EMPLOYMENT AGREEMENTEmployee Retention Agreement |
|
|
You are currently viewing: This Employee Retention Agreement involves
INVENTIV HEALTH INC | inVentiv Communications, Inc. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
Search Employee Retention Agreement by:
EXECUTION
COPY
EMPLOYMENT AGREEMENT (this
“Agreement”),
dated as of June 3, 2008 between inVentiv Health, Inc., a Delaware corporation
with an office at 200 Cottontail Lane, Vantage Court North, Somerset, New
Jersey 08873 (the “Employer”), and R.
Blane Walter, an individual whose current residence is as reflected in the
Employer’s records (the “Executive”).
WHEREAS, the Executive has
been employed by and currently serves as the Employer’s President pursuant to an
employment agreement between the Executive and the Employer, dated as of August
7, 2007 (the “2007
Agreement”);
WHEREAS, prior to the 2007
Agreement, the Executive served as President and Chief Executive Officer of the
Employer’s subsidiary, InVentiv Communications, Inc. (f/k/a inChord
Communications, Inc.), pursuant to an Employment Agreement, dated as of
September 6, 2005 between inVentiv Communications, Inc. and the
Executive (the “2005 Agreement” and
collectively with the 2007 Agreement, the “Prior
Agreements”);
WHEREAS, the Employer desires
that Executive serve as its Chief Executive Officer, and Executive is willing to
accept such employment by the Employer, on the terms and subject to the
conditions set forth in this Agreement; and
WHEREAS, except where
otherwise specified, the parties desire to supersede and replace the Prior
Agreements with this Agreement.
NOW THEREFORE, in
consideration of the mutual covenants and promises contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the parties agree as follows:
|
1.
|
Term of Employment;
Title; Duties; Authority.
|
|
(a)
|
The
Employer hereby employs the Executive, and the Executive hereby accepts
employment with the Employer, upon the terms set forth in this Agreement,
effective June 11, 2008 (the “Effective
Date”) and continuing until the date of the termination of the
Executive’s employment hereunder in accordance with the terms of this
Agreement (the “Termination
Date”). The Executive shall serve as the Chief Executive
Officer of the Employer from and after the Effective Date, with such
authority, duties and responsibilities as are commensurate with such
position.
|
|
(b)
|
During
the term of his employment hereunder, the Executive shall report to the
Board of Directors of the Employer (the “Board”). Capitalized
terms used and not otherwise defined herein shall have the meanings
assigned to them in the Acquisition Agreement dated as of September 6,
2005 (the “Acquisition
Agreement”) relating to the acquisition by a subsidiary of the
Employer of inVentiv Communications,
Inc.
|
|
2.
|
Extent of
Services.
|
|
(a)
|
During
the term of his employment hereunder, the Executive agrees to devote his
entire business time and attention to the performance of his duties under
this Agreement. The Executive shall perform his duties to the
best of his ability and shall use his reasonable best efforts to further
the interests of the Employer. The Executive shall not, while
employed by the Employer, unless otherwise agreed to in advance in writing
by the Employer, commence employment with any other party or become
self-employed, provided that it shall not constitute a breach of the
Executive’s obligations under this Section 2(a) to (i) serve on
corporate, civic or charitable boards or committees, subject to Section 8
of this Agreement, (ii) deliver lectures or fulfill speaking
engagements, subject to Section 9 of this Agreement, or (iii) manage
personal investments, in each case so long as such activities do not
materially interfere with the Executive’s performance of his duties to the
Employer. It is expressly understood and agreed that, to the
extent that any such activities are being conducted by the Executive as of
the date of this Agreement, the continued conduct of such activities (or
the conduct of activities similar in nature and scope thereto) in a
substantially similar manner and degree subsequent to the date of this
Agreement shall be deemed not to materially interfere with the performance
of the Executive’s duties to the Employer under this
Agreement. The Executive shall not be required to be based at
any office or location outside the greater Columbus, Ohio metropolitan
area or to relocate his residence but will spend such time at other office
locations of the Employer as is reasonable for the proper discharge of his
duties as Chief Executive Officer of the
Employer.
