address: 320 Park Avenue, New York, New York 10022.
(6) Includes the shares set forth as being issuable upon the exercise
of currently vested stock options and options that will vest within the next 60
days.
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Item 13. Certain Relationships and Related Transactions.
None.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
Exhibits
Exhibit
Number Description
2.1 Transfer and Exchange Agreement, dated as of October 11, 1991,
between Walsh International Inc. and Pharmaceutical Marketing Services
Inc. (incorporated by reference to Exhibit 2.1 to the Registrant's
Registration Statement Number 33-43226)
2.2 Merger Agreement and Plan of Reorganization, dated October 11,
1991, by and between Walsh International Inc., Pharmaceutical
Marketing Services Inc. and SLA Acquisition Corp., on the one hand,
and Scott-Levin Associates, Inc., Joy Scott and Larry Levin, on the
other (incorporated by reference to Exhibit 2.2 to the Registrant's
Registration Statement Number 33-43226)
2.3 English translation of Agreement for the Sale and Purchase of the
Shares of IMR S.A. (translation for information purposes only)
(incorporated by reference to Exhibit 2.1 to the Registrant's Current
Report on Form 8-K filed May 13, 1993)
2.4 Contrat pour l'Achat et la Vente des Actions de la Societe IMR
S.A. (incorporated by reference to Exhibit 2.2 to the Registrant's
Current Report on Form 8-K filed May 13, 1993)
2.5 Sale and Purchase Agreement dated July 30, 1997 by and among
Bugamor Databases BV, PMSI Nederland BV and PMSI Bugamor Inc. (as
sellers), and Excerpta Medica Medical Communications BV and Elsevier
Science Inc. (as purchasers) (incorporated by reference to Exhibit 2.2
to the Registrant's Current Report on Form 8-K filed August 19, 1997)
3.1 Certificate of Incorporation of Pharmaceutical Marketing Services
Inc. and Amendment thereto (incorporated by reference to Exhibit 3.1
to the Registrant's Registration Statement No. 33-43226)
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3.2 By-laws of Pharmaceutical Marketing Services Inc. (incorporated by
reference to Exhibit 3.2 to the Registrant's Registration Statement
No. 33-43226)
3.3 Amendment to Certificate of Incorporation of Pharmaceutical
Marketing Services Inc.
4.1 Indenture, dated as of February 1, 1993, between Pharmaceutical
Marketing Services Inc., and Harris Trust Company of New York, Trustee
(incorporated by reference to Exhibit 4.1 to the Registrant's Annual
Report on Form 10-K filed March 30, 1993)
10.1(a)(i) Purchase and Sale Agreement, dated as of April 1, 1994, by
and between Walsh Belgium N.V. and PMSI Belgium, S.A.
10.1(a)(ii) Purchase and Sale Agreement, dated as of April 1, 1994, by
and among Walsh Nederland B.V., Walsh Medical Data and Research B.V.
and PMSI Bugamor B.V.
10.1(b) Amended and Restated Alpha Database License Agreement, dated
as of July 1, 1994 by and between Walsh America Limited and
Pharmaceutical Data Services, Inc., on the one hand, and
Pharmaceutical Marketing Services Inc., on the other.
10.1(c) Physician Database License Agreement, dated as of December 2,
1991, by and between Walsh International Inc. and Pharmaceutical
Marketing Services Inc. (incorporated by reference to Exhibit 10.1(c)
to the Registrant's Registration Statement No. 33-43226)
10.1(d) Management and Executive Services Agreement, dated as of
December 2, 1991, by and between Walsh International Inc., Pharminfo
Advisors Limited and Informed Management Limited, on the one hand, and
Pharmaceutical Marketing Services Inc., on the other (incorporated by
reference to Exhibit 10.1(d) to the Registrant's Registration
Statement No. 33-43226)
10.1(e) Data Processing Agreement, dated as of December 2,1991, by and
between Walsh International Inc. and Pharmaceutical Marketing Services
Inc. (incorporated by reference to Exhibit 10.1(e) to the Registrant's
Registration Statement No. 33-43226)
10.1(f) Facilities Agreement, dated as of December 2, 1991, by and
between Walsh International Inc. and Pharmaceutical Marketing Services
Inc. (incorporated by reference to Exhibit 10.1(f) to the Registrant's
Registration Statement No. 33-43226)
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10.1(g) Collaborative Marketing Agreement, dated as of December 2,
1991, by and between Walsh America Limited and Pharmaceutical Data
Services, Inc., on the one hand, and Pharmaceutical Marketing Services
Inc. and American Medical Census Corp., on the other (incorporated by
reference to Exhibit 10.1(g) to the Registrant's Registration
Statement No. 33-43226)
10.1(h) Health and Benefits Agreement, dated as of December 2, 1991,
by and between Walsh International Inc. and Pharmaceutical Marketing
Services Inc. (incorporated by reference to Exhibit 10.1(h) to the
Registrant's Registration Statement No. 33-43226)
*10.1(i) Mailing Services Agreement, dated as of December 2, 1991, by
and between Walsh International Inc. and Pharmaceutical Marketing
Services Inc. (incorporated by reference to Exhibit 10.1(i) to the
Registrant's Registration Statement No. 33-43226)
10.1(j) English translation of Warranty Agreement (translation for
information purposes only) (incorporated by reference to Exhibit 3.1
to the Registrant's Current Report on Form 8-K filed May 13, 1993)
10.1(k) Contrat de Garantie (incorporated by reference to Exhibit 3.2
to the Registrant's Current Report on Form 8-K filed May 13, 1993)
10.1(l) English translation of Agreement for the Supply of Services
(translation for information purposes only) (incorporated by reference
to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed
May 13,1993)
10.1(m) Contrat de Prestations de Services (incorporated by reference
to Exhibit 4.2 to the Registrant's Current Report on Form 8-K filed
May 13, 1993)
10.1(n) English translation of Put Option (translation for information
purposes only) (incorporated by reference to Exhibit 5.1 to the
Registrant's Current Report on Form 8-K filed May 13, 1993)
10.1(o) Promesse Unilaterale de Vente d'Actions (incorporated by
reference to Exhibit 5.2 to the Registrant's Current Report on Form
8-K filed May 13, 1993)
10.1(p) English translation of Call Option (translation for
information purposes only) (incorporated by reference to Exhibit 6.1
to the Registrant's Current Report on Form 8-K filed May 13, 1993)
10.1(q) Purchase Agreement, dated as of August 3, 1998, among IMS
Health Incorporated, Pharmaceutical Marketing Services Inc., PMSI
13
<PAGE>
Holdings Limited and Source Informatics European Holdings LLC
(incorporated by reference to Exhibit 2 to the Registrant's Current
Report on Form 8-K filed August 18, 1998)
10.2(a) Pharmaceutical Marketing Services Inc. and its Subsidiaries
Stock Option and Restricted Stock Purchase Plan (incorporated by
reference to Exhibit 10.2 to the Registrant's Registration Statement
No.33-43226)
10.2(b) Pharmaceutical Marketing Services Inc. Non-Employee Directors'
Stock Option Plan (incorporated by reference to Exhibit 4.3 to the
Registrant's Registration Statement No. 33-66306)
10.2(c) Pharmaceutical Marketing Services Inc. 1998 Employee Stock
Plan
10.3(a) Employment Agreement, dated as of August 5, 1998, between
Pharmaceutical Marketing Services Inc. and Dennis M.J. Turner
10.3(b) Executive Services Agreement, dated as of August 5, 1998,
between PMSI Limited and Dennis M.J. Turner
10.4 Employment Agreement, dated as of August 5, 1998, between
Pharmaceutical Marketing Services Inc. and Joy Scott
10.5 Employment Agreement, dated as of July 1, 1996, between
Pharmaceutical Marketing Services Inc. and Warren Hauser
21 List of subsidiaries of Pharmaceutical Marketing Services Inc.
23 Consent of PricewaterhouseCoopers LLP
* Certain portions of this Exhibit have been omitted pursuant to an order
of the Securities and Exchange Commission granting confidential
treatment.
14
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this amendment to be signed on its behalf
by the undersigned, thereunto duly authorized.
Pharmaceutical Marketing Services Inc.
(Registrant)
By: /s/ Raymund M. Davies
Name: Raymund M. Davies
Title: Chief Financial Officer
November 24, 1998
(Date)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ Dennis M.J. Turner Director, Chairman and Chief
- ------------------------- Executive Officer November 24, 1998
Dennis M.J. Turner
/s/ Frederick W. Kyle Director November 24, 1998
- -------------------------
*
/s/ Robert J. Frattaroli Director November 24, 1998
- -------------------------
*
/s/ Raymund M. Davies Vice President, Chief Financial November 24, 1998
- ------------------------- Officer and Treasurer
Raymund M. Davies
/s/ Carolyne K. Davis Director November 24, 1998
- -------------------------
*
/s/ Robert A. Schwed Director November 24, 1998
- -------------------------
*
/s/ Carlos Gonzales Director November 24, 1998
- -------------------------
*
* By Raymund M. Davies, attorney-in-fact
15
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
2.1 Transfer and Exchange Agreement, dated as of October 11, 1991,
between Walsh International Inc. and Pharmaceutical Marketing Services
Inc. (incorporated by reference to Exhibit 2.1 to the Registrant's
Registration Statement Number 33-43226)
2.2 Merger Agreement and Plan of Reorganization, dated October 11,
1991, by and between Walsh International Inc., Pharmaceutical
Marketing Services Inc. and SLA Acquisition Corp., on the one hand,
and Scott-Levin Associates, Inc., Joy Scott and Larry Levin, on the
other (incorporated by reference to Exhibit 2.2 to the Registrant's
Registration Statement Number 33-43226)
2.3 English translation of Agreement for the Sale and Purchase of the
Shares of IMR S.A. (translation for information purposes only)
(incorporated by reference to Exhibit 2.1 to the Registrant's Current
Report on Form 8-K filed May 13, 1993)
2.4 Contrat pour l'Achat et la Vente des Actions de la Societe IMR
S.A. (incorporated by reference to Exhibit 2.2 to the Registrant's
Current Report on Form 8-K filed May 13, 1993)
2.5 Sale and Purchase Agreement dated July 30, 1997 by and among
Bugamor Databases BV, PMSI Nederland BV and PMSI Bugamor Inc. (as
sellers), and Excerpta Medica Medical Communications BV and Elsevier
Science Inc. (as purchasers) (incorporated by reference to Exhibit 2.2
to the Registrant's Current Report on Form 8-K filed August 19, 1997)
3.1 Certificate of Incorporation of Pharmaceutical Marketing Services
Inc. and Amendment thereto (incorporated by reference to Exhibit 3.1
to the Registrant's Registration Statement No. 33-43226)
3.2 By-laws of Pharmaceutical Marketing Services Inc. (incorporated by
reference to Exhibit 3.2 to the Registrant's Registration Statement
No. 33-43226)
3.3 Amendment to Certificate of Incorporation of Pharmaceutical
Marketing Services Inc.
4.1 Indenture, dated as of February 1, 1993, between Pharmaceutical
Marketing Services Inc., and Harris Trust Company of New York, Trustee
(incorporated by reference to Exhibit 4.1 to the Registrant's Annual
Report on Form 10-K filed March 30, 1993)
16
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10.1(a)(i) Purchase and Sale Agreement, dated as of April 1, 1994, by
and between Walsh Belgium N.V. and PMSI Belgium, S.A.
10.1(a)(ii) Purchase and Sale Agreement, dated as of April 1, 1994, by
and among Walsh Nederland B.V., Walsh Medical Data and Research B.V.
and PMSI Bugamor B.V.
10.1(b) Amended and Restated Alpha Database License Agreement, dated
as of July 1, 1994 by and between Walsh America Limited and
Pharmaceutical Data Services, Inc., on the one hand, and
Pharmaceutical Marketing Services Inc., on the other.
10.1(c) Physician Database License Agreement, dated as of December 2,
1991, by and between Walsh International Inc. and Pharmaceutical
Marketing Services Inc. (incorporated by reference to Exhibit 10.1(c)
to the Registrant's Registration Statement No. 33-43226)
10.1(d) Management and Executive Services Agreement, dated as of
December 2, 1991, by and between Walsh International Inc., Pharminfo
Advisors Limited and Informed Management Limited, on the one hand, and
Pharmaceutical Marketing Services Inc., on the other (incorporated by
reference to Exhibit 10.1(d) to the Registrant's Registration
Statement No. 33-43226)
10.1(e) Data Processing Agreement, dated as of December 2,1991, by and
between Walsh International Inc. and Pharmaceutical Marketing Services
Inc. (incorporated by reference to Exhibit 10.1(e) to the Registrant's
Registration Statement No. 33-43226)
10.1(f) Facilities Agreement, dated as of December 2, 1991, by and
between Walsh International Inc. and Pharmaceutical Marketing Services
Inc. (incorporated by reference to Exhibit 10.1(f) to the Registrant's
Registration Statement No. 33-43226)
10.1(g) Collaborative Marketing Agreement, dated as of December 2,
1991, by and between Walsh America Limited and Pharmaceutical Data
Services, Inc., on the one hand, and Pharmaceutical Marketing Services
Inc. and American Medical Census Corp., on the other (incorporated by
reference to Exhibit 10.1(g) to the Registrant's Registration
Statement No. 33-43226)
10.1(h) Health and Benefits Agreement, dated as of December 2, 1991,
by and between Walsh International Inc. and Pharmaceutical Marketing
Services Inc. (incorporated by reference to Exhibit 10.1(h) to the
Registrant's Registration Statement No. 33-43226)
17
<PAGE>
*10.1(i) Mailing Services Agreement, dated as of December 2, 1991, by
and between Walsh International Inc. and Pharmaceutical Marketing
Services Inc. (incorporated by reference to Exhibit 10.1(i) to the
Registrant's Registration Statement No. 33-43226)
10.1(j) English translation of Warranty Agreement (translation for
information purposes only) (incorporated by reference to Exhibit 3.1
to the Registrant's Current Report on Form 8-K filed May 13, 1993)
10.1(k) Contrat de Garantie (incorporated by reference to Exhibit 3.2
to the Registrant's Current Report on Form 8-K filed May 13, 1993)
10.1(l) English translation of Agreement for the Supply of Services
(translation for information purposes only) (incorporated by reference
to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed
May 13,1993)
10.1(m) Contrat de Prestations de Services (incorporated by reference
to Exhibit 4.2 to the Registrant's Current Report on Form 8-K filed
May 13, 1993)
10.1(n) English translation of Put Option (translation for information
purposes only) (incorporated by reference to Exhibit 5.1 to the
Registrant's Current Report on Form 8-K filed May 13, 1993)
10.1(o) Promesse Unilaterale de Vente d'Actions (incorporated by
reference to Exhibit 5.2 to the Registrant's Current Report on Form
8-K filed May 13, 1993)
10.1(p) English translation of Call Option (translation for
information purposes only) (incorporated by reference to Exhibit 6.1
to the Registrant's Current Report on Form 8-K filed May 13, 1993)
10.1(q) Purchase Agreement, dated as of August 3, 1998, among IMS
Health Incorporated, Pharmaceutical Marketing Services Inc., PMSI
Holdings Limited and Source Informatics European Holdings LLC
(incorporated by reference to Exhibit 2 to the Registrant's Current
Report on Form 8-K filed August 18, 1998)
10.2(a) Pharmaceutical Marketing Services Inc. and its Subsidiaries
Stock Option and Restricted Stock Purchase Plan (incorporated by
reference to Exhibit 10.2 to the Registrant's Registration Statement
No.33-43226)
10.2(b) Pharmaceutical Marketing Services Inc. Non-Employee Directors'
Stock Option Plan (incorporated by reference to Exhibit 4.3 to the
Registrant's Registration Statement No. 33-66306)
18
<PAGE>
10.2(c) Pharmaceutical Marketing Services Inc. 1998 Employee Stock
Plan
10.3(a) Employment Agreement, dated as of August 5, 1998, between
Pharmaceutical Marketing Services Inc. and Dennis M.J. Turner
10.3(b) Executive Services Agreement, dated as of August 5, 1998,
between PMSI Limited and Dennis M.J. Turner
10.4 Employment Agreement, dated as of August 5, 1998, between
Pharmaceutical Marketing Services Inc. and Joy Scott
10.5 Employment Agreement, dated as of July 1, 1996, between
Pharmaceutical Marketing Services Inc. and Warren Hauser
21 List of subsidiaries of Pharmaceutical Marketing Services Inc.
23 Consent of PricewaterhouseCoopers LLP
* Certain portions of this Exhibit have been omitted pursuant to an order of
the Securities and Exchange Commission granting confidential treatment.
19
EXHIBIT 10.3(A)
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the fifth day of August, 1998 BETWEEN:
(1) PHARMACEUTICAL MARKETING SERVICES INC. (hereinafter the "Company" or
"PMSI"), a Delaware Corporation with offices at 45 Rockefeller Plaza, Suite 912,
New York, New York; and
(2) DENNIS M. J. TURNER, an individual residing at 34 Chester Terrace, London
NW1 4ND, England (the "Executive").
WITNESSETH:
WHEREAS, Executive served continuously as Chief Executive Officer of
Walsh International Inc. ("Walsh"), the predecessor-in-interest to the Company,
from June 1988 until the carve-out of the Company from Walsh in December 1991;
and as Chief Executive Officer of the Company thereafter pursuant to a Support
Service Agreements between the Company and Walsh and between the Company and
Source Informatics Inc. ("Source") after its spin-off by Walsh on April 16, 1996
(the "Spin-Off"); and
WHEREAS, pursuant to various agreements fully described in the
Company's Proxy Statement dated 14 November 1997, Source was sold to National
Data Corporation in a three party transaction to which the Company was a party,
effective on December 15, 1997 (the "Source Sale"); and
WHEREAS, effective as of the Source Sale, the Executive was asked by
the Board of Directors of the Company to continue to serve as its Chief
Executive Officer; and
WHEREAS, on August 5, 1998 the Company sold substantially all of its
assets and business outside the United States to a third party; and
WHEREAS, the Company wishes to assure itself of the continued
availability of the services of the Executive in the capacity of Chief Executive
Officer and to that end desires to enter into an employment agreement with
Executive upon the terms and conditions set forth herein; and
WHEREAS, Executive is willing to enter into such an employment
agreement under the terms and conditions stated hereinafter.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein set forth, the parties hereto mutually covenant and agree as follows:
1
<PAGE>
1. COMMENCEMENT AND TERM
1.1 The Company shall employ Executive in the capacity of Chief Executive
Officer under and subject to the terms and conditions set forth in this
Agreement.
1.2 Executive's employment with the Company commenced on December 21, 1991
but, for purposes of determining Executive's length of service,
Executive shall be credited with his continuous employment from January
1, 1987 with Pharminfo Advisors Limited, (which became a subsidiary of
Walsh, on June 23, 1988) and subsequently with Source Informatics Inc.
until the Source Sale and the concurrent commencement of Executive's
direct employment by the Company pursuant to this Agreement.
1.3 The employment of Executive shall (subject to the provisions of Clauses
1 and 10) be for an indefinite term, provided that the employment of
Executive may be terminated by the Company or Executive at any time in
accordance with Clause 10 hereinafter.
2. OBLIGATIONS DURING EMPLOYMENT
2.1 The Executive shall during the continuance of his employment:
2.1.1 Serve the Company to the best of his ability in the capacity
of Chief Executive Officer;
2.1.2 Faithfully and diligently perform such duties and exercise
such powers consistent with his office, subject to the
direction of the Board of Directors;
2.1.3 Do all in his power to protect, promote, develop, and extend
the business interests and reputation of the Company;
2.1.4 At all times and in all respects conform to and comply with
the lawful and reasonable directions of the Board of Directors
including all authority levels and procedures from time to
time specified by the Board of Directors;
2.1.5 Perform such related duties with respect to the business and
operations of the Company and the Associated Companies which
from time to time require Executive's presence outside the
United Kingdom;
2.1.6 Promptly give to the Board of Directors (in writing if so
requested) all such information, explanations and assistance
as it may require in connection with the business and affairs
of the Company and any Associated Company;
2.1.7 If and so long as the Board of Directors so directs, perform
and exercise the said duties and powers on behalf of any
Associated Company;
2
<PAGE>
2.1.8 Provide to the Associated Companies responsible for doing the
Business of the Company in the Territory, in his capacity as
Chief Executive Officer, executive services in the planning,
organization, management and control of that business. In this
regard, meet with management of the Associated Companies in
the Territory to:
(i) analyze and appraise the operations and performance
of the PMSI Group and the PMSI Group management in
the Territory to determine compliance with long-range
goals, plans and programs;
(ii) advise and consult on trends in the pharmaceutical
and healthcare industries and participate in the
formulation of plans and business goals for the
individual Operating Companies and the PMSI Group;
(iii) advise and assist in the development of an effective
organization in the staffing and management of the
employees of the business; and
(iv) direct the development and monitoring of plans to
implement new business opportunities, including
acquisitions, mergers, new produce start-ups and
developments;
2.1.9 Unless prevented by sickness, injury or other incapacity, or
as specified in Clause 16.5 hereinafter, or as otherwise
agreed by the Board of Directors, work under the terms of this
Agreement for a period of up to one hundred forty (140) days
per year and, during said period, devote the appropriate and
necessary time and attention during his hours of work (which
shall be normal business hours and such additional hours as
may be necessary for the proper performance of his duties) to
the performance of his duties and the business and affairs of
the Company and any Associated Company for which he is
required to perform duties; provided, however, that, Executive
shall not be required to spend more than one hundred ten (110)
days (as 'days' are defined for tax residency by the Internal
Revenue Service Code) in the United States in any calendar
year; and
2.1.10 Travel from time to time as may be required in connection with
the business of the Company and any Associated Company for
which he is required to perform duties; provided, however,
that Executive shall not be required, without his written
consent to (i) relocate from his principal residence in
London, England to perform services under this Agreement or
(ii) perform any services or duties whatsoever under this
Agreement in the United Kingdom.
3. RENUMERATION
3.1 The Company shall pay to the Executive during the continuance of his
employment a salary (which shall accrue from day to day) at the rate
of two hundred fifty thousand dollars ($250,000) per annum. The salary
shall be payable in equal monthly installments in arrears or as
otherwise determined by the Company on a company-wide basis.
3
<PAGE>
3.2 As further remuneration the Executive shall be entitled to an annual
bonus based upon the achievement of performance criteria established by
the Board of Directors. The amount of the bonus for the achievement of
100% of targeted performance will be 75 % of the Executive's then
annual base salary and will be prorated as determined by the Board for
any shortfall in achieving agreed objectives.
3.3 The salary and bonus shall be reviewed from time to time and the rates
thereof may be increased by the Company with effect from any such
review date.
4. INSURANCE, PENSION SCHEME AND OTHER BENEFITS
4.1 At all times during the term of this Agreement, the Company shall
provide Executive, and where appropriate his dependents, with insurance
(including accidental death insurance, medical and dental expense
insurance, permanent health and disability insurance, and travel
insurance), pension benefits as hereinafter described, and such other
benefits of the Company enjoyed by or made available to other senior
executive officers of the Company to the extent that the Executive
qualifies under the eligibility provisions of any such plan or scheme,
as presently in effect or as they may be modified from time to time.
4.2 The Company shall make regular monthly payments into a pension plan
established by the Company for the benefit of Executive in an amount
each year of not less than fifteen percent (15 %) of the Executive's
aggregate annual cash compensation. In the event that, at the date of
execution of this Agreement, Executive's pension has not been fully
funded from January 1, 1991, as aforesaid, the Company shall make
payments into the pension plan, in such amounts as to ensure that said
pension is fully funded on or before December 31, 1998.
4.3 At all times during the term of this Agreement, the Company, acting
either directly or through an Associated Company, shall maintain in
force a life insurance policy on behalf of Executive in the amount of
$1,000,000, the beneficiaries of which will be designated by Executive.
5. EXPENSES
5.1 The Company shall during the continuance of Executive's employment
reimburse him all reasonable and appropriate travel and accommodations
(which shall include first class air travel), entertainment and other
similar out-of-pocket expenses actually incurred or expended by him in
the performance of his duties hereunder. Such reimbursement shall
include membership fees in the Lotos Club or another similar private
4
<PAGE>
club providing temporary residential accommodations during visits to
New York, on the basis that such club is utilized primarily for
company-related matters.
5.2 Except where specified to the contrary, all expenses shall be
reimbursed on a monthly basis subject to the Executive providing
appropriate evidence (including receipts, invoices, tickets and/or
vouchers as may be appropriate) of the expenditure in respect for which
he claims reimbursement.
