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INVENTIV HEALTH INC | inVentiv Health, Inc

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Title: SEVERANCE AND NON?COMPETITION AGREEMENT
Date: 3/18/2016
Industry: Business Services     Sector: Services

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Exhibit10.22

SEVERANCE AND NON–COMPETITION AGREEMENT

This SEVERANCE AND NON-COMPETITION AGREEMENT (this “ Agreement ”), is made effective as of May 6, 2015 (the “ Effective Date ”), between Michael McKelvey (the “ Employee ”) and inVentiv Health, Inc. (“ inVentiv ”) in connection with the Employee’s employment by inVentiv or one of its affiliated companies, directly or indirectly controlled by, controlling or under common control with inVentiv (an “ Affiliated Company ” and collectively, the “ Company ”).

WITNESSETH:

WHEREAS, the Employee is a current employee of the Company (or, alternatively, an individual who is offered the Agreement in conjunction with hiring) who (i) holds a senior executive position with the Company and/or (ii) provides unique, expert services to the Company;

WHEREAS, the Company desires to be assured that the confidential information and goodwill of the Company will be preserved for the exclusive benefit of the Company; and

WHEREAS, in consideration for (i) the mutual covenants and promises contained herein and (ii) for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged;

NOW, THEREFORE, the Company and the Employee, intending to be legally bound, hereby agree as follows:

1.

Termination of Employment . Employee’s employment shall terminate immediately upon the occurrence of any of the following:

 

(a)

Death . The death of the Employee.

 

(b)

Disability . The physical or mental disability of the Employee, whether totally or partially, such that with or without reasonable accommodation the Employee is unable to perform the Employee’s material duties for an aggregate of one hundred eighty (180) days within any given period of three hundred sixty (360) consecutive days. During any period (not to exceed three hundred sixty (360) days) in which the Company’s Board of Directors (the “ Board ”) believes that the Employee’s incapacity could reasonably be expected to result in a Disability, the Board or the Company’s Chief Executive Officer (“ CEO ”) shall be entitled to appoint an interim employee to fulfill Employee’s duties, without such appointment in and of itself triggering the “Good Reason” termination provisions set forth herein.

 

(c)

Termination by the Company for Cause . As used herein, “ Cause ” means:

 

 

(i)

the material failure or refusal of the Employee to perform the Employee’s duties (other than any such failure resulting from the Employee’s Disability);

 

 

(ii)

the engaging by the Employee in illegal conduct or willful misconduct that, in either case, is materially detrimental to the Company, monetarily or reputationally;

 

 

(iii)

the commitment by the Employee of any act of fraud, embezzlement or misappropriation of funds; I2SEV-NC-CIC-GR-4-2013

 

 

(iv)

the conviction by the Employee of, or the plea by the Employee of guilty or nolo contendere to, any felony;

 

 

(v)

use of illegal drugs;

 

 

(vi)

breach of fiduciary duty to the Company or an Affiliated Company (as defined below); and

 

 

(vii)

a significant violation of the Company’s Code of Business Conduct and Ethics.

For purposes of this definition of “Cause,” no act, or failure to act, will be deemed “willful” if done, or omitted to be done, by the Employee in good faith and with a reasonable belief that Employee’s act, or failure to act, was in the best interest of the Company or an Affiliated Company.

(d)

Termination by the Company without Cause . The Company may terminate the Employee’s employment without Cause by providing the Employee with at least three (3) days’ written notice. The notice will specify the Employee’s Date of Termination (as defined below). During such notice period, the Company may require that the Employee cease performing some or all of the Employee’s duties and/or not be present at the Company’s or an Affiliated Company’s offices.

 


 

 

(e)

Termination by the Employee for Good Reason . The Employee may immediately resign the Employee’s position for Good Reason and, in such event, the Employee’s employment shall terminate. As used herein, “ Good Reason ” means a material negative change in the employment relationship without the Employee’s prior written consent, as evidenced by the occurrence of any of the following: (i) a material diminution in the Employee’s title, duties, responsibilities or authority; (ii) reduction of Employee’s base salary and benefits except for across-the-board changes for senior executives of the Company; (iii) exclusion from eligibility to participate in an executive benefit/compensation plan where similarly-situated executives are eligible to participate in such plan; (iv) a material change in the geographic location at which the Employee must perform Employee’s services unless otherwise mutually agreed; or (v) material breach of the Agreement by the Company. For purposes of this Agreement, a change in the Employee’s reporting structure or hierarchy shall not in and of itself be deemed Good Reason. 