|
|
(b)
|
The
Executive represents and warrants to the Employer that he is able to enter
into this Agreement and that his ability to enter into this Agreement and
to fully perform his duties hereunder are not limited to or restricted by
any agreements or understandings between the Executive and any other
person. For the purposes of this Agreement, the term “person” means
any natural person, corporation, partnership, limited liability
partnership, limited liability company or any other entity of any
nature.
|
|
3.
|
Compensation.
|
|
(a)
|
The
Employer shall pay the Executive a base salary at an annualized rate of
$550,000, subject to annual review by the Board or the Compensation
Committee thereof (the “Compensation
Committee”), which may increase, but not decrease, the amount (the
“Base
Salary”). The Base Salary shall be paid periodically in
accordance with the Employer’s ordinary payroll practices for executive
personnel, less deductions required by law or pursuant to the benefit
plans and policies of the Employer and its
affiliates.
|
|
(b)
|
The
Executive shall be eligible for a bonus in each calendar year, commencing
with calendar year 2008, based on the Executive’s success in reaching or
exceeding performance objectives (the “Bonus”), as
determined by the Board or the Compensation Committee, the amount of such
Bonus, if any, to be determined in the discretion of the Board or the
Compensation Committee, and (unless the Executive’s employment is
terminated by the Employer without Cause between January 1 and January 15
of the year following the year with respect to which the Bonus is earned)
subject to the Executive remaining employed by the Employer through
January 15 of the year following the year with respect to which the Bonus
is earned (the “Payment Eligibility
Condition”). Any Bonus will be paid at the same time
bonuses are paid to executive officers generally (but in no event later
than December 31 of the year following the year with respect to which the
Bonus relates). The Executive’s target Bonus in each calendar
year commencing on and after January 1, 2009 shall be 100% of
the Executive’s then current Base Salary (“Target”) and
the maximum Bonus that may be paid shall be 200% of the Executive’s then
current Base Salary (“Maximum”). With
respect to 2008, the Executive shall be eligible for a Bonus as
follows: (i) in accordance with the 2007 Agreement, a Bonus
with respect to the period from January 1, 2008 until December 31, 2008
based on the Executive’s success in reaching or exceeding performance
objectives, provided that such Bonus shall be determined by the
Compensation Committee for such period, and (ii) the Executive shall be
eligible for an additional Bonus with respect to the period from the
Effective Date until December 31, 2008 in an amount (A) determined on the
same basis as clause (i) (with such appropriate modifications, if any, in
the non-quantitative criteria as the Compensation Committee may reasonably
establish) but assuming the Target and Maximum were in effect during all
of 2008, multiplied by (B) a fraction, the numerator of which is the
number of days remaining in 2008 after the Effective Date and the
denominator of which is 366 (“2008 Fraction”) minus (B) the amount that
the Executive receives under clause (i) above multiplied by the 2008
Fraction. The amount of each Bonus, if any, that is actually
awarded, shall be determined at the discretion of the Board or the
Compensation Committee. All or any portion of the Bonus may be
awarded pursuant to a plan satisfying the requirements of Section 162(m)
of the Internal Revenue Code of 1986, as amended (the “Code”).
|
|
(c)
|
Subject
to the execution by the Executive of the Employer’s applicable award
documentation, the Employer shall grant to the Executive (i) in respect of
the Executive’s promotion to Chief Executive Officer of the Employer, a
special equity incentive award grant on or about June 11, 2008 having a
value of at least $1,250,000 (the “Promotional
LTI”). One-third of the value of the Promotional LTI
shall be made in the form of restricted stock and two-thirds of the value
of the Promotional LTI shall be made in the form of stock
options. The award documentation for the Promotional LTI shall
be in substantially the form used for grants to other executive officers
of the Employer; provided, however, that, subject to accelerated vesting
under the applicable plan pursuant to which the Promotional LTI was made
or this Agreement, the Promotional LTI restricted stock award shall vest
in two equal installments on each of the second and fifth anniversaries of
the Effective Date and the Promotional LTI award made in the form of stock
options shall vest in four equal annual installments commencing on the
first anniversary of the date of grant, in each case assuming continued
service through each applicable vesting date. The value of
equity awards shall be determined in accordance with Statement of
Financial Accounting Standards No.
