Exhibit 10.23
IMS HEALTH INCORPORATED
Employment Agreement for Xxxxxxxx X. Xxxx
IMS HEALTH INCORPORATED
Employment Agreement for Xxxxxxxx X. Xxxx
Page
1. Employment ............................................................ 1
2. Term .................................................................. 1
3. Offices and Duties .................................................... 2
(a) Generally ......................................................... 2
(b) Place of Employment ............................................... 2
4. Salary and Annual Incentive Compensation .............................. 2
(a) Base Salary ....................................................... 2
(b) Annual Incentive Compensation ..................................... 3
5. Long Term Compensation, Including Stock Options, and Benefits, Deferred
Compensation, and Expense Reimbursement ............................. 3
(a) Executive Compensation Plans ...................................... 3
(b) Employee and Executive Benefit Plans .............................. 3
(c) Acceleration of Awards Upon a Change in Control ................... 4
(d) Deferral of Compensation .......................................... 4
(e) Company Registration Obligations .................................. 4
(f) Reimbursement of Expenses ......................................... 5
6. Termination Due to Retirement, Death, or Disability ................... 5
(a) Retirement ........................................................ 5
(b) Death ............................................................. 5
(c) Disability ........................................................ 6
(d) Other Terms of Payment Following Retirement, Death, or Disability . 7
7. Termination of Employment For Reasons Other Than Retirement,
Death, or Disability ................................................ 8
(a) Termination by the Company for Cause .............................. 8
(b) Termination by Executive Other Than For Good Reason ............... 8
(c) Termination by the Company Without Cause Prior to or More than Two
Years After a Change in Control ................................. 8
(d) Termination by Executive for Good Reason Prior to or More than Two
Years After a Change in Control ................................. 11
(e) Termination by the Company Without Cause Within Two Years After
a Change in Control ............................................. 13
(f) Termination by Executive for Good Reason Within Two Years After
a Change in Control ............................................. 15
(g) Other Terms Relating to Certain Terminations of Employment ........ 17
8. Definitions Relating to Termination Events ............................ 17
(a) "Cause" ........................................................... 17
(b) "Change in Control" ............................................... 18
(c) "Compensation Accrued at Termination" ............................. 19
(d) "Disability" ...................................................... 19
(e) "Good Reason" ..................................................... 19
(f) "Potential Change in Control" ..................................... 21
9. Rabbi Trust Obligation Upon Potential Change in Control; Excise
Tax Related Provisions .............................................. 21
(a) Rabbi Trust Funded Upon Potential Change in Control ............... 21
(b) Gross-up If Excise Tax Would Apply ................................ 21
10. Non-Competition and Non-Disclosure; Executive Cooperation;
Non-Disparagement ................................................... 23
(a) Non-Competition ................................................... 23
(b) Non-Disclosure; Ownership of Work ................................. 23
(c) Cooperation With Regard to Litigation ............................. 24
(d) Non-Disparagement ................................................. 24
(e) Release of Employment Claims ...................................... 24
(f) Forfeiture of Outstanding Options ................................. 24
(g) Survival .......................................................... 25
11. Governing Law; Disputes; Arbitration .................................. 25
(a) Governing Law ..................................................... 25
(b) Reimbursement of Expenses in Enforcing Rights ..................... 25
(c) Arbitration ....................................................... 25
(d) Interest on Unpaid Amounts ........................................ 26
12. Miscellaneous ......................................................... 26
(a) Integration ....................................................... 26
(b) Successors; Transferability ....................................... 26
(c) Beneficiaries ..................................................... 26
(d) Notices ........................................................... 27
(e) Reformation ....................................................... 27
(f) Headings .......................................................... 27
(g) No General Waivers ................................................ 27
(h) No Obligation To Mitigate ......................................... 27
(i) Offsets; Withholding .............................................. 27
(j) Successors and Assigns ............................................ 28
(k) Counterparts ...................................................... 28
13. Indemnification ....................................................... 28
IMS HEALTH INCORPORATED
Employment Agreement for Xxxxxxxx X. Xxxx
THIS EMPLOYMENT AGREEMENT by and between IMS HEALTH INCORPORATED, a
Delaware corporation (the "Company"), and Xxxxxxxx X. Xxxx ("Executive") shall
become effective as of July 1, 1998 (the "Effective Date").
