Exhibit 10.40
SEVERANCE AGREEMENT AND GENERAL RELEASE
THIS SEVERANCE AGREEMENT AND GENERAL
RELEASE (“ Release Agreement ”) is executed by
David Natan (the “ Executive ”) pursuant to
Section 6 of the Employment Agreement dated as of
January 10, 2007 by and between PharmaNet Development Group,
Inc., a Delaware corporation (the “ Company ”)
and the Executive (the “ Employment Agreement
”).
WHEREAS, the Executive’s
employment with the Company has been terminated effective November
21, 2007 (the “Effective Date of Termination”);
WHEREAS, the Executive has had
21 days to consider this Release Agreement, and 7 days to
revoke after signing;
WHEREAS, the Company has advised the
Executive in writing, through this Release Agreement, to consult
with an attorney before signing this Release Agreement, and
Executive has done so with Charles Freiburger, Esq., his counsel of
choice;
WHEREAS, the Executive acknowledges
that the consideration to be provided to the Executive under this
Release Agreement is sufficient to support all promises contained
herein; and
WHEREAS, the Executive understands
that the Company regards the representations and covenants by the
Executive in the Employment Agreement and this Release Agreement as
material and that the Company is relying on such representations
and covenants in paying amounts to the Executive pursuant to the
Employment Agreement and this Release Agreement.
THE
EXECUTIVE THEREFORE AGREES AS FOLLOWS:
1. The Executive shall receive
the payments and benefits set forth in Section 6(c) of the
Employment Agreement in accordance with the terms and subject to
the conditions thereof, and those set forth herein, except that the
provisions of Section 6 shall be modified as follows:
(a) Executive’s
execution of this Release Agreement shall signify his certification
that he has complied with his obligations under the Employment
Agreement and acknowledges his continuing obligations under the
Employment Agreement. Executive further certifies that he has
returned any and all documents, data, materials and other property
of Company that he has ever had in his possession, custody, or
control. Executive shall be permitted to purchase the laptop
computer and printer owned by the Company and used by the Executive
prior to the Effective Date of Termination for the fair market
value of three hundred dollars ($300); provided, however, that all
proprietary materials of the Company and software (including
licensed software) shall be removed from the computer.
Executive’s execution of this Release Agreement shall be
deemed sufficient to satisfy the requirements of
Section 6(b)(i)(a), (b), and (c) of the Employment
Agreement.
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(b) Section 6(c)(i)
of the Employment Agreement is modified as follows: “In lieu
of any further salary payments to the Executive for periods
subsequent to the Effective Date of Termination, the Company shall
cause an aggregate severance payment to be made to the Executive,
in cash, equal to two (2) times such Executive’s Annual
Base Salary (the “ Cash Severance Payment ”),
and payable in forty-eight (48) equal bi-monthly installments
in accordance with the Company’s normal pay roll practices
commencing with the Company’s first pay roll period in the
month following the Executive’s “separation from
service” (as such term is defined in Treasury Regulations
issued under Section 409A of the Internal Revenue Code) in
accordance with Section 6(f), or such later date required by
Section 6(g) hereof, subject to the Executive’s execution of
an effective release.”
(c) Section 6(c)(ii)
of the Employment Agreement is modified as follows: “For a
twenty-four (24) month period after the Effective Date of
Termination, the Executive shall receive life, disability, accident
and health insurance coverage that is substantially similar to that
which the Executive is receiving immediately prior to the Effective
Date of Termination; provided, however, that in order to receive
continued health coverage, the Executive shall be required to pay
to the Company at the same time that premium payments are due for
the month an amount equal to the full monthly premium payments
required for such health coverage and the Company shall reimburse
to the Executive the amount of such monthly premium, less the
amount that the Executive was required to pay for such health
coverage immediately prior to the Effective Date of Termination
(the “Health Payment”), no later than five
(5) days following the date the premium for the month is paid
by the Executive. In addition, on each date on which the Health
Payments are made, subject to subparagraph 6(g), the Company shall
pay to the Executive an additional amount equal to the federal,
state and local income and payroll taxes that the Executive incurs
on each monthly Health Payment (the “Health Gross-up
Payment”). The Health Payment paid to the Executive during
the period of time during which the Executive would be entitled to
continuation coverage under the Company’s group health plan
pursuant to Code Section 4980B (or any replacement or
successor provision of the United States tax law) if the Executive
elected such coverage and paid the applicable premiums is intended
to qualify for the exception from deferred compensation as a
medical benefit provided in accordance with the requirements of
Treas. Reg. §1.409A-1(b)(9)(v)(B). The Health Payment, the
Health Gross-up Payment, and any taxable medical benefits paid or
provided hereunder shall be reimbursed to Executive in a manner
that complies with the requirements of Treas. Reg.
§1.409A-3(i)(1)(iv). The COBRA health care continuation
coverage period under section 4980B of the Code shall run
concurrently with the foregoing 24-month period.”
(d) As
of the date of Executive’s execution of this Release
Agreement, the Executive has seven (7) unused vacation days.
The Executive shall be permitted to use these vacation days prior
to the Effective Date of Termination. To the extent that the
Executive is unable to use any of these vacation days prior to the
Effective Date of Termination due to work assigned to him by the
Company, the Company shall compensate the Executive for all unused
vacation days at the daily rate of pay for Executive’s Annual
Base Salary, which payment will be made simultaneously at the time
the first payment is made to Executive under Section 1(b)
above.
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(e) Section 6(f)
of the Employment Agreement is modified as follows: “The Cash
Severance Payment shall be made twice monthly in accordance with
the Company’s ordinary payroll practices in each of the
twenty-four (24) months immediately following the month in
which the Effective Date of Termination occurs, subject to the
Executive’s execution of an effective release. At the time
that payments are made under this Section, the Company shall
provide the Executive with a detailed written statement setting
forth the manner in which such payments were calculated and the
basis for such calculations. Notwithstanding the foregoing, Cash
Severance Payments shall immediately cease and no longer be payable
if Executive violates any of the terms set forth in Sections 7
or 8 hereof. Such remedy shall be in addition to any and all other
remedies available by law or equity.”
2. The Company will reimburse
Executive’s legal fees incurred in connection with the review
and negotiation of this Agreement upon providing appropriate
invoices evidencing the same; provided such amount shall not exceed
five thousand dollars ($5,000). The Executive shall provide such
invoices within sixty (60) days of the execution of this
Release Agreement and the Company shall reimburse the Executive
within thirty (30) days after received.
3.&nb