6. VACATIONS AND HOLIDAYS
6.1 The Executive shall (in addition to the usual public holidays) be
entitled during the continuance of his employment to eighteen (18)
working days' paid vacation in each calendar year.
6.2 Except in circumstances approved by the Board, the Executive shall not
be permitted to carry forward accumulated, unused vacation entitlement
in excess of eighteen (18) days from one calendar year to the next.
6.3 Upon the termination of his employment for any reason, the Executive's
entitlement to accrued vacation pay (which accrues at the rate of one
and one half (1 1/2) days per month) shall be calculated on a pro rata
basis in respect of each completed month of service in the vacation
year in which his employment terminates which shall be added any
vacation carryover entitlement accumulated in the previous year
pursuant to Clause 6.2 above, and the appropriate amount shall be paid
to the Executive; provided that if the Executive shall have taken more
days' vacation than his accrued entitlement the Company is hereby
authorized to make an appropriate deduction from the Executive's final
salary payment.
7. INCAPACITY
7.1 Subject to his compliance with the Company's procedures relating to the
notification and certification of periods of absence from work, the
Executive shall continue to be paid his salary and all other emoluments
specified in Clauses 3, 4 and 5 hereinabove (inclusive of any statutory
sick pay or social security benefits to which he may be entitled)
during any periods of absence from work due to sickness, injury or
other incapacity for a minimum of 26 weeks in aggregate in any period
of 52 consecutive weeks.
7.2 If the Executive shall have been absent from work due to sickness,
injury or other incapacity for a continuous period of 26 weeks or more,
the Company shall have the right to terminate his employment pursuant
to Clause 10.4 hereinafter and, in such event, Executive shall receive
such benefits (if any) as are available to him under the terms of the
applicable plan referred to in Clause 4.1 and the other benefits
specified in Clause 10.4.
5
<PAGE>
8. INTELLECTUAL PROPERTY
8.1 Subject to applicable law, if at any time in the course of his
employment, the Executive makes or discovers or participates in the
making or discovery of any Intellectual Property relating to or capable
of being used in the business of the Company or any Associated Company
he shall immediately disclose full details of such Intellectual
Property to the Company and at the request and expense of the Company
he shall do all things which may be necessary or desirable for
obtaining appropriate forms of protection for the Intellectual Property
in such parts of the world as may be specified by the Company and for
vesting all rights in the same in the Company or its nominee.
8.2 The Executive hereby irrevocably appoints the Company to be his
attorney in his name and on his behalf to sign execute or do any
instrument or thing and generally to use his name for the purpose of
giving to the Company or its nominee the full benefit of the provisions
of this Clause and in favor of any third party a certificate in writing
signed by any director or the secretary of the Company that any
instrument or act falls within the authority conferred by this Clause
shall be conclusive evidence that such is the case.
8.3 All rights and obligations under this Clause 8 in respect of
Intellectual Property made or discovered by the Executive during his
employment shall continue in full and force and effect after the
termination of his employment and shall be binding upon the Executive's
personal representatives.
9. CONFIDENTIALITY
9.1 The Executive shall not (other than in the proper performance of his
duties or without the prior written consent of the Company or unless
ordered by a court of competent jurisdiction) at any time either during
the continuance of his employment or after its termination disclose or
communicate to any person or use for his own benefit or the benefit of
any person other than the Company or any Associated Company any
confidential information relating to the Company or any Associated
Company which may come to his knowledge in the course of his employment
and the Executive shall during the continuance of his employment use
his best endeavors to prevent the unauthorized publication or misuse of
any confidential information provided that such restrictions shall
cease to apply to any confidential information which may enter the
public domain other than through the default of the Executive.
9.2 All notes and memoranda of any trade secret or confidential information
concerning the business the Company and the Associated Companies or any
of its or their suppliers, agents, distributors, clients, customers or
others which shall have been acquired, received, or made by the
Executive during the course of his employment shall be the property of
the Company and shall be surrendered by the Executive to someone duly
6
<PAGE>
authorized in that behalf at the termination of his employment or at
the request of the Board of Directors at any time during the course of
his Employment.
10. TERMINATION OF EMPLOYMENT
10.1 Termination by the Company Without Cause; Termination by the Executive
for Good Reason. The Company may terminate the employment of the
Executive at any time without Cause by giving the Executive a Notice of
Termination in accordance with Clause 14.2 hereof at least 24 months
prior to the effective date of such termination specified in such
notice. The executive may terminate his employment by the Company at
any time for Good Reason by giving a Notice of Termination to the
Company in accordance with Clause 14.2 hereof, and the effective date
of such termination shall be determined in accordance with Clause
10.1.3.
10.1.1 Except as provided in Clause 10.1.2, in the event that the
Executive's employment is terminated by the Company Without
Cause:
(a) the Company shall pay to the Executive, within 30 days after
the Notice of Termination is given, a lump-sum cash amount
equal to (i) two times the sum of (A) his then current annual
salary under Clause 3 and (B) 75 % of his then current annual
salary under Clause 3 (representing his annual bonus for the
achievement of 100% of performance objectives, irrespective of
whether performance objectives have been achieved), plus (ii)
an additional amount of salary equal to all of the ----
Executive's accrued unused vacation entitlement up to a
maximum of thirty six (36) days; plus (iii) the cash
equivalent of all emoluments specified hereinabove ----
(except those the Company shall continue to provide pursuant
to Clause 10.1.2(b) during the period of twenty four (24)
months following the effective date of such termination); plus
(iv) a bonus for the then current year equal to 75% of his
then current annual salary under Clause 3 (irrespective of
whether performance objectives have been achieved); provided,
however, that in the event of a termination for Good Reason
pursuant to Clause 16.1.8(b), the annual salary used for
computation under this Clause 10.1.1 (a) shall be the one in
effect prior to the reduction referred to in Clause 16.1.8(b).
Executive shall have the right to request and receive the
aggregate lump sum payment comprising subclauses (i), (ii),
(iii) and (iv) hereinabove in installments designated by
Executive paid over the calendar year of the effective date of
termination and the subsequent two calendar years;
7
<PAGE>
(b) for a period of twenty four (24) months after the effective
date of such termina tion, the Company shall provide the
Executive with pension contributions, life, health, accidental
death, disability and other insurance benefits for the
Executive and his dependents under the Benefit Plans and such
other benefits as are set out in Clauses 4 and 5, at the
respective levels of coverage in effect at the time the Notice
of Termination is given, or the cash equivalents of the
foregoing for the twenty- four month period (less any
contribution to such benefits plans made through a payroll
deduction charged to the Executive immediately prior to such
effective date in respect of any such benefits);
(c) if requested by Executive, the Company shall take all actions
necessary to transfer, if contractually permitted, all life
insurance policies to the Executive or his designee to enable
Executive and his family and/or beneficiaries to receive, at
their own expense, the benefits thereof after the expiration
of the thirty six (36) month period referred to in subclause
(b) above;
(d) the Company shall vest as of the effective date of termination
pursuant to this Clause 10.1.1 all options granted to the
Executive under the Stock Option Plan and allow the Executive
a period ending two years after the effective date of the
termination of his employment within which to exercise such
options.
10.1.2 Notwithstanding the other provisions of this Clause 10.1, in
the event that (x) the Company terminates the Executive's
employment Without Cause in anticipation of, or pursuant to, a
Notice of Termination delivered to the Executive within two
years after a Change in Control, or (y) the Executive
terminates his employment for any reason (other than due to
his death or disability, as defined below) within two years
after a Change in Control:
(a) the Company shall pay to the Executive, within 30 days after
the Notice of Termination is given, a lump-sum cash amount
equal to (i) three times the sum of (A) his then current
annual salary under Clause 3 and (B) 75% of his then current
annual salary under Clause 3 (representing his annual bonus
for the achievement of 100% of performance objectives,
irrespective of whether performance objectives have been
achieved), plus (ii) an additional amount of salary equal to
all of the Executive's accrued unused vacation entitlement up
to a maximum of thirty six (36) days; plus (iii) the cash
equivalent of all emoluments specified herein above (except
those the Company shall continue to provide pursuant to Clause
10.1.2(b) during the period of thirty six (36) months
following the effective date of such termination; plus (iv) a
bonus for the then current year equal to 75% of his then
current annual salary under Clause 3 (irrespective of whether
performance objectives have been achieved); provided, however,
that in the event of a termination for Good Reason pursuant to
Clause 16.1.8(b), the annual used for computation under this
(Clause 10.1.2(a) shall be the one in effect prior to the
reduction referred to in Clause 16.1.8(b). Executive shall
have the right to request and receive the aggregate lump sum
payment comprising subclauses (i), (ii), (iii) and (iv)
hereinabove in installments designated by Executive paid over
the calendar year of the effective date of termination and the
subsequent two calendar years;
8
<PAGE>
(b) for a period of thirty six (36) months after the effective
date of such termination, the Company shall provide the
Executive with pension contributions, life, health, accidental
death, disability and other insurance benefits for the
Executive and his dependents under the Benefit Plans and such
other benefits as are set out in Clauses 4 and 5, at the
respective levels of coverage in effect at the time the Notice
of Termination is given, or the cash equivalents of the
foregoing for the thirty-six month period (less any
contribution to such benefits plans made through a payroll
deduction charged to the Executive immediately prior to such
effective date in respect of any such benefits);
(c) if requested by Executive, the Company shall take all actions
necessary to transfer, if contractually permitted, all life
insurance policies to the Executive or his designee to enable
Executive and his family and/or beneficiaries to receive, at
their own expense, the benefits thereof after the expiration
of the thirty six (36) month period referred to in subclause
(b) above;
(d) the Company shall vest as of the time of such Change in
Control all options granted to the Executive under the Stock
Option Plan and allow the Executive a period ending two years
after the effective date of the termination of his employment
within which to exercise such options.
10.1.3 Except as provided in Clause 10.1.2 pursuant to a Change in
Control, in the event that the Executive terminates his
employment for Good Reason, he shall have the rights and
receive the benefits to which he would be entitled if the
Company had terminated his employment without Cause under
Section 10.1.1. The effective date of the Executive's
termination of his employment pursuant to this Clause 10.1.3
shall be the date that would have been the effective date had
the Company terminated the Executive without cause pursuant to
Clause 10.1 on the same date.
10.2 Termination by the Company for Cause: Termination by the Executive
Without Good Reason. The Company may at any time terminate the
Executive's employment for Cause by giving the Executive a Notice of
Termination in accordance with Clause 14.2 and, if applicable, after
complying with Clause 16.1.5 hereof. The Executive may at any time
terminate his employment with the Company in accordance with Clause
14.2 hereof by giving notice at least 12 months prior to the effective
date of such termination specified in such notice. In the event of a
termination by the Company for Cause or by the Executive without Good
Reason (except in the case where the Executive so terminates his
employment within two years after a Change in Control, as provided in
Clause 10.1.2), the Executive shall be entitled to receive any unpaid
amount of his then current salary (including unused vacation
entitlements pursuant to Clause 6.3) through the effective date of such
termination, as well as any other benefits which shall have vested and
become payable to him under the Benefit Plans as of such effective
date.
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10.3 Retirement. The employment of the Executive shall terminate
automatically upon his retirement. "Retirement" shall mean a
termination of the Executive's employment initiated by the Executive,
other than for Good Reason, whereby the Executive is entitled to
receive an immediately payable benefit, including any applicable early
retirement benefit, under any other pension or retirement plan then
generally applicable to its salaried employees or under any retirement
arrangement established with respect to the Executive with his prior
written consent; in either case, whether or not the Executive commences
to receive such benefit at the time of such termination. In the event
of the termination of the Executive's employment pursuant to his
retirement, the Executive shall be entitled to any other benefits which
shall have vested and become payable to him under the Benefit Plans as
of the effective date of such Retirement or to which the Executive is
otherwise entitled upon his Retirement under any Benefit Plan or other
policy or program of the Company or any Associated Company in
accordance with the respective terms of such Benefit Plan, policy or
program.
10.4 Death or Disability
10.4.1 Disability. Subject to the requirements of the Americans with
Disabilities Act of 1990, as amended, the Family and Medical
Leave Act of 1993, as amended and/or any other legislation
applicable to the Executive's employment by the Company, the
Company may terminate employment of the Executive, by giving
him a Notice of Termination not less than six months prior to
the effective date of such termination specified in such
notice, if the Executive shall have been absent from work due
to sickness, injury or other incapacity for more than 183 days
in the Aggregate during any period of 12 consecutive months or
if, in the opinion of a physician or other appropriate expert
selected by the Company, the Executive is likely to be unable
to perform his duties for more than 183 days in the Aggregate
during any period of 12 consecutive months; provided, that the
Company shall withdraw such notice if during its pendency the
Executive returns to full-time work and provides the Company
with a certificate from a physician or other appropriate
expert reasonably acceptable to the Company stating that he
has fully recovered and that no recurrence of such incapacity
may reasonably be anticipated, and provided further that if
the Executive returns to work after a period of absence which
would have entitled the Company to terminate his employment
the Company shall, after he has completed a period of three
consecutive months at work without further material absence
due to such sickness, injury or other incapacity, be deemed to
have waived its rights to terminate his employment based on
such previous period of absence. Circumstances justifying
termination of the Executive's employment by the Company
pursuant to this Clause 10.4.1 are referred to herein as
"Disability" and while in these circumstances executive is
deemed "Disabled".
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10.4.2 Death. The employment of the Executive by the Company shall
terminate automatically upon his death.
10.4.3 Benefits upon Disability. In the event of termination of
employment due to Disability the Company shall (i) continue to
pay Executive's salary and bonus for achieving 100% of his
performance objectives under Clause 3 and provide the other
emoluments and benefits specified hereinabove, including
contributions to the pension plan designated by the Executive
at the full rate for a period of twelve (12) months from the
date of termination hereunder; and (ii) cause the vesting of
all of the stock options granted to Executive under the Stock
Option Plan and allow the Executive a period of twenty-four
(24) months from the effective date of termination within
which to exercise such options. In addition, if the
Executive's employment is terminated by the Company pursuant
to Clause 10.4.1, the Company shall, after the expiration of
said twelve (12) month period, (a) continue to provide or
arrange for and fund a disability benefit to the Executive in
an amount of not less than sixty percent (60%) of his then
applicable base salary and (b) contribute to Executives
Pension Plan at the level in effect on the effective date of
termination for as long as the Executive is Disabled but in no
event after the Executive has reached the age of 65; provided,
however, that such disability benefit will be reduced to the
extent that it duplicates any payments under any disability
insurance plan of the company from time to time in effect.
10.4.4 Benefits upon Death. In the event of a termination of
employment due to the death of the Executive, his legal
representatives shall be entitled to receive any unpaid amount
of his then current salary through the effective date of such
termination plus a further three months base salary, as well
as any other benefits which shall have vested and become
payable to him under the Benefit Plans as of such effective
date or to which the Executive is otherwise entitled upon his
death under any Benefit Plan or other policy or program of the
Company or any associated Company in accordance with the
respective terms of such Benefit Plan, policy or program.
10.5 Upon the termination of his employment the Executive, or Executive's
legal representative as applicable, shall be entitled to accrued
vacation pay pursuant to Clause 6.3.
10.6 Notwithstanding the terms of Clause 2 or any other provision of this
Agreement, during any period between the giving of a Notice of
Termination and the effective date of termination in accordance with
the Clause 10, the Company shall not be under any obligation to provide
the Executive with any work and the Company may at any time during such
notice period without further notice suspend the Executive and/or
exclude him from all or any premises of the Company or any Associated
Company, provided, however, that, throughout such notice period, the
Company shall not make or give effect to any change in the terms and
conditions of the Executive's employment as in effect immediately
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prior to the Reference Time (as defined below) that would constitute
Good Reason under any of Paragraphs (b) through (g) of Clause 16.1.8
(regardless of whether his employment is terminated for Good Reason),
and the Executive's salary and other contractual, benefits shall
continue to be paid or provided by the Company in the manner to effect
at the Reference Time. "Reference Time" means the time immediately
prior to (i) in the case of a termination for Good Reason, the
occurrence that constitutes such Good Reason, or (ii) in all other
cases, the giving of the Notice of Termination. At any time during such
notice period the Executive shall at the request of the Company
immediately resign from office as a Director of the Company and any
Associated Company and from other office held by him in the Company or
my Associated Company (but without claim to compensation other than as
provided under this Agreement) and in the event of his failure to do so
the Company is hereby irrevocably authorized to appoint some person in
his name and on his behalf to sign and deliver such resignations to the
Company.
10.7 The Executive shall have no obligation to take any action to mitigate
or offset any amounts payable by the Company pursuant to this Clause
10, by seeking other employment or otherwise, nor shall the amount of
any payment provided for in this Agreement be reduced by any
compensation earned by the Executive as the result of employment by
another employer after the date of termination of the Executive's
employment or otherwise.
10.8 The termination of the Executive's employment for any reason whatsoever
shall not operate to terminate this Agreement as an entirety or to
adversely affect the respective continuing rights and obligations of
the parties under this Agreement, all of which shall survive the
effective date of such termination of employment in accordance with
their respective terms.
10.9 The Executive acknowledges that the Company may have in effect from
time to time a written severance plan or policy, which plan or policy
is or may be subject to change at the discretion of the Company. The
Executive shall not be entitled to any notice, payment in lieu of
notice or other severance payments under such plan or policy, but if
the notice period (or payment) to which the Executive would have been
entitled under such plan or policy as it may then exist is greater than
the notice period (or payment in lieu of such notice) to which the
Executive would be entitled under this Agreement, then the notice
period (and payment in lieu thereof) for termination hereunder shall be
deemed to be such greater amounts.
11. EXECUTIVE COVENANTS
11.1 The Executive acknowledges that during the course of his employment
with the Company he will receive and have access to Confidential
Information of the Company and its Associated Companies (including
without limitation those matters specified in Clause 9.2 of this
Agreement, as well as detailed customer lists and information relating
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to the operations and business requirements of those customers) and
accordingly he is willing to enter into the covenants described in
Clauses 11.2 and 11.3 in order to provide the Company and its
Associated Companies with what he considers to be reasonable protection
for those interests.
11.2 The Executive hereby covenants with the Company that during the term of
his employment he will not either directly or indirectly engage or
participate in any activity competitive with or adverse to the business
or interests of the Company or any of its Associated Companies.
11.3 The Executive hereby covenants with the Company that he will not for
the period of 24 months after the Executive's last active day of
employment without prior written consent of the Board of Directors,
directly or indirectly:
11.3.1 carry on or set up or be employed or engaged by or otherwise
assist in or be interested in any capacity (including without
limitation as a shareholder) in any line of business in
competition with any line of business which is part of the
Business of the Group with which the Executive has had
involvement and which the Company or any Associated Company is
carrying on during the 12 months preceding the Executive's
last active day of employment; or
11.3.2 carry on or set up or be employed or engaged by or otherwise
assist in or be interested in any capacity (including without
limitation as a shareholder) a business which competes or will
complete with any business of the Company or any Associated
Company which is planned or contemplated at the date of the
Executive's last active day of employment in any country in
which the business is planned or contemplated to operate and
which plans the Executive has been involved with to a material
extent; or
11.3.3 in connection with the carrying on of any businesses which is
in competition with the Business of the Group canvass, solicit
or approach or cause to be canvassed or solicited or
approached for orders in respect of any services provided
and/or any goods sold by the Company or any Associated Company
any person, firm or company who or which at the date of the
Executive's last active day of employment or at any time
during the period of 12 months prior to that data is a
supplier, customer or client of the Company or any Associated
Company and with whom or which the Executive shall have had
dealings during the course of his employment; or
11.3.4 in connection with the carrying on of any business in
competition with the Business of the Group do business with
any person, firm or company who or which has at any time
during the period of 12 months immediately preceding the date
of the Executive's last active date of employment done
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business with the Company or any Associated Company as a
supplier, customer or client or distributor or consultant and
with whom or which the Executive shall have had dealings
during the course of his employment; or
11.3.5 solicit, entice away or hire or endeavor to solicit or entice
away from the Company or any Associated Company any person who
at the date of the Executive's last active day of employment
or at any time during the period of six months prior to that
date is employed or engaged by the Company or any Associated
Company as a head of any business unit, the direct report of
such business unit head, or any other key technical, marketing
or sales position and with whom the Executive shall have had
contact during the course of his employment (whether or not
such a person would commit a breach of his contract of
employment by so doing).
11.4 The Executive hereby agrees that he will at the cost of the Company
enter into a direct agreement or undertaking with any Associated
Company whereby he will accept restrictions and provisions
corresponding to the restrictions and provisions in Clause 11.3 above
(or such of them as may be appropriate in the circumstances) in
relation to such activities and such country or countries as such
Associated Company may reasonably require for the protection of its
legitimate business interests.
11.5 Notwithstanding the generality of the covenants contained in Clause
11.3 those covenants shall apply only with respect to those countries
in which the Company or any Associated Company has transacted any
business during the 12 months prior to the date of Executive's last
active day of employment in which the Executive has been involved.
11.6 Nothing contained herein shall prohibit the Executive from (x) holding
directly or through nominees up to two percent of the outstanding stock
of any publicly-held and traded company or shares or an equity interest
in PERQ/HCI, a majority-owned subsidiary of VNU, a Dutch public
company, ("PERQ/HCI"), a company formed as a result of the purchase by
VNU of Healthcare Communications Inc. ("HCI"), previously a
privately-held corporation organized under the laws of the State of
Delaware, solely for investment purposes, or (y) serving as a director
of PERQ/HCI, during the continuance of his employment pursuant to this
Agreement; provided, however, that if any private company in which
Executive directly holds shares is merged with a publicly-held company
and, as a result of such merger, Executive's holdings are in excess of
two percent of the public entity, such holdings shall not be deemed to
have caused a violation of this Agreement.
11.7 The covenants contained in Clauses 11.3.1, 11.3.2, 11.3.3, 11.3.4 and
11.3.5 are intended to be separate and severable and enforceable as
such.
11.8 In the event of a breach of Clauses 11.3.1, 11.3.2, 11.3.3, 11.3.4, or
11.3.5, the Executive acknowledges that in addition to any other
remedies available under law to the Company and any Associated Company,
the Company and any Associated Company may be entitled to an
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injunction enjoining the Executive or any person or persons acting for
or with the Executive in any capacity whatsoever from violating any of
the terms thereof.
12. DISCIPLINARY AND GRIEVANCE PROCEDURES
12.1 For statutory purposes there is no formal disciplinary procedure in
relation to the Executive's employment. The Executive shall be expected
to maintain the highest standards of integrity and behavior.
12.2 If the Executive is not satisfied with any disciplinary decision taken
in relation to him he may apply in writing within 14 days of that
decision to the Board of Directors whose decision shall be final.
12.3 If the Executive has any grievance in relation to his employment he may
raise it in writing with the Board of Directors whose decision shall be
final.
13. ASSIGNMENT
13.1 The Company may assign its rights or delegate its performance, in whole
or in part, to any of its Associated Companies; provided that any such
assignment or delegation shall not affect the Executive's position with
the Company. This Agreement shall be binding upon and shall inure to
the benefit of the Company and any successor of the Company. In the
event of any permitted assignment, the Company shall guarantee the
performance of this Agreement by the Associated Company.
13.2 This Agreement shall be binding upon and shall inure to the benefit of
Executive, his legal representatives and assigns, except that
Executive's obligations to perform services under this Agreement are
personal and are expressly declared to be non-assignable and
non-transferable by him without the consent in writing of the Company.
13.3 In the event of a Change in Control, the Company shall require the
successor to the Company as the Executive's employer (whether such
succession is direct or indirect, by purchase, merger, consolidation or
otherwise, to all or a substantial portion 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, the term "Company" shall mean the Company as
hereinbefore defined and any successor to all or a substantial portion
of its business and/or assets as aforesaid.
14. NOTICES
14.1 Any notice to be given under this Agreement shall be given in writing
and shall be deemed to be sufficiently served by one party on the other
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if it is delivered personally or is sent by facsimile transmission,
overnight delivery service or registered or recorded delivery prepaid
post (air mail if overseas) addressed to either the Company's
registered office for the time being or the Executive's last known
address as the case may be.
14.2 Any purported termination of the Executive's employment by the Company
or by the Executive shall not be effective unless communicated by
written Notice of Termination to the other party hereto in accordance
with Clause 14.1 above and the relevant provisions of Clause 10. A
Notice of Termination shall identify the specific termination provision
of this Agreement relied upon, shall specify the intended effective
date of such termination (which date shall comply with the notice
period requirements of the provision so identified) and shall set forth
in reasonable detail the facts and circumstances claimed to provide a
basis for termination under the provision so identified.