W I T N E S S E T H
WHEREAS, Executive has served the Company and its predecessors in executive
and senior executive capacities since September 1991;
WHEREAS, the Company desires to continue to employ Executive as President
and Chief Operating Officer of the Company, and Executive desires to accept such
employment on the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
contained herein, and other good and valuable consideration the receipt and
adequacy of which the Company and Executive each hereby acknowledge, the Company
and Executive hereby agree as follows:
1. Employment.
The Company hereby agrees to employ Executive as its President and Chief
Operating Officer, and Executive hereby agrees to accept such employment and
serve in such capacities, during the Term as defined in Section 2 (subject to
Section 7(c) and 7(e)) and upon the terms and conditions set forth in this
Employment Agreement (the "Agreement").
2. Term.
The term of employment of Executive under this Agreement (the "Term") shall
be the period commencing on the Effective Date and ending on June 30, 2001 and
any period of extension thereof in accordance with this Section 2, except that
the Term will end at a date, prior to the end of such period or extension
thereof, specified in Section 6 or 7 in the event of termination of Executive's
employment. The Term, if not previously ended, shall be extended automatically
without further action by either party by one additional year (added to the end
of the Term) first on June 30, 2001 (extending the Term to June 30, 2002) and on
each succeeding June 30 thereafter, unless either party shall have served
written notice in accordance with Section 12(d) upon the other party on or
before the December 31 preceding a June 30 extension date electing not to extend
the Term further as of that June 30 extension date, in which case employment
shall terminate on that June 30 and the Term shall end at that date, subject to
earlier termination of employment and earlier termination of the Term in
accordance with Section 6 or 7. The foregoing notwithstanding, in the event
there occurs a Potential Change in Control during the period of 180 days prior
to the June 30 on which the Term will terminate as a result of notice given by
Executive hereunder, the Term shall be extended automatically at that June 30 by
an additional period such that the Term will extend until the 180th day
following such Potential Change in Control.
3. Offices and Duties.
The provisions of this Section 3 will apply during the Term, except as
otherwise provided in Section 7(c) and 7(e):
(a) Generally. Executive shall serve as the President and Chief
Operating Officer of the Company and, if elected, shall serve as a member
of the Board of Directors of the Company (the "Board") and, for so long as
she is serving on the Board, Executive agrees to serve as a member of any
Board committee if the Board shall elect Executive to such committee. In
any and all such capacities, Executive shall report only to the Chairman of
the Board and Chief Executive Officer of the Company and to the Board.
Executive shall have and perform such duties, responsibilities, and
authorities as are customary for the president and chief operating officer
of a publicly held corporation of the size, type, and nature of the Company
as they may exist from time to time and consistent with such position and
status, but in no event shall such duties, responsibilities, and
authorities be reduced from those of Executive at the Effective Date.
Executive shall devote her full business time and attention, and her best
efforts, abilities, experience, and talent, to the positions of President
and Chief Operating Officer and for the businesses of the Company without
commitment to other business endeavors, except that Executive (i) may make
personal investments which are not in conflict with her duties to the
Company and manage personal and family financial and legal affairs, (ii)
may serve as a member of the board of directors of each of Orion Capital
Corporation and Ligand Pharmaceuticals Incorporated, (iii) undertake public
speaking engagements, and (iv) serve as a director of (or similar position
with) any other business or an educational, charitable, community, civic,
religious, or similar type of organization with the approval of the Chief
Executive Officer and the Board, so long as such activities (i.e., those
listed in clauses (i) through (iv)) do not preclude or render unlawful
Executive's employment or service to the Company or otherwise materially
inhibit the performance of Executive's duties under this Agreement or
materially impair the business of the Company or its subsidiaries.
