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EXHIBIT 10.11
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into by
The Xxxxx Group, Inc., a North Carolina corporation (hereinafter the "Company")
and Xxxxxxxx X. Xxxxx (hereinafter "Employee").
Pursuant to the Asset Purchase Agreement dated as of April 16, 1996
(hereinafter "Asset Purchase Agreement") by and between Company, Quintiles
Transnational Corp. ("Quintiles"), Xxxxx - VHI, Inc. ("Xxxxx - VHI"), Value
Health, Inc. ("VHI"), Xxxxxxxx X. Xxxxx, and Xxxxxx X. Xxxxx, Company agreed
to purchase certain of the assets and assume certain of the liabilities of
Xxxxx - VHI.
As a condition of the Asset Purchase Agreement, Employee shall execute
a written Employment Agreement with the Company upon the terms and conditions
hereinafter set forth.
In consideration of the mutual promises contained herein and the Asset
Purchase Agreement, and other good and valuable consideration, the receipt and
sufficiency of which is mutually acknowledged, the parties agree as follows:
1. EMPLOYMENT. The Company employs Employee and Employee accepts
employment on the terms and conditions set forth below.
2. NATURE OF EMPLOYMENT. Employee shall serve as Chief Executive
Officer and have such responsibilities and authority as may from time to time
be assigned by the Company's Board of Directors. Subject to the Board's
direction, Employee shall perform such duties as are commensurate with and
required by the position of Chief Executive Officer. Employee shall devote all
his working time and best efforts to successfully perform his duties and
advance the Company's interests; provided, however, to the extent that there is
no interference with Employee's performance of his duties under this Agreement,
Employee may: (a) without consent of the Board, write professionally (subject
to Section 9 below), (b) without consent of the Board, continue to serve and
may be reelected to serve as a member of any Board of Directors and/or Board of
Trustees on which he served as of the date of this Agreement (and to retain
director's fees and other compensation, including stock options and awards, for
services rendered), (c) with prior consent of Quintiles (which shall not be
unreasonably withheld), accept election to Boards of Directors and/or Boards of
Trustees other than those specified in clause (b) during the term of this
Agreement, and (d) without consent of the Board, engage in voluntary or
charitable activities and be elected to serve on the boards of voluntary,
not-for-profit organizations. As to actions permitted by the preceding
sentence, Employee shall (i) conduct any such professional writing individually
or as an employee of or consultant to a person or entity other than the Company
or any Affiliate (as defined below) and not as an employee of or consultant to
the Company or any
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Affiliate, and (ii) shall indemnify and hold harmless the Company and its
Affiliates and their respective directors, officers, employees, agents and
shareholders from and against any and all losses, claims, actions, damages,
liabilities, costs and expenses (including attorneys' fees), joint or several,
relating to or arising out of any such professional writing by Employee or any
other conduct, act or omission of Employee, occurring on or after the date of
this Agreement, other than in his capacity as an employee, officer or director
of the Company or Quintiles. For purposes of this Agreement, "Affiliates"
shall mean Quintiles, or any subsidiary or related entity of either the Company
or Quintiles, or any entity directly or indirectly controlled or beneficially
owned in whole or substantial part by the Company or Quintiles or any
subsidiary or related entity of either.
3. TERM. The original term of employment shall begin on the
Closing Date (as defined in the Asset Purchase Agreement) and end on the third
anniversary date thereafter (the "Term") unless terminated earlier as set forth
in Section 10. Upon the original term's or any renewal term's expiration,
Employee's employment shall be automatically renewed for an additional one (1)
year period unless either party gives the other party not less than ninety (90)
days prior notice of its intent not to continue the employment relationship.
During any renewal terms, all terms, conditions, and provisions of this
Agreement shall remain in full force and effect. Sections 2 (Nature of
Employment), 5 (Consultancy), 6 (Non-Competition), 7 (Remedies for Certain
Breaches), 8 (Confidentiality), 9 (Intellectual Property), 14 (Arbitration) and
17 (Governing Law) shall survive any termination of this Agreement as provided
herein.