For each event described above in this Section 1(e), the Employee must notify the Company within ninety (90) days of the occurrence of the event and the Company shall have thirty (30) days after receiving such notice in which to cure. If the Company fails to cure, the Employee’s resignation shall not be considered to be for Good Reason unless the Employee resigns not later than thirty (30) days after the expiration of the cure period. The Employee’s employment shall terminate on the date the Employee resigns.

(f)

Termination by the Employee Voluntarily . The Employee may terminate the Employee’s employment at any time for any reason other than Good Reason during a Change of Control Period (as defined below), or for no reason effective thirty (30) days following notice to the Company of the Employee’s intent to terminate Employee’s employment. The Company may accept or give a shorter notice period (or no notice period) and require that the Employee cease performing some or all of the Employee’s duties and/or not be present at the Company’s or Affiliated Company’s offices.

 

(g)

Date of Termination . The date upon which Employee’s employment terminates pursuant to this Section 1 shall be the Employee’s “ Date of Termination ” for all purposes of this Agreement. In the event that the termination of the Employee’s employment does not constitute a “separation from service” as defined in Section 409A of the Internal Revenue Code of 1986, including all regulations and other guidance issued pursuant thereto (the “ Code ”), the Employee’s rights to the payments and benefits described in Section 2 shall vest upon the Date of Termination, but no payment to the Employee that is subject to Code Section 409A shall be paid until the Employee incurs a separation from service (or until six (6) months after such date if the Employee is a specified employee as defined in Code Section 409A), and any amounts that would otherwise have been paid prior to such date shall be paid instead as soon as practicable after such date.

 

2.

Obligations of the Company upon Termination .

 

(a)

Termination by the Company Without Cause . If the Company terminates the Employee’s employment without Cause, the Employee shall be entitled to receive, as Employee’s exclusive right and remedy in respect of such termination, the payment of:

 

 

(i)

all Accrued Obligations (as defined below); plus

 

 

(ii)

at the time the Company pays its employees bonuses in accordancewith its general payroll policies, the Pro Rata Bonus (as defined below), if any; plus

 

 

(iii)

severance pay equal to twelve (12) months of the Employee’s base salary as of the Date of Termination payable in accordance with the Company’s regular pay schedule; plus

 

 

(iv)

Twelve (12) months of continued health and welfare benefit plan coverage following the Date of Termination at active employee levels, if and to the extent the Employee was participating in any such plans on the Date of Termination and timely elects continuation coverage, provided that the Employee remits monthly premiums for the full cost of any health benefits; plus

 

 

(v)

a cash payment each month during the twelve-month (12 month) period following the Date of Termination equal to the full monthly premium for the medical and health benefits described in clause (iv) above minus the active employee cost of such coverage: provided that in lieu of such payments the Company may impute taxable income to the Employee in an amount such that the net amount of taxable income realized in any year, after all applicable withholding, is equal to the amount of such payments that would otherwise be required for such year; plus

 

 

(vi)

with respect to non-vested equity and non-equity awards, the applicable plans and award agreements will govern vesting, exercise periods and payments due under such applicable plans and award agreements; plus

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(vii)

three (3) months of executive-level career transition assistance services by a firm selected by the Company (including an aggregate cost) with such assistance being commenced by the Employee no later than sixty (60) days following the Employee’s Date of Termination. 

For purposes of this Agreement, “ Accrued Obligations ” shall mean: (1) all base salary earned by the Employee but unpaid as of the Date of Termination, (2) reimbursement for any and all monies advanced in connection with the Employee’s employment for reasonable and necessary expenses incurred by the Employee through the Date of Termination, (3) a payment representing the Employee’s accrued but unused paid time off in accordance with the Company’s or Affiliated Companies’ policy and (4) all other payments and benefits to which the Employee may be entitled under the terms of any applicable compensation arrangement or benefit plan or program of the Company. For purposes of this Agreement, “ Pro Rata Bonus ” shall mean, as to any fiscal year of the Company in which the Employee’s employment with the Company is terminated, an amount equal to that pro rata portion of the Employee’s annual bonus which, but for the Employee’s termination of employment, would have been earned by the Employee during such year. The actual amount of any annual bonus shall be determined by and in accordance with the terms of the Company’s then-current bonus program and the Employee shall have no absolute right to an annual bonus in any year.