15. MISCELLANEOUS
15.1 Golden Parachute Tax
15.1.1 Anything in this agreement to the contrary notwithstanding, in
the event that any payment by the Company to or for the
benefit of the Executive, whether paid or payable pursuant to
the terms of this Agreement or otherwise or any income
realized upon the exercise of any options granted by the
Company to the Executive (such payment or income, excluding
any payment pursuant to this Clause 15.1, a "Payment") is
either reasonably determined by the Company to be subject, or
is subjected by the IRS (after exhaustion by the Company of
its remedies described in Clause 15.1.3), to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986,
as amended, (the "Code") or any interest or penalties with
respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Executive shall be
entitled to receive from the Company, within 15 days following
the determination described in Clause 15.1.2 below, an
additional payment (an "Excise Tax Adjustment Payment") in an
amount such that, after payment by the Executive of all
applicable U.S. federal, state and local taxes (computed at
the maximum marginal rates and including any interest or
penalties imposed with respect to such taxes) and the Hospital
Insurance portion of FICA tax, including any Excise Tax
imposed upon the Excise Tax Adjustment Payment, the Executive
retains an amount of the Excise Tax Adjustment Payment equal
to the Excise Tax imposed upon the payments.
15.1.2 In the event that as the result of a position taken by the
Company to the IRS, the Executive is required to make a
payment of any Excise Tax, the determination of the amount of
the Excise Tax Adjustment Payment shall be made by a
nationally recognized accounting firm acceptable to the
Executive and the Company (the "Accounting Firm"), which shall
provide detailed supporting calculations to the Company and
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the Executive. Subject to the provisions of Clause 15.1.3
below, the amount of the Excise Tax Adjustment Payment shall
be promptly paid by the Company to or for the benefit of the
Executive. The determination of The Excise Tax Adjustment
Payment by the Accounting Firm shall be binding upon the
Company and the Executive.
15.1.3 The Executive shall notify the Company in writing of any claim
by the IRS that, if successful, would require the payment by
the Company of the Excise Tax Adjustment Payment. Such
notification shall be given as soon as practicable but no
later than 20 business days after the Executive is informed in
writing of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is
requested to be paid. The Executive shall not pay such claim
prior to the expiration of the 30-day period following the
date on which he gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies
the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive
shall:
(a) give the Company any information reasonably required
by the Company relating to such claim,
(b) take such action in connection with contesting such
claim as the company shall reasonably request in
writing from time to time, including, without
limitation, accepting legal representation with
respect to such claim by an attorney reasonably
selected by the Company,
(c) cooperate with the Company in good faith in order
effectively to contest such claim, and
(d) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold
the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and
expenses. Without limiting the foregoing provisions of the Clause
15.1.3, the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and
all administrative appeals, proceedings, hearings and conferences with
the taxing authority in respect of such claim and any, at its sole
option, either direct the Executive to pay the tax claimed and sue for
a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before
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any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall determine; provided,
however, that if the Company directs the Executive to pay such claim
and sue for a refund, the Company shall advance the amount of such
payment to the Executive on an interest-free basis and shall indemnify
and hold the Executive harmless, on an after-tax basis, from any Excise
Tax or income tax (including interest or penalties with respect hereto)
imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of taxes
for the taxable year of the Executive with respect to which such
contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company's control of the contest
shall be limited to issues with respect to which an Excise Tax
Adjustment Payment would be payable hereunder and the Executive shall
be entitled to settle or contest, as the case may be, any other issue
raised by the IRS or any other taxing authority.
15.1.4 If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Clause 15.1.3, the Executive
becomes entitled to receive any refund with respect to such
claim, the Executive shall (subject to the Company's complying
with the requirements of Clause 15.1.3) promptly pay to the
Company the amount of such refund (together with any interest
paid or credited thereon after taxes applicable hereto). If,
after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 15.1.3, a determination is
made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of
refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall
not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Excise Tax
Adjustment Payment required to be paid.
15.2 The Executive hereby warrants that by virtue of entering into this
Agreement he will not be in breach of any express or implied terms of
any court order, contract or of any other obligation legally binding
upon him.
15.3 Any benefits provided by the Company to the Executive or his family
which are not expressly referred to in this Agreement shall be regarded
as ex gratia benefits provided at the entire discretion of the Company
and shall not form part of the Executive's contract of employment.
15.4 Except as expressly provided in this Clause 15, the Executive shall be
responsible for the payment of all individual taxes on all amounts paid
or benefits provided to him under this Agreement. All compensation
(including without limitation, salary and any severance payments) paid
to the Executive shall be subject to such deductions as from time to
time may be required by law or regulation subject to agreement with, or
consent of the Executive which will not be unreasonably withheld.
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15.5 Any waiver by either party of any breach of any provision of this
Agreement must be set forth in a writing signed by such party, in order
for it to be effective, and no such waiver shall operate as a waiver of
any subsequent breach of that provision or any breach of any other
provision of this Agreement.
15.6 This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall
constitute one and the same instrument.
15.7 The Company will indemnify the Executive (and his legal
representatives, heirs, estate or other successors) to the fullest
extent permitted (including payment of expenses in advance of final
disposition of any proceeding) by the laws of the jurisdiction of the
incorporation of the Company as in effect at the time of the subject
act or omission, or by the Certificate of Incorporation and by-laws of
the Company as in effect at such time or on the date of this Agreement,
or by the terms of any indemnification agreement between the Company
and the Executive, whichever affords or afforded greatest protection to
the Executive, and the Executive shall be entitled to the protection of
any insurance policies the Company or any Associated Company may elect
to maintain generally for the benefit of its directors and officers,
and to the extent the Company or an Associated Company maintains such
an insurance policy or policies the Executive shall be covered by such
policy or policies in accordance with its or their terms, to the
maximum extent of the coverage available for a person serving or having
served in the positions and offices in which the Executive is serving
or has served), against all costs, charges and expenses whatsoever
incurred or sustained by him (or his legal representatives, heirs,
estate or other successors) at the time such costs, charges and
expenses are incurred or sustained, in connection with any action, suit
or proceeding to which he (or his legal representatives, heirs, estate
or other successors) may be made a party by reason of his being or
having been a director, officer or employee of the Company or any
Associated Company, or by reason of his serving or having served any
other enterprise as a director, officer or employee at the request of
the Company or any Associated Company.
15.8 In the event of a dispute between the Executive and the Company with
respect to any of the Executive's rights under this Agreement, the
Company shall reimburse the Executive for any and all legal fees and
disbursements incurred by him in connection with enforcing such rights,
at the time such fees and disbursements are incurred (but in no event
more frequently than monthly); provided, however, that if the
Executive's claim is found by a court of competent jurisdiction to have
been frivolous, the Executive shall reimburse the Company for all
amounts paid by the Company pursuant to this Clause 15.8.
15.9 The Company or PMSI shall maintain in force directors' and officers'
liability insurance for a minimum of $10 million and shall afford
Executive the maximum protection available under the terms of that
policy for the performance of his duties as an officer and director of
the Company.
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16. DEFINITIONS AND INTERPRETATION
16.1 In this Agreement unless the context otherwise requires or as otherwise
defined herein the following expressions have the following meanings:
16.1.1 "Associated Company"
Any corporation, limited liability company or other legal
entity that, directly or indirectly through one or more
intermediaries controls, is controlled by or is under common
control with the Company, where "control" means the power to
direct or cause the direction of the management and policies
of such entity, Whether through ownership of voting
securities, by contract or otherwise.
16.1.2 "Benefit Plans"
The 401(k) plan and other pension, retirement, life insurance,
medical, dental, health, accident, disability, welfare,
savings, deferred compensation or similar plans of the Company
and its Associated Companies.
16.1.3 "the Board of Directors"
The Board of Directors for the time being of the Company
including any duly appointed committee thereof.
16.1.4 "the Business of the Group"
The business of the Company and the Associated Companies as
described in the Schedule hereto and such other business or
businesses as the Company or any Associated Company may enter
into from time to time of which the Executive is aware.
16.1.5 "Cause"
Any of the following:
(a) the Executive's willful and continued failure substantially to
perform his duties hereunder (other than as a result of
sickness, injury or other physical or mental incapacity or as
a result of termination by the Executive for Good Reason);
provided, however, that such failure shall constitute "Cause"
only if (x) the Company delivers a written demand for
substantial performance to the Executive that specifies the
manner in which the Company believes the Executive has failed
substantially to perform his duties hereunder and (y) the
Executive shall not have corrected such failure within 10
business days after his receipt of such demand;
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(b) willful misconduct by the Executive in the performance of his
duties hereunder that is demonstrably and materially injurious
to the Company or any Associated Company for which he is
required to perform duties hereunder;
(c) the Executive's conviction of (or plea of 'nolo contendere'
to) a felony under the laws of the United States or any state
thereof or a criminal offense under the laws of the United
Kingdom or any other non-U.S. jurisdiction that would
constitute a felony under the laws of the United States or of
the State of Delaware (other than offence under the
road-traffic legislation in the United States or elsewhere for
which a non-custodial penalty is imposed); or
(d) the Executive's illegal or persistent immoderate use or abuse
of alcoholic beverages or drugs in a manner that in the
reasonable opinion of the Company demonstrably and materially
impairs the Executive's ability to perform his duties under
this Agreement or demonstrably and materially adversely
affects the Executive's or the Company's reputation with
customers or in the community as a whole; provided, however,
that this clause (d) shall not apply to use of prescription
drugs in the manner prescribed by a physician or other duly
licensed medical or health practitioner authorized to issue
prescriptions for such prescription drugs.
No action, or failure to act, shall be considered "willful" if
it is done by the Executive in good faith and with the
reasonable belief that his action or omission was in the best
interest of the Company.
16.1.6 "Change in Control"
The occurrence of any of the following:
(a) any event pursuant to which any "Person" becomes an "Acquiring
Person" (as such terms are defined in that certain Agreement
dated as of January 28, 1998 between the Company and Harris
Trust Company of New York as Rights Agent);
(b) a merger, consolidation, exchange, combination or other
transaction involving the Company and another entity (or the
securities of the Company and such other entity) as a result
of which the holders of all of the shares of Common Stock of
the Company outstanding prior to such transaction do not hold,
directly or indirectly, shares of the outstanding voting
securities of, or other voting ownership interests in, the
surviving, resulting or successor entity in such transaction
in substantially the same percentages of ownership as those in
which they held the outstanding shares of Common Stock of the
Company immediately prior to such transaction;
(c) the sale, transfer, assignment or other disposition by the
Company and/or one of more Associated Companies, in one
transaction or a series of transactions within
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any period of 18 consecutive calendar months (including,
without limitation, by means of the sale of capital stock of
any subsidiary or subsidiaries of the Company) of assets which
account for an aggregate of 50% of the assets of the Company
or more than 50% of the consolidated revenues of the Company
and its subsidiaries, as determined in accordance with U.S.
generally accepted accounting principles, for the fiscal year
most recently ended prior to the date of such transaction (or,
in the case of a series of transactions as described above,
the first such transaction); provided, however, that no such
transaction shall be taken into account if substantially all
the proceeds thereof (whether in cash or in kind) are used
after such transaction in the ongoing conduct by the Company
and/or its subsidiaries of the business conducted by the
Company and/or its subsidiaries prior to such transaction;
(d) the Company is dissolved; or
(e) a majority of the directors of the Company are persons who
were not members of the Board of Directors as of the date (the
"Reference Date") which is the more recent of the date hereof
and the date which is two years prior to the date on which
such determination is made, unless the first election or
appointment (or the first nomination for election by the
Company's shareholders) of each director who was not a member
of the Board of Directors on the Reference Date was approved
by a vote of at least two-thirds of the Board of Directors in
office prior to the time of such first election, appointment
or nomination.
16.1.7 "the Chief Executive Officer"
The Chief Executive Officer of the Company and a member of the
Board of Directors of the Company.
16.1.8 "Good Reason"
The occurrence of any of the following (other than by reason
of a termination of the Executive for Cause or Disability):
(a) the position or responsibilities of the Executive are
significantly reduced, (including, without limitation, by
reason of the elimination of the position of the Chief
Executive Officer or the failure to elect the Executive to the
position of the Chief Executive Officer or by reason of a
change in the reporting responsibilities to and of such
position, or, following a Change in Control, or any reason of
a substantial reduction in the size of the Company or other
substantial change in the character or scope of the Company's
operations), or the Executive is assigned without his written
consent to any duties inconsistent with his positions, duties,
responsibilities and status with the Company immediately prior
to such assignment;
22
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(b) the salary provided in Clause 3.1 hereof (as the same may be
increased from time to time in accordance with Clause 3.3) is
reduced (except if such reduction occurs prior to a Change in
Control and is part of an across-the-board reduction
applicable to all senior level executives of the Group);
(c) the annual incentive compensation provided for in Clause 3.2
hereof is reduced or eliminated or, if after a change in
Control, the Executive's participation level is reduced or the
manner of assessing actual performance is changed in a manner
that results or would result in the Executive earning less
such compensation for a given period than he would have for
the same period absent such change;
(d) the Executive's aggregate level of benefits under the Benefit
Plans is reduced, except if such reduction occurs prior to a
Change in Control is part of an across-the-board reduction in
such benefits applicable to all senior level executives of the
Group;
(e) after a Change in Control, the Company fails to continue to
provide the Executive with benefits and perquisites which are
substantially similar in the aggregate to those to which the
Executive is entitled under the Company's Benefit Plans in
which the Executive was participating immediately prior to the
Change in Control, or fails to provide the Executive with
directors' and officers' insurance, at least at the level
maintained immediately prior to the Change in Control;
(f) the Executive is required to change his regular work location
to a location that is more than 15 miles from the current
address of Executive set out at the beginning of this
Agreement;
(g) the Company fails to pay the Executive any amount otherwise
vested and due hereinunder or under any plan or policy of the
Company, or fails to comply with any other provision of or
perform any of its other obligations under this Agreement; or
(h) the Company fails to obtain from any successor and to deliver
to the Executive such successor's written agreement to assume
and agree to perform the Company's obligations under this
Agreement.
If the Executive delivers to the Company a Notice of
Termination in connection with an event described in Clauses (a) through (h)
above, the Company shall have 10 business days from the date of receipt of such
notice to effect a cure of the event described therein, and upon cure thereof by
the Company to the Executive's reasonable satisfaction, such event shall no
longer constitute "Good Reason" for purposes of this Agreement.
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16.1.9 "Group"
The Company and the Associated Companies.
16.1.10 "Intellectual Property"
Letters patent, trademarks, trade names, service marks,
designs, copyrights, utility models, design rights,
applications for registration of any of the foregoing and the
right to apply for them in any part of the world, inventions,
drawings, computer programs, trade secrets and other
non-public proprietary information, know-how and rights of
like nature arising or subsisting anywhere in the world in in
relation to the Business of the Company whether registered or
unregistered.
16.1.11 "IRS"
The United States Internal Revenue Service, or any successor
agency of the United States Government.
16.1.12 "Stock Option Plan"
The Pharmaceutical Marketing Services Inc. and its
Subsidiaries Stock Option and Restricted Stock Purchase Plan,
as the same may be amended from time to time, or any employee
stock option plan that replaces, supersedes or supplements
such plan.
16.1.13 "Territory"
The counties of North America, Asia and the Far East and
Continental Europe, excluding the United Kingdom.
16.2 The headings in this Agreement are for convenience only and shall not
affect its construction or interpretation.
16.3 Any reference in this Agreement to a statutory provision shall be
deemed to include a reference to any statutory amendment, modification
or re-enactment of it or to any legislation that supersedes it.
16.4 This Agreement together with the Company plans, agreements and other
arrangements referred to herein contains the entire understanding
between the parties and supersedes any other prior agreements,
arrangements and understandings (written or oral) between the Company
and the Executive relating to the employment of the Executive with the
Company (other than Executive's activities on behalf of the Group in
the United Kingdom) which such agreements, arrangements and
understandings shall be deemed to have been terminated by mutual
consent; provided, however, that this Agreement shall not terminate any
agreement in effect on the date hereof between the Company and the
24
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Executive granting or otherwise relating to any stock option, and any
such agreement shall be deemed to be modified and amended hereby to the
extent that the terms of such agreement are inconsistent with the terms
hereof. The Executive acknowledges that he has not entered into this
Agreement in reliance on any warranty, representation or undertaking
which is not contained in or specifically incorporated in this
Agreement.
16.5 The parties acknowledge that PMSI Limited, an Associated Company, and
Executive have entered into an executive services agreement relating to
Executive's services in the United Kingdom. The parties hereto have
agreed that, in the case of conflict, the performance of Executive's
duties under this Employment Agreement shall take precedence over the
performance of Executive's duties under that agreement. The parties
hereto expressly agree (i) that Executive shall not be required to work
more than 140 days under this Agreement and (ii) that the term of
employment set forth in Clause 1 of this Agreement shall not be
terminated or affected in any way, and Executive's remuneration under
this Agreement shall not be changed by the termination for an reason
whatsoever of Executive's employment with PMSI Limited, the intent
being that each employment shall be separate from and independent of
the other.
16.6 The various Clauses of this Agreement are severable and if any Clause
or identifiable part thereof is held to be invalid or unenforceable by
any court of competent jurisdiction then such invalidity or
unenforceability shall not affect the validity or enforceability of the
remaining Clauses or identifiable parts thereof in this Agreement, and
the parties hereto agree that the portion so held invalid,
unenforceable or void shall, if possible, be deemed amended or reduced
in scope, or otherwise be stricken from this agreement, to the extent
required for the purposes of the validity and enforcement hereof.
16.7 Unless the context otherwise requires, any reference in this Agreement
to the employment of the Executive or the Executive's last day of
active employment refers to the Executive's employment with the
Company.
16.8 Unless the context otherwise requires, any reference herein to Benefit
Plans or other plans, agreements, arrangements, policies or programs of
the "Company," or to a benefit, payment or contribution provided or to
be provided to the Executive by the "Company" shall be understood to
include any Benefit Plan, plan, agreement, arrangement, policy or
program of any Associated Company, or any benefit, payment or
contribution provided or to be provided to the Executive by any
Associated Company, respectively.
16.9 This Agreement is governed by and shall be construed in accordance with
the laws of the State of Delaware, and the parties to this Agreement
hereby submit to the nonexclusive jurisdiction of the Federal and State
Courts sitting in Wilmington, Delaware.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date first above written.
ATTEST: PHARMACEUTICAL MARKETING
SERVICES INC.
By: /s/ Cynthia R. Thomas By: /s/ Warren J. Hauser
WITNESS: DENNIS M.J.TURNER
/s/ A.M. Lee Abbott /s/ Dennis M.J. Turner
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SCHEDULE
BUSINESS OF THE GROUP
The Business of the Group consists of the provision to the pharmaceutical
industry of:
(a) information services from and surveys of physicians and
managed care professionals;
(b) marketing research audits and surveys evaluating promotional
expenditure, physicians attitudes, behaviours and prescribing;
(c) profiles of managed care organizations, formularies,
regulations and legislation; and
(d) related strategic studies and consulting services.
27
EXHIBIT 10.3(b)
EXECUTIVE SERVICES AGREEMENT
THIS AGREEMENT is made as of the fifth day of August, 1998 BETWEEN:
PMSI LIMITED (hereinafter the "Company" or "PMSI"), a limited liability company
organized and existing under the laws of the United Kingdom with its registered
office at Craven House, Hampton Court Road, East Molesey, Surrey KT8 9BX,
England and DENNIS M. J. TURNER, an individual residing at 34 Chester Terrace,
London NW1 4ND, England (the "Executive").
WITNESSETH:
WHEREAS, the parent of the Company, Pharmaceutical Marketing Services Inc.
("PMSI") is engaged in the business of providing data, information and
consulting services to the pharmaceutical and healthcare industries in the
United Kingdom of Great Britain and Northern Ireland; and
WHEREAS, Source Informatics Limited ("SIL"), a predecessor-in-interest to
the Company, entered into an Executive Services Agreement dated as of the 16th
day of April 1996 (the "Original Executive Services Agreement) with Executive;
and
WHEREAS, SIL was acquired by Pharmaceutical Marketing Services Inc., a
Delaware Corporation ("PMSI") on December 15, 1997 and was sold to a third party
on August 5, 1998 as a result of which the Company was formed to continue
certain services on behalf of PMSI; and
WHEREAS, the Company and Executive now wish to amend and restate the terms
of the Original Executive Services Agreement in this new Executive Services
Agreement with the Company, as set forth hereinbelow.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein set forth, the parties hereto amend and restate the original Executive
Services Agreement, effective as of the date first above written in its entirety
as follows:
1. COMMENCEMENT AND TERM
1.1 The Company shall employ the Executive upon and subject to the terms and
conditions set forth in this Agreement.
<PAGE>
1.2 The Executive's employment began with the Company's
predecessor-in-interest, Walsh U.K. Limited (through its subsidiary,
Infomed Management Limited) on 15th January 1987 and has been continuous
thereafter. For statutory purposes Executive's period of continuous
employment for relevant purposes began on 15th January 1987.
1.3 The employment of Executive shall (subject to the provisions of Clause
10) be for an indefinite term.
2. OBLIGATIONS DURING EMPLOYMENT
2.1 The Executive shall during the continuance of his employment:
2.1.1 Provide executive management services to the Company and the Group in the
United Kingdom;
2.1.2 Consult with and provide advice to the Board of Directors of the Company
and the Company's parent company, PMSI, on business performance, policy,
procedures and programs in the United Kingdom;
2.1.3 Supervise and coordinate the preparation and review of strategies, plans,
budgets and projections for the Company;
2.1.4 Review, with the Group's UK-based outside advisors, tax, legal and
financial questions relating to the operations of the Company and the
Group;
2.1.5 Advise on the operations and performance of the Company in the United
Kingdom;
2.1.6 Perform such related duties in the United Kingdom with respect to the
business activities of the Company and the Group as may be assigned to
Executive by the Boards of Directors of the Company or PMSI;
2.1.7 Do all in his power to protect, promote, develop, and extend the business
interests and reputation of the Company and the Group within the United
Kingdom;
2.1.8 Unless prevented by sickness, injury or other incapacity, and subject to
the restrictions specified in Clause 16.4 hereinafter or as otherwise
agreed by the Board of Directors, devote appropriate and necessary time
and attention during his hours of work (which shall be normal business
hours and such additional hours as may be necessary for the proper
performance of his duties) to the performance of his duties and the
business and affairs of the Company and any Associated Company for which
he is required to perform duties;
2.1.9 Travel from time to time as may be required in connection with the
business of the Company; provided that the Executive shall not be
required to change his regular work location to another work location
more than fifteen (15) miles from the Executive's residence as set forth
above.
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3. REMUNERATION
3.1 The Company shall pay to the Executive during the continuance of his
employment a salary (which shall accrue from day to day) at the rate of
ninety-six thousand Pounds Sterling ((pound)96,000) per annum. The salary
shall be payable in equal monthly installments in arrears or as otherwise
determined by the Company on a company-wide basis.
3.2 As further remuneration the Executive shall be entitled to an annual
bonus based upon the achievement of performance criteria established by
the Board of Directors. The amount of the bonus for the achievement of
100% of targeted performance will be 75% of the Executive's then annual
base salary.
3.3 The salary and bonus shall be reviewed from time to time and the rates
thereof may be increased by the Company with effect from any such review
date.
4. INSURANCE, PENSION SCHEME AND OTHER BENEFITS
4.1 At all times during the term of this Agreement, the Company shall provide
Executive, and where appropriate his dependents, with insurance
(including accidental death insurance, medical and dental expense
insurance, permanent health and disability insurance, and travel
insurance), pension benefits as hereinafter described, and such other
benefits of the Company enjoyed by or made available to other senior
executive officers of the Company to the extent that the Executive
qualifies under the eligibility provisions of any such plan or scheme, as
presently in effect or as they may be modified from time to time.
4.2 The Company shall make appropriate regular monthly payments into a
pension plan established by the Company for the benefit of Executive in
an amount each year of not less than fifteen percent (15%) of the
Executive's aggregate annual cash compensation. In the event that, at the
date of execution of this Agreement, Executive's pension has not been
fully funded from January 1, 1991, as aforesaid, the Company shall make
payments into the pension plan, in such amounts as to ensure that said
pension is fully funded on or before December 31, 1998.