4. COMPENSATION.
(A) SALARY. Employee shall receive an annual salary of
not less than $288,750 (less applicable withholdings) payable in equal biweekly
installments. Employee's salary shall be subject to at least annual review and
adjustment in accordance with the Company's current standard practice for
executive compensation and subject to the discretion of the Company's Board of
Directors or Compensation Committee thereof. The Company shall not reduce
Employee's salary without Employee's consent.
In addition, Employee shall be eligible to earn a
discretionary annual performance bonus (the "Annual Bonus") at a target level
of not less than 50% of salary pursuant to criteria to be approved by the
Company's Board of Directors (or the Compensation Committee thereof). Employee
may also be eligible to receive an additional discretionary bonus of up to 50%
of the Annual Bonus (the "Additional Bonus Target Percentage") pursuant to
criteria to be approved by the Company's Board of Directors (or the
Compensation Committee thereof). Pursuant to Paragraph 1 (f) of the
Indemnification Agreement entered into on April 16, 1996, by and among the
Company, Quintiles, Xxxxx-VHI, VHI, Xxxxxxxx X. Xxxxx, Xxxxxx X. Xxxxx, Xxxxxx
X. Atlas, Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxx, and Xxxxx X. Xxxxxx
("Indemnification Agreement"), any cash bonus pool established by the Company
for Employee's or other employees' benefit shall be reduced by an amount
necessary to recover a Loss (as defined in the Indemnification Agreement).
Employee's total compensation under this Agreement (salary
plus bonus) for payment dates following the date of any final determination or
agreement described in clause (i) or (ii) below shall be reduced by: (i) any
amount that a court or arbitrator with jurisdiction over
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the subject matter finally determines, or that Employee agrees, is owed by
Employee to either the Company or Quintiles pursuant to the Indemnification
Agreement; and (ii) any amount that a court or arbitrator with jurisdiction
over the subject matter finally determines, or that Employee agrees, is owed by
Employee to either Xxxxx-VHI or VHI pursuant to that certain
cross-indemnification agreement, dated April 16, 1996, by and among Employee,
Xxxxx-VHI, VHI, and other employees of the Company (the "VHI
Cross-Indemnification Agreement"). Such reduction shall be applied to payments
of compensation hereunder until the aggregate amount of such reductions is
equal to the amount so determined or agreed to be owed, plus interest at the
rate of eight percent (8%) per annum. No salary reduction shall exceed the
extent of Employee's remaining liability to the Company and Quintiles pursuant
to Schedule 1 of the Indemnification Agreement.
(B) STOCK OPTION.
(i) Nonqualified. Employee shall be entitled to
such stock options as are granted under the Stock Option Agreement attached as
Exhibit 1; such options shall be governed by the terms and conditions of the
Quintiles Xxxxx Nonqualified Stock Option Plan. Twenty-five percent (25%) of
such options shall vest and become exercisable immediately and the remainder of
such options shall vest and become exercisable in equal monthly installments
over a three year period beginning as of the Closing Date. The options shall
have an exercise price per share equal to the closing price per share of
Quintiles Common Stock on the Nasdaq National Market as of the Closing Date.
Any unvested stock options shall vest and become exercisable immediately: 1)
upon the Company's termination of the employment relationship created by this
Agreement, unless such termination is "for cause" pursuant to Section 10(a)
hereof; 2) in the event Quintiles should sell all or substantially all of the
assets or stock of the Company to any entity other than an Affiliate of
Quintiles and, because of such sale, Employee elects to terminate the
employment relationship created by this Agreement; and, 3) in the event of
Employee's total disability (as defined hereinafter) or death.
(ii) Qualified. As soon as practicable after the
execution of this Agreement by all parties, Employee shall be granted an
incentive stock option pursuant to Quintiles' Equity Compensation Plan ("the
Plan") to purchase ten thousand (10,000) shares of Quintiles Common Stock.