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(b) Place of Employment. Executive's principal place of employment
shall be at the Corporate Offices of the Company which shall be in (i) New
York City, (ii) Westchester County, New York, (iii) Fairfield County,
Connecticut (iv) Xxxxxxxxxx County, Pennsylvania, (v) Passaic County, New
Jersey, or (vi) London, England.
4. Salary and Annual Incentive Compensation.
As partial compensation for the services to be rendered hereunder by
Executive, the Company agrees to pay to Executive during the Term the
compensation set forth in this Section 4.
(a) Base Salary. The Company will pay to Executive during the Term a
base salary at the initial annual rate of $600,000, payable in cash in
substantially equal semi-monthly installments commencing at the beginning
of the Term, and otherwise in accordance with the Company's usual payroll
practices with respect to senior executives (except to the extent deferred
under Section 5(d)). Executive's annual base salary shall be reviewed by
the Compensation and Benefits Committee of the Board (the "Committee") at
least once in each calendar year and may be increased above, but may not be
reduced below, the then-current rate of such base salary. For purposes of
this Agreement, "Base Salary" means Executive's then-current base salary.
(b) Annual Incentive Compensation. The Company will pay to Executive
during the Term annual incentive compensation which shall offer to
Executive an opportunity to earn additional compensation based upon
performance in amounts determined by the Committee in accordance with the
applicable plan and consistent with past practices of the Company;
provided, however, that the annual incentive opportunity shall be not less
than the greater of 58% of Base Salary or the annual target incentive
opportunity for the prior year for achievement of target level performance,
with the nature of the performance and the levels of performance triggering
payments of such annual target incentive compensation for each year to be
established and communicated to Executive during the first quarter of such
year by the Committee. In addition, the Committee (or the Board) may
determine, in its discretion, to increase the Executive's annual target
incentive opportunity or provide an additional annual incentive
opportunity, in excess of the annual target incentive opportunity, payable
for performance in excess of or in addition to the performance required for
payment of the annual target incentive amount. Any annual incentive
compensation payable to Executive shall be paid in accordance with the
Company's usual practices with respect to payment of incentive compensation
to senior executives (except to the extent deferred under Section 5(d)).
5. Long-Term Compensation, Including Stock Options, and Benefits, Deferred
Compensation, and Expense Reimbursement
(a) Executive Compensation Plans. Executive shall be entitled during
the Term to participate, without discrimination or duplication, in all
executive compensation plans and programs intended for general
participation by senior executives of the Company, as presently in effect
or as they may be modified or added to by the Company from time to time,
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subject to the eligibility and other requirements of such plans and
programs, including without limitation any stock option plans, plans under
which restricted stock/restricted stock units, performance-based restricted
stock/restricted stock units ("PERS") or performance-accelerated restricted
stock/restricted stock units ("PARS") may be awarded, other annual and
long-term cash and/or equity incentive plans, and deferred compensation
plans; provided, however, that such plans and programs, in the aggregate,
shall provide Executive with compensation and incentive award opportunities
substantially no less favorable than those provided by the Company to
Executive under such plans and programs as in effect on the Effective Date.
(b) Employee and Executive Benefit Plans. Executive shall be entitled
during the Term to participate, without discrimination or duplication, in
all employee and executive benefit plans and programs of the Company, as
presently in effect or as they may be modified or added to by the Company
from time to time, to the extent such plans are available to other senior
executives or employees of the Company, subject to the eligibility and
other requirements of such plans and programs, including without limitation
plans providing pensions, supplemental pensions, supplemental and other
retirement benefits, medical insurance, life insurance, disability
insurance, and accidental death or dismemberment insurance, as well as
savings, profit-sharing, and stock ownership plans; provided, however, that
such benefit plans and programs, in the aggregate, shall provide Executive
with benefits and compensation substantially no less favorable than those
provided by the Company to Executive under such plans and programs as in
effect on the Effective Date. The foregoing notwithstanding, Executive
shall not be eligible to participate or receive benefits under the
Company's Employee Protection Plan.