(b)

Death . If the Employee’s employment is terminated by reason of the Employee’s death, this Agreement shall terminate without further obligations to the Employee’s heirs, executors, administrators or other legal representatives under this Agreement, other than for (i) payment of all Accrued Obligations, plus (ii) at the time the Company pays its senior executive bonuses in accordance with its general payroll policies, the Pro Rata Bonus.

 

(c)

Disability . If the Employee’s employment is terminated by reason of the Employee’s Disability, this Agreement shall terminate without further obligations to the Employee, other than for  (i) payment of all Accrued Obligations, plus (ii) the amount payable or provided pursuant to Sections 2(a)(iii)-(vi) ; provided , however , that to the extent the Company’s long-term disability plan does not offset the amount payable or provided pursuant to this Section 2(c), such amounts shall be reduced by the amount of any disability insurance payments or benefits paid to the Employee pursuant to the Company’s long-term disability plan.

 

(d)

Termination by the Company for Cause or Termination by the Employee . If the Employee’s employment is terminated for Cause or the Employee voluntarily terminates the Employee’s employment, excluding a termination for Good Reason during a Change of Control Period (as defined below), this Agreement shall terminate without further obligations to the Employee other than the obligation to pay to the Employee’s Accrued Obligations through the Date of Termination.

 

3.

Change of Control .

 

(a)

Definitions .

 

 

(i)

Change of Control . For the purpose of this Agreement, a “ Change of Control ” shall mean: any change in the ownership of the capital stock of inVentiv Group Holdings, Inc. if, immediately after giving effect thereto, (a) any Person (or group of Persons acting in concert) other than the Investors (as defined in the Stockholders Agreement dated as of August 4, 2010 by and among inVentiv Group Holdings, Inc. and the other parties thereto) will have the direct or indirect power to elect a majority of the members of the Board of Directors of inVentiv Group Holdings, Inc. or (b) the Investors shall own less than twenty-five percent (25%) of the Equivalent Shares. “Equivalent Shares” means, at any date of determination, (a) as to any outstanding shares of the Company’s common stock (“ Stock ”), such number of shares of Stock and (b) as to any outstanding options, warrants or convertible securities, the maximum number of shares of Stock for which or into which such options, warrants or convertible securities may at the time be exercised, converted or exchanged (or which will become exercisable, convertible or exchangeable on or prior to, or by reason of, the transaction or circumstance in connection with which the number of Equivalent Shares is to be determined).

For purposes of this definition, “ Person ” shall mean any individual, partnership, corporation, company, association, trust, joint venture, limited liability company, unincorporated organization, entity or division, or any government, governmental department, agency or political subdivision thereof.

 

(ii)

Change of Control Period . For purposes of this Agreement, the “ Change of Control Period ” shall mean the period commencing on the date of a Change of Control and ending on the twelfth (12th) month anniversary of such date.

 

 

(iii)

Start Date . For purposes of this Agreement, “ Start Date ” shall mean the first date of the Change of Control Period. Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and if the Employee’s employment with the Company is terminated prior to the date on which the Change of Control occurs, and if it is reasonably demonstrated by the Employee that such termination of employment (a) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (b) otherwise arose in connection with or anticipation of a Change of Control, then for all purposes of this Agreement the “ Start Date ” shall mean the date immediately prior to the Date of Termination.

3


 

 

(b)

Obligations of the Company upon Employee’s Voluntary Termination with Good Reason or the Company’s Involuntary Termination of Employee Without Cause (Other Than for Death or Disability) During Change of Control Period . If, during the Change of Control Period, the Company terminates the Employee’s employment without Cause (other than for death or Disability) or the Employee terminates the Employee’s employment for Good Reason, then the Company shall pay or provide to the Employee the following: 

 

 

(i)

all amounts described in Section 2(a) , except the amount described in Section 2 (a)(ii) , which amounts shall be paid at the same time and in the same manner as if the Date of Termination had not occurred during a Change of Control Period;

 

 

(ii)

an amount equal to one hundred percent (100%) of the Employee’s annual cash incentive bonus payment at target for the year preceding the Change of Control, paid in a lump sum in cash within thirty (30) days following the Date of Termination; and

 

 

(iii)

with respect to non-vested equity and non-equity awards, the applicable plans and award agreements will govern vesting, exercise periods and payments due under such applicable plans and award agreements. For purposes of this subsection (iii), the definition of change of control (or change in control, as applicable) in the applicable award agreements or plans will determine if a change of control occurred and whether accelerated vesting is necessary or required for any outstanding non-vested equity and non-equity awards.