This option shall be governed by the terms and conditions of the Plan and,
subject to the applicable terms and conditions, shall be evidenced by a stock
option agreement in the standard form employed by Quintiles for incentive stock
options issued pursuant to the Plan; shall vest and become exercisable in equal
monthly installments over a three year period beginning as of the Closing Date;
and shall have an exercise price per share equal to the closing price per share
of Quintiles Common Stock on the Nasdaq National Market on the last trading day
prior to the date the option is granted (subject to adjustment as provided in
the applicable stock option agreement).
(C) PARTICIPATION IN OTHER BENEFITS. Employee may
participate (subject to applicable terms and conditions) in all pension, profit
sharing, bonus, incentive, insurance, medical, disability and other benefit
plans and programs made available to Company executives from time to time.
Nothing in this Agreement, however, shall require the Company to create or
confirm any such employee benefits. In addition, the Company agrees to
purchase within sixty
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days of the date this Agreement is executed, a term life policy on the life of
Employee with an approximate annual cost to the Company of $15,000 so long as
this Agreement remains in effect, but not beyond April 25, 2000, and provided
that Employee is insurable. The Company may, in its discretion, satisfy its
obligation with respect to such term life insurance policy by assuming any
existing term life insurance policy which Employee may have. The beneficiary
of such policy shall be designated by Employee. Employee shall be considered a
level 3 employee (or the substantial equivalent thereof) under Quintiles'
Executive Compensation Plan except that Employee shall not be eligible for
Quintiles' cash bonus, automobile policy, vacation and noncompetition benefits
and policies.
(D) EXPENSES. Subject to the terms and conditions of
applicable reimbursement policies, Employee shall be entitled to reimbursement
of expenses actually incurred by Employee in performing the services under this
Agreement.
5. CONSULTANCY. Upon the Company's request, Employee will serve
as a consultant to the Company or its Affiliates for a term of one year after
the termination of the employment relationship and make himself available for
consulting assignments as requested by the Company or its Affiliates; such
requests shall be upon reasonable notice and shall not require Employee's
services as a consultant for more than twenty (20) hours per week or in a
manner that would interfere with Employee's subsequent employment. Company
will pay Employee a consulting fee for making himself available under this
section equal to the base salary paid to Employee for the year immediately
preceding the term of consultancy. As a consultant, Employee shall be an
independent contractor, not an employee, and shall be responsible for paying
all applicable income and other taxes on or related to such consulting fees and
shall not be entitled to benefits, but shall remain subject to all obligations
set forth in this Agreement in Sections 6 (Non-competition), 8
(Confidentiality) and 9 (Intellectual Property).
6. NON-COMPETITION. The Employee acknowledges that he shall have
access to and control of confidential information concerning the Company and
its Affiliates. In consideration of the Company's commitments to the Employee
under this Agreement and under the Asset Purchase Agreement, Employee expressly
covenants and agrees that during his employment and for a period that shall
expire upon the latter of either one (1) year after termination of employment
or five (5) years from the Closing Date unless such termination by the Company
is not "for cause," in which case the period shall be one (1) year after
termination of employment, Employee will not, without the Company's prior
written consent duly authorized by resolution of the Board of Directors:
(a) serve as a partner, trustee, officer, director, employee,
consultant, stockholder, option holder, or guarantor of, or lender of money to,
or otherwise assist, or have any interest in or referral or other agreement
with, any other health economics or health policy consulting firm, contract
research organization, corporation, firm or business engaged in the same
business as, or a business competitive with, the Company's or its Affiliates'
business, in any capacity connected with such entities' competitive activities
in the geographical areas set forth below. This prohibition shall not apply to
any business which the Company or its Affiliates did not engage in or
contemplate engaging in on the Employee's termination date. It is agreed that
ownership,
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directly or indirectly, of not more than one (1%) percent of the issued and
outstanding stock of a corporation, the shares of which are regularly traded on
a national securities exchange or in the over-the-counter market, shall not be
deemed to be in violation of the preceding sentence.