In furtherance of and not in limitation of the foregoing, during the Term:
(i) Executive will participate as President and Chief Operating
Officer in all executive and employee vacation and time-off
programs;
(ii) The Company will provide Executive with coverage as President and
Chief Operating Officer with respect to long-term disability
insurance and benefits substantially no less favorable (including
any required contributions by Executive) than such insurance and
benefits in effect on the Effective Date;
(iii) Executive will be covered by Company-paid group and individual
term life insurance providing a death benefit no less than the
death benefit provided under Company-paid insurance in effect at
the Effective Date; provided, however, that, with the consent of
Executive, such insurance may be combined with a supplementary
retirement funding vehicle;
(iv) Executive will be entitled to retirement benefits substantially no
less favorable than those under the defined benefit pension plans
and programs of the Company, including the IMS Health Incorporated
Supplemental Executive Retirement Plan (the "SERP"), as in effect
on the Effective Date; and
(v) The Company will provide Executive with health and medical
benefits consistent
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with its policies for other senior executives.
Any provision to the contrary contained in this Agreement
notwithstanding, unless Executive is terminated by the Company for "Cause"
(as defined in Section 8(a)) or Executive terminates voluntarily and not
for "Good Reason" (as defined in Section 8(e)), Executive may elect
continued participation after termination of employment in the Company's
health and medical coverage for herself and her spouse and dependent
children after such coverage would otherwise end until such time as
Executive becomes eligible for similar coverage with a subsequent employer
or other entity to which Executive provides services or becomes eligible
for Medicare (under rules in effect at the Effective Date hereof);
provided, however, that in the event of such election, Executive shall pay
the Company each year an amount equal to the then-current annual COBRA
premium being paid (or payable) by any other former employee of the
Company, unless otherwise provided under Section 6 or 7.
(c) Acceleration of Awards Upon a Change in Control. In the event of a
Change in Control (as defined in Section 8(b)), all outstanding stock
options and restricted stock then held by Executive shall become vested and
exercisable.
(d) Deferral of Compensation. If the Company has in effect or adopts
any deferral program or arrangement permitting executives to elect to defer
any compensation, Executive will be eligible to participate in such program
on terms no less favorable than the terms of participation of any other
executive officer of the Company.
(e) Company Registration Obligations. The Company will use its best
efforts to file with the Securities and Exchange Commission and thereafter
maintain the effectiveness of one or more registration statements
registering under the Securities Act of 1933, as amended (the "1933 Act"),
the offer and sale of shares by the Company to Executive pursuant to stock
options or other equity-based awards granted to Executive under Company
plans or otherwise or, if shares are acquired by Executive in a transaction
not involving an offer or sale to Executive but resulting in the acquired
shares being "restricted securities" for purposes of the 1933 Act,
registering the reoffer and resale of such shares by Executive.
(f) Reimbursement of Expenses. The Company will promptly reimburse
Executive for all reasonable business expenses and disbursements incurred
by Executive in the performance of Executive's duties during the Term in
accordance with the Company's reimbursement policies as in effect from time
to time.
6. Termination Due to Retirement, Death, or Disability.
(a) Retirement. Executive may elect to terminate employment hereunder
by retirement at or after age 55 or at such earlier age as may be approved
by the Board (in either case, "Retirement"). At the time Executive's
employment terminates due to Retirement, the Term will terminate, all
obligations of the Company and Executive under Sections 1 through 5 of this
Agreement will immediately cease except for obligations which expressly
continue after termination of employment due to Retirement, and the Company
will pay Executive, and Executive will be entitled to receive, the
following:
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(i) Executive's Compensation Accrued at Termination (as defined in
Section 8(c));
(ii) In lieu of any annual incentive compensation under Section 4(b)
for the year in which Executive's employment terminated, an amount
equal to the portion of annual incentive compensation that would
have become payable in cash to Executive (i.e., excluding the
portion payable in PERS or in other non-cash awards) for that year
if her employment had not terminated, based on performance
actually achieved in that year (determined by the Committee
following completion of the performance year), multiplied by a
fraction the numerator of which is the number of days Executive
was employed in the year of termination and the denominator of
which is the total number of days in the year of termination;
(iii) The vesting and exercisability of stock options held by Executive
at termination and all other terms of such options shall be
governed by the plans and programs and the agreements and other
documents pursuant to which such options were granted (subject to
Section 10(f) hereof); and
(iv) All restricted stock and deferred stock awards, including
outstanding PERS awards, all other long-term incentive awards, and
all deferral arrangements under Section 5(d), shall be governed by
the plans and programs under which the awards were granted or
governing the deferral, and all rights under the SERP and any
other benefit plan shall be governed by such plan.