4.3 The parties hereto acknowledge that a Contracting-Out Certificate is not
in force in respect of Executive's employment with the Company.
4.4 The Company shall provide the Executive with a car of such make and model
as the Company shall decide is suitable for him and compatible with his
status in the Company for his sole use during the continuance of his
employment in respect of which the Company shall pay or reimburse the
Executive all standing and running costs including the cost of fuel
consumed by the car in the course of private journeys undertaken by the
Executive. The Company shall replace the car with another of equivalent
make and model/value once every three years.
4.5 The Executive shall at all times and in all respects conform to and
<PAGE>
comply with any policy which may from time to time be made by the Company
in relation to cars provided by it for the use of its employees and,
without limiting the foregoing, the Executive:
4.5.1 shall ensure that at all times when the car is driven on a public highway
it is in the state and condition required by law; and
4.5.2 shall at all times be the holder of a valid current driving license.
4.6 Alternatively, in lieu of such car, the Executive may elect to opt for
the Company's cash alternative scheme and take the sum of Twenty Two
Thousand Pounds Sterling ((pound)22,000) in cash per annum, payable in
equal monthly installments. The amount of the cash payment in lieu of the
car shall be increased on an annual basis for each year by an amount not
less than the percentage increase in the Retail Price Index in the United
Kingdom for the preceding year as determined by the Government of the
United Kingdom.
4.7 For the avoidance of doubt, the Company shall be entitled at its absolute
discretion to withdraw the use of the car provided to Executive pursuant
to this Clause if the Executive is disqualified from holding a valid
current driving license; provided however, that in such event the Company
shall pay Executive the cash alternative car allowance specified in
Clause 4.6 hereinabove.
5. EXPENSES
5.1 The Company shall during the continuance of Executive's employment
reimburse him in respect of all reasonable and appropriate travel and
accommodation (which shall include first class air travel), entertainment
and other similar out-of-pocket expenses actually incurred or expended by
him in the performance of his duties hereunder. Such reimbursement shall
include, but not be limited to, the membership fees and annual dues of
the Royal Automobile Club or an equivalent private dining and social dub
selected by Executive where such dub is utilized primarily for
company-related matters.
5.2 Except where specified to the contrary, all expenses shall be reimbursed
on a monthly basis subject to the Executive submitting claims and
providing appropriate authorized evidence (including receipts, invoices,
tickets and/or vouchers as may be appropriate) of the expenditure in
respect for which he claims reimbursement.
6. HOLIDAYS
6.1 The Executive shall (in addition to the usual public and bank holidays)
be entitled during the continuance of his employment to twelve (12)
working days' paid holiday in each calendar year.
6.2 The Executive shall not be permitted to carry forward accumulated, used
holiday entitlement in excess of twelve (12) days from one calendar year
to the next.
<PAGE>
6.3 Upon the termination of his employment, the Executive's entitlement to
accrued holiday pay (which accrues at the rate of one (1) day per month)
shall be calculated on a pro rata basis in respect of each completed
month of service in the holiday year in which his employment terminates
to which shall be added any carry-over accumulated in the previous year
pursuant to Clause 6.2 above, and the appropriate amount shall be paid to
the Executive, provided that if the Executive shall have taken more days'
holiday than his accrued entitlement the Company is hereby authorized to
make an appropriate deduction from the Executive's final salary payment.
7. INCAPACITY
7.1 Subject to his compliance with the Company's procedures relating to the
notification and certification of periods of absence from work, the
Executive shall continue to be paid his salary and all other emoluments
specified in Clauses 3, 4, 5 and 6 hereinabove (inclusive of any
statutory sick pay or social security benefits to which he may be
entitled) during any periods of absence from work due to sickness, injury
or other incapacity for a minimum 26 weeks in aggregate in any period of
52 consecutive weeks.
7.2 If the Executive shall have been absent from work due to sickness, injury
or other incapacity for a continuous period of 26 weeks or more, the
Company shall have the right to terminate his employment pursuant to
Clause 11.3 hereinafter and, in such event, Executive shall receive such
benefits (if any) as are available to him under the terms of the
applicable plan referred to in Clause 4.1 and the other benefits
specified in Clause 11.3.
8. INTELLECTUAL PROPERTY
8.1 Subject to applicable law, if at any time in the course of his
employment, the Executive makes or discovers or participates in the
making or discovery of any Intellectual Property relating to or capable
of being used in the business of the Company or any Associated Company he
shall immediately disclose full details of such Intellectual Property to
the Company and at the request and expense of the Company he shall do all
things which may be necessary or desirable for obtaining appropriate
forms of protection for the Intellectual Property in such parts of the
world as may be specified by the Company and for vesting all rights in
the same in the Company or its nominee.
8.2 The Executive hereby irrevocably appoints the Company to be his attorney
in his name and on his behalf to sign, execute or do any instrument or
thing and generally to use his name for the purpose of giving to the
Company or its nominee the full benefit of the provisions of this Clause
and in favour of any third party a certificate in writing signed by any
director or the secretary of the Company that any instrument or act falls
within the authority conferred by this Clause shall be conclusive
evidence that such is the case.
8.3 All rights and obligations under this Clause 8 in respect of Intellectual
Property made or discovered by the Executive during his employment shall
continue in full force and effect after the termination of his employment
and shall be binding upon the Executive's personal representatives.
<PAGE>
9. CONFIDENTIALITY
9.1 The Executive shall not (other than in the proper performance of his
duties or without the prior written consent of the Company or unless
ordered by a court of competent jurisdiction) at any time either during
the continuance of his employment or after its termination disclose or
communicate to any person or use for his own benefit or the benefit of
any person other than the Company or any Associated Company any
confidential information relating to the Company or any Associated
Company which may come to his knowledge in the course of his employment
and the Executive shall during the continuance of his employment use his
best endeavors to prevent the unauthorized publication or misuse of any
confidential information provided that such restrictions shall cease to
apply to any confidential information which may enter the public domain
other than through the default of the Executive.
9.2 All notes and memoranda of any trade secret or confidential information
concerning the business of the Company and the Associated Companies or
any of its or their suppliers, agents, distributors, clients, customers
or others which shall have been acquired, received or made by the
Executive during the course of his employment shall be the property of
the Company and shall be surrendered by the Executive to someone duly
authorized in that behalf at the termination of his employment or at the
request of the Board of Directors at any time during the course of his
employment.
10. TERMINATION OF EMPLOYMENT 10.1 Termination by the Company Without Cause;
Termination by the Executive for Good Reason. The Company may terminate
the employment of the Executive at any time Without Cause by giving the
Executive a Notice of Termination in accordance with Clause 14.2 hereof
at least 24 months prior to the effective date of such termination
specified in such notice. The executive may terminate his employment by
the Company at any time for Good Reason by giving a Notice of Termination
to the Company in accordance with Clause 14.2 hereof, and the effective
date of such termination shall be determined in accordance with Clause
10.1.3.
10.1.1 Except as provided in Clause 10.1.2, in the event that the Executive's
employment is terminated by the Company Without Cause:
(a) the Company shall pay to the Executive, within 30 days after the
Notice of Termination is given, a lump-sum cash amount equal to
(i) two times the sum of (A) his then current annual salary under
Clause 3 and (B) 75% of his then current annual salary under
Clause 3 (representing his annual bonus for the achievement of
100% of performance objectives, irrespective of whether
performance objectives have been achieved), plus (ii) an
additional amount of salary equal to all of the Executive's
<PAGE>
accrued unused vacation entitlement up to a maximum of thirty six
(36) days; plus (iii) the cash equivalent of all emoluments
specified hereinabove (except those the Company shall continue to
provide pursuant to Cause 10.1.2(b) during the period of
twenty-four (24) months following the effective date of such
termination); provided, however, that Executive shall have the
right to request and receive the aggregate lump sum payment
comprising subclauses (i), (ii), and (iii) hereinabove in
installments designated by Executive paid over the calendar year
of the effective date of termination and the subsequent two
calendar years;
(b) for a period of twenty four (24) months after the effective date
of such termination, the Company shall provide the Executive with
his company car or cash allowance in lieu, pension contributions,
life, health, accidental death, disability and all other insurance
benefits for the Executive and his dependents under the Benefit
Plan and such other benefits as are set out in Clauses 4 and 5, at
the respective levels of coverage in effect at the time the Notice
of Termination is given, or the cash equivalents of the foregoing
for the twenty-four month period (less any contribution to such
benefits plans made through a payroll deduction charged to the
Executive immedi ately prior to such effective date in respect of
any such benefits);
(c) if requested by Executive, the Company shall take all actions
necessary to transfer, if contractually permitted, all life
insurance policies to the Executive or his designee to enable
Executive and his family and/or beneficiaries to receive, at their
own expense, the benefits thereof after the expiration of the
twenty four (24) month period referred to in subclause (b) above.
10.1.2 Notwithstanding the other provisions of this Clause 10.1, in the extent
that (x) the Company terminates the Executive's employment Without Cause
in anticipation of, or pursuant to, a Notice of Termination delivered to
the Executive within two years after a Change in Control, or (y) the
Executive terminates his employment for any reason (other than due to his
death or disability, as defined below) within two years after a Change in
Control:
(a) the Company shall pay to the Executive, within 30 days after the
Notice of Termination is given, a lump-sum cash amount equal to
(i) three times the sum of (A) his then current annual salary
under Clause 3 and (B) 75% of his then current annual salary under
Clause 3 (representing his annual bonus for the achievement of
100% of performance objectives, irrespective of whether
performance objectives have been achieved), plus (ii) an
additional amount of salary equal to all of the Executive's
accrued unused vacation entitlement up to a maximum of thirty six
(36) days; plus (iii) the cash equivalent of all emoluments
specified hereinabove (except those the Company shall continue to
<PAGE>
provide pursuant to Clause 10.1.2(b) during the period of thirty
six (36) months following the effective date of such termination
plus (iv) a bonus for the then current year equal to 75% of his
then current annual salary under Clause 3 (irrespective of whether
performance objectives have been achieved), provided, however,
that in the event of a termination for Good Reason pursuant to
Clause 16.1.7(b), the annual salary used for computation under
this Clause 10.1.2(a) shall be the one in effect prior to the
reduction referred to in Clause 16.1.7(b); provided, however, that
Executive shall have the right to request and receive the
aggregate lump sum payment comprising subclauses (i), (ii), (iii)
and (iv) herein above in installments designated by Executive paid
over the calendar year of the effective date of termination and
the subsequent two calendar years;
(b) for a period of thirty six (36) months after the effective date of
such termination, the Company shall provide the Executive with his
company car or cash allowance in lieu, pension contributions,
life, health, accidental death, disability and other insurance
benefits for the Executive and his dependents under the Benefit
Plans and such other benefits as are set out in Clauses 4 and 5,
at the respective levels of coverage in effect at the time the
Notice of Termination is given, or the cash equivalents of the
foregoing for the thirty-six month period (less any contribution
to such benefits plans made through a payroll deduction charged to
the Executive immediately prior to such effective date in respect
of any such benefits);
(c) if requested by Executive, take all actions necessary to transfer,
if contractually permitted, all life insurance policies to the
Executive or his designee to enable Executive and his family
and/or beneficiaries to receive, at their own expense, the
benefits thereof after the expiration of the thirty six (36) month
period referred to in subclause (b) above;
10.1.3 Except as provided in Clause 10.1.2 pursuant to a Change in Control, in
the event that the Executive terminates his employment for Good Reason,
he shall have the same rights and receive the same benefits to which he
would be entitled if the Company had terminated his employment Without
Cause under Clause 10.1.1. The effective date of the Executive's
termination of his employment pursuant to this Clause 10.1.3 shall be the
date that would have been the effective date had the Company terminated
the Executive without cause on the same date pursuant to Clause 10.1.
10.2 Termination by the Company for Cause; Termination by the Executive
Without Good Reason. The Company may at any time terminate the
Executive's employment for Cause by giving the Executive a Notice of
Termination in accordance with Clause 14.2 and, if applicable, after
complying with Clause 16.1.5 hereof. The Executive may at any time
terminate his employment with the Company in accordance with Clause 14.2
hereof by giving notice at least 12 months prior to the effective date of
<PAGE>
such termination specified in such notice. In the event of a termination
by the Company for Cause or by the Executive without Good Reason (except
in the case where the Executive so terminates his employment within two
years after a Change in Control, as provided in Clause 10.1.2), the
Executive shall be entitled to receive any unpaid amount of his then
current salary (including unused vacation entitlements pursuant to Clause
6.3) through the effective date of such termination, as well as any other
benefits which shall have vested and become payable to him under the
Benefit Plans as of such effective date.
10.3 Retirement. The employment of the Executive shall terminate automatically
upon his retirement. "Retirement" shall mean a termination of the
Executive's employment initiated by the Executive, other than for Good
Reason, whereby the Executive is entitled to receive an immediately
payable benefit, including any applicable early retirement benefit, under
any other pension or retirement plan then generally applicable to its
salaried employees or under any retirement arrangement established with
respect to the Executive with his prior written consent; in either case,
whether or not the Executive commences to receive such benefit at the
time of such termination. In the event of the termination of the
Executive's employment pursuant to his retirement, the Executive shall be
entitled to any other benefits which shall have vested and become payable
to him under the Benefit Plans as of the effective date of such
retirement or to which the Executive is otherwise entitled upon his
retirement under any Benefit Plan or other policy or program of the
Company or any Associated Company in accordance with the respective terms
of such Benefit Plan, policy or program.
10.4 Death or Disability
10.4.1 Disability. Subject to the requirements of the Americans with
Disabilities Act of 1990, as amended, the Family and Medical Leave Act of
1993, as amended, and/or any other legislation applicable to the
Executive's employment by the Company, the Company may terminate
employment of the Executive, by giving him a Notice of Termination not
less than six months prior to the effective date of such termination
specified in such notice, if the Executive shall have been absent from
work due to sickness, injury or other incapacity for more than 183 days
in the aggregate during any period of 12 consecutive months or if, in the
opinion of a physician or other appropriate expert selected by the
Company, the Executive is likely to be unable to perform his duties for
more than 183 days in the Aggregate during any period of 12 consecutive
months; provided, that the Company shall withdraw such notice if during
its pendency the Executive returns to full-time work and provides the
Company with a certificate from a physician or other appropriate expert
reasonably acceptable to the Company stating that he has fully recovered
and that no recurrence of such incapacity may reasonably be anticipated,
and provided further that if the Executive returns to work after a period
of absence which would have entitled the Company to terminate his
employment the Company shall, after he has completed a period of three
consecutive months at work without further material absence due to such
sickness, injury or other incapacity, be deemed to have waived its rights
<PAGE>
to terminate employment based on such previous period of absence.
Circumstances justifying termination of the Executive's employment by the
Company pursuant to this Clause 10.4.1 are referred to herein as
"Disability" and while in these circumstances executive is
deemed"Disabled."
10.4.2 Death. The employment of the Executive by the Company shall terminate
automatically upon his death.
10.4.3 Benefits upon Disability. In the event of termination of employment due
to Disability the Company shall (i) continue to pay Executive's salary
and bonus for achieving 100% of his performance objectives under Clause 3
and provide the other emoluments and benefits specified hereinabove,
including contributions to the pension plan designated by the Executive
at the full rate for a period of twelve (12) months from the date of
termination hereunder, and (ii) cause the vesting of all of the stock
options granted to Executive under the Stock Option Plan and allow the
Executive a period of twenty-four (24) months from the effective date of
termination within which to exercise such options. In addition, if the
Executive's employment is terminated by the Company pursuant to Clause
10.4.1, the Company shall, after the expiration of said twelve (12) month
period, (a) continue to provide or arrange for and fund a disability
benefit to the Executive in an amount of not less than sixty percent
(60%) of his then applicable base salary and (b) contribute to Executives
Pension Plan at the level in effect on the effective date of termination
for as long as the Executive is Disabled but in no event after the
Executive has reached the age of 65; provided, however, that such
disability benefit will be reduced to the extent that it duplicates any
payments under any disability insurance plan of the Company from time to
time in effect.
10.4.4 Benefits upon Death. In the event of a termination of employment due to
the death of the Executive, his legal representatives shall be entitled
to receive any unpaid amount of his then current salary through the
effective date of such termination plus a further three months base
salary, as well as any other benefits ---- which shall have vested and
become payable to him under the Benefit Plans as of such effective date
or to which the Executive is otherwise entitled upon his death under any
Benefit Plan or other policy or program of the Company or any Associ ated
Company in accordance with the respective terms of such Benefit Plan,
policy or program.
10.5 Upon the termination of his employment the Executive, or Executive's
legal representative as applicable, shall be entitled to accrued vacation
pay pursuant to clause 6.3.
10.6 Notwithstanding the terms of Clause 2 or any other provision of this
Agreement, during any period between the giving of a Notice of
Termination and the effective date of termination in accordance with
Clause 10, the Company shall not be under any obligation to provide the
Executive with any work and the Company may at any time during such
notice period without further notice suspend the Executive and/or exclude
<PAGE>
him from all or any premises of the Company or any Associated Company,
provided, however, that, throughout such notice period, the Company,
shall not make or give effect to any change in the terms and conditions
of the Executive's employment as in effect immediately prior to the
Reference Time (as defined below) that would constitute Good Reason under
any of paragraphs (b) through (g) of Clause 16.1.8 (regardless of whether
his employment is terminated for Good Reason), and the Executive's salary
and other contractual benefits shall continue to be paid or provided by
the Company in the manner in effect at the Reference Time. "Reference
Time" means the time immediately prior to (i) in the case of a
termination for Good Reason, the occurrence that constitutes such Good
Reason, or (ii) in all other cases, the giving of the Notice of
Termination. At any time during such notice period the Executive shall at
the request of the Company immediately resign from office as a Director
of the Company and any Associated Company and from other office held by
him in the Company or any Associated Company (but without claim to
compensation other than as provided under this Agreement) and in the
event of his failure to do so the Company is hereby irrevocably
authorized to appoint some person in his name and on his behalf to sign
and deliver such resignations to the Company.
10.7 The Executive shall have no obligation to take any action to mitigate or
offset any amounts payable by the Company pursuant to this Clause 10, by
seeking other employment or otherwise, nor shall the amount of any
payment provided for in this Agreement be reduced by any compensation
earned by the Executive as a result of employment by another employer
after the date of termination of the Executive's employment or otherwise.
10.8 The termination of the Executive's employment for any reason whatsoever
shall not operate to terminate this Agreement as an entirety or to
adversely affect the respective continuing rights and obligations of the
parties under this Agreement, all of which shall survive the effective
date of such termination of employment in accordance with their
respective terms.
10.9 The Executive acknowledges that the Company may have in effect from time
to time a written severance plan or policy, which plan or policy is or
may be subject to change at the discretion of the Company. The Executive
shall not be entitled to any notice, payment in lieu of notice or other
severance payments under such plan or policy, but if the notice period
(or payment) to which the Executive would have been entitled under such
plan or policy as it may then exist is greater than the notice period (or
payment in lieu of such notice) to which the Executive would be entitled
under this Agreement, then the notice period (and payment in lieu
thereof) for termination hereunder shall be deemed to be such greater
amounts.
11. EXECUTIVES COVENANTS
11.1 The Executive acknowledges that during the course of his employment with
the Company he will receive and have access to Confidential Information
of the Company and its Associated Companies (including without limitation
<PAGE>
those matters specified in Clause 9.2 of this Agreement, as well as
detailed customer lists and information relating to the operations and
business requirements of those customers) and accordingly he is willing
to enter into the covenants described in Clauses 11.2 and 11.3 in order
to provide the Company and its Associated Companies with what he
considers to be reasonable protection for those interests.
11.2 The Executive hereby covenants with the Company that during the term of
his employment he will not either directly or indirectly engage or
participate in any activity competitive with or adverse to the business
or interests of the Company or any of its Associated Companies.
11.3 The Executive hereby covenants with the Company that he will not of the
period of 24 months after the Executive's last active day of employment
without prior written consent of the Board of Directors, directly or
indirectly:
11.3.1 carry on or set up or be employed or engaged by or otherwise assist in or
be interested in any capacity (including without limitation as a
shareholder) in any line of business in competition with any line of
business which is part of the Business of the Group with which the
Executive has had involvement and which the Company or any Associated
Company is carrying on in each specific national market during the 12
months preceding the Executive's last active day of employment; or
11.3.2 carry on or set up or be employed or engaged by or otherwise assist in or
be interested in any capacity (including without limitation as a
shareholder) a business which competes or will compete with any business
of the Company or any Associated Company which is planned or contemplated
at the date of the Executive's last active day of employment in any
country in which the business is planned or contemplated to operate and
which plans the Executive has been involved with to a material extent; or
11.3.3 in connection with the carrying on of any business which is in
competition with the Business of the Group canvass, solicit or approach
or cause to be canvassed or solicited or approached for orders in respect
of any services provided and/or any goods sold by the Company or any
Associated Company any person firm or company who or which at the date of
the Executive's last active day of employment or at any time during the
period of 12 months prior to that date is a supplier, customer or client
of the Company or any Associated Company and with whom or which the
Executive shall have had dealings during the course of his employment; or
11.3.4 in connection with the carrying on of any business in competition with
the Business of the Group do business with any person, firm or company
who or which has at any time during the period of 12 months immediately
preceding the date of the Executive's last active date of employment done
business with the Company or any Associated Company as a supplier,
<PAGE>
customer or client or distributor or consultant and with whom or which
the Executive shall have had dealings during the course of his
employment; or
11.3.5 solicit, entice away or hire or endeavor to solicit or entice away from
the Company or any Associated Company any person who at the date of the
Executive's last active day of employment or at any time during the
period of six months prior to that date is employed or engaged by the
Company or any Associated Company as a head of any business unit, the
direct report of such business, unit head, or any other key technical,
marketing or sales position and with whom the Executives shall have had
contact during the course of his employment (whether or not such a person
would commit a breach of his contract of employment by so doing).
11.4 The Executive hereby agrees that he will at the cost of the Company enter
into a direct agreement or undertaking with any Associated Company
whereby he will accept restrictions and provisions corresponding to the
restrictions and provisions in Clause 11.3 above (or such of them as may
be appropriate in the circumstances) in relation to such activities and
such country or countries as such Associated Company may reasonably
require for the protection of its legitimate business interests.
11.5 Notwithstanding the generality of the covenants contained in Clause 11.3
those covenants shall apply only with respect to those countries in which
the Company or any Associated Company has transacted any business during
the 12 months prior to the date of Executive's last active day of
employment in which the Executive has been involved.
11.6 Nothing contained herein shall prohibit the Executive from (x) holding
directly or through nominees up to two percent of the outstanding stock
of any publicly-held and traded company or shares or an equity interest
in PERQ/HCI, a majority-owned subsidiary of VNU, a Dutch public company,
("PERQ/HCI"), a company formed as a result of the purchase by VNU of
Healthcare Communications Inc. ("HCI"), previously a privately-held
corporation organized under the laws of the State of Delaware, solely for
investment. purposes, or (y) serving as a director of PERQ/HCI, during
the continuance of his employment pursuant to this Agreement; provided,
however, that if any private company in which Executive directly holds
shares is merged with a publicly-held company and, as a result of such
merger, Executive's holdings are in excess of two percent of the public
entity, such holdings shall not be deemed to have caused a violation of
this Agreement.
11.7 The covenants contained in Clauses 11.3.1, 11.3.2, 11.3.3, 11.3.4 and
11.3.5 are intended to be separate and severable and enforceable as such.
11.8 In the event of a breach of Clauses 11.3.1, 11.3.2, 11.3.3, 11.3.4, or
11.3.5, the Executive acknowledges that in addition to any other remedies
available under law to the Company and any Associated Company, the
Company and any Associated Company may be entitled to an injunction
enjoining the Executive or any person or persons acting for or with the
Executive in any capacity whatsoever from violating any of the terms
thereof.
<PAGE>
12. DISCIPLINARY AND GRIEVANCE PROCEDURES
12.1 For statutory purposes there is no formal disciplinary procedure in
relation to the Executive's employment. The Executive shall be expected
to maintain the highest standards of integrity and behavior.
12.2 If the Executive is not satisfied with any disciplinary decision taken in
relation to him he may apply in writing within 14 days of that decision
to the Board of Directors whose decision shall be final.
12.3 If the Executive has any grievance in relation to his employment he may
raise it in writing with the Board of Directors whose decision shall be
final.
13. ASSIGNMENT
13.1 The Company may assign its rights or delegate its performance, in whole
or in part, to any of its Associated Companies; provided that any such
assignment or delegation shall not affect the Executive's position with
the Company. This Agreement shall be binding upon and shall inure to the
benefit of the Company and any successor of the Company. In the event of
any permitted assignment, the Company shall guarantee the performance of
this Agreement by the Associated Company.