Notwithstanding the foregoing provisions of this section,
Employee may, after termination of employment under this Agreement,: (i)
obtain employment with an institution of higher education or a local, state, or
federal governmental body; (ii) accept speaking engagements, provided that such
engagements shall not be presented to, on behalf of, or under the sponsorship
of, a competitor of the Company; and (iii) unless the termination of his
employment is "for cause," provide his personal consulting services to a person
or entity which is not in competition with the Company. The provision of such
personal consulting services is permissible during the term of this
non-competition provision only if such services are performed through the
Company and in accordance with any applicable Company policies or practices.
Fees charged for such personal consulting services shall be charged through the
Company to the consulting client and shall not exceed $500,000 in any twelve
(12) month period. For the first $50,000 in fees received by the Company from
such consulting clients in any twelve (12) month period, the Company shall pay
Employee $50,000. For fees received by the Company in excess of $50,000 in the
twelve (12) month period, the Company shall pay Employee an amount equal to the
amount of fees received by the Company less a deduction for operating profit
payable to the Company in the amount of fifteen percent (15%) of such fees.
Arrangements for office space and secretarial services, if any, shall be
separately negotiated to the mutual satisfaction of the parties. In performing
such consulting services, Employee shall be an independent contractor and not
an employee. If termination of employment is "for cause," then, unless the
Company and the Employee agree otherwise, in lieu of the foregoing consulting
arrangement, Employee may provide personal consulting services as a sole
proprietor (or similar individual business without other consultants) directly
to consulting clients which are not in competition with the Company so long as
Employee's consulting does not in any way benefit a competitor, the Employee
otherwise complies with the provisions of this Section 6, and so long as
consulting fees arising from such services do not exceed $500,000 in any twelve
(12) month period. Provided that, Employee must give reasonably prompt notice
of personal consulting services to be so provided, and Employee must provide
contemporaneous copies of billing and make payment to the Company of fifteen
percent (15%) of net revenues (as defined by the Company's standard accounting
practices) from such personal consulting services. Payment shall be made to
the Company immediately upon Employee's receiving payment for such consulting
services. For purposes of this subparagraph 6(a), "personal consulting
services" shall be specialized services which Employee uniquely is qualified to
provide (either by virtue of Employee's skills, knowledge, or experience or by
virtue of Employee's past relationship with the client), and which are provided
without any assistance from other consultants or staff except a personal
secretary.
(b) solicit, interfere with the Company's contractual
relationship with, or entice away from Company, any customer, supplier, person,
firm, or corporation who has at any time during the one (1) year immediately
preceding termination of Employee's employment or consultancy done business
with the Company or its Affiliates, or offer employment to or procure
employment for any person who at any time during the one (1) year immediately
preceding the termination of Employee's employment or consultancy with the
Company, shall have been
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employed by the Company or its Affiliates or done any substantial work for the
Company or its Affiliates; provided, however, that this paragraph shall not
apply in any manner to Employee's secretary.
(c) take or engage in any action, in any form or manner,
which directly or indirectly is materially detrimental to the goodwill or name
of the Company or its Affiliates, or is otherwise intended to be adverse to the
Company or its Affiliates; provided, however, that this paragraph shall not
prohibit lawful competitive conduct so long as the Employee does not violate
the restrictions in Section 6(a) and 6(b) above.
The restrictions set forth above, in Sections 6(a) and 6(b), apply to
the following geographical areas: (i) any city, metropolitan area or county in
which the Company, or its subsidiaries or Affiliates, does or, during the
Employee's employment, did business; (ii) any city, metropolitan area or county
in which the Company, or its subsidiaries or Affiliates, or the Employee's
services were provided, or for which the Employee had responsibility, while
employed by the Company.
In the event a court of competent jurisdiction holds that the five (5)
year non-competition period is unenforceable, then the non-competition period
shall be four (4) years; unless that period is held unenforceable, then the
non-competition period shall be three (3) years; unless that period is held
unenforceable, then the non-competition period shall be two (2) years; unless
that period is held unenforceable, then the non-competition period shall be one
(1) year.
