EXECUTION
COPY
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT
(the “Agreement”) is
made this 9th day of May, 2006 (the “Effective Date”)
by inVentiv Health, Inc., a Delaware corporation with its principal
place of business at 200 Cottontail Lane, Somerset, New Jersey
08873 (the “Company”), and Eran Broshy, residing at 88
Central Park West, Apartment 1W, New York, NY 10023 (the
“Executive”).
WHEREAS , the parties wish to set forth the terms and
conditions upon which the Company will employ Executive;
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:
ARTICLE I
Position; Title;
Duties .
Executive shall serve as Chief Executive Officer of the Company and
shall perform services consistent with that position and as may be
reasonably assigned to him from the Board of Directors of the
Company (the “Board”).
ARTICLE II
Extent of
Services .
Executive agrees to devote his entire
business time and attention to the performance of his duties under
this Agreement. He shall perform his duties to the best of his
ability and shall use his best efforts to further the interests of
the Company. Executive shall perform his duties in the
Company’s New York City and New Jersey metropolitan area
offices and will be required to travel as necessary to perform the
services required of him under this Agreement. It is understood
that Executive will maintain his principal residence in New York
City and it is anticipated that his principal place of business
will be in the New York - New Jersey metropolitan area.
ARTICLE III
Base
Salary . The
Company shall pay Executive an annual base salary of $560,000,
subject to annual review by the Board (it being understood that any
determination the Board is required or entitled to make hereunder,
other than a determination pursuant to Section 1 or 9(c), may be
made by the Compensation Committee of the Board), which may
increase, but not decrease the amount thereof (the “Base
Salary”). The Base Salary shall be payable in installments in
accordance with the Company’s ordinary payroll practices,
minus such deductions as may be required by law or reasonably
requested by Executive.
ARTICLE IV
Bonus
. Executive shall be eligible for a
bonus in each calendar year, based on Executive’s success in
reaching or exceeding performance objectives as determined by the
Board (the “Bonus”). Executive’s target Bonus
shall be determined by the Board and shall be no less than 50% of
Executive’s then current salary. The amount of the Bonus, if
any, that is actually awarded shall be determined at the discretion
of the Board. 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.
ARTICLE V
Term of
Employment .
Executive is an employee “at will” and subject to the
provisions of Sections 9 through 11 hereof, Executive’s
employment with the Company may be terminated by the Company or by
the Executive at any time for any reason.
ARTICLE VI
Stock Options and
Restricted Stock .
Section 6.01
Stock Options
. Executive shall be eligible to
receive annual option grants for the purchase of shares of the
common stock of the Company (“Options”) at the
discretion of the Board; provided that no Option shall have an
exercise price less than the fair market value of the common stock
of the Company on the date of grant. Under the circumstances
provided in Sections 9 through 11, all Options held by Executive
shall become fully vested.
Section 6.02
Restricted Stock
. Executive shall be eligible to
receive annual grants of restricted shares of the common stock of
the Company at the discretion of the Board. Under the circumstances
provided in Sections 9 through 11, all restricted shares held by
Executive shall become fully vested.
ARTICLE VII
Fringe
Benefits .
Section 7.01 Benefits . Executive shall be
entitled to all benefits generally available to senior executives
of the Company.
Section 7.02
Vacation . Executive shall be entitled to five (5) weeks
of vacation during each year of employment. Executive shall be
entitled to sick leave and holidays in accordance with the policy
of the Company applicable to its senior executives.
Section 7.03
Car Allowance
. Executive shall be entitled to
monthly car allowance $833.00, paid as taxable wages. The allowance
will end effective with Executive’s termination.
(d) Life Insurance . The Company shall maintain for the benefit of
Executive during the term of his employment a minimum of $2.5
million in term life insurance.
ARTICLE VIII
Reimbursement of Business
Expenses . The
Company shall reimburse Executive in accordance with
Company’s policies for all reasonable out-of-pocket costs
incurred or paid by Executive in connection with or related to, the
performance of his duties, responsibilities or services under this
Agreement, upon presentation by Executive of documentation, expense
statements, vouchers, and/or such other supporting information as
the Company may reasonably request.
ARTICLE IX
Termination of Employment
Prior to a Change in Control
.
Section 9.01
Accrued Amounts
. In the event of the termination of
Executive’s employment for any reason, Executive shall be
entitled to (A) unpaid Base Salary through the date of termination;
(B) any earned but unpaid Bonus for the prior fiscal year of the
Company; (C) any benefits due to Executive under any employee
benefit plan of the Company and any payments due to Executive under
the terms of any Company program, arrangement or agreement,
excluding any severance program or policy and (D) any expenses owed
to Executive ((A), (B), (C) and (D) collectively, the
“Accrued Amounts”). Except as provided in Section 9(b),
Executive shall have no further right or entitlement under this
Agreement upon a termination of Executive’s employment within
the scope of this Section 9.