 

(c)

Obligations of the Company upon Employee’s Death . If the Employee’s employment is terminated by reason of the Employee’s death during the Change of Control Period, the Company shall provide the Employee’s estate or beneficiaries with the Accrued Obligations and the timely payment of the amount described in Section 3(b) . and shall have no other severance obligations under this Agreement.

 

(d)

Obligations of the Company upon Employee’s Disability . If the Employee’s employment is terminated by reason of the Employee’s Disability during the Change of Control Period, the Company shall provide the Employee with the Accrued Obligations and the timely payment of the amount described in Sections 2(a)(iii)-(vi) (subject to the applicable offset described in Section 2(c ) , and shall have no other severance obligations under this Agreement.

 

(e)

Obligations of the Company upon Employee’s Voluntary Termination Without Good Reason or the Company’s Involuntary Termination of Employee With Cause During Change of Control Period . If the Employee’s employment is terminated for Cause, or the Employee resigns without Good Reason, during the Change of Control Period, the benefits provided to the Employee shall be the same as if the Date of Termination had not occurred during a Change of Control Period.

 

(f)

280G Modified Cap .

 

 

(i)

Notwithstanding anything in this Agreement to the contrary, if the aggregate amount of the benefits and payments under this Agreement, and other payments and benefits which the Employee has the right to receive from the Company (including the value of any equity rights which become vested upon a Change of Control) (the “ Total Payments ”)) would constitute a “parachute payment” as defined in Code Section 280G(b)(2), the Employee shall receive theTotal Payments unless the (a) after-tax amount that would be retained by the Employee (after taking into account all federal, state and local income taxes payable by the Employee and the amount of any excise taxes payable by the Employee under Code Section 4999 that would be payable by the Employee (the “ Excise Taxes ”)) if the Employee were to receive the Total Payments has a lesser aggregate value than (b) the after-tax amount that would be retained by the Employee (after taking into account all federal, state and local income taxes payable by the Employee) if the Employee were to receive the Total Payments reduced to the largest amount as would result in no portion of the Total Payments being subject to Excise Taxes (the “ Reduced Payments ”), in which case the Employee shall be entitled only to the Reduced Payments.

 

 

(ii)

The determination of whether Section 3(f) applies, and the calculation of the amount of the Reduced Payments, if applicable, shall be performed by an accounting firm selected by the Company (the “ Accounting Firm ”). Such reduction shall be accomplished by first reducing all cash payments in the order they would otherwise be paid, and then reducing any equity grant the vesting of which was accelerated by reason of a change of control (as defined in the applicable award agreements or plans), with equity grants subject to performance-based vesting reduced first, and then equity grants subject to time-based vesting reduced in the reverse order that they would otherwise have vested. The Accounting Firm shall provide detailed supporting calculations both to the Company and the Employee within fifteen (15) business days of the receipt of notice from the Employee that there has been a payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Employee may appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company.

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4.

Waiver and Release Agreement . In no event, however, shall the Employee be entitled to receive the pay and benefits that the Company shall provide the Employee pursuant to Sections 2(a), 2(c), 3(b) or 3(d) unless the Employee provides the Company an enforceable waiver and release agreement in a form that the Company normally requires for senior executive employees. Such release shall be furnished to the Employee for Employee’s review not later than seven (7) business days following the Date of Termination, and shall be executed and returned to the Company within twenty-one (21) days of receipt (or within forty-five (45) days of receipt if the Employee’s separation is part of a group). Provided the Employee does not timely revoke the waiver and release agreement within seven (7) days after its execution (or within fifteen (15) days if the Employee is employed in Minnesota), pay and benefits pursuant to Sections 2(a), 2(c), 3(b) or 3(d) shall comm


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