7. REMEDIES FOR CERTAIN BREACHES. In addition to any other right
and remedy it may have, the Company shall be entitled to an injunction
enjoining or restraining the Employee from any violation or threatened
violation of Sections 6, 8 and 9. If a court of competent jurisdiction should
determine that any provision of Sections 6, 8 or 9 is unenforceable for any
reason, Employee specifically agrees and requests that the court making such
determination shall modify and reform the provision or provisions found to be
unenforceable and, in its modified form, specifically enforce Sections 6, 8 and
9. Notwithstanding anything to the contrary, Employee's obligations under
Sections 6, 8, and 9 are independent covenants without any conditions precedent
or subsequent and the Company may enforce the provisions of Sections 6, 8 and 9
in any and all circumstances including but not limited to a termination of
employment without cause and irrespective of whether the Company has fulfilled
any or all its obligations to Employee; provided that Employee may specifically
enforce any obligations owed to Employee by the Company, but Employee may not
assert any alleged breach by the Company as a defense to the enforcement of any
of the Company's rights under Sections 6, 8 or 9. The Company's rights under
this Agreement are cumulative with, and not to the exclusion or limitation of,
any and all rights of the Company and its Affiliates under the Asset Purchase
Agreement or otherwise. It is specifically acknowledged and agreed by both
parties that the Asset Purchase Agreement and this Employment Agreement were
simultaneously bargained for by the parties and that the Asset Purchase
Agreement was an inducement to each party to enter into this Agreement and vice
versa. It is further agreed that neither party would have entered into the
Asset Purchase Agreement without entry into this Agreement or vice versa. It
is specifically agreed that the
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provisions of Sections 6, 8 and 9 are reasonable and that they shall be
interpreted, construed and enforced according to the laws of North Carolina.
8. CONFIDENTIALITY. During employment and for five (5) years
thereafter, or such longer time as may be required by any obligation of
confidentiality to third parties, which obligation is known to the Employee,
Employee shall not, for any purpose other than in the performance of his work
for the Company and in accordance with applicable policies and procedures, use,
disclose or aid third parties in obtaining or using any confidential
information of the Company or its Affiliates. For the purposes of this
Agreement, Confidential Information means information of the Company or its
Affiliates, not generally available to the public, including without
limitation, information about customer identity, needs, practices; pricing
lists and policies; marketing contracts and practices; and other corporate,
business, marketing and technical information, methods and plans including
without limitation formulae, computer programming techniques, documentation,
software source codes, object codes, documentation, "know-how", processes,
methods, research, development or marketing techniques, programs, materials or
plans, client lists or any other of its or their trade secrets or confidential
information. In the event that Employee shall be required to make disclosure
pursuant to court order or other government process or that disclosure is
necessary to enable the Employee to comply with applicable law or defend
against claims, Employee shall promptly notify the Company and take at the
Company's expense all reasonably necessary steps requested by the Company to
defend against the enforcement of such court order or other government process,
and permit the Company to participate with counsel of its choice in any
proceeding relating to the enforcement thereof. Upon the termination of
employment, Employee shall deliver to the Company all records, memoranda, data
and other documents of any description which refer or relate in any way to such
information, the disclosure of which is prohibited by these provisions, and
return to the Company any of its equipment and property which may then be in
Employee's possession or control.
9. INTELLECTUAL PROPERTY. Intellectual Property includes but is
not limited to all ideas, discoveries and inventions (including without
limitation machinery, apparatus, products, processes, methods, formulas,
techniques, computer hardware, software, information systems and programs and
works of authorship), and improvements thereof, and know-how related
thereto--whether or not patentable, copyrightable or subject to other
protection.
(A) DISCLOSURE. Employee will disclose to the Company
promptly in writing all Intellectual Property conceived, developed or made by
him, individually or jointly, during his employment or consultancy with the
Company.