(b) Death. In the event of Executive's death which results in the
termination of Executive's employment, the Term will terminate, all
obligations of the Company and Executive under Sections 1 through 5 of this
Agreement will immediately cease except for obligations which expressly
continue after death, and the Company will pay Executive's beneficiary or
estate, and Executive's beneficiary or estate will be entitled to receive,
the following:
(i) Executive's Compensation Accrued at Termination;
(ii) In lieu of any annual incentive compensation under Section 4(b)
for the year in which Executive's death occurred, an amount equal
to the portion of annual incentive compensation that would have
become payable in cash to Executive (i.e., excluding the portion
payable in PERS or in other non-cash awards) for that year if her
employment had not terminated, based on performance actually
achieved in that year (determined by the Committee following
completion of the performance year), multiplied by a fraction the
numerator of which is the number of days Executive was employed in
the year of her death and the denominator of which is the total
number of days in the year of death;
(iii) The vesting and exercisability of stock options held by Executive
at death and all other terms of such options shall be governed by
the plans and programs and
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the agreements and other documents pursuant to which such options
were granted; and
(iv) All restricted stock and deferred stock awards, including
outstanding PERS awards, all other long-term incentive awards, and
all deferral arrangements under Section 5(d), shall be governed by
the plans and programs under which the awards were granted or
governing the deferral, and all rights under the SERP and any
other benefit plan shall be governed by such plan.
(c) Disability. The Company may terminate the employment of Executive
hereunder due to the Disability (as defined in Section 8(d)) of Executive.
Such employment shall terminate at the expiration of the 30-day period
referred to in the definition of Disability set forth in Section 8(d),
unless Executive has returned to service and presented to the Company a
certificate of good health prior to such termination as specified in
Section 8(d). Upon termination of employment, the Term will terminate, all
obligations of the Company and Executive under Sections 1 through 5 of this
Agreement will immediately cease except for obligations which expressly
continue after termination of employment due to Disability, and the Company
will pay Executive, and Executive will be entitled to receive, the
following:
(i) Executive's Compensation Accrued at Termination;
(ii) In lieu of any annual incentive compensation under Section 4(b)
for the year in which Executive's employment terminated, an amount
equal to the portion of annual incentive compensation that would
have become payable in cash to Executive (i.e., excluding the
portion payable in PERS or in other non-cash awards) for that year
if her employment had not terminated, based on performance
actually achieved in that year (determined by the Committee
following completion of the performance year), multiplied by a
fraction the numerator of which is the number of days Executive
was employed in the year of termination and the denominator of
which is the total number of days in the year of termination;
(iii) Stock options held by Executive at termination, if not then vested
and exercisable, will become fully vested and exercisable at the
date of such termination, and, in other respects (including the
period following termination during which such options may be
exercised), such options shall be governed by the plans and
programs and the agreements and other documents pursuant to which
such options were granted;
(iv) Any performance objectives upon which the earning of
performance-based restricted stock and deferred stock awards,
including outstanding PERS awards, and other long-term incentive
awards is conditioned shall be deemed to have been met at target
level at the date of termination, and restricted stock and
deferred stock awards, including outstanding PERS awards, and
other long-term incentive awards (to the extent then or previously
earned, in the case of performance-based awards) shall become
fully vested and non-forfeitable at the
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date of such termination, and, in other respects, such awards
shall be governed by the plans and programs and the agreements and
other documents pursuant to which such awards were granted;
(v) Disability benefits shall be payable in accordance with the
Company's plans, programs and policies (including the SERP), and
all deferral arrangements under Section 5(d) will be settled in
accordance with the plans and programs governing the deferral; and
(vi) For the period extending from the date of termination due to
Disability until the date Executive reaches age 65, Executive