123R.
|
|
(d)
|
(i)
The Executive shall be awarded as part of the Employer’s 2009 annual
equity grant program an equity grant having a value of at least $1,000,000
(the “2009
LTI”). One-third of the value of the 2009 LTI shall be
made in the form of restricted stock and two-thirds of the value of the
2009 LTI shall be made in the form of stock options. The award
documentation for the 2009 LTI shall be in substantially the form used for
grants to other executive officers of the Employer; provided, however,
that, subject to accelerated vesting under the applicable plan pursuant to
which the 2009 LTI is made or this Agreement, the 2009 LTI awards shall
vest in four equal annual installments commencing on the first anniversary
of the date of grant assuming continued service through each applicable
vesting date.
|
(ii)
Commencing in 2010, the Executive shall be eligible to receive annual equity
grants commensurate with the Executive’s position, with each such grant, if any,
subject to the discretion of the Compensation Committee (the “Annual
LTI”). Without limiting such discretion, the Employer and the
Executive acknowledge that each Annual LTI shall be expected to have a value of
at least $1,000,000. The award documentation for each Annual LTI
shall be in substantially the form used for grants to other executive officers
of the Employer, subject to accelerated vesting under the applicable plan
pursuant to which the Annual LTI is made or this Agreement.
|
(e)
|
All
grants provided for herein shall be subject to (i) the terms and
conditions of the inVentiv Health, Inc. 2006 Long-Term Incentive Plan (or
any successor plan), and (ii) the Executive remaining employed
until the time of the applicable
grant.
|
|
4.
|
Fringe
Benefits.
|
|
(a)
|
The
Executive shall be entitled to participate in all benefit plans, policies,
programs or arrangements which the Employer provides to its executive
officers in accordance with the terms thereof as in effect from time to
time. The Employer represents, and the Executive acknowledges
that, the Employer does not maintain any retirement programs as of the
date hereof other than the Employer’s 401(k) plan and its executive
nonqualified deferred compensation
plan.
|
|
(b)
|
The
Executive shall be entitled to five (5) weeks of vacation during each year
of employment, to be prorated monthly for partial years. Such
vacation shall be taken at such time or times consistent with the
reasonable needs of the business of the Employer. The Executive
shall be entitled to sick leave and holidays in accordance with the
policies of the Employer.
|
|
(c)
|
During
the period of the Executive’s employment, the Employer shall pay to the
Executive as a car allowance the net amount of $833 per month paid as
taxable wages. The allowance will end effective with the
Executive’s termination.
|
|
(d)
|
The
Employer shall provide the Executive with term life insurance coverage
that provides at least $3 million dollars in death benefits to the
Executive’s designated
beneficiaries.
|
|
(e)
|
For
so long as the Executive is an officer or director of the Employer or any
of its subsidiaries and thereafter for so long as such insurance is
carried by the Employer, the Employer shall provide, at its expense,
director’s and officer’s insurance and indemnity coverage covering the
Executive, in each case on the same terms as it provides to other
executive officers and directors of the Employer or its subsidiaries or,
for any period during which the Executive is no longer employed, on the
same terms as it provides to other former executive officers and directors
of the Employer or its
subsidiaries.
|
|
5.
|
Reimbursement of
Business Expenses.
|
The
Employer shall reimburse the Executive in accordance with the Employer’s
policies generally applicable to executive officers for all reasonable
out-of-pocket costs (including, without limitation, the cost of chartered
airplane travel when reasonable alternative travel is not practicable) incurred
or paid by the Executive in connection with, or related to, the performance of
his duties, responsibilities or services under this Agreement, upon presentation
by the Executive of documentation, expense statements, vouchers and/or such
other supporting information as the Employer may reasonably
request.
|
6.
|
Disability.
|
For
purposes of this Agreement, “Disabled” or “Disability” means the
suffering of a physical or mental incapacity as a result of which the Executive
becomes unable to continue to perform fully his duties, with “reasonable
accommodation,” as defined in the Americans with Disabilities Act and applicable
state laws, hereunder for a consecutive period of one hundred twenty (120)
days. The Employer may terminate the Executive’s employment by reason
of Disability upon ten (10) days’ prior written notice. At the
Employer’s option, such physical or mental incapacity may be determined by a
physician selected by the Employer and reasonably acceptable to Executive or
presumed by the Employer on the basis of Executive’s failure to perform the
duties and services of his position for a period of one hundred twenty (120)
days.