(B) ASSIGNMENT. Employee, upon the Company's request
during his employment or consultancy with the Company or thereafter, will
assign to the Company any of his rights or interest in any Intellectual
Property, make all applications for patents, execute all other writings and
perform all other acts, which in the Company's opinion may be necessary to
establish and perfect in the Company the Employee's entire right, title and
interest, foreign and domestic, in the Intellectual Property, patent
applications and patents; provided, however, the Employee will not be required
to assign any rights in any Intellectual Property that:
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(i) he developed entirely on his own time without
using the Company's equipment, supplies, facilities or confidential or trade
secret information, including any professional writing as described in Section
2 hereof; and
(ii) does not relate to the Company's business or
actual or anticipated research or development, or result from his work for the
Company.
(c) Employee acknowledges that the name, "The Xxxxx
Group, Inc.," is the property of the Company. Accordingly, Employee shall not
use the name "Xxxxx," or grant the right to others to use the name "Xxxxx," as
part of the name or identification of any other contract research organization,
corporation, firm, or business engaged in the same business as, or a business
competitive with, the Company's or its Affiliates' business for such time as
the Company or its Affiliates may be in existence.
10. TERMINATION.
(a) The Company shall have the right to terminate
Employee's employment immediately for cause, or in the event of Employee's
total disability as determined by an independent physician selected jointly by
the Company and Employee, or death. For purposes of this Agreement, "total
disability" shall mean a physical or mental infirmity which impairs the
Employee's ability substantially to perform his employment duties for the
Company and which continues for a period of at least one hundred and eighty
(180) days. For purposes of this Agreement, "cause" shall include: (i)
Employee's commission of any act of negligence, unlawfulness, or dishonesty ,
which is materially detrimental to the Company's interests; (ii) Employee's
personal performance of his job in a grossly unsatisfactory manner, as
reasonably determined by the Board of Directors of the Company and specified in
writing, or failure to comply with the Company's directions, policies, rules or
regulations, which performance or failure to comply, is materially detrimental
to the Company's interests; or (iii) Employee's material breach of this
Agreement. In the event of "cause" arising under Section 10(a)(i)(except for
unlawfulness or dishonesty), (ii), or (iii), Employee shall be entitled to
receive written notice from the Company specifying the deficiency giving rise
to "cause" and a reasonable opportunity to cure such deficiency, and such
notice shall be accompanied by an opinion of outside counsel to the Company
confirming that in such counsel's opinion the facts alleged (which such counsel
can assume as true) constitute cause under this Agreement.
The Company also may terminate Employee's employment during
the Term (or any renewal term) in its full discretion, for any reason or no
reason, as provided for in subparagraph (c) below.
(b) In the event that the Company terminates Employee's
employment as provided in subparagraph (a) above, then the Company shall have
no obligation to make any payments under this Agreement for any period
subsequent to the date of such termination. Nothing in this Agreement is
intended to supplant, waive, terminate or otherwise affect Employee's
eligibility for or receipt of any death, disability or dismemberment benefits
to which Employee otherwise would be entitled.
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(c) In the event that the Company terminates Employee's
employment during the Term (or any renewal term) otherwise than as provided in
subparagraph (a) above or Employee terminates his employment during the Term
(or any renewal term) by reason of the Company's breach of this Agreement, such
termination by Employee being only after the Company receives written notice
from the Employee specifying the deficiency alleged to constitute breach and a
reasonable opportunity to cure such deficiency:
(i) the Company shall continue to pay Employee's
salary (in the amount and manner established in paragraph 4(a) above) for any
then-remaining balance of the initial three (3) year Term, less any amount
payable pursuant to paragraph (ii) below; and
(ii) the Company's sole and exclusive other
obligation, upon the Employee's execution of an enforceable waiver and release
of all claims under this Agreement and claims related to employment, shall be
to pay to Employee, in equal monthly installments, the greater of (A) an amount
equal to Employee's salary pursuant to paragraph 4(a) at the rate in effect
prior to such termination, for a period of one year or (B) the amount of
severance pay applicable to Employee pursuant to the Company's standard
severance policy as then in effect, if any. Notwithstanding anything to the
contrary, the Company shall have no further liability or obligation to the
Employee except as provided by law or if the terms of any employee benefit plan
continue benefits under these circumstances of termination.