shall continue to participate in those employee and executive
benefit plans and programs under Section 5(b) to the extent such
plans and programs provide medical insurance, disability insurance
and life insurance benefits (but not other benefits, such as
pension and retirement benefits, provided under Section 5(b)) in
which Executive was participating immediately prior to
termination, the terms of which allow Executive's continued
participation, as if Executive had continued in employment with
the Company during such period or, if the terms of such plans or
programs do not allow Executive's continued participation,
Executive shall be paid a cash payment equivalent on an after-tax
basis to the value of the additional benefits (of the type
described in this Section 6(c)(vi)) Executive would have received
under such plans or programs had Executive continued to be
employed during such period following Executive's termination
until age 65, with such benefits provided by the Company at the
same times and in the same manner as such benefits would have been
provided to Executive under such plans and programs (it being
understood that the value of any insurance-provided benefits will
be based on the premium cost to Executive, which shall not exceed
the highest risk premium charged by a carrier having an investment
grade or better credit rating); provided, however, that Executive
must continue to satisfy the conditions set forth in Section 10 in
order to continue receiving the benefits provided under this
Section 6(c)(vi).
(d) Other Terms of Payment Following Retirement, Death, or Disability.
Nothing in this Section 6 shall limit the benefits payable or provided In
the event Executive's employment terminates due to Retirement, death, or
Disability under the terms of plans or programs of the Company more
favorable to the Executive (or her beneficiaries) than the benefits payable
or provided under this Section 6 (except in the case of annual incentives
in lieu of which amounts are paid hereunder), including plans and programs
adopted after the date of this Agreement. Amounts payable under this
Section 6 following Executive's termination of employment, other than those
expressly payable following determination of performance for the year of
termination for purposes of annual incentive compensation or otherwise
expressly payable on a deferred basis, will be paid as promptly as
practicable after such termination of employment.
7. Termination of Employment For Reasons Other Than Retirement, Death, or
Disability.
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(a) Termination by the Company for Cause. The Company may terminate
the employment of Executive hereunder for Cause (as defined in Section
8(a)) at any time. At the time Executive's employment is terminated for
Cause the Term will terminate, all obligations of the Company and Executive
under Sections 1 through 5 of this Agreement will immediately cease, and
the Company will pay Executive, and Executive will be entitled to receive,
the following:
(i) Executive's Compensation Accrued at Termination (as defined in
Section 8(c));
(ii) All stock options, restricted stock and deferred stock awards,
including outstanding PERS awards, and all other long-term
incentive awards will be governed by the terms of the plans and
programs under which the awards were granted; and
(iii) All deferral arrangements under Section 5(d) will be settled in
accordance with the plans and programs governing the deferral, and
all rights under the SERP and any other benefit plan shall be
governed by such plan.
(b) Termination by Executive Other Than For Good Reason. Executive may
terminate her employment hereunder voluntarily for reasons other than Good
Reason (as defined in Section 8(e)) at any time. An election by Executive
not to extend the Term pursuant to Section 2 hereof shall be deemed to be a
termination of employment by Executive for reasons other than Good Reason
at the date of expiration of the Term, unless a Change in Control (as
defined in Section 8(b)) occurs prior to, and there exists Good Reason at,
such date of expiration. At the time Executive's employment is terminated
by Executive other than for Good Reason the Term will terminate, all
obligations of the Company and Executive under Sections 1 through 5 of this
Agreement will immediately cease, and the Company will pay Executive, and
Executive will be entitled to receive, the following:
(i) Executive's Compensation Accrued at Termination;
(ii) All stock options, restricted stock and deferred stock awards,
including outstanding PERS awards, and all other long-term
incentive awards will be governed by the terms of the plans and
programs under which the awards were granted; and
(iii) All deferral arrangements under Section 5(d) will be settled in
accordance with the plans and programs governing the deferral, and
all rights under the SERP and any other benefit plan shall be
governed by such plan.