13.2 This Agreement shall be binding upon and shall inure to the benefit of
Executive, his legal representatives and assigns, except that Executive's
obligations to perform services under this Agreement are personal and are
expressly declared to be non-assignable and non-transferable by him
without the consent in writing of the Company.
13.3 In the event of a Change in Control, the Company shall require the
successor to the Company as the Executive's employer (whether such
succession is direct or indirect, by purchase, merger, consolidation or
otherwise, to all or a substantial portion 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, the term "Company" shall mean the Company as hereinbefore
defined and any successor to all or a substantial portion of its business
and/or assets as aforesaid.
14. NOTICES
14.1 Any notice to be given under this Agreement shall be given in writing and
shall be deemed to be sufficiently served by one party or the other if it
is delivered personally or is sent by facsimile transmission, overnight
delivery service or registered or recorded delivery prepaid post (air
mail if overseas) addressed to either the Company's registered office for
the time being or the Executive's last known address as the case may be.
14.2 Any purported termination of the Executive's employment by the Company or
<PAGE>
by the Executive shall not be effective unless communicated by written
Notice of Termination to the other party hereto in accordance with Clause
14.1 above and the relevant provisions of Clause 10. A Notice of
Termination shall identify the specific termination provision of this
Agreement relied upon, shall specify the intended effective date of such
termination (which date shall comply with the notice period requirements
of the provision so identified) and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination on
under the provision so identified.
15. MISCELLANEOUS
15.1 The Executive hereby warrants that by virtue of entering into this
Agreement he will not be in breach of any express or implied terms of any
court order, contract or of any other obligation legally binding upon
him.
15.2 Any benefits provided by the Company to the Executive or his family which
are not expressly referred to in this Agreement shall be regarded as ex
gratia benefits provided at the entire discretion of the Company and
shall not form part of the Executive's contract of employment.
15.3 Except as expressly provided in this Clause 15, the Executive shall be
responsible for the payment of all individual taxes on all amounts paid
or benefits provided to him under this Agreement. All compensation
(including without limitation, salary and any severance payments) paid to
the Executive shall be subject to such deductions as from time to time
may be required by law or regulation subject to agreement with, or
consent of, the Executive which would not be unreasonably withheld.
15.4 Any waiver by either party of any breach of any provision of this
Agreement must be set forth in writing signed by such party, in order for
it to be effective, and no such waiver shall operate as a waiver of any
subsequent breach of that provision or any breach of any other provision
of this Agreement.
15.5 This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original and all of which together shall constitute
one and the same instrument.
15.6 The Company and PMSI will indemnify the Executive (and his legal
representatives, heirs, estate or other successors) to the fullest extent
provided (including payment of expenses in advance of final disposition
of any proceeding) under Section 310 of the Companies Act 1985 and the
Articles of Association and By-Laws of the Company as in effect at such
time or on the date of this Agreement, or by the terms of any
indemnification agreement between the Company and the Executive,
whichever affords or afforded greatest protection to the Executive, and
the Executive shall be entitled to the protection of any insurance
policies the Company or any Associated Company may elect to maintain
generally for the benefit of its directors and officers (and to the
extent the Company or an Associated Company maintains such an insurance
policy or policies), the Executive shall be covered by such policy or
<PAGE>
policies, in accordance with its or their terms, to the maximum extent of
the coverage available for a person serving or having served in the
positions and offices in which the Executive is serving or has served),
against all costs, charges and expenses whatsoever incurred or sustained
by him (or his legal representatives, heirs, estate or other successors)
at the time such costs, charges and expenses are incurred or sustained,
in connection with any action, suit or proceeding to which he (or his
legal representatives, heirs, estate or other successors) may be made a
party by reason of his being or having been a director, officer or
employee of the Company or any Associated Company, or by reason of his
serving or having served any other enterprise as a director, officer or
employee at the request of the Company or any Associated Company.
15.7 The Company or PMSI shall maintain in force directors' and officers'
liability insurance for a minimum of $10 million and shall afford
Executive the maximum protection available under the terms of that policy
for the performance of his duties as an officer and director of the
Company.
15.8 In the event of a dispute between the Executive and the Company with
respect to any of the Executive's rights under this Agreement, the
Company shall reimburse the Executive for any and all legal fees and
disbursements incurred by him in connection with enforcing such rights,
at the time such fees and disbursements are incurred (but in no event
more frequently than monthly); provided, however, that if the Executive's
claim is found by a court of competent jurisdiction to have been
frivolous, the Executive shall reimburse the Company for all amounts paid
by the Company pursuant to this Clause 15.8.
16. DEFINITIONS AND INTERPRETATION
16.1 In this Agreement unless the context otherwise requires or as otherwise
defined herein the following expressions have the following meanings:
16.1.1 "Associated Company"
Any corporation, limited liability company or other legal entity that,
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with the Company, where
"control" means the power to direct or cause the direction of the
management and policies of such entity, whether through ownership of
voting securities, by contract or otherwise.
16.1.2 "Benefit Plans"
The 401(k) plan and other pension, retirement, life insurance, medical,
dental, health, accident, disability, welfare, savings, deferred
compensation or similar plans of the Company and its Associated
Companies.
16.1.3 "the Board of Directors"
<PAGE>
The Board of Directors for the time being of the Company including any
duly appointed committee thereof.
16.1.4 "the Business of the Group"
The business of the Company and the Associated Companies as described in
the Schedule hereto and such other business or businesses as the Company
or any Associated Company may enter into from time to time of which the
Executive is aware.
16.1.5 "Cause"
Any of the following:
(a) the Executive's willful and continued failure substantially to
perform his duties hereunder (other than as a result of sickness,
injury or other physical or mental incapacity or as a result of
termination by the Executive for Good Reason); provided, however,
that such failure shall constitute "Cause" only if (x) the Company
delivers a written demand for substantial performance to the
Executive that specifies the manner in which the Company believes
the Executive has failed substantially to perform his duties
hereunder and (y) the Executive shall not have corrected such
failure within 10 business days after his receipt of such demand;
(b) willful misconduct by the Executive in the performance of his
duties hereunder that is demonstrably and materially injurious to
the Company or any Associated Company for which he is required to
perform duties hereunder;
(c) the Executive's conviction of (or plea of 'nolo contendere') to a
criminal offence under the laws of the United Kingdom, a felony
under the laws of the United States or any state thereof or any
non-U.S. jurisdiction that would constitute a felony under the
laws of the United States or of the state of Delaware (other than
offences under the road-traffic legislation in the United Kingdom
or elsewhere for which a non-custodial penalty is imposed); or
(d) the Executive's illegal or persistent immoderate use or abuse of
alcoholic beverages or drugs in a manner that in the reasonable
opinion of the Company demonstrably and materially impairs the
Executive's ability to perform his duties under this Agreement or
demonstrably and materially adversely affects the Executive's or
the Company's reputation with customers or in the community as a
whole; provided, however, that this clause (d) shall not apply to
use of prescription drugs in the manner prescribed by a physician
or other duly licensed medical or health practitioner authorized
to issue prescriptions for such prescription drugs.
No action, or failure to act, shall be considered "willful" if it is done
by the Executive in good faith and with the reasonable belief that his
action or omission was in the best interest of the Company.
<PAGE>
16.1.6 "Change in Control"
The occurrence of any of the following:
(a) any event pursuant to which any "Person" becomes an "Acquiring
Person" (as such terms are defined in that certain Agreement dated
as of January 28, 1998 between the Company and Harris Trust
Company of New York as Rights Agent, as such Agreement initially
entered into effective as of such date);
(b) a merger, consolidation, exchange, combination or other
transaction involving the Company and another entity (or the
securities of the Company and such other entity) as a result of
which the holders of all of the shares of Common Stock of the
Company outstanding Prior to such transaction do not hold,
directly or indirectly, shares of the outstanding voting
securities of, or other voting ownership interests in, the
surviving, resulting or successor entity in such transaction in
substantially the same percentage of ownership as those in which
they held the outstanding shares of Common Stock of the Company
immediately prior to such transaction;
(c) the sale, transfer, assignment or other disposition by PMSI, the
Company and/or one or more Associated Companies, in one
transaction or a series of transactions within any period of 18
consecutive calendar months (including, without limitation, by
means of the sale of capital stock of any subsidiary or
subsidiaries of the Company) of assets which account for an
aggregate of 50% of the assets of PMSI or more than 50% of the
consolidated revenues of PMSI and its subsidiaries, as determined
in accordance with U.S. generally accepted accounting principles,
for the fiscal year most recently ended prior to the date of such
transaction (or, in the case of a series of transactions as
described above, the first such transaction); provided, however,
that no such transaction shall be taken into account if
substantially all the proceeds thereof (whether in cash or in
kind) are used after such transaction in the ongoing conduct by
the Company and/or its subsidiaries of the business conducted by
the Company and/or its subsidiaries prior to such transaction;
(d) the Company is dissolved; or
(e) a majority of the directors of the Company are persons who were
not members of the Board of Directors as of the date (the
"Reference Date") which is the more recent of the date hereof and
the date which is two years prior to the date on which such
determination is made, unless the first election or appointment
(or the first nomination for (election by the Company's
shareholders) of each director who was not a member of the Board
of Directors on the Reference Date was approved by a vote of at
least two-thirds of the Board of Directors in office prior to the
time of such first election, appointment or nomination.
16.1.7 "Good Reason"
<PAGE>
The occurrence of any of the following (other than by reason of a
termination of the Executive for Cause or Disability):
(a) the position or responsibilities of the Executive are
significantly reduced, (including, without limitation, by reason
of the elimination of the position of the Chief Executive Officer
of PMSI or the failure to elect the Executive to the position of
the Chief Executive Officer of PMSI or by reason of a change in
the reporting responsibilities to and of such position, or,
following a Change in Control, by reason of a substantial
reduction in the size of PMSI or other substantial change in the
character or scope of the PMSI operations), or the Executive is
assigned without his written consent to any duties inconsistent
with his positions, duties, responsibilities and status with the
Company immediately prior to such assignment;
(b) the salary provided in Clause 3.1 hereof (as the same may be
increased from time to time in accordance with Clause 3.3) is
reduced except if such reduction occurs prior to a Change in
Control and is part of an across-the-board reduction applicable to
all senior level executives of the Group);
(c) the annual incentive compensation provided for in Clause 3.2
hereof is reduced or eliminated or, if after a change in Control,
the Executive's participation level is reduced or the manner of
assessing actual performance is changed which results in the
Executive earning less such compensation for a given period than
he would have for the same period absent such change;
(d) the Executive's aggregate level of benefits under the Benefit
Plans is reduced, except if such reduction occurs prior to a
Change in Control and is part of an across-the-board reduction in
such benefits applicable to all senior level executives of the
Group;
(e) after a Change in Control, the Company fails to continue to
provide the Executive with benefits and perquisites which are
substantially similar in the aggregate to those to which the
Executive is entitled under the Company's Benefit Plans in which
the Executive was participating immediately prior to the Change in
Control, or fails to provide the Executive with directors' and
officers' insurance, at least at the level maintained immediately
prior to the Change in Control;
(f) the Executive is required to change his regular work location to a
location that is more than 15 miles from the current address of
Executive set out at the beginning of this Agreement;
(g) the Company fails to pay the Executive any amount otherwise vested
and due hereinunder or under any plan or policy of the Company, or
fails to comply with any other provision of or perform any of its
other obligations under this Agreement; or
<PAGE>
(h) the Company fails to obtain from any successor and to deliver to
the Executive such successor's written agreement to assume and
agree to perform the Company's obligations under this Agreement.
If the Executive delivers to the Company a Notice of Termination in
connection with an event described in Clauses (a) through (h) above, the
Company shall have 10 business days from the date of receipt of such
notice to effect a cure of the event described therein, and upon cure
thereof by the Company to the Executive's reasonable satisfaction, such
event shall no longer constitute "Good Reason" for purposes of this
Agreement.
16.1.8 "Intellectual Property"
Letters patent, trademarks, trade names, service marks, designs,
copyrights, utility models, design rights, applications for registration
of any of the foregoing and the right to apply for them in any part of
the world, inventions, drawings, computer programs, trade secrets and
other non-public proprietary information, know-how and rights of like
nature arising or subsisting anywhere in the world in relation to the
Business of the Group whether registered or unregistered.
16.1.9 "Group"
The Company and the Associated Companies.
16.2 The headings in this Agreement are for convenience only and shall not
affect its construction or interpretation.
16.3 Any reference in this Agreement to a statutory provision shall be deemed
to include a reference to any statutory amendment, modification or
re-enactment of it or to any legislation that supersedes it.
16.4 This Agreement contains the entire understanding between the parties and
supersedes all prior agreements, arrangements and understandings (written
or oral) relating to the employment of the Executive with the Company
(other than Executive's activities on behalf of the Group in the United
Kingdom and his compensation therefor). The parties acknowledge that PMSI
and Executive have entered into an Employment Agreement relating to
Executive's services outside of the United Kingdom for an aggregate
period not to exceed one hundred forty (140) working days each year.
The parties hereto have agreed that, in the case of conflict, the
performance of Executive's duties under the Employment Agreement with
PMSI shall take precedence over the performance of Executive's duties
under this Executive Services Agreement. The parties hereto expressly
agree that the term of employment set forth in Clause 1 of this Agreement
shall not be terminated or affected in any way, and Executive's
remuneration under this Agreement shall not be changed by the termination
for any reason whatsoever of Executive's employment with PMSI, the intent
<PAGE>
being that each employment shall be separate from and independent of the
other.
16.5 The various Clauses of this Agreement are severable and if any Clause or
identifiable part thereof is held to be invalid or unenforceable by any
court of competent jurisdiction then such invalidity or unenforceability
shall not affect the validity or enforceability of the remaining Clauses
or identifiable part thereof in this Agreement, and the parties hereto
agree that the portion so held invalid, unenforceable or void shall, if
possible, be deemed amended or reduced in scope, or otherwise be stricken
from this agreement, to the extent required for e purposes of the
validity and enforcement hereof.
16.6 Unless the context otherwise requires, any reference in this Agreement to
the employment of the Executive or the Executive's last day of active
employment refers to the Executive's employment with the Company.
16.7 Unless the context otherwise requires, any reference herein to Benefit
Plans or other plans, agreements, arrangements, policies or programs of
the "Company," or to a benefit, payment or contribution provided or to be
provided to the Executive by the "Company" shall be understood to include
any Benefit Plan, plan, agreement, arrangement, policy or program of any
Associated Company, or any benefit, payment or contribution provided or
to be provided to the Executive by any Associated Company, respectively.
16.8 This Agreement is governed by and shall be construed in accordance with
the law of the United Kingdom.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date first above written.
EXECUTED AND DELIVERED AS A DEED BY PMSI LIMITED
/s/ R. S. Towill /s/ Raymund Davies
- ---------------------------- -------------------------
Title: R.S. Towill, Director Title:
SIGNED SEALED AND DELIVERED
by the said DENNIS M.J. TURNER
in the presence of:
/s/ A.M. Lee Abbott /s/ Dennis M.J. Turner
- ---------------------------- -------------------------
<PAGE>
SCHEDULE
BUSINESS OF THE GROUP The Business of the Group consists of the provision to the
pharmaceutical industry of:
(a) information services from and survey of physicians and managed care
professionals;
(b) marketing research audits and survey evaluating promotional
expenditure, physicians attitudes and behaviours and prescribing;
(c) profiles of managed care organizations, formularies, regulations and
legislation; and
(d) related consulting services to the pharmaceutical industry.
EXHIBIT 10.4
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the fifth day of August, 1998 BETWEEN:
PHARMACEUTICAL MARKETING SERVICES INC. (the "Company"), a Delaware Corporation
with offices at 45 Rockefeller Plaza, Suite 912, New York, New York, and JOY
SCOTT, an individual residing at 1509 Dolington Road, Yardley, Pennsylvania
19067 (the "Executive").
WHEREAS, the Company wishes to assure itself of the services of the
Executive in the capacity of Executive Vice President of the Company and Chief
Executive Officer of PMSI Scott-Levin Inc. ("SLA") and to that end desires to
amend the earlier Employment Agreement dated 8 April, 1996 with Executive; and
WHEREAS, Executive is willing to enter into an Amended and Restated
Employment Agreement upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein set forth, the parties hereto mutually covenant and agree as follows:
1. COMMENCEMENT AND TERM
1.1 The Company shall employ the Executive in the capacity of Executive
Vice President of the Company and Chief Executive Officer of SLA under
and subject to the terms and conditions set forth in this Agreement.
1.2 The employment of the Executive shall be for an indefinite term,
provided that the employment of Executive may be terminated by the
Company and by Executive at any time in accordance with Clause 9
hereinafter.
1.3 This Agreement has been entered into as of the date first above
written but, for purposes of determining Executive's length of
service, the Executive shall be credited with her employment with SLA
or any predecessor-in-interest, which began on May 1982.
2. OBLIGATIONS DURING EMPLOYMENT
2.1 The Executive shall during the continuance of her employment:
<PAGE>
2.1.1 Serve the Company to the best of her ability in the capacity
of Executive Vice President of the Company and Chief
Executive Officer of SLA and manage affairs of SLA in
accordance with the policies and procedures established by
the Chief Executive Officer of the Company, to whom the
Executive shall report; and
2.1.2 Faithfully and diligently perform such duties and exercise
such powers consistent with such office, subject to the
direction and supervision of the Chief Executive Officer of
the Company; and
2.1.3 If and so long as the Chief Executive Officer so directs,
perform and exercise the said duties and powers on behalf of
any Associated Company and act as an officer of any Associ-
ated Company; and
2.1.4 Do all in her power to protect, promote, develop, and extend
the business interests and reputation of the Company; and
2.1.5 At all times and in all respects conform to and comply with
the lawful and reasonable directions of the Chief Executive
Officer including all authority levels and procedures from
time to time specified by the Chief Executive Officer; and
2.1.6 Promptly give to the Chief Executive Officer (in writing if
so requested) all such information, explanations and
assistance as he may require in connection with the business
and affairs of the Company and any Associated Company; and
2.1.7 Unless prevented by sickness, injury or other incapacity or
as otherwise agreed by the Chief Executive Officer, devote
the whole of her time, attention and abilities during her
hours of work (which shall be normal business hours and such
additional hours as may be necessary for the proper
performance of her duties) to the performance of her duties
and the business and affairs of the Company and any
Associated Company for which she is required to perform
Duties; and
<PAGE>
2.1.8 Work at such offices of the Company as the Company may
direct and travel from time to time as may be required in
connection with the business of the Company and any Associ-
ated Company for which she is required to perform duties.
3. REMUNERATION
3.1 The Company shall pay to the Executive during the continuance of her
employment a salary (which shall accrue from day to day) at the rate
of $265,000 per annum. The salary shall be payable in equal
[bimonthly] installments in arrears or as otherwise determined by the
Company on a company-wide basis.
3.2 As further remuneration, the Executive shall be entitled to an annual
bonus based upon the achievement of performance criteria established
by the Chief Executive Officer. The amount of the bonus for the
achievement of 100% of targeted performance will not be less than
forty percent (40%) of the Executive's then annual base salary.
3.3 The salary and bonus shall be reviewed from time to time and the rates
thereof may be increased by the Company with effect from any such
review date. Review due 1st January 1999.
4. INSURANCE, PENSION SCHEME AND OTHER BENEFITS
4.1 At all times during the term of this Agreement, the Company shall
provide Executive with health insurance (including any medical expense
insurance, permanent health and accident insurance, and travel
insurance), life insurance, the opportunity to participate in a 401(k)
Savings Plan, and such other benefits of the Company enjoyed by or
made available to other senior officers of the Company to the extent
that the Executive qualifies under the eligibility provisions of any
such plan, as presently in effect or as they may be modified from time
to time.
4.2 SLA shall provide Executive with a suitable Company automobile and
will reimburse all expenses associated with the operation of the
vehicle.
<PAGE>
5. EXPENSES
5.1 The Company shall during the continuance of her employment reimburse
the Executive in respect of all reasonable and appropriate travel,
accommodations, business entertainment and other similar out-of-pocket
expenses actually incurred or expended by her in the performance of
her duties hereunder.
5.2 Except where specified to the contrary, all expenses shall be
reimbursed on a monthly basis subject to the Executive providing
appropriate evidence (including receipts, invoices, tickets and/or
vouchers as may be appropriate) of the expenditure in respect of which
she claims reimbursement.
6. VACATION
6.1 The Executive shall (in addition to the usual public and bank
holidays) be entitled during the continuance of her employment to four
weeks paid vacation in each calendar year.
6.2 The Executive shall not be permitted to carry forward any accumulated,
unused vacation entitlement in excess of five weeks from one calendar
year to the next.
6.3 Upon the termination of her employment, the Executive's entitlement to
accrued vacation pay (which accrues on a monthly basis) shall be
calculated on a pro rata basis in respect of each completed month of
service in the vacation year in which her employment terminates and
the appropriate amount shall be paid to the Executive; provided that
if the Executive shall have taken more days' vacation than her accrued
entitlement, the Company is hereby authorized to make an appropriate
deduction from the Executive's final salary payment.
7. INTELLECTUAL PROPERTY
7.1 Subject to applicable law, if at any time in the course of her
employment, the Executive makes or discovers or participates in the
making or discovery of any Intellectual Property relating to or
capable of being used in the business of the Company or any Associated
Company, she shall immediately disclose full details of such
Intellectual Property to the Company and, at the request and expense
of the Company, she shall do all things which may be necessary or
desirable for obtaining appropriate forms of protection for the
Intellectual Property in such parts of the world as may be specified
by the Company and for vesting all rights in the same in the Company
or its nominee.
<PAGE>
7.2 The Executive hereby irrevocably appoints the Company to be her
attorney and in her name and on her behalf to execute any instrument
or do any thing and generally to use her name for the purpose of
giving to the Company or its nominee the full benefit of the
provisions of this Clause.
7.3 All rights and obligations under this Clause 7 in respect of
Intellectual Property made or discovered by the Executive during her
employment shall continue in full and force and effect after the
termination of her employment and shall be binding upon the
Executive's personal representatives.
8. CONFIDENTIALITY
8.1 The Executive shall not (other than in the proper performance of her
duties or with the prior written consent of the Company or unless
ordered by a court of competent jurisdiction) at any time either
during the continuance of her employment or after its termination
disclose or communicate to any person or use for her own benefit or
the benefit of any person other than the Company or any Associated
Company any confidential information relating to the Company or any
Associated Company which may come to her knowledge in the course of
her employment and the Executive shall during the continuance of her
employment use her best endeavors to prevent the unauthorized
publication or misuse of any confidential information, provided
however that such restrictions shall cease to apply to any
confidential information which may enter the public domain other than
through the fault of the Executive.
8.2 All notes and memoranda of any trade secret or confidential
information concerning the business of the Company and the Associated
Companies or any of its or their suppliers, agents, distributors,
clients, customers or others which shall have been acquired, received
or made by the Executive during the course of her employment shall be
the property of the Company and shall be surrendered by the Executive
to a person duly authorized by the Company at the termination of her
employment or earlier at the request of the Chief Executive Officer of
the Company at any time during the course of her employment.
9. TERMINATION OF EMPLOYMENT
9.1 Termination by the Company Without Cause; Termination by the Executive
for Good Reason. The Company may terminate the employment of the
<PAGE>
Executive at any time without Cause by giving the Executive a Notice
of Termination in accordance with Clause 12.2 hereof at least 24
months prior to the effective date of such termination specified in
such notice. The executive may terminate her employment by the Company
at any time for Good Reason by giving a Notice of Termination to the
Company in accordance with Clause 12.2 hereof, and the effective date
of such termination shall be deter mined in accordance with Clause
9.1.3.