(d) In the event Employee's employment terminates upon
the Company's election not to renew the Term (or any extension of the Term),
the Company's sole and exclusive obligation shall be to pay to Employee, in
equal monthly payments, the greater of (i) an amount equal to the Employee's
then current annual salary or (ii) the amount of severance pay applicable to
Employee pursuant to the Company's standard severance policy as then in effect,
if any.
(e) If Quintiles should sell all or substantially all of
the assets or stock of the Company to any entity other than an Affiliate of
Quintiles, Employee may elect to terminate the employment relationship created
by this Agreement. In the event Employee so elects, he shall have no
entitlement to any further compensation or severance pay from the Company and
he shall not be subject to the provisions of Section 6 (Non-competition)
hereof, unless the Company should request his services as a consultant under
Section 5 (Consultancy) hereof, in which case, he shall be subject to the
provisions of Section 6 (Non-competition) as if the termination of employment
were without "cause."
(f) Notwithstanding anything in the foregoing to the
contrary, upon the termination, for any reason, of Employee's employment
pursuant to this Agreement, the Employee shall continue to receive health
insurance coverage from the Company until Employee reaches age sixty-five (65)
or is eligible for Medicare, whichever is earlier. If, in order to provide
such insurance at a commercially reasonable rate, it is necessary for the
Employee to remain an employee of the Company outside the terms of this
Agreement, then the Company and the Employee shall agree to an employment
relationship which would accomplish such provision; provided, however, that any
such agreement shall not impose upon Employee any additional non-
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compete, confidentiality, or related restriction. Employee and the Company
agree to cooperate in the obtaining of such insurance at commercially
reasonable rates. Employee agrees that he shall contribute to the cost of such
insurance in an amount equal to the Company's average cost per employee for
health insurance during the period Employee shall receive such coverage, and
Employee also shall pay any ordinary employee contributions for such insurance.
11. GARNISHMENT OF WAGES. The Company will not garnish Employee's
wages except as may be required by law or by court order or as expressly
authorized by the third paragraph of Section 4(a).
12. ILLNESS OR INCAPACITY. If the Employee is unable to perform
his services by reason of illness or incapacity, but is not totally disabled as
defined herein, the Company shall continue the Employee's regular compensation
for a period of up to, but not more than, one hundred eighty (180) days in any
twelve (12) month period.
13. REPRESENTATION OF EMPLOYEE. Employee represents and warrants
that his performance of the terms under this Agreement will not breach any duty
or obligation owed by Employee to another under contract or otherwise, violate
any confidence of another, or violate any law or recognized standard of ethics
or business custom. Employee's breach of a representation or warranty in the
Asset Purchase Agreement shall constitute a breach by Employee of this
Agreement only if the representation or warranty in the Asset Purchase
Agreement were made by Employee with actual and personal knowledge that such
representation or warranty was untrue when made or upon the Closing Date.
14. ARBITRATION. The parties agree that any controversy or claim
arising out of this Agreement shall be settled by arbitration in Raleigh, North
Carolina in accordance with applicable rules of the American Arbitration
Association and Exhibit 2 hereto. Any judgment of the arbitrator shall be
final and binding on the parties. Provided, however, should a party desire to
seek injunctive or other equitable relief with respect to such controversy or
claim, then such party may bring the matter to a court of competent
jurisdiction in lieu of arbitration and such judicial proceeding may resolve
damages and other similar relief in addition to injunctive or equitable relief.
Should the party seeking injunctive or equitable relief not be awarded any such
relief, then to the extent unresolved, the claim or controversy shall be
submitted to binding arbitration as described herein at the request of either
party. Nothing herein shall be construed to require arbitration of disputes
with respect to the Asset Purchase Agreement or other Transaction Documents.
15. WAIVER OF BREACH. Waiver by the Company or Employee of any
breach of any of the provisions of this Agreement shall not operate or be
construed as a waiver of any subsequent breach by the parties.