(c) Termination by the Company Without Cause Prior to or More than Two
Years After a Change in Control. The Company may terminate the employment
of Executive hereunder without Cause, if at the date of termination no
Change in Control has occurred or such date of termination is at least two
years after the most recent Change in Control, upon at least 90 days'
written notice to Executive. The foregoing notwithstanding, the Company may
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elect, by written notice to Executive, to terminate Executive's positions
specified in Sections 1 and 3 and all other obligations of Executive and
the Company under Section 3 at a date earlier than the expiration of such
90-day period, if so specified by the Company in the written notice,
provided that Executive shall be treated as an employee of the Company
(without any assigned duties) for all other purposes of this Agreement,
including for purposes of Sections 4 and 5, from such specified date until
the expiration of such 90-day period. An election by the Company not to
extend the Term pursuant to Section 2 hereof shall be deemed to be a
termination of Executive's employment by the Company without Cause at the
date of expiration of the Term and shall be subject to this Section 7(c) if
at the date of such termination no Change in Control has occurred or such
date of termination is at least two years after the most recent Change in
Control; provided, however, that, if Executive has attained age 65 at such
date of termination, such termination shall be deemed a Retirement of
Executive. At the time Executive's employment is terminated by the Company
(i.e., at the expiration of such notice period), the Term will terminate,
all remaining obligations of the Company and Executive under Sections 1
through 5 of this Agreement will immediately cease (except as expressly
provided below), and the Company will pay Executive, and Executive will be
entitled to receive, the following:
(i) Executive's Compensation Accrued at Termination;
(ii) Cash in an aggregate amount equal to two times the sum of (A)
Executive's Base Salary under Section 4(a) immediately prior to
termination plus (B) an amount equal to the greater of (x) the
portion of Executive's annual target incentive compensation
potentially payable in cash to Executive (i.e., excluding the
portion payable in PERS or in other non-cash awards) for the year
of termination or (y) the portion of Executive's annual incentive
compensation that became payable in cash to Executive (i.e.,
excluding the portion payable in PERS or in other non-cash awards)
for the latest year preceding the year of termination based on
performance actually achieved in that latest year. The amount
determined to be payable under this Section 7(c)(ii) shall be
payable in monthly installments over the 24 months following
termination, without interest, except the Company may elect to
accelerate payment of the remaining balance of such amount and to
pay it as a lump sum, without discount;
(iii) In lieu of any annual incentive compensation under Section 4(b)
for the year in which Executive's employment terminated, an amount
equal to the portion of Executive's annual target incentive
compensation potentially payable in cash to Executive (i.e.,
excluding the portion payable in PERS or in other non-cash awards)
for the year of termination, multiplied by a fraction the
numerator of which is the number of days Executive was employed in
the year of termination and the denominator of which is the total
number of days in the year of termination;
(iv) Stock options held by Executive at termination, if not then vested
and exercisable, will become fully vested and exercisable at the
date of such termination, and, in other respects (including the
period following termination
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during which such options may be exercised), such options shall be
governed by the plans and programs and the agreements and other
documents pursuant to which such options were granted;
(v) Any performance objectives upon which the earning of
performance-based restricted stock and deferred stock awards,
including outstanding PERS awards, and other long-term incentive
awards is conditioned shall be deemed to have been met at target
level at the date of termination, and restricted stock and
deferred stock awards, including outstanding PERS awards, and
other long-term incentive awards (to the extent then or previously
earned, in the case of performance-based awards) shall become
fully vested and non-forfeitable at the date of such termination,
and, in other respects, such awards shall be governed by the plans
and programs and the agreements and other documents pursuant to
which such awards were granted;
(vi) All deferral arrangements under Section 5(d) will be settled in
accordance with the plans and programs governing the deferral;
(vii) For purposes of the SERP, Executive shall be credited with
additional years of age and/or years of Service (as defined in the
SERP) if and to the extent required so that Executive's
termination will qualify as a "Retirement" within the meaning of
the SERP, so that Executive will be entitled to not less than the
minimum "Retirement Benefit" determined in accordance with Section
3.1 of the SERP.