9.1.1 Except as provided in Clause 9.1.2, in the event that the Executive's
employment is terminated by the Company Without Cause:
(a) the Company shall pay to the Executive, within 30 days after
the Notice of Termination is given, a lump-sum cash amount
equal to (i) two times the sum of (A) her then current
annual salary under Clause 3 and (B) 40% of her then current
annual salary under Clause 3 (representing her annual bonus
for the achievement of 100% of performance objectives,
irrespective of whether performance objectives have been
achieved), plus (ii) an additional amount of salary equal to
all of the Executive's accrued unused vacation entitlement
up to a maximum of eight weeks; plus (iii) the cash
equivalent of all emoluments specified hereinabove (except
those the Company shall continue to provide pursuant to
Clause 9.1.1(b) during the period of twenty-four (24) months
following the effective date of such termination; and
provided further that in the event of a termination for Good
Reason pursuant to Clause 14.1.8(b), the annual salary used
for computation under this Clause 9.1.1(a) shall be the one
in effect prior to the reduction referred to in clause
14.1.8(b). Executive shall have the right to request and
receive the aggregate lump sum payment comprising
subclauses (i), (ii), and (iii) hereinabove in installments
designated by Executive paid over the calendar year of the
effective date of termination and the subsequent two
calendar years;
(b) for a period of twenty-four (24) months after the effective
date of such termination, the Company shall provide the
Executive with life, health, disability and other insurance
benefits for the Executive and her dependents under the
benefit plans, at the respective levels of coverage in
effect at the time the Notice of Termination is given, or
<PAGE>
the cash equivalents of the foregoing (less any contribution
to such benefits plans made through a payroll deduction
charged to the Executive immediately prior to such effective
date in respect of any such benefits), provided, however,
that nothing contained herein is intended to affect
Executive's eligibility for COBRA coverage upon termination
of her employment with the Company;
(c) the Company shall vest as of the time of such termination
all options granted to the Executive under the Stock Option
Plan and allow the Executive a period ending twenty-four
months after the effective date of the termination of her
employment within which to exercise such options;
(d) if so requested by Executive the Company shall provide
outplacement services to Executive, for a period not to
exceed twelve (12) months following the effective date of
termination, with a nationally-recognized outplacement firm
selected by the Company.
9.1.2 Notwithstanding the other provisions of this Clause 9.1, in the event
that the Company terminates the Executive's employment Without Cause
in anticipation of, or pursuant to a Notice of Termination delivered
to the Executive within two years after a Change in Control:
(a) the Company shall pay to the Executive, within 30 days after
the Notice of Termination is given, a lump-sum cash amount
equal to (i) three times the sum of (A) her then current
annual salary under Clause 3 and (B) 40% of her then current
annual salary under Clause 3 (representing her annual bonus
for the achievement of 100% of performance objectives,
irrespective of whether performance objectives have been
achieved), plus (ii) an additional amount of salary equal to
all of the Executive's accrued unused vacation entitlement
up to a maximum of eight weeks; plus (iii) the cash
equivalent of all emoluments specified hereinabove (except
those the Company shall continue to provide pursuant to
Clause 9.1.2(b) during the period of thirty-six (36) months
following the effective date of such termination; and
provided further that in the event of a termination for Good
Reason pursuant to Clause 14.1.8(b), the annual salary used
for computation under this Clause 9.1.2(a) shall be the
<PAGE>
one in effect prior to the reduction referred to in Clause
14.1.8(b). Executive shall have the right to request and
receive the aggregate lump sum payment comprising
subclauses (i), (ii), and (iii) herein above in installments
designated by Executive paid over the calendar year of the
effective date of termination and the subsequent two
calendar years;
(b) for a period of thirty-six (36) months after the effective
date of such termination, the Company shall provide the
Executive with life, health, disability and other insurance
benefits for the Executive and her dependents under the
benefit plans, at the respective levels of coverage in
effect at the time the Notice of Termination is given, or
the cash equivalents of the foregoing (less any contribution
to such benefits plans made through a payroll deduction
charged to the Executive immediately prior to such
effective date in respect of any such benefits); provided,
however, that nothing contained herein is intended to
affect Executive's eligibility for COBRA coverage upon
termination of her employment with the Company;
(c) the Company shall vest as of the time of such Change in
Control all options granted to the Executive under the
Stock Option Plan and allow the Executive a period ending
twenty-four months after the effective date of the
termination of her employment within which to exercise such
options; and;
(d) the Company shall provide outplacement services to
Executive, for a period not to exceed twelve (12) months
following the effective date of termination, with a
nationally-recognized outplacement firm selected by the
Company.
9.1.3 Except as provided in Clause 9.1.2, in the event that the Executive
terminates her employment for Good Reason, she shall have the rights
and receive the benefits to which she would be entitled if the Company
had terminated her employment without Cause by delivering a Notice of
Termination under Section 9.1.1. The effective date of the
Executive's termination of her employment pursuant to this Clause
9.1.3 shall be the date specified in Executive's Notice of
Termination; provided, however, that, under no circumstances shall
the Executive specify an effective date less than one hundred twenty
<PAGE>
(120) days after the date of such notice. In such event, the
Executive shall receive the benefits provided in Clause 9.1.1 on the
effective date of termination of her employment.
9.1.4 In the event of a dispute between the Executive and the Company with
respect to any of the Executive's rights under this Agreement, the
Company shall reimburse the Executive for any and all legal fees and
disbursements incurred by her in connection with enforcing such
rights, at the time such fees and disbursements are incurred (but in
no event more frequently than monthly); provided, however, that if the
Executive's claim is found by a court of competent jurisdiction to
have been frivolous, the Executive shall reimburse the Company for all
amounts paid by the Company pursuant to this Clause 9.1.4.
9.2 Termination by the Company for Cause; Termination by the Executive
Without Good Reason. The Company may at any tine terminate the
Executive's employment for Cause by giving the Executive a Notice of
Termination in accordance with Clause 12.2 and, if applicable, after
complying with Clause 14.1.5 hereof. The Executive may at any time
terminate her employment with the Company in accordance with Clause
12.2 hereof at least twelve (12) months prior to the effective date of
such termination specified in such notice. In the event of a
termination by the Company for Cause or by the Executive without Good
Reason (except in the case where the Executive so terminates her
employment within two years after a Change in Control, as provided in
Clause 9.1.2), the Executive shall be entitled to receive any unpaid
amount of her then current salary (including unused vacation
entitlements pursuant to Clause 6.3) through the effective date of
such termination, as well as any other benefits which shall have
vested and become payable to her under the Benefit Plans as of such
effective date.
9.3 Retirement. The employment of the Executive shall terminate
automatically upon her retirement. In the event of the termination of
the Executive's employment pursuant to her retirement, the Executive
shall be entitled to any other benefits which shall have vested and
become payable to her under the Benefit Plans as of the effective date
of such retirement or to which the Executive is otherwise entitled
upon her retirement under any Benefit Plan or other policy or program
of the Company or any Associated Company in accordance with the
<PAGE>
respective terms of such Benefit Plan, policy or program.
9.4 Death or Disability
9.4.1 Disability. Subject to the requirements of the Americans with
Disabilities Act of 1990, as amended, the Family and Medical Leave Act
of 1993, as amended, and/or any other legislation applicable to the
Executive's employment by the Company, the Company may terminate
employment of the Executive, by giving her a Notice of Termination not
less than six months prior to the effective date of such termination
specified in such notice, if the Executive shall have been absent from
work due to sickness, injury or other incapacity for more than 183
days in the aggregate during any period of 12 consecutive months or
if, in the opinion of a physician or other appropriate expert selected
by the Company, the Executive is likely to be unable to perform her
duties for more than 183 days in the aggregate during any period of
12 consecutive months; provided, that the Company shall withdraw such
notice if during its pendency the Executive returns to full-time work
and provides the Company with a certificate from a physician or other
appropriate expert reasonably acceptable to the Company stating that
she has fully recovered and that no recurrence of such incapacity may
reasonably be anticipated, and provided further that if the Executive
returns to work after a period of absence which would have entitled
the Company to terminate her employment the Company shall, after she
has completed a period of three consecutive months at work without
further material absence due to such sickness, injury or other
incapacity, be deemed to have waived its rights to terminate her
employment based on such previous period of absence. Circumstances
justifying termination of the Executive's employment by the Company
pursuant to this Clause 9.4.1 are referred to herein as "Disability".
9.4.2 Death. The employment of the Executive by the Company shall terminate
automatically upon her death.
9.4.3 Benefits upon Disability. In the event of termination of employment
due to Disability the Company shall continue to pay Executive's salary
and bonus for achieving 100% of her performance objectives under
Clause 3 and provide the other emoluments and benefits specified
hereinabove for a period of six (6) months from the date of
termination hereunder; and cause the vesting of all of the stock
options granted to Executive under the Stock Option Plan and allow
<PAGE>
the Executive a period of eighteen (18) months from the effective date
of termination within which to exercise such options.
9.4.4 Benefits upon Death. In the event of a termination of employment due
to death of the Executive, her legal representatives shall be entitled
to receive any unpaid amount of her then current salary through the
effective date of such termination as well as any other benefits which
shall have vested and become payable to her under the Benefit Plans as
of such effective date or to which the Executive is otherwise entitled
upon her death under any Benefit Plan or other policy or program of
the Company or any associated Company in accordance with the
respective terms of such Benefit Plan, policy or program.
9.5 Upon the termination of her employment the Executive shall be entitled
to accrued vacation pay pursuant to clause 6.3.
9.6 Notwithstanding the terms of Clause 1.2 or any other provision of this
Agreement, during any period between the giving of a Notice of
Termination and the effective date of termination in accordance with
this Clause 9, the Company shall not be under any obligation to
provide the Executive with any work and the Company may at any time
during such notice period without further notice suspend the Executive
and/or exclude her from all or any premises of the Company or any
Associated Company, provided, however, that, throughout such notice
period, the Company shall not make or give effect to any change in the
terms and conditions of the Executive's employment as in effect
immediately prior to the Reference Time (as defined below) that would
constitute Good Reason under any of paragraphs (b) through (g) of
Clause 14.1.8 (regardless of whether her employment is terminated for
Good Reason), and the Executive's salary and other contractual
benefits shall continue to be paid or provided by the Company in the
manner in effect at the Reference Time. "Reference Time" means the
time immediately prior to (i) in the case of a termination for Good
Reason, the occurrence that constitutes such Good Reason, or (ii) in
all other cases, the giving of the Notice of Termination. At any time
during such notice period the Executive shall at the request of the
Company immediately resign from office as a Director of the Company
and any Associated Company and from other office held by her in the
Company or any Associated Company (but without claim to compensation
<PAGE>
other than as provided under this Agreement) and in the event of her
failure to do so the Company is hereby irrevocably authorized to
appoint some person in her name and on her behalf to sign and deliver
such resignations to the Company.
9.7 The Executive shall have no obligation to take any action to mitigate
or offset any amounts payable by the Company pursuant to this Clause
9, by seeking other employment or otherwise, nor shall the amount of
any payment provided for in this Agreement be reduced by any
compensation earned by the Executive as the result of employment by
another employer after the date of termination of the Executive's
employment or otherwise.
9.8 The termination of the Executive's employment for any reason
whatsoever shall not operate to terminate this Agreement as an
entirety or to adversely affect the respective continuing rights and
obligations of the parties under the relevant clauses of this
Agreement, all of which shall survive the effective date of such
termination of employment in accordance with their respective terms.
9.9 The Executive acknowledges that the Company may have in effect from
time to time a written severance plan or policy, which plan or policy
is or may be subject to change at the discretion of the Company. The
Executive shall not be entitled to any notice, payment in lieu of
notice or other severance payments under such plan or policy, but if
the notice period (or payment) to which the Executive would have been
entitled under such plan or policy as it may then exist is greater
than the notice period (or payment in lieu of such notice) to which
the Executive would be entitled under this Agreement, then the notice
period (and payment in lieu thereof) for termination hereunder shall
be deemed to be such greater amounts.
10. EXECUTIVES COVENANTS
10.1 The Executive acknowledges that during the course of her employment
with the Company she will receive and have access to Confidential
Information of the Company and its Associated Companies (including
without limitation those matters specified in Clause 8.2 of this
Agreement, as well as detailed client/customer lists and information
relating to the operations and business requirements of those
clients/customers) and accordingly she is willing to enter into the
covenants described in Clauses 10.2 and 10.3 in order to provide
<PAGE>
the Company and its Associated Companies with what she considers to be
reasonable protection for those interests.
10.2 The Executive hereby covenants with the Company that during the term
of her employment she will not either directly or indirectly engage or
participate in any activity competitive with or adverse to the
business or interests of the Company or any of its Associated
Companies.
10.3 The Executive hereby covenants with the Company that she will not for
the period of 24 months after the Executive's last active day of
employment without prior written consent of the Chief Executive
Officer, directly or indirectly:
10.3.1 carry on or set up or be employed or engaged by or otherwise assist in
or be interested in any capacity (including without limitation as a
shareholder) in any line of business in competition with any line of
business which is part of the Business of the PMSI Group with which
the Executive has had involvement and which the Company or any
Associated Company is carrying on during the 12 months preceding the
Executive's last active day of employment; or
10.3.2 carry on or set up or be employed or engaged by or otherwise assist in
or be interested in any capacity (including without limitation as a
shareholder) a business which competes or will compete with any
business of the Company or any Associated Company which is planned or
contemplated at the date of the Executive's last active day of
employment in any country in which the business is planned or
contemplated to operate and which plans the Executive has been
involved with to a material extent; or
10.3.3 in connection with the carrying on of any businesses which is in
competition with the Business of the Group canvass, solicit or
approach or cause to be canvassed or solicited or approached for
orders in respect of any services provided and/or any goods sold by
the Company or any Associated Company any person, firm or company who
or which at the date of the Executive's last active day of employment
or at any time during the period of 12 months prior to that date is a
supplier, customer or client of the Company or any Associated Company
and with whom or which the Executive shall have had dealings during
the course of her employment; or
<PAGE>
10.3.4 in connection with the carrying on of any business in competition with
the Business of the Group do business with any person, firm or company
who or which has at any time during the period of 12 months
immediately preceding the date of the Executive's last active date of
employment done business with the Company or any Associated Company,
customer or client or distributor or consultant and with whom or which
the Executive shall have had dealings during the course of her
employment; or
10.3.5 solicit, entice away or hire or endeavor to solicit or entice away
from the Company or any Associated Company any person who at the date
of the Executive's last active day of employment or at any time during
the period of six months prior to that date is employed or engaged by
the Company or any Associated Company as a head of any business unit,
the direct report of such business unit head, or any other key
technical, marketing or sales position and with whom the Executive
shall have had contact during the course of her employment (whether or
not such a person would commit a breach of his or her contract of
employment by so doing).
10.4 The Executive hereby agrees that she will at the cost of the Company
enter into a direct agreement or undertaking with any Associated
Company whereby she will accept restrictions and provisions
corresponding to the restrictions and provisions in Clause 10.3 above
(or such of them as may be appropriate in the circumstances) in
relation to such activities and such country or countries as such
Associated Company may reasonably require for the protection of its
legitimate business interests.
10.5 Notwithstanding the generality of the covenants contained in Clause
10.3, those covenants shall apply only with respect to those countries
in which the Company or any Associated Company has transacted any
business during the 12 months prior to the date of Executive's last
active day of employment in which the Executive has been involved,
except that during the 24- month period after the Executive's last
active day of employment the Executive may not be engaged or employed
by or render any services to or for the benefit of IMS Health Inc.,
National Data Corporation, Snyder Communications, Inc. or Quintiles
Transnational Corporation or any of their direct or indirect
subsidiaries, wherever located, except with the prior consent of the
Chief Executive Officer.
<PAGE>
10.6 Nothing contained herein shall prohibit the Executive from holding
directly or through nominees up to two percent of the outstanding
stock of any publicly-held and traded company or shares.
10.7 The covenants contained in Clauses 10.3.1, 10.3.2, 10.3.3, 10.3.4 and
10.3.5 are intended to be separate and severable and enforceable as
such.
10.8 In the event of a breach of Clauses 10.3.1, 10.3.2, 10.3.3, 10.3.4, or
10.3.5, the Executive acknowledges that in addition to any other
remedies available under law to the Company and any Associated
Company, the Company and any Associated Company may be entitled to an
injunction enjoining the Executive or any person or persons acting for
or with the Executive in any capacity whatsoever from violating any of
the terms thereof.
11. ASSIGNMENT
11.1 The Company may assign its rights or delegate its performance, in
whole or in part, to any of its Associated Companies; provided that
any such assignment or delegation shall not affect the Executive's
position with the Company. This Agreement shall be binding upon and
shall inure to the benefit of the Company and any successor of the
Company. In the event of any permitted assignment, the Company shall
guarantee the performance of this Agreement by the Associated Company.
11.2 This Agreement shall be binding upon and shall inure to the benefit of
Executive, her legal representatives and assigns, except that
Executive's obligations to perform services under this Agreement are
personal and are expressly declared to be non-assignable and
non-transferable by her without the consent in writing of the Company.
11.3 In the event of a Change in Control, the Company shall require the
successor to the Company as the Executive's employer (whether such
succession is direct or indirect, by purchase, merger, consolidation
or otherwise, to all or a substantial portion 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, the term "Company" shall mean the Company
as hereinbefore defined and any successor to all or a substantial
portion of its business and/or assets as aforesaid.
<PAGE>
12. NOTICES
12.1 Any notice to be given under this Agreement shall be given in writing
and shall be deemed to be sufficiently served by one party on the
other if it is delivered personally or is sent by facsimile
transmission, overnight delivery service or registered or recorded
delivery prepaid post (air mail if overseas) addressed to either the
Company's registered office for the time being or the Executive's last
known address as the case may be.
12.2 Any purported termination of the Executive's employment by the Company
or by the Executive shall not be effective unless communicated by
written Notice of Termination to the other party hereto in accordance
with Clause 12.1 above and the relevant provisions of Clause 9. A
Notice of Termination shall identify the specific termination
provision of this Agreement relied upon, shall specify the intended
effective date of such termination (which date shall comply with the
notice period requirements of the provision so identified) and shall
set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination under the provision so identified.
13. MISCELLANEOUS
13.1 The Executive hereby warrants that by virtue of entering into this
Agreement she will not be in breach of any express or implied terms of
any court order, contract or of any other obligation legally binding
upon her.
13.2 Any benefits provided by the Company to the Executive or her family
which are not expressly referred to in this Agreement shall be
regarded as ex gratia benefits provided at the entire discretion of
the Company and shall not form part of the Executive's contract of
employment.
13.3 Except as expressly provided in this Clause 13, the Executive shall be
responsible for the payment of all individual taxes on all amounts
paid or benefits provided to her under this Agreement. All
compensation (including without limitation, salary and any severance
payments) paid to the Executive shall be subject to such deductions as
from time to time may be required by law or regulation or by
agreement with, or consent of the Executive.
<PAGE>
13.4 Any waiver by either party of any breach of any provision of this
Agreement must be set forth in a writing signed by such party, in
order for it to be effective, and no such waiver shall operate as a
waiver of any subsequent breach of that provision or any breach of any
other provision of this Agreement.
13.5 This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall
constitute one and the same instrument.
13.6 The Company will indemnify the Executive (and her legal
representatives, heirs, estate or other successors) to the fullest
extent permitted (including payment of expenses in advance of final
disposition of any proceeding) by the laws of the jurisdiction of the
incorporation of the Company as in effect at the time of the subject
act or omission, or by the Certificate of Incorporation and by-laws of
the Company as in effect at such time or on the date of this
Agreement, or by the terms of any indemnification agreement between
the Company and the Executive, whichever affords or afforded greatest
protection to the Executive, and the Executive shall be entitled to
the protection of any insurance policies the Company or any Associated
Company may elect to maintain generally for the benefit of its
directors and officers (and to the extent the Company or an Associated
Company maintains such an insurance policy or policies, the Executive
shall be covered by such policy or policies, in accordance with its or
their terms, to the maximum extent of the coverage available for a
person serving or having served in the positions and offices in which
the Executive is serving or has served), against all costs, charges
and expenses whatsoever incurred or sustained by her (or her legal
representatives, heirs, estate or other successors) at the time such
costs, charges and expenses are incurred or sustained, in connection
with any action, suit or proceeding to which she (or her legal
representatives, heirs, estate or other successors) may be made a
party by reason of her being or having been a director, officer or
employee of the Company or any Associated Company, or by reason of her
serving or having served any other enterprise as a director, officer
or employee at the request of the Company or any Associated Company.
<PAGE>
14. DEFINITIONS AND INTERPRETATION
14.1 In this Agreement unless the context otherwise requires or as
otherwise defined herein the following expressions have the following
meanings:
14.1.1 "Associated Company"
Any company which is a direct or indirect subsidiary of the Company.
14.1.2 "Benefit Plans"
The 401(k) plan and other pension, retirement, life insurance medical,
health, accident, disability, welfare, savings, deferred compensation
or similar plans of the Company and its Associated Companies.
14.1.3 "the Board of Directors"
The Board of Directors for the time being of the Company including any
duly appointed committee thereof.
14.1.4 "the Business of the Group"
The business of the Company and the Associated Companies as described
in the Schedule hereto and such other business or businesses as the
Company or any Associated Company may enter into from time to time of
which the Executive is aware.
14.1.5 "Cause"
Any of the following:
(a) the Executive's willful and continued failure substantially
to perform her duties hereunder (other than as a result of
sickness, injury or other physical or mental incapacity or
as a result of termination by the Executive for Good
Reason); provided, however, that such failure shall
constitute "Cause" only if (x) the Company delivers a
written demand for substantial performance to the Executive
that specifies the manner in which the Company believes the
Executive has failed substantially to perform her duties
hereunder and (y) the Executive shall not have corrected
such failure within 10 business days after her receipt of
such demand;
<PAGE>
(b) willful misconduct by the Executive in the performance of
her duties hereunder that is demonstrably and materially
injurious to the Company or any Associated Company for which
she is required to perform duties hereunder;
(c) the Executive's conviction of (or plea of nolo contendere
to) a felony under the laws of the United States or any
state thereof or a criminal offense under the laws of any
other non-U.S. jurisdiction that would constitute a felony
under the laws of the United States or of the state of
Delaware; or
(d) the Executive's illegal or continuing immoderate use or
abuse of alcoholic beverages or drugs in a manner that
materially impairs the Executive's ability to perform her
duties under this Agreement or materially adversely affects
the Executive's or the Company's reputation with customers
or in the community as a whole; provided, however, that this
clause (d) shall not apply to use of prescription drugs in
the manner prescribed by a physician or other duly licensed
medical or health practitioner authorized to issue
prescriptions for such prescription drugs.
No action, or failure to act, shall be considered "willful" if it is
done by the Executive in good faith and with the reasonable belief
that her action or omission was in the best interest of the Company.
14.1.6 "Change in Control"
The occurrence of any of the following:
(a) any event pursuant to which any "Person" becomes an
"Acquiring Person" (as such terms are defined in that
certain Agreement dated as of January 28, 1998 between the
Company and Harris Trust Company of New York as Rights
Agent, as such Agreement initially entered into effect as of
such date);
(b) a merger, consolidation, exchange, combination or other
transaction involving the Company and another entity (or the
securities of the Company and such other entity) as a result
of which the holders of all of the shares of Common Stock of
the Company outstanding prior to such transaction do not
hold, directly or indirectly, shares of the outstanding
voting securities of, or other voting ownership interests
<PAGE>
in, the surviving, resulting or successors entity in such
transaction in substantially the same proportions as those
in which they held the outstanding shares of Common Stock of
the Company immediately prior to such transaction;
(c) the sale, transfer, assignment or other disposition by the
Company and/or one of more Associated Companies, in one
transaction or a series of transactions within any period of
18 consecutive calendar months which account for an
aggregate of 50% or more of the assets or 50% or more of the
consolidated revenues of the Company and its subsidiaries,
as determined in accordance with U.S. generally accepted
accounting principles, for the fiscal year most recently
ended prior to the date of such transaction (or, in the case
of a series of transactions as described above, the first
such transaction); provided, however, that no such
transaction shall be taken into account if substantially all
the proceeds thereof (whether in cash or in kind) are used
after such transaction in the ongoing conduct by the Company
and/or its subsidiaries of the business conducted by the
Company and/or its subsidiaries prior to such transaction;
(d) the Company is dissolved; or
14.1.7 "the Chief Executive Officer"
The Chief Executive Officer of the Company.