|
7.
|
Termination.
|
|
(a)
|
The
Executive’s employment shall be “at will” and may be terminated at any
time by the Employer with or without Cause, subject to the terms of this
Agreement.
|
|
(b)
|
For
the purposes of this Agreement, “Cause” shall
mean any of the following: (i) a material breach by the
Executive of this Agreement, including without limitation the provisions
of Section 8 or 9 of this Agreement, which, to the extent susceptible of
cure, is not cured within ten (10) business days after written notice to
the Executive (or any shorter notice period reasonably necessary to avoid
material harm to the Employer) that identifies with reasonable specificity
the manner in which the Employer believes the Executive has breached; (ii)
the Executive willfully engaging in misconduct which is materially
injurious to the Employer or any of its Affiliates; (iii) the Executive’s
willful gross neglect of his duties for which he is employed or refusal or
failure to follow the material, lawful directives of the Board or a
committee thereof in any material respect, in either case, where such
neglect, refusal or failure is not due to the Executive’s physical or
mental incapacity and, which to the extent susceptible of cure, is not
cured within ten (10) business days after written notice to the Executive
(or any shorter notice period reasonably necessary to avoid material harm
to the Employer) that identifies with reasonable specificity the willful
gross neglect or failure to follow directives; and (iv) the Executive’s
conviction of a felony or of any misdemeanor involving dishonesty, fraud
or moral turpitude or the entry of a guilty or nolo contendere plea
with respect thereto. For purposes of this Section 7(b), no act
or failure to act on the part of the Executive shall be considered “willful” unless
it is done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive’s act or omission was in the
best interests of the Employer. Any act, or failure to act,
based upon express authority given pursuant to the written direction of
the Board with respect to such act or omission shall be presumed to be
done, or omitted to be done, by the Executive in good faith and in the
best interests of the Employer. The termination of the
Executive’s employment for Cause shall not be deemed to be effective
unless and until the Board finds (after reasonable notice, specifying the
particulars thereof in reasonable detail, is provided to the Executive and
the Executive is given an opportunity, together with counsel, to be heard
before the Board), that, in the good faith opinion of the Board, the
Executive is guilty of the conduct described in clause (i), (ii), (iii) or
(iv) above.
|
|
(c)
|
The
Executive may terminate his employment with the Employer for “Good Reason”
by notice to the Employer (i) within ninety (90) days of the occurrence or
the events or circumstances in which such termination for “Good Reason” is
based and (ii) following, in the case of any termination for “Good Reason”
pursuant to clause (i), (ii), (iii) or (vi) below, reasonable notice,
specifying the particulars thereof in reasonable detail, to the Board an
opportunity for the Board, together with counsel, to confer with the
Executive. For purposes of this Agreement, “Good Reason”
shall mean any of the following: (i) the assignment to the
Executive of any duties materially inconsistent with the Executive’s
position as Chief Executive Officer (including status, offices, title(s)
and reporting requirements), authority, duties or responsibilities, or any
other action by the Employer which results in a material diminution in
such position, authority, duties or responsibilities, excluding for this
purpose any action not taken in bad faith and which is remedied by the
Employer within ten (10) business days after receipt of written notice
thereof given by the Executive that identifies with reasonable specificity
the manner in which the Executive believes the Employer has violated this
clause; (ii) any failure of the Executive to be nominated for election as
a director of the Employer or the removal of the Executive as a director
of the Employer by the Board other than for Cause; (iii) any material
breach of this Agreement by the Employer or its subsidiaries, that is not
remedied by the Employer within ten (10) business days after written
notice to the Employer that identifies with reasonable specificity the
manner in which the Executive believes the Employer or subsidiary, as
applicable, has breached this Agreement; (iv) any purported
termination by the Employer of the Executive’s employment otherwise than
as expressly permitted by this Agreement; (v) any failure by the Employer
to comply with and satisfy Section 16(h) of this Agreement which is not
remedied within ten (10) business days after the closing of a transaction
contemplated by subparagraph (ii) of Section 16(h) of this Agreement; or
(vi) any termination of employment by the Executive during the thirty (30)
day period following the one (1) year anniversary of a Change in
Control.