(viii) For a period of two years after such termination (but not after
Executive attains age 65), Executive shall continue to participate
in those employee and executive benefit plans and programs under
Section 5(b) to the extent such plans and programs provide medical
insurance, disability insurance and life insurance benefits (but
not other benefits, such as pension and retirement benefits,
provided under Section 5(b)) in which Executive was participating
immediately prior to termination, the terms of which allow
Executive's continued participation, as if Executive had continued
in employment with the Company during such period; provided,
however, that such participation shall terminate, or the benefits
under such plans and programs shall be reduced, if and to the
extent Executive becomes covered (or is eligible to become
covered) by plans of a subsequent employer or other entity to
which Executive provides services during such period providing
comparable benefits. If the terms of the Company plans and
programs referred to in this Section 7(c)(viii) do not allow
Executive's continued participation, Executive shall be paid a
cash payment equivalent on an after-tax basis to the value of the
additional benefits described in this Section 7(c)(viii) Executive
would have received under such plans or programs had Executive
continued to be employed during such period, with such benefits
provided by the Company at the same times and in the same manner
as such benefits would have been provided to Executive under such
plans and programs (it being understood that the value of any
insurance-provided benefits will be based on
-11-
the premium cost to Executive, which shall not exceed the highest
risk premium charged by a carrier having an investment grade or
better credit rating); provided, however, that Executive must
continue to satisfy the conditions set forth in Section 10 in
order to continue receiving the benefits provided under this
Section 7(c)(viii). Executive agrees to promptly notify the
Company of any employment or other arrangement by which Executive
provides services during the benefits-continuation period and of
the nature and extent of benefits for which Executive becomes
eligible during such period which would reduce or terminate
benefits under this Section 7(c)(viii); and the Company be
entitled to recover from Executive any payments and the fair
market value of benefits previously made or provided to Executive
hereunder which would not have been paid under this Section
7(c)(viii) if the Company had received adequate prior notice as
required by this sentence.
(d) Termination by Executive for Good Reason Prior to or More than Two
Years After a Change in Control. Executive may terminate her employment
hereunder for Good Reason, prior to a Change in Control or after the second
anniversary of the most recent Change in Control, upon 90 days' written
notice to the Company; provided, however, that, if the Company has
corrected the basis for such Good Reason within 30 days after receipt of
such notice, Executive may not terminate her employment for Good Reason,
and therefore Executive's notice of termination will automatically become
null and void. At the time Executive's employment is terminated by
Executive for Good Reason (i.e., at the expiration of such notice period),
the Term will terminate, all obligations of the Company and Executive under
Sections 1 through 5 of this Agreement will immediately cease (except as
expressly provided below), and the Company will pay Executive, and
Executive will be entitled to receive, the following:
(i) Executive's Compensation Accrued at Termination;
(ii) Cash in an aggregate amount equal to two times the sum of (A)
Executive's Base Salary under Section 4(a) immediately prior to
termination plus (B) an amount equal to the greater of (x) the
portion of Executive's annual target incentive compensation
potentially payable in cash to Executive (i.e., excluding the
portion payable in PERS or in other non-cash awards) for the year
of termination or (y) the portion of Executive's annual incentive
compensation that became payable in cash to Executive (i.e.,
excluding the portion payable in PERS or in other non-cash awards)
for the latest year preceding the year of termination based on
performance actually achieved in that latest year. The amount
determined to be payable under this Section 7(d)(ii) shall be
payable in monthly installments over the 24 months following
termination, without interest, except the Company may elect to
accelerate payment of the remaining balance of such amount and to
pay it as a lump sum, without