14.1.8 "Good Reason"
The occurrence of any of the following (other than by reason of a
termination of the Executive for Cause or Disability):
(a) the position or responsibilities of the Executive are
significantly reduced, (including, without limitation, by
reason of the elimination of the position of the Executive
Vice President of the Company and Chief Executive Officer of
SLA or by reason of a material change in the reporting
responsibilities to and of such position, or, following a
Change in Control, by reason of a substantial reduction in
the size of the Company or other substantial change in the
character or scope of the Company's operations), or the
<PAGE>
Executive is assigned without her written consent to any
duties inconsistent with her positions, duties,
responsibilities and status with the Company immediately
prior to such assignment;
(b) the salary provided in Clause 3.1 hereof (as the same may be
increased from time to time in accordance with Clause 3.3)
is reduced (except if such reduction occurs prior to a
Change in Control and is part of an across-the-board
reduction applicable to all senior level executives of the
Group);
(c) the annual incentive compensation provided for in Clause 3.2
hereof is reduced or eliminated or, if after a change in
Control, the Executive's participation level is reduced or
the manner of assessing actual performance is changed in a
manner that results in the Executive earning less such
compensation for a given period than she would have for the
same period absent such change;
(d) the Executive's aggregate level of benefits under the
Benefit Plans is reduced, except if such reduction occurs
prior to a Change in Control and is part of an
across-the-board reduction in such benefits applicable to
all senior level executives of the Group;
(e) after a Change in Control, the Company fails to continue to
provide the Executive with benefits and perquisites which
are substantially similar in the aggregate to those to which
the Executive is entitled under the Company's Benefit Plans
in which the Executive was participating immediately prior
to the Change in Control, or fails to provide the Executive
with directors' and officers' insurance, at least at the
level maintained immediately prior to the Change in Control;
(f) the Executive is required to change he regular work location
to a location that is more than 25 miles from the current
address of Executive set out at the beginning of this
Agreement;
(g) the Company fails to pay the Executive any amount otherwise
vested and due hereunder or under any plan or policy of the
Company, or fails to comply with any other provision of or
perform any of its other obligations under this Agreement;
or
<PAGE>
(h) the Company fails to obtain from any successor and to
deliver to the Executive such successor's written agreement
to assume and agree to perform the Company's obligations
under this Agreement.
If the Executive delivers to the Company a Notice of Termination in
connection with an event described in Clauses (a) through (h) above,
the Company shall have 10 business days from the date of receipt of
such notice to effect a cure of the event described therein, and upon
cure thereof by the Company to the Executive's reasonable
satisfaction, such event shall no longer constitute "Good Reason" for
purposes of this Agreement.
14.1.9 "Intellectual Property"
Letters patent, trademarks, trade names, service marks, designs,
copyrights, utility models, design rights, applications for
registration of any of the foregoing and the right to apply for them
in any part of the world, inventions, drawings, computer programs and
software, trade secrets and other non-public proprietary information,
know-how and rights of like nature arising or subsisting anywhere in
the world in relation to all of the foregoing whether registered or
unregistered.
14.1.10 "IRS"
The United States Internal Revenue Service, or any successor agency of
the United States Government.
14.1.11 "PMSI Group" or "Group"
The Company and the Associated Companies.
14.1.12 "Stock Option Plan"
The Pharmaceutical Marketing Services Inc. and its Subsidiaries Stock
Option and Restricted Stock Purchase Plan, as the same may be amended
from time to time, or any employee stock option plan that replaces,
supersedes or supplements such plan.
14.2 The headings in this Agreement are for convenience only and shall not
affect its construction or interpretation.
14.3 Any reference in this Agreement to a statutory provision shall be
deemed to include a reference to any statutory amendment, modification
<PAGE>
or re-enactment of it or to any legislation that supersedes it.
14.4 This Agreement together with the Company plans, agreements and other
arrangements referred to herein contains the entire understanding
between the parties and supersedes any other prior agreements,
arrangements and understandings (written or oral) between the Company
and the Executive relating to the employment of the Executive with the
Company which such agreements, arrangements and understandings shall
be deemed to have been terminated by mutual consent; provided,
however, that this Agreement shall not terminate any agreement in
effect on the date hereof between the Company and the Executive
granting or otherwise relating to any stock option, and any such
agreement shall be deemed to be modified and amended hereby to the
extent that the terms of such agreement are inconsistent with the
terms hereof. The Executive acknowledges that she has not entered into
this Agreement in reliance on any warranty, representation or
undertaking which is not contained in or specifically incorporated in
this Agreement.
14.5 The various Clauses of this Agreement are severable and if any Clause
or identifiable part thereof is held to be invalid or unenforceable by
any court of competent jurisdiction then such invalidity or
unenforcability shall not affect the validity or enforceability of the
remaining Clauses or identifiable parts thereof in this Agreement, and
the parties hereto agree that the portion so held invalid,
unenforceable or void shall, if possible, be deemed amended or reduced
in scope, or otherwise be stricken from this agreement, to the extent
required for the purposes of the validity and enforcement hereof.
14.6 Unless the context otherwise requires, any reference in this Agreement
to the employment of the Executive or the Executive's last day of
active employment refers to the Executive's employment with the
Company.
14.7 Unless the context otherwise requires, any reference herein to a
Benefit Plan or other plan, agreement, arrangement, policy or program
of the "Company," or to a benefit, payment or contribution provided or
to be provided to the Executive by the "Company" shall be understood
to include any Benefit Plan, plan, agreement, arrangement, policy or
program of any Associated Company, or any benefit, payment or
<PAGE>
contribution provided or to be provided to the Executive by any
Associated Company, respectively.
14.8 This Agreement is governed by and shall be construed in accordance
with the laws of the State of Pennsylvania, and the parties to this
Agreement hereby submit to the nonexclusive jurisdiction of the
federal and state courts sitting in Philadelphia, Pennsylvania.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date first above written.
PHARMACEUTICAL MARKETING SERVICES INC.
By: /s/Dennis J. Turner
___________________________
Dennis J. Turner
Chief Executive Officer
EXECUTIVE
By: /s/Joy Scott
___________________________
Joy Scott
<PAGE>
SCHEDULE
BUSINESS OF THE PMSI GROUP
The Business of the PMSI Group consists of the provision to the
pharmaceutical industry of:
(a) Surveys of and information services from physicians and managed
care professionals;
(b) marketing research audits and surveys evaluating marketing and
promotional activities, expenditure and effectiveness; physicians attitudes,
behaviours and prescribing; and drug production, distribution and dispensing,
and therapy trends;
(c) profiles of physicians, managed care professionals, managed care
organizations, formularies, regulations and legislation and marketing research
on managed healthcare;
(d) related strategic studies and consulting services.
EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the first day of July, 1996 BETWEEN:
PHARMACEUTICAL MARKETING SERVICES INC. (the "Company"), a Delaware Corporation
with offices at 45 Rockefeller Plaza, Suite 912, New York, New York, and WARREN
J. HAUSER, an individual residing at 416 Chichester Lane, Wynnewood,
Pennsylvania (the "Executive").
WHEREAS, the Company wishes to assure itself of the services of the
Executive in the capacity of Vice President, Secretary and General Counsel of
the Company and to that end desires to enter into an employment agreement with
Executive upon the terms and conditions set forth herein; and
WHEREAS, Executive is willing to enter into such an agreement of
employment under the terms and conditions stated hereinafter.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein set forth, the parties hereto mutually covenant and agree as follows:
1. COMMENCEMENT AND TERM
1.1 The Company shall employ the Executive in the capacity of Vice
President, Secretary and General Counsel under and subject to the terms
and conditions set forth in this Agreement.
1.2 The employment of the Executive shall be for an indefinite term,
provided that the employment of Executive may be terminated by the
Company at any time in accordance with Clause 9 hereinafter.
1.3 This Agreement has been entered into as of the date first above written
but, for purposes of determining Executive's length of service, the
Executive shall be credited with his employment with the Company's
predecessor-in-interest, Walsh International Inc., which began on April
17, 1989 and continued until April 16, 1996 and his employment with an
associated company, Source Informatics Inc., which commenced on April
16, 1996 and continued thereafter until the commencement of Executive's
employment with the Company.
2. OBLIGATIONS DURING EMPLOYMENT
2.1 The Executive shall during the continuance of his employment:
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<PAGE>
2.1.1 Serve the Company to the best of his ability in the capacity of Vice
President, Secretary and General Counsel and manage the legal affairs of
the Company and its subsidiaries in accordance with the policies and
procedures established by the Chief Executive Officer of the Company, to
whom the Executive shall report; and
2.1.2 Faithfully and diligently perform such duties and exercise such powers
consistent with such office, subject to the direction and supervision of
the Chief Executive Officer of the Company; and
2.1.3 If and so long as the Chief Executive Officer so directs, perform and
exercise the said duties and powers on behalf of any Associated Company
and act as an officer of any Associated Company; and
2.1.4 Do all in his power to protect, promote, develop, and extend the
business interests and reputation of the Group; and
2.1.5 At all times and in all respects conform to and comply with the lawful
and reasonable directions of the Chief Executive Officer including all
authority levels and procedures from time to time specified by the Chief
Executive Officer; and
2.1.6 Promptly give to the Chief Executive Officer (in writing if so
requested) all such information, explanations and assistance as he may
require in connection with the business and affairs of the Company and
any Associated Company; and
2.1.7 Unless prevented by sickness, injury or other incapacity or as
otherwise agreed by the Chief Executive Officer, devote the whole of
his time, atten- tion and abilities during his hours of work (which
shall be normal business hours and such additional hours as may be
necessary for the proper performance of his duties) to the performance
of his duties and the business and affairs of the Company and any
Associated Company for which he is required to perform duties; and
2.1.8 Work at such offices of the Company as the Company may direct and travel
from time to time as may be required in connection with the business of
the Company and any Associated Company for which he is required to
perform duties.
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<PAGE>
3. REMUNERATION
3.1 The Company shall pay to the Executive during the continuance of his
employment a salary (which shall accrue from day to day) at the rate of
$227,000 per annum. The salary shall be payable in equal bi-monthly
installments in arrears or as otherwise determined by the Company on a
company-wide basis.
3.2 As further remuneration, the Executive shall be entitled to an annual
bonus based upon the achievement of performance criteria established by
the Chief Executive Officer. The amount of the bonus for the achievement
of 100% of targeted performance will not be less than thirty percent
(30%) of the Executive's then annual base salary.
3.3 The salary and bonus shall be reviewed from time to time and the rates
thereof may be increased by the Company with effect from any such review
date.
4. INSURANCE, PENSION SCHEME AND OTHER BENEFITS
4.1 At all times during the term of this Agreement, the Company shall
provide Executive with health insurance (including any medical expense
insurance, permanent health and accident insurance, and travel
insurance), life insurance, the opportunity to participate in a 401(k)
Savings Plan, and such other benefits of the Company enjoyed by or made
available to other senior executive officers of the Company to the
extent that the Executive qualifies under the eligibility provisions of
any such plan, as presently in effect or as they may be modified from
time to time.
4.2 The Company shall establish a pension plan covering Executive and make
appropriate payments into said plan on behalf of Executive or, at
Executive's option, make payment into a private pension plan, in either
case said pension payments shall be in an aggregate amount equal to
fifteen percent (15%) of the Executive's aggregate annual compen- sation
with effect from January 1, 1991. In the event that, at the date of
execution of this Agreement, Execu- tive's pension has not been fully
funded from January 1, 1991, as aforesaid, the Company shall make
payments into the Company pension plan or into the Executive's private
pension plan, as the case may be, in such amounts as to ensure that said
pension is fully funded on or before June 30, 1998.
5. EXPENSES
5.1 The Company shall during the continuance of his employment reimburse the
Executive in respect of all reasonable and appropriate travel,
accommodations, business entertainment and other similar out-of-pocket
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<PAGE>
expenses actually incurred or expended by him in the performance of his
duties hereunder.
5.2 Except where specified to the contrary, all expenses shall be reimbursed
on a monthly basis subject to the Executive providing appropriate
evidence (including receipts, invoices, tickets and/or vouchers as may
be appropriate) of the expenditure in respect of which he claims
reimbursement.
6. HOLIDAYS
6.1 The Executive shall (in addition to the usual public and bank holidays)
be entitled during the continuance of his employment to twenty-five (25)
working days' paid holiday in each calendar year.
6.2 The Executive shall not be permitted to carry forward any accumulated,
unused vacation entitlement in excess of twenty-five (25) days from one
calendar year to the next.
6.3 Upon the termination of his employment, the Executive's entitlement to
accrued holiday pay (which accrues at the rate of two days per month)
shall be calculated on a pro rata basis in respect of each completed
month of service in the holiday year in which his employment terminates
and the appropriate amount shall be paid to the Executive; provided that
if the Executive shall have taken more days' holiday than his accrued
entitlement, the Company is hereby authorized to make an appropriate
deduction from the Executive's final salary payment.
7. INTELLECTUAL PROPERTY
7.1 Subject to applicable law, if at any time in the course of his
employment, the Executive makes or discovers or participates in the
making or discovery of any Intellectual Property relating to or capable
of being used in the business of the Company or any Associated Company,
he shall immediately disclose full details of such Intellectual Property
to the Company and, at the request and expense of the Company, he shall
do all things which may be necessary or desirable for obtaining
appropriate forms of protection for the Intellectual Property in such
parts of the world as may be specified by the Company and for vesting
all rights in the same in the Company or its nominee.
7.2 The Executive hereby irrevocably appoints the Company to be his attorney
and in his name and on his behalf to execute any instrument or do any
thing and generally to use his name for the purpose of giving to the
Company or its nominee the full benefit of the provisions of this
Clause.
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<PAGE>
7.3 All rights and obligations under this Clause 7 in respect of
Intellectual Property made or discovered by the Executive during his
employment shall continue in full and force and effect after the
termination of his employment and shall be binding upon the Executive's
personal representatives.
8. CONFIDENTIALITY
8.1 The Executive shall not (other than in the proper performance of his
duties or with the prior written consent of the Company or unless
ordered by a court of competent jurisdiction) at any time either during
the continuance of his employment or after its termination disclose or
communicate to any person or use for his own benefit or the benefit of
any person other than the Company or any Associated Company any
confidential information relating to the Company or any Associated
Company which may come to his knowledge in the course of his employment
and the Executive shall during the continuance of his employment use his
best endeavors to prevent the unauthorized publication or misuse of any
confidential information, provided however that such restrictions shall
cease to apply to any confidential information which may enter the
public domain other than through the fault of the Executive.
8.2 All notes and memoranda of any trade secret or confidential information
concerning the business of the Company and the Associated Companies or
any of its or their suppliers, agents, distributors, clients, customers
or others which shall have been acquired, received or made by the
Executive during the course of his employment shall be the property of
the Company and shall be surrendered by the Executive to a person duly
authorized by the Company at the termination of his employment or
earlier at the request of the President of the Company at any time
during the course of his employment.
9. TERMINATION OF EMPLOYMENT
9.1 Termination by the Company Without Cause; Termination by the Executive
for Good Reason. The Company may terminate the employment of the
Executive at any time without Cause by giving the Executive a Notice of
Termination in accordance with Clause 13.2 hereof at least 18 months
prior to the effective date of such termination specified in such
notice. The executive may terminate his employment by the Company at any
time for Good Reason by giving a Notice of Termination to the Company in
accordance with Clause 13.2 hereof, and the effective date of such
termination shall be determined in accordance with Clause 9.1.3.
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<PAGE>
9.1.1 Except as provided in Clause 9.1.2, in the event that the Executive's
employment is terminated by the Company Without Cause:
(a) the Company shall pay to the Executive, within 30 days after the
Notice of Termination is given, a lump-sum cash amount equal to
(i) one and a half times the sum of (A) his then current annual
salary under Clause 3 and (B) 30% of his then current annual
salary under Clause 3 (representing his annual bonus for the
achievement of 100% of performance objectives, irrespective of
whether performance objectives have been achieved), plus (ii) an
additional amount of salary equal to all of the Executive's
accrued unused vacation entitlement up to a maximum of
twenty-five (25) days; plus (iii) the cash equivalent of all
emoluments specified hereinabove (except those the Company shall
continue to provide pursuant to Clause 9.1.2(b) during the
period of eighteen (18) months following the effective date of
such termination; provided, however, that Executive shall have
the right to request and receive the aggregate lump sum payment
comprising subclauses (i), (ii), and (iii) hereinabove in
installments designated by Executive paid over the calendar year
of the effective date of termination and the subsequent two
calendar years;
(b) for a period of eighteen (18) months after the effective date of
such termination, the Company shall provide the Executive with
pension contributions, life, health, disability and other
insurance benefits for the Executive and his dependents under
the benefit plans, at the respective levels of coverage in
effect at the time the Notice of Termination is given, or the
cash equivalents of the foregoing on a monthly basis (less any
monthly contribution to such benefits plans made through a
payroll deduction charged to the Executive immediately prior to
such effective date in respect of any such benefits), provided,
however, that nothing contained herein is intended to affect
Executive's eligibility for COBRA coverage upon termination of
his employment with the Company;
(c) the Company shall vest as of the time of such Change in Control
all options granted to the Executive under the Stock Option Plan
and allow the Executive a period ending eighteen months after
the effective date of the termination of his employment within
which to exercise such options;
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<PAGE>
(d) the Company shall use its best efforts to cause the similar
vesting of all stock options granted to Executive under the
stock option plans of any Associated Company, as hereinafter
defined; and
(e) the Company shall provide outplacement services to Executive,
for a period not to exceed twelve (12) months following the
effective date of termination, with a nationally-recognized
outplacement firm selected by the Company.
9.1.2 Notwithstanding the other provisions of this Clause 9.1, in the event
that the Company terminates the Executive's employment Without Cause in
anticipation of, or pursuant to a Notice of Termination delivered to the
Executive within two years after a Change in Control:
(a) the Company shall pay to the Executive, within 30 days after the
Notice of Termination is given, a lump-sum cash amount equal to
(i) two times the sum of (A) his then current annual salary
under Clause 3 and (B) 30% of his then current annual salary
under Clause 3 (representing his annual bonus for the
achievement of 100% of performance objectives, irrespective of
whether performance objectives have been achieved), plus (ii) an
additional amount of salary equal to all of the Executive's
accrued unused vacation entitlement up to a maximum of
twenty-five (25) days; plus (iii) the cash equivalent of all
emoluments specified herein above (except those the Company
shall continue to provide pursuant to Clause 9.1.2(b) during the
period of twenty-four (24) months following the effective date
of such termination; and provided further that in the event of a
termination for Good Reason pursuant to Clause 15.1.8(b), the
annual salary used for computation under this Clause 9.1.2(a)
shall be the one in effect prior to the reduction referred to in
Clause 15.1.8(b); provided, however, that Executive shall have
the right to request and receive the aggregate lump sum payment
comprising subclauses (i), (ii), and (iii) herein above in
installments designated by Executive paid over the calendar year
of the effective date of termination and the subsequent two
calendar years;
(b) for a period of twenty four (24) months after the effective date
of such termination, the Company shall provide the Executive
with pension contributions, life, health, disability and other
insurance benefits for the Executive and his dependents under
the benefit plans, at the respective levels of coverage in
effect at the time the Notice of Termination is given, or the
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nation is given, or the cash equivalents of the foregoing on a
monthly basis (less any monthly contribution to such benefits
plans made through a payroll deduction charged to the Executive
immediately prior to such effective date in respect of any such
benefits); provided, however, that nothing contained herein is
intended to affect Executive's eligibility for COBRA coverage
upon termination of his employment with the Company;
(c) the Company shall vest as of the time of such Change in Control
all options granted to the Executive under the Stock Option Plan
and allow the Executive a period ending twenty-four months after
the effective date of the termination of his employment within
which to exercise such options; and;
(d) the Company shall use its best efforts to cause the similar
vesting of all stock options granted to Executive under the
stock option plans of any Associated Company, as hereinafter
defined; and
(e) the Company shall provide outplacement services to Executive,
for a period not to exceed eighteen (18) months following the
effective date of termination, with a nationally-recognized
outplacement firm selected by the Company.
9.1.3 Except as provided in Clause 9.1.2, in the event that the Executive
terminates his employment for Good Reason, he shall have the rights and
receive the benefits to which he would be entitled if the Company had
terminated his employment without Cause by delivering a Notice of
Termination under Section 9.1.1 (the "Company Reference Termina-
tion"). The effective date of the Executive's termination of his
employment pursuant to this Clause 9.1.3 shall be the date specified in
Executive's Notice of Termination; provided, however, that, under no
circumstances shall the Executive specify an effective date less than
one hundred twenty (120) days after the date of such notice. In such
event, the Executive shall receive the benefits provided in Clause 9.1.1
on the effective date of termination of his employment.
9.1.4 In the event of a dispute between the Executive and the Company with
respect to any of the Executive's rights under this Agreement, the
Company shall reimburse the Executive for any and all legal fees and
disbursements incurred by him in connection with enforcing such rights,
at the time such fees and disbursements are incurred (but in no event
more frequently than monthly); provided, however, that if the
Executive's claim is found by a court of competent jurisdiction to
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have been frivolous, the Executive shall reimburse the Company for all
amounts paid by the Company pursuant to this Clause 9.1.4.
9.2 Termination by the Company for Cause; Termination by the Executive
Without Good Reason. The Company may at any time terminate the
Executive's employment for Cause by giving the Executive a Notice of
Termination in accordance with Clause 13.2 and, if applicable, after
complying with Clause 15.1.5 hereof. The Executive may at any time
terminate his employment with the Company in accordance with Clause 13.2
hereof at least 3 months prior to the effective date of such termination
specified in such notice. In the event of a termination by the Company
for Cause or by the Executive without Good reason (except in the case
where the Executive so terminates his employment within two years after
a Change in Control, as provided in Clause 9.1.2), the Executive shall
be entitled to receive any unpaid amount of this then current salary
(including unused vacation entitlements pursuant to Clause 6.3) through
the effective date of such termination, as well as any other benefits
which shall have vested and become payable to him under the Benefit
Plans as of such effective date.
9.3 Retirement. The employment of the Executive shall terminate
automatically upon his Retirement. "Retirement" shall mean a termination
of the Executive's employment initiated by the Executive, other than for
Good Reason, whereby the Executive is entitled to receive an immediately
payable benefit, including any applicable early retirement benefit,
under any other pension or retirement plan then generally applicable to
its salaried employees or under any retirement arrangement established
with respect to the Executive with his prior written consent; in either
case, whether or not the Executive commences to receive such benefit at
the time of such termination. In the event of the termination of the
Executive's employment pursuant to his Retirement, the Executive shall
be entitled to any other benefits which shall have vested and become
payable to him under the Benefit Plans as of the effective date of such
Retirement or to which the Executive is otherwise entitled upon his
Retirement under any Benefit Plan or other policy or program of the
Company or any Associated Company in accordance with the respective
terms of such Benefit Plan, policy or program.
9.4 Death or Disability
9.4.1 Disability. Subject to the requirements of the Americans with
Disabilities Act of 1990, as amended, the Family and Medical Leave Act
of 1993, as amended, and/or any other legislation applicable to the
Executive's employment by the Company, the Company may terminate
employment of the Executive, by giving him a Notice of Termination
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Executive, by giving him a Notice of Termination not less than six
months prior to the effective date of such termination specified in such
notice, if the Executive shall have been absent from work due to
sickness, injury or other incapacity for more than 183 days in the
aggregate during any period of 12 consecutive months or if, in the
opinion of a physician or other appropriate expert selected by the
Company, the Executive is likely to be unable to perform his duties for
more than 183 days in the Aggregate during any period of 12 consecutive
months; provided, that the Company shall withdraw such notice if during
its pendency the Executive returns to full-time work and provides the
Company with a certificate from a physician or other appropriate expert
reasonably acceptable to the Company stating that he has fully recovered
and that no recurrence of such incapacity may reasonably be anticipated,
and provided further that if the Executive returns to work after a
period of absence which would have entitled the Company to terminate his
employment the Company shall, after he has completed a period of three
consecutive months at work without further material absence due to such
sickness, injury or other incapacity, be deemed to have waived its
rights to terminate his employment based on such previous period of
absence. Circumstances justifying termination of the Executive's
employment by the Company pursuant to this Clause 9.4.1 are referred to
herein as "Disability".
9.4.2 Death. The employment of the Executive by the Company shall terminate
automatically upon his death.
9.4.3 Benefits upon Disability. In the event of termination of employment due
to Disability the Company shall continue to pay Executive's salary and
bonus for achieving 100% of his performance objectives under Clause 3
and provide the other emoluments and benefits specified hereinabove,
including contributions to the pension plan designated by the Executive
at the full rate for a period of six (6) months from the date of
termination hereunder; and cause the vesting of all of the stock options
granted to Executive under the Stock Option Plan and allow the Executive
a period of eighteen (18) months from the effective date of termination
within which to exercise such options.
9.4.4 Benefits upon Death. In the event of a termination of employment due to
death of the Executive, his legal representatives shall be entitled to
receive any unpaid amount of his then current salary through the
effective date of such termination plus a further three months base
salary, as well as any other benefits which shall have vested and become
payable to him under the Benefit Plans as of such effective date or to
which the Executive is otherwise entitled upon his death under any
Benefit Plan or other policy or program of the Company or any associated
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Company in accordance with the respective terms of such Benefit Plan,
policy or program.