|
|
(d)
|
The
Executive may terminate his employment other than for Good Reason,
provided that prior to any termination pursuant to this Section 7(d), the
Executive shall provide not less than forty-five (45) days’ prior written
notice thereof to the Board.
|
|
(e)
|
Upon
any termination of employment, regardless of the reason therefor, the
Employer shall pay to the Executive or his estate (i) the Base Salary
through the date of termination, (ii) subject to satisfaction of the
Payment Eligibility Condition, any earned but unpaid Bonus amount (subject
to any existing deferral elections with respect thereto), (iii) any
expenses subject to reimbursement in accordance with Section 5 of this
Agreement and (iv) any benefits due to Executive under any employee
benefit plan of the Employer and any payments due to Executive under the
terms of any Employer program, arrangement or agreement, excluding any
severance program or policy, in each case at the times and in the amounts
determined in accordance with the terms of such plan, program, arrangement
or agreement (the “Accrued
Amounts”). Upon any termination of employment by the
Employer for Cause or by the Executive other than for Good Reason, the
Executive shall be entitled only to the Accrued Amounts and the Employer
shall, except as required by law, have no other obligations hereunder or
otherwise with respect to the Executive’s employment from and after the
termination date and shall have no other obligations to the Executive in
respect of such termination (including under any severance plan or policy
of the Employer or any of its affiliates), and the Employer shall continue
to have all other rights available
hereunder.
|
|
(f)
|
(i) If
the Executive’s employment is terminated by the Employer without Cause or
due to Disability or if the Executive terminates his employment for Good
Reason, in each case prior to a Change in Control, then in addition to the
payment of the Accrued Amounts, the Executive shall be entitled
to: (A) a lump sum payment, payable, subject to Section 13,
within the (10) business days of the date of the Executive’s termination,
equal to the product of (x) two and (y) the sum of (I) the aggregate of
the Base Salary that would otherwise have been payable if the Executive
continued the Executive’s employment hereunder for twelve (12) months
following the date of such termination and (II) the average annualized
Bonus paid to the Executive for the three (3) preceding fiscal years (or
such shorter period that the Executive has been Chief Executive Officer,
if higher), disregarding any fiscal years for which the Executive was not
eligible for a Bonus in accordance with the terms hereof or, with respect
to a Termination due to without Cause or due to Disability or if the
Executive terminates his employment for Good Reason prior to January 15,
2009, 100% of 2008 Base Salary; and (B) vesting of all equity incentive
awards, including options, stock appreciation rights, restricted stock and
restricted shares previously granted to the Executive (and with respect to
any performance-based awards, based on the deemed attainment of applicable
performance objectives at target levels), and each such equity incentive
award shall remain exercisable, where applicable (but subject to the terms
of the equity plan under which such awards were granted relating to
extraordinary transactions and forfeiture for misconduct), to the
applicable date provided in Section 13 of this Agreement. Such
severance pay shall be paid, net of payroll taxes and other legally
required deductions. The Employer shall, except as required by
law and as described in Section 7(i) of this Agreement, have no other
obligations hereunder or otherwise with respect to the Executive’s
employment from and after the termination date and shall have no other
obligations to the Executive in respect of a termination described in the
first sentence of this Section 7(f)(i) (including under any severance plan
or policy of the Employer or any of its affiliates), and the Employer
shall continue to have all other rights available
hereunder.
|
(ii) If
the Executive dies prior to a Change in Control, then in addition to the payment
of the Accrued Amounts, all equity incentive awards, including options, stock
appreciation rights, restricted stock and restricted shares previously granted
to the Executive (and with respect to any performance-based awards, based on the
deemed attainment of applicable performance objectives at target levels) shall
immediately vest and each such equity incentive award shall remain exercisable,
where applicable (but subject to the terms of the equity plan under which such
awards were granted relating to extraordinary transactions and forfeiture for
misconduct), to the applicable date provided in Section 13 of this Agreement.