16. NOTICES. Any notice required or permitted to be given under
this Agreement shall be considered sufficient if in writing, sent by overnight
courier or fax to Employee at his residence of record with Company and/or to
the Company at its principal office.
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17. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of North Carolina.
18. ENTIRE AGREEMENT. This Agreement together with the Option
Agreement: (i) supersedes all other understandings and agreements, oral or
written, between the parties with respect to its subject matter; and (ii)
constitutes the sole agreement between the parties with respect to its subject
matter. Each party acknowledged that: (i) no representations, inducements,
promises or agreements, oral or written, have been made by any party or by
anyone acting on behalf of any party, which are not embodied in the Agreement;
and (ii) no agreement, statement or promise not contained in the Agreement
shall be valid or binding on the parties unless such change or modification is
in writing and is signed by the parties.
19. SEVERABILITY. If a court of competent jurisdiction holds that
any provision or sub-part thereof contained in the Agreement is invalid,
illegal or unenforceable, that invalidity, illegality or unenforceability shall
not affect any other provision in the Agreement.
20. PARTIES BOUND. The Agreement shall apply to, be binding upon
and inure to the benefit of the parties' successors, assigns, heirs and other
representatives; provided, however, the Employee cannot assign this Agreement
without the Company's prior written consent, which consent the Company may
withhold. In addition, the Company may not assign this Agreement to any entity
that is not wholly-owned by Quintiles without Employee's consent, which consent
Employee may withhold.
21. DUPLICATE ORIGINALS. This Agreement is executed in duplicate
originals one of which is retained by each party.
IN WITNESS WHEREOF, the parties have executed this Agreement this the
13th day of May, 1996.
THE XXXXX GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Title: Vice President
------------------------
EMPLOYEE:
/s/ Xxxxxxxx X. Xxxxx
--------------------------------
Xxxxxxxx X. Xxxxx
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EXHIBIT 2
Dispute Resolution Procedures
1.0 For purposes of this Exhibit, "Dispute" shall mean
any dispute, controversy or claim arising out of or related to the
interpretation, application, or enforcement of the Employment Agreement or any
breach, termination or claim of invalidity of the Employment Agreement.
2.0 In the event of any Dispute, the matter -- upon
written request of either party detailing the nature of the Dispute (a "Dispute
Notice") -- shall immediately be referred the arbitrator selected as provided
below. Except as otherwise provided in Section 14 of the Employment Agreement,
the Employee and the Company agree to submit all Disputes to binding
arbitration. The arbitration shall be administered by the American Arbitration
Association in Washington, D.C., and conducted in accordance with the
Employment Dispute Resolution Rules of the American Arbitration Association,
with the hearing locale to be Raleigh, North Carolina.
3.0 If a Dispute Notice is served, the parties shall
promptly attempt to agree on and appoint a single arbitrator. If the parties
have not, within 15 days of the delivery of the Dispute Notice, agreed
unanimously on a single arbitrator to resolve the Dispute, either party may
request that the American Arbitration Association appoint a neutral arbitrator
in accordance with its rules.
4.0 A single neutral arbitrator (the "Arbitrator"),
selected in accordance with the preceding subparagraph, shall preside over the
arbitration and decide the Dispute (the "Decision"). The Decision shall be
binding, and the prevailing party may enforce such decision in any court of
competent jurisdiction.
5.0 The parties shall cooperate with each other in
causing the arbitration to be held in as efficient and expeditious a manner as
practicable and in this connection to furnish such documents and make available
such of their respective personnel as the Arbitrator may request. The parties
have selected arbitration in order to expedite the resolution of Disputes and
to reduce the costs and burdens associated with litigation. The parties agree
that the Arbitrator should take these concerns into account when determining
whether to authorize discovery and, if so, the scope of permissible discovery
and other hearing and pre-hearing procedures.
6.0 The Arbitrator shall render a Decision within 30 days
after accepting an appointment to serve as Arbitrator unless the parties
otherwise agree or the Arbitrator makes a finding that a party has carried the
burden of showing good cause for a longer period.
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