9.5 Upon the termination of his employment the Executive shall be entitled
to accrued vacation pay pursuant to clause 6.3.
9.6 Notwithstanding the terms of Clause 2 or any other provision of this
Agreement, during any period between the giving of a Notice of
Termination and the effective date of termination in accordance with the
Clause 9, the Company shall not be under any obligation to provide the
Executive with any work and the Company may at any time during such
notice period without further notice suspend the Executive and/or
exclude him from all or any premises of the Company or any Associated
Company, provided, however, that, throughout such notice period, the
Company shall not make or give effect to any change in the terms and
conditions of the Executive's employment as in effect immediately prior
to the Reference Time (as defined below) that would constitute Good
Reason under any of paragraphs (b) through (g) of Clause 16.1.8
(regardless of whether his employment is terminated for Good Reason),
and the Executive's salary and other contractual benefits shall continue
to be paid or provided by the Company in the manner in effect at the
Reference Time. "Reference Time" means the time immediately prior to (i)
in the case of a termination for Good Reason, the occurrence that
constitutes such Good Reason, or (ii) in all other cases, the giving of
the Notice of Termination. At any time during such notice period the
Executive shall at the request of the Company immediately resign from
office as a Director of the Company and any Associated Company and from
other office held by him in the Company or any Associated Company (but
without claim to compensation other than as provided under this
Agreement) and in the event of his failure to do so the Company is
hereby irrevocably authorized to appoint some person in his name and on
his behalf to sign and deliver such resignations to the Company.
9.7 The Executive shall have no obligation to take any action to mitigate or
offset any amounts payable by the Company pursuant to this Clause 9, by
seeking other employment or otherwise, nor shall the amount of any
payment provided for in this Agreement be reduced by any compensation
earned by the Executive as the result of employment by another employer
after the date of termination of the Executive's employment or
otherwise.
9.8 The termination of the Executive's employment for any reason whatsoever
shall not operate to terminate this Agreement as an entirety or to
adversely affect the respective continuing rights and obligations of the
parties under Clauses 6, 7 through 10, and 12 through 16, inclusive,
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of this Agreement, all of which shall survive the effective date of such
termination of employment in accordance with their respective terms.
9.9 The Executive acknowledges that the Company may have in effect from time
to time a written severance plan or policy, which plan or policy is or
may be subject to change at the discretion of the Company. The Executive
shall not be entitled to any notice, payment in lieu of notice or other
severance payments under such plan or policy, but if the notice period
(or payment) to which the Executive would have been entitled under such
plan or policy as it may then exist is greater than the notice period
(or payment in lieu of such notice) to which the Executive would be
entitled under this Agreement, then the notice period (and payment in
lieu thereof) for termination hereunder shall be deemed to be such
greater amounts.
10. EXECUTIVES COVENANTS
10.1 The Executive acknowledges that during the course of his employment with
the Company he will receive and have access to Confidential Information
of the Company and its Associated Companies (including without
limitation those matters specified in Clause 8.2 of this Agreement, as
well as detailed client/customer lists and information relating to the
operations and business requirements of those clients/customers) and
accordingly he is willing to enter into the covenants described in
Clauses 10.2 and 10.3 in order to provide the Company and its Associated
Companies with what he considers to be reasonable protection for those
interests.
10.2 The Executive hereby covenants with the Company that during the term of
his employment he will not either directly or indirectly engage or
participate in any activity competitive with or adverse to the business
or interests of the Company or any of its Associated Companies.
10.3 The Executive hereby covenants with the Company that he will not for the
period of 24 months after the Executive's last active day of employment
without prior written consent of the Chief Executive Officer, directly
or indirectly:
10.3.1 carry on or set up or be employed or engaged by or otherwise assist in
or be interested in any capacity (including without limitation as a
shareholder) in any line of business in competition with any line of
business which is part of the Business of the Group with which the
Executive has had involvement and which the Company or any Associated
Company is carrying on during the 12 months preceding the Executive's
last active day of employment; or
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10.3.2 carry on or set up or be employed or engaged by or otherwise assist in
or be interested in any capacity (including without limitation as a
shareholder) a business which competes or will complete with any
business of the Company or any Associated Company which is planned or
contemplated at the date of the Executive's last active day of employ-
ment in any country in which the business is planned or contemplated to
operate and which plans the Executive has been involved with to a
material extent; or
10.3.3 in connection with the carrying on of any businesses which is in
competition with the Business of the Group canvass, solicit or approach
or cause to be canvassed or solicited or approached for orders in
respect of any services provided and/or any goods sold by the Company or
any Associated Company any person, firm or company who or which at the
date of the Executive's last active day of employment or at any time
during the period of 12 months prior to that date is a supplier,
customer or client of the Company or any Associated Company and with
whom or which the Executive shall have had dealings during the course of
his employment; or
10.3.4 in connection with the carrying on of any business in competition with
the Business of the Group do business with any person, firm or company
who or which has at any time during the period of 12 months immediately
preceding the date of the Executive's last active date of employment
done business with the Company or any Associated Company as a supplier,
customer or client or distributor or consultant and with whom or which
the Executive shall have had dealings during the course of his
employment; or
10.3.5 solicit, entice away or hire or endeavor to solicit or entice away from
the Company or any Associated Company any person who at the date of the
Executive's last active day of employment or at any time during the
period of six months prior to that date is employed or engaged by the
Company or any Associated Company as a head of any business unit, the
direct report of such business unit head, or any other key technical,
marketing or sales position and with whom the Executive shall have had
contact during the course of his employment (whether or not such a
person would commit a breach of his contract of employment by so doing).
10.4 The Executive hereby agrees that he will at the cost of the Company
enter into a direct agreement or undertaking with any Associated Company
whereby he will accept restrictions and provisions corresponding to the
restrictions and provisions in Clause 10.3 above (or such of them as may
be appropriate in the circumstances) in relation to such activities and
such country or countries as such Associated Company may reasonably
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require for the protection of its legitimate business interests.
10.5 Notwithstanding the generality of the covenants contained in Clause
10.3.1 those covenants shall apply only with respect to those countries
in which the Company or any Associated Company has transacted any
business during the 12 months prior to the date of Executive's last
active day of employment in which the Executive has been involved,
except that during the 24-month period after the Executive's last
active day of employment the Executive may not be engaged or employed by
or render any services to or for the benefit of Cognizant Corporation,
or any of its direct or indirect subsidiaries, wherever located, except
with the prior consent of the Chief Executive Officer or as the result
of a merger, consolidation, sale of stock or assets or other business
combination between such entity and the Company or an Associated
Company.
10.6 Nothing contained herein shall prohibit the Executive from holding
directly or through nominees up to two percent of the outstanding stock
of any publicly-held and traded company or shares.
10.7 The covenants contained in Clauses 10.3.1, 10.3.2, 10.3.3, 10.3.4 and
10.3.5 are intended to be separate and severable and enforceable as
such.
10.8 In the event of a breach of Clauses 10.3.1, 10.3.2, 10.3.3, 10.3.4, or
10.3.5, the Executive acknowledges that in addition to any other
remedies available under law to the Company and any Associated Company,
the Company and any Associated Company may be entitled to an injunction
enjoining the Executive or any person or persons acting for or with the
Executive in any capacity whatsoever from violating any of the terms
thereof.
11. DISCIPLINARY AND GRIEVANCE PROCEDURES
11.1 For statutory purposes there is no formal disciplinary procedure in
relation to the Executive's employment. The Executive shall be expected
to maintain the highest standards of integrity and behavior.
11.2 If the Executive is not satisfied with any disciplinary decision taken
in relation to him he may apply in writing within 14 days of that
decision to the Board of Directors whose decision shall be final.
11.3 If the Executive has any grievance in relation to his employment he may
raise it in writing with the Board of Directors whose decision shall be
final.
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12. ASSIGNMENT
12.1 The Company may assign its rights or delegate its performance, in whole
or in part, to any of its Associated Companies; provided that any such
assignment or delegation shall not affect the Executive's position with
the Company. This Agreement shall be binding upon and shall inure to the
benefit of the Company and any successor of the Company. In the event of
any permitted assignment, the Company shall guarantee the performance of
this Agreement by the Associated Company.
12.2 This Agreement shall be binding upon and shall inure to the benefit of
Executive, his legal representatives and assigns, except that
Executive's obligations to perform services under this Agreement are
personal and are expressly declared to be non-assignable and
non-transferable by him without the consent in writing of the Company.
12.3 In the event of a Change in Control, the Company shall require the
successor to the Company as the Executive's employer (whether such
succession is direct or indirect, by purchase, merger, consolidation or
otherwise, to all or a substantial portion 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, the term "Company" shall mean the Company as
hereinbefore defined and any successor to all or a substantial portion
of its business and/or assets as aforesaid.
13. NOTICES
13.1 Any notice to be given under this Agreement shall be given in writing
and shall be deemed to be sufficiently served by one party on the other
if it is delivered personally or is sent by facsimile transmission,
overnight delivery service or registered or recorded delivery prepaid
post (air mail if overseas) addressed to either the Company's registered
office for the time being or the Executive's last known address as the
case may be.
13.2 Any purported termination of the Executive's employment by the Company
or by the Executive shall not be effective unless communicated by
written Notice of Termination to the other party hereto in accordance
with Clause 13.1 above and the relevant provisions of Clause 9. A Notice
of Termination shall identify the specific termination provision of this
Agreement relied upon, shall specify the intended effective date of such
termination (which date shall comply with the notice period requirements
of the provision so identified) and shall set forth in reasonable detail
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the facts and circumstances claimed to provide a basis for termination
under the provision so identified.
14. MISCELLANEOUS
14.1 The Executive hereby warrants that by virtue of entering into this
Agreement he will not be in breach of any express or implied terms of any
court order, contract or of any other obligation legally binding upon
him.
14.2 Any benefits provided by the Company to the Executive or his family which
are not expressly referred to in this Agreement or in a separate
agreement between Executive or the Company's subsidiary Source
Informatics Limited of even date herewith shall be regarded as ex gratia
benefits provided at the entire discretion of the Company and shall not
form part of the Executive's contract of employment.
14.3 Except as expressly provided in this Clause 14, the Executive shall be
responsible for the payment of all individual taxes on all amounts paid
or benefits provided to him under this Agreement. All compensation
(including without limitation, salary and any severance payments) paid to
the Executive shall be subject to such deductions as from time to time
may be required by law or regulation or by agreement with, or consent of
the Executive.
14.4 Any waiver by either party of any breach of any provision of this
Agreement must be set forth in a writing signed by such party, in order
for it to be effective, and no such waiver shall operate as a waiver of
any subsequent breach of that provision or any breach of any other
provision of this Agreement.
14.5 This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original and all of which together shall constitute
one and the same instrument.
14.6 The Company will indemnify the Executive (and his legal representatives,
heirs, estate or other successors) to the fullest extent permitted
(including payment of expenses in advance of final disposition of any
proceeding) by the laws of the jurisdiction of the incorporation of the
Company as in effect at the time of the subject act or omission, or by
the Certificate of Incorporation and by-laws of the Company as in effect
at such time or on the date of this Agreement, or by the terms of any
indemnification agreement between the Company and the Executive,
whichever affords or afforded greatest protection to the Executive, and
the Executive shall be entitled to the protection of any insurance
policies the Company or any Associated Company may elect to maintain
generally for the benefit of its directors and officers (and to the
extent the Company or an Associated Company maintains such an insurance
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policy or policies, the Executive shall be covered by such policy or
policies, in accordance with its or their terms, to the maximum extent of
the coverage available for a person serving or having served in the
positions and offices in which the Executive is serving or has served),
against all costs, charges and expenses whatsoever incurred or sustained
by him (or his legal representatives, heirs, estate or other successors)
at the time such costs, charges and expenses are incurred or sustained,
in connection with any action, suit or proceeding to which he (or his
legal representatives, heirs, estate or other successors) may be made a
party by reason of his being or having been a director, officer or
employee of the Company or any Associated Company, or by reason of his
serving or having served any other enterprise as a director, officer or
employee at the request of the Company or any Associated Company.
15. DEFINITIONS AND INTERPRETATION
15.1 In this Agreement unless the context otherwise requires or as otherwise
defined herein the following expressions have the following meanings:
15.1.1 "Associated Company"
Source Informatics Inc. ("Source"), Walsh International Inc. ("Walsh") or
any company which is a direct or indirect subsidiary of Source, Walsh or
the Company.
15.1.2 "Benefit Plans"
The 401(k) plan and other pension, retirement, life insurance, medical,
health, accident, disability, welfare, savings, deferred compensation or
similar plans of the Company and its Associated Companies.
15.1.3 "the Board of Directors"
The Board of Directors for the time being of the Company including any
duly appointed committee thereof.
15.1.4 "the Business of the Group"
The business of the Company and the Associated Companies as described in
the Schedule hereto and such other business or businesses as the Company
or any Associated Company may enter into from time to time of which the
Executive is aware.
15.1.5 "Cause"
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Any of the following:
(a) the Executive's willful and continued failure substantially to
perform his duties hereunder (other than as a result of sickness,
injury or other physical or mental incapacity or as a result of
termination by the Executive for Good Reason); provided, however,
that such failure shall constitute "Cause" only if (x) the Company
delivers a written demand for substantial performance to the
Executive that specifies the manner in which the Company believes
the Executive has failed substantially to perform his duties
hereunder and (y) the Executive shall not have corrected such
failure within 10 business days after his receipt of such demand;
(b) wilful misconduct by the Executive in the performance of his
duties hereunder that is demonstrably and materially injurious to
the Company or any Associated Company for which he is required to
perform duties hereunder;
(c) the Executive's conviction of (or plea of nolo contendere to) a
felony under the laws of the United States or any state thereof or
a criminal offense under the laws of any other non-U.S.
jurisdiction that would constitute a felony under the laws of the
United States or the of the state of Delaware; or
(d) the Executive's illegal or immoderate use or abuse of alcoholic
beverages or drugs on a continuing basis in a manner that in the
reasonable opinion of the Company demonstrably and materially
impairs the Executive's ability to perform his duties under this
Agreement or demonstrably and materially adversely affects the
Executive's or the Company's reputation with customers or in the
community as a whole; provided, however, that this clause (d)
shall not apply to use of prescription drugs in the manner
prescribed by a physician or other duly licensed medical or health
practitioner authorized to issue prescriptions for such
prescription drugs.
No action, or failure to act, shall be considered "willful" if it is done by the
Executive in good faith and with the reasonable belief that his action or
omission was in the best interest of the Company.
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15.1.6 "Change in Control"
The occurrence of any of the following:
(a) any event pursuant to which any "Person" becomes an "Acquiring
Person" (as such terms are defined in that certain Agreement dated
as of January 28, 1998 between the Company and Harris Trust
Company of New York as Rights Agent, as such Agreement initially
entered into effect as of such date);
(b) a merger, consolidation, exchange, combination or other
transaction involving the Company and another entity (or the
securities of the Company and such other entity) as a result of
which the holders of all of the shares of Common Stock of the
Company outstanding prior to such transaction do not hold,
directly or indirectly, shares of the outstanding voting
securities of, or other voting ownership interests in, the
surviving, resulting or successor entity in such transaction in
substantially the same proportions as those in which they held the
outstanding shares of Common Stock of the Company immediately
prior to such transaction;
(c) the sale, transfer, assignment or other disposition by the Company
and/or one of more Associated Companies, in one transaction or a
series of transactions within any period of 18 consecutive
calendar months (including, without limitation, by means of the
sale of capital stock of any subsidiary or subsidiaries of the
Company) of assets which account for an aggregate of 50% or more
of the consolidated revenues of the Company and its subsidiaries,
as determined in accordance with U.S. generally accepted
accounting principles, for the fiscal year most recently ended
prior to the date of such transaction (or, in the case of a series
of transactions as described above, the first such transaction);
provided, however, that no such transaction shall be taken into
account if substantially all the proceeds thereof (whether in cash
or in kind) are used after such transaction in the ongoing conduct
by the Company and/or its subsidiaries of the business conducted
by the Company and/or its subsidiaries prior to such transaction;
(d) the Company is dissolved; or
(e) a majority of the directors of the Company are persons who were
not members of the Board of Directors as of the date (the
"Reference Date") which is the more recent of the date hereof and
the date which is two years prior to the date on which such
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determination is made, unless the first election or appointment
(or the first nomination for election by the Company's
shareholders) of each director who was not a member of the Board
of Directors on the Reference Date was approved by a vote of at
least two-thirds of the Board of Directors in office prior to the
time of such first election, appointment or nomination.
15.1.7 "the Chief Executive Officer"
The Chief Executive Officer and member of the Board of Directors
of the Company.
15.1.8 "Good Reason"
The occurrence of any of the following (other than by reason of a
termination of the Executive for Cause or Disability):
(a) the position or responsibilities of the Executive are
significantly reduced, (including, without limitation, by reason
of the elimination of the position of the Vice President,
Secretary and General Counsel or the failure to elect the
Executive to the position of the Vice President, Secretary and
General Counsel or by reason of a change in the reporting
responsibilities to and of such position, or, following a Change
in Control, by reason of a substantial reduction in the size of
the Company or other substantial change in the character or scope
of the Company's operations), or the Executive is assigned without
his written consent to any duties inconsistent with his positions,
duties, responsibilities and status with the Company immediately
prior to such assignment;
(b) the salary provided in Clause 3.1 hereof (as the same may be
increased from time to time in accordance with Clause 3.3) is
reduced (except if such reduction occurs prior to a Change in
Control and is part of an across-the-board reduction applicable to
all senior level executives of the Group);
(c) the annual incentive compensation provided for in Clause 3.2
hereof is reduced or eliminated or, if after a change in Control,
the Executive's participation level is reduced or the manner of
assessing actual performance is changed in a manner that results
in the Executive earning less such compensation for a given period
than he would have for the same period absent such change;
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(d) the Executive's aggregate level of benefits under the Benefit
Plans is reduced, except if such reduction occurs prior to a
Change in Control and is part of an across-the-board reduction in
such benefits applicable to all senior level executives of the
Group;
(e) after a Change in Control, the Company fails to continue to
provide the Executive with benefits and perquisites which are
substantially similar in the aggregate to those to which the
Executive is entitled under the Company's Benefit Plans in which
the Executive was participating immediately prior to the Change in
Control, or fails to provide the Executive with directors' and
officers' insurance, at least at the level maintained immediately
prior to the Change in Control;
(f) the Executive is required to change his regular work location to a
location that is more than 15 miles from the current address of
Executive set out at the beginning of this Agreement;
(g) the Company fails to pay the Executive any amount otherwise vested
and due hereinunder or under any plan or policy of the Company, or
fails to comply with any other provision of or perform any of its
other obligations under this Agreement; or
(h) the Company fails to obtain from any successor and to deliver to
the Executive such successor's written agreement to assume and
agree to perform the Company's obligations under this Agreement.
If the Executive delivers to the Company a Notice of Termination
in connection with an event described in Clauses (a) through (h)
above, the Company shall have 10 business days from the date of
receipt of such notice to effect a cure of the event described
therein, and upon cure thereof by the Company to the Executive's
reasonable satisfaction, such event shall no longer constitute
"Good Reason" for purposes of this Agreement.
15.1.9 "Intellectual Property"
Letters patent, trademarks, trade names, service marks, designs,
copyrights, utility models, design rights, applications for
registration of any of the foregoing and the right to apply for
them in any part of the world, inventions, drawings, computer
programs, trade secrets and other non-public proprietary
information, know-how and rights of like nature arising or
subsisting anywhere in the world in relation to all
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of the foregoing whether registered or unregistered.
15.1.10 "IRS"
The United States Internal Revenue Service, or any successor
agency of the United States Government.
15.1.11 "Group"
The Company and the Associated Companies.
15.1.12 "Stock Option Plan"
The Pharmaceutical Marketing Services Inc. and its Subsidiaries
Stock Option and Restricted Stock Purchase Plan, as the same may
be amended from time to time, or any employee stock option plan
that replaces, supersedes or supplements such plan.
15.1.13 "Territory"
The counties of North America, Asia and the Far East and Continental
Europe, excluding the United Kingdom.
15.2 The headings in this Agreement are for convenience only and shall not
affect its construction or interpretation.
15.3 Any reference in this Agreement to a statutory provision shall be deemed
to include a reference to any statutory amendment, modification or
re-enactment of it or to any legislation that supersedes it.
15.4 This Agreement together with the Company plans, agreements and other
arrangements referred to herein contains the entire understanding between
the parties and supersedes any other prior agreements, arrangements and
understandings (written or oral) between the Company and the Executive
relating to the employment of the Executive with the Company which such
agreements, arrangements and understandings shall be deemed to have been
terminated by mutual consent; provided, however, that this Agreement
shall not terminate any agreement in effect on the date hereof between
the Company and the Executive granting or otherwise relating to any stock
option, and any such agreement shall be deemed to be modified and amended
hereby to the extent that the terms of such agreement are inconsistent
with the terms hereof. The Executive acknowledges that he has not entered
into this Agreement in reliance on any warranty, representation or
undertaking which is not contained in or specifically incorporated in
this Agreement.
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15.5 The various Clauses of this Agreement are severable and if any Clause or
identifiable part thereof is held to be invalid or unenforceable by any
court of competent jurisdiction then such invalidity or unenforcability
shall not affect the validity or enforceability of the remaining Clauses
or identifiable parts thereof in this Agreement, and the parties hereto
agree that the portion so held invalid, unenforceable or void shall, if
possible, be deemed amended or reduced in scope, or otherwise be stricken
from this agreement, to the extent required for the purposes of the
validity and enforcement hereof.
15.6 Unless the context otherwise requires, any reference in this Agreement to
the employment of the Executive or the Executive's last day of active
employment refers to the Executive's employment with the Company.
15.7 Unless the context otherwise requires, any reference herein to a Benefit
Plan or other plan, agreement, arrangement, policy or program of the
"Company," or to a benefit, payment or contribution provided or to be
provided to the Executive by the "Company" shall be understood to include
any Benefit Plan, plan, agreement, arrangement, policy or program of any
Associated Company, or any benefit, payment or contribution provided or
to be provided to the Executive by any Associated Company, respectively.
15.8 This Agreement is governed by and shall be construed in accordance with
the laws of the State of Delaware, and the parties to this Agreement
hereby submit to the nonexclusive jurisdiction of the federal and state
courts sitting in Wilmington, Delaware.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date first above written.
PHARMACEUTICAL MARKETING SERVICES INC.
By:/s/ Dennis M.J. Turner
__________________________________
Dennis J. Turner
Chief Executive Officer
EXECUTIVE
By:/s/ Warren J. Hauser
__________________________________
Warren J. Hauser
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SCHEDULE
BUSINESS OF THE GROUP
The Business of the Group consists of the provision of physician
targeting services, information services from pharmacy-derived prescriptions in
Europe, marketing research surveys and audits evaluating promotional
expenditure, physicians attitudes and behaviours and prescribing and related
consulting services to the pharmaceutical industry.
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EXHIBIT 21
SUBSIDIARIES OF PHARMACEUTICAL MARKETING SERVICES INC.
Subsidiary Name Domicile
PMSI Holdings Limited Delaware
PMSI Scott-Levin Inc. New Jersey
PMSI Finance Limited Delaware
PMSI Database Services Inc. Delaware
Source Informatics European Delaware
Holdings Inc.
Source Informatics European Delaware
Holdings LLC
Source Informatics European Delaware
Finance Inc.
PMSI Belgium S.A. Belgium
Inedi S.A. Belgium
Medical Time Communication Sprl Belgium
Source Informatics Belgium N.V. Belgium
Pharma Informatics Inc. Delaware
Medical Informatics KK Japan
PMSI Ltd. U.K.
ISIS Ltd. U.K.
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in (i) the Registration
Statement on Form S-8 (File No. 33-48364), (ii) the Registration Statement on
Form S-8 (File No. 33-66306) and (iii) the Registration Statement on Form S-3
(File No. 33-59734) of our reports dated August 14, 1998, except for Note 21 as
to which the date is September 2, 1998, on our audits of the consolidated
financial statements and financial statement schedule of Pharmaceutical
Marketing Services Inc. and Subsidiaries as of June 30, 1997 and 1998, and the
years ended June 30, 1996, 1997 and 1998, which reports are included in this
Form 10-K.
PricewaterhouseCoopers LLP
Stamford, Connecticut
November 19, 1998