Such acceleration shall be subject to required payroll taxes and other legally
required deductions, if any. The Employer shall, except as required
by law and as described in Section 7(i) of this Agreement, have no other
obligations hereunder or otherwise with respect to the Executive’s employment
from and after the termination date and shall have no other obligations to the
Executive in respect of a termination described in the first sentence of this
Section 7(f)(ii) (including under any severance plan or policy of the Employer
or any of its affiliates), and the Employer shall continue to have all other
rights available hereunder.
|
(g)
|
Upon
a Change in Control during the Executive’s employment hereunder, the
Executive shall be entitled to: (i) a lump sum payment equal to
the product of (x) two and (y) the sum of (A) the aggregate of the Base
Salary that would otherwise have been payable if the Executive continued
the Executive’s employment hereunder for twelve (12) months following such
Change in Control and (B) the average annual Bonus paid to the Executive
for the three (3) preceding fiscal years (or such shorter period that the
Executive has been Chief Executive Officer, if higher), disregarding any
fiscal years for which the Executive was not eligible for a Bonus in
accordance with the terms hereof or, with respect to a Change in Control
prior to January 15, 2009, 100% of 2008 Base Salary; (ii) full vesting of
all equity incentive awards, including options, stock appreciation rights,
restricted stock and restricted shares previously granted to the Executive
(and with respect to any such equity awards that may be performance-based,
based on the deemed attainment of applicable performance objectives at
target levels), and each such equity incentive award shall remain
exercisable, where applicable (but subject to the terms of the equity plan
under which such awards were granted relating to extraordinary
transactions and forfeiture for misconduct), to the applicable date
provided in Section 13(a) of this Agreement; and (iii) any Gross-Up
Payment due in accordance with Section 7(l) of this
Agreement. The amount described in clauses (i) and (iii) of the
preceding sentence shall be payable net of payroll taxes and other legally
required deductions. The Employer shall have no other
obligations to the Executive in respect of a Change in Control (including
under any severance plan or policy of the Employer or any of its
affiliates) and the Employer and Executive shall continue to have all
other rights available hereunder.
|
|
(h)
|
If
the Executive is terminated by the Employer without Cause, if the
Executive terminates his employment for Good Reason or if the Executive is
terminated for Disability, in each case within thirteen (13) months after
a Change in Control, then in addition to the payment of the Accrued
Amounts, the Executive shall be entitled to receive a lump sum payment,
subject to Section 13, equal to the sum of: (i) the aggregate
of the Base Salary that would otherwise have been payable if the Executive
continued the Executive’s employment hereunder for twelve (12) months
following such termination; (ii) the average annualized Bonus paid to the
Executive for the three (3) preceding fiscal years, (or such shorter
period that the Executive has been Chief Executive Officer, if higher),
disregarding any fiscal years for which the Executive was not eligible for
a Bonus in accordance with the terms hereof or, with respect to such a
termination of employment prior to January 15, 2009, 100% of 2008 Base
Salary; and (iii) any Gross-Up Payment due in accordance with Section 7(l)
of this Agreement. Such payment shall be made, net of required
payroll taxes and other legally required deductions, if
any. The Employer shall, except as required by law and as
described in Section 7(i) of this Agreement, have no other obligations
hereunder or otherwise with respect to the Executive’s employment from and
after the termination date and shall have no other obligations to the
Executive in respect of a termination described in the first sentence of
this Section 7(h) (including under any severance plan or policy of the
Employer or any of its affiliates), and the Employer shall continue to
have all other rights available
hereunder.
|
|
(i)
|
If
the Executive’s employment is terminated by the Employer without Cause, if
the Executive terminates his employment for Good Reason, if the
Executive's employment terminates by reason of his death or if the
Executive is terminated for Disability (a “Qualifying Termination”),
then:
|
(i) Except
where the Executive's Qualifying Termination is by reason of his death, the
Employer shall maintain the same amount of life insurance required by the
Agreement, (A) for a period of thirty-six (36) months following the termination
of the Executive’s employment if such termination of employment occurs during
the thirteen