Section 9.02
Termination Without Cause; For
Good Reason . The Company
may terminate Executive’s employment without Cause (other
than by reason of Disability) and Executive may terminate his
employment for Good Reason, in each case upon thirty (30) days
prior written notice (which, in the case of a termination of
employment by the Executive for Good Reason, shall be given within
ninety (90) days of the event or circumstance constituting Good
Reason). In the event that the Company terminates Executive’s
employment without Cause (other than by reason of Disability) or
Executive terminates his employment for Good Reason, in either case
prior to a Change in Control, Executive shall be entitled to the
following in lieu of any payments or benefits under any severance
program or policy of the Company:
(ii)
a lump sum cash severance payment,
payable, subject to Section 20, within 10 business days of
termination, equal to two times the sum of (A) Executive’s
highest Base Salary as of the date of termination and (B) the
average annual Bonus earned by Executive with respect to the three
fiscal years preceding the date of termination;
(iii)
continued coverage for a period of
twelve months commencing on the date of termination (A) for
Executive (and his eligible dependents, if any) under the
Company’s health plans on the same basis as such coverage is
made available to senior executives of the Company (including,
without limitation, co-pays, deductibles and other required
payments and limitations) and (B) under any Company life insurance
plan in which Executive was participating immediately prior to the
date of termination; and
(iv)
full vesting of all Options, Stock
Appreciation Rights and Restricted Shares previously granted to
Executive, which Options and Stock Appreciation Rights shall remain
exercisable for the period determined in accordance with Section
20.
If and to the
extent the Company is not permitted under the terms of any
applicable plan or policy or applicable law to provide the benefits
described in clause (iii) above or Section 10(a)(iii) or 11(b)(iii)
below, or if the provisions of such benefits would cause any
applicable plan to be deemed to be discriminating in favor of
highly compensated employees under the Employee Retirement Income
Security Act of 1974, as amended, the Company shall either (x)
provide equivalent benefits on an individual basis at no additional
after-tax cost to the Executive or (y) pay to the Executive an
amount sufficient to permit the Executive to purchase equivalent
benefits at no additional after-tax cost to the
Executive.
Section 9.03
Definition of
“Cause” . For
purposes of this Agreement, the term “Cause” shall mean
(i) Executive’s willful and continuing failure (except where
due to physical or mental incapacity) to substantially perform his
duties hereunder or refusal or failure to follow the lawful
directives of the Board, in either case which is not remedied
within 15 days after receipt of written notice from the
Company specifying such failure; (ii) Executive’s willful
malfeasance or gross neglect in the performance of his duties
hereunder resulting in material harm to the Company; (iii)
Executive’s conviction of, or plea of guilty or nolo
contendere to, a felony or a misdemeanor involving moral
turpitude; (iv) the commission by Executive of an act of fraud or
embezzlement against the Company or any affiliate; or (v)
Executive’s willful material breach of any material provision
of this Agreement (as determined in good faith by the Board) which
is not remedied within 15 days after receipt of written notice
from the Company specifying such breach, provided that the
Executive shall be given the opportunity to appear before the Board
prior to the time such termination would otherwise become
effective. For purposes of the preceding sentence, no act or
failure to act by Executive shall be considered
“willful” unless done or omitted to be done by
Executive in bad faith or without reasonable belief that
Executive’s action or omission was in the best interests of
the Company.
Section 9.04
Definition of “Good
Reason” . For
purposes of this Agreement, the term “Good Reason”
shall mean the occurrence, without Executive’s express
written consent, of: (i) any adverse change in Executive’s
title agreed to or effected by the Board, (ii) any material
diminution in Executive’s employment duties, responsibilities
or authority, or the assignment to Executive of duties that are
materially inconsistent with his position, that is not cured within
15 days after written notice thereof is received from Executive;
(iii) any reduction in Base Salary or reduction of the target bonus
below 50% of the Base Salary; (iv) a relocation of
Executive’s principal place of employment to a location
inconsistent with Section 2 hereof that would unreasonably increase
Executive’s commute; (v) during Executive’s employment
with the Company, any failure of Executive to be nominated for
election as a director of the Company or the removal of Executive
as a director of the Company by the Board other than for cause;
(vi) any willful material breach by the Company of any material
provision of this Agreement that is not cured within 15
days after written notice thereof is received from Executive;
or (vii) any termination of employment by Executive during the
thirty day period following the one year anniversary of a Change in
Control.
Section 9.05 In order to be eligible to receive any Severance
Payment pursuant to Section 9(b) hereof, Executive must sign, prior
to receiving such payment, a complete release of all claims against
Company (other than claims under this Section 9), in substantially
the form attached hereto as Exhibit I and such release must have
become effective in accordance with its terms.
ARTICLE X
Disability;
Death.
Section 10.01
Termination Upon
Disability . The Company
may terminate Executive’s employment by reason of Disability
upon thirty (30) days prior written notice. If the Executive is
terminated for Disability, the Executive shall be entitled to the
following in lieu of any payments or benefits under any severance
program or policy of the Company (but not in lieu of any disability
benefits to which Executive is entitled under any disability
program or policy of the Company):
(ii)
a lump sum cash severance payment,
payable, subject to Section 20, within 10 business days of
termination, equal to two times the sum of (A) Executive’s
highest Base Salary as of the date of termination and (B) the
average annual Bonus earned by Executive with respect to the three
fiscal years preceding the date of termination, reduced by any
amount previously paid to the Executive pursuant to Section
11(a);
(iii)
continued coverage for a period of
twelve months commencing on the date of termination (A) for
Executive (and his eligible dependents, if any) under the
Company’s health plans on the same basis as such coverage is
made available to senior executives of the Company (including,
without limitation, co-pays, deductibles and other required
payments and limitations) and (B) under any Company life insurance
plan in which Executive was participating immediately prior to the
date of termination; and
(iv)
full vesting of all Options, Stock
Appreciation Rights and Restricted Shares previously granted to
Executive, which Options and Stock Appreciation Rights shall remain
exercisable for the period determined in accordance with Section
20.
(b)
Definition of
Disability . For purposes
hereof, "Disability" means Executive's inability due to physical or
mental incapacity to perform the duties and services of his
position for a period of 120 days. At the Company's option, such
physical or mental incapacity may be determined by a physician
selected by the Company and reasonably acceptable to Executive or
presumed by the Company on the basis of Executive's failure to
perform the duties and services of his position for a period of 120
days.
(c)
Release . In order to be eligible to receive any payment
pursuant to Section 10(a) hereof, Executive must sign, prior to
receiving such payment, a complete release of all claims against
Company (other than claims under this Section 10), in substantially
the form attached hereto as Exhibit I and such release must have
become effective in accordance with its terms.
(d)
Death . If Executive dies during the term of his
employment with the Company, (i) the Executive's estate shall be
entitled to the Accrued Amounts and any death benefits to which
Executive is entitled under any program or policy of the Company
providing such benefits, and the Company shall have no other
liability to Executive's estate in respect of any additional
compensatory or severance amount and (ii) all Options, Stock
Appreciation Rights and Restricted Shares previously granted to
Executive shall immediately vest in full and shall remain
exercisable for the period determined in accordance with Section
20.
ARTICLE XI
Change in
Control.
Section 11.01
Payment Upon Change in
Control . In the event of
a Change in Control while Executive is employed by the Company,
Executive shall be entitled to the following:
(i)
a lump sum cash payment, payable,
subject to Section 20, within 10 business days of the Change in
Control, equal to two times the sum of (A) Executive’s
highest Base Salary as of the date of the Change in Control and (B)
the average annual Bonus earned by Executive with respect to the
three fiscal years preceding the date of the Change in
Control;
(ii)
full vesting of all Options, Stock
Appreciation Rights and Restricted Shares previously granted to
Executive, which Options and Stock Appreciation Rights shall remain
exercisable for the period determined in accordance with Section
20; and
(iii) any Gross-Up Payment due in accordance with
Section 11(c) hereof.
Section 11.02
Termination Without Cause; For
Good Reason . In the
event that the Company terminates Executive’s employment
other than for Cause or Disability or Executive terminates his
employment for Good Reason within 13 months following a Change in
Control, Executive shall be entitled to the following in lieu of
any payments or benefits under any severance program or policy of
the Company:
(ii)
a lump sum cash severance payment,
payable, subject to Section 20, within 10 business days of
termination, equal to the sum of (A) Executive’s highest Base
Salary as of the date of termination and (B) the average annual
Bonus earned by Executive with respect to the three fiscal years
preceding the date of termination;
(iii)
continued coverage for a period of
thirty-six months commencing on the date of termination (A) for
Executive (and his eligible dependents, if any) under the
Company’s health plans on the same basis as such coverage is
made available to senior executives of the Company (including,
without limitation, co-pays, deductibles and other required
payments and limitations) and (B) under any Company life insurance
plan in which Executive was participating immediately prior to the
date of termination; and
(iv)
any Gross-Up Payment due in
accordance with Section 11(c) hereof.
Section 11.03
Gross-Up Payment
. (i)Anything in this Agreement to
the contrary notwithstanding, in the event it shall be determined
that any payment, award, benefit or distribution (or any
acceleration of any payment, award, benefit or distribution) by the
Company (or any of its affiliated entities) or any entity which
effectuates a Change in Control to or for the benefit of Executive
(whether pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under
this Section 5(c)) (the “Payments”) would be subject to
the excise tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the “Code”), or any interest or
penalties are incurred by Executive with respect to such excise tax
(such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the
“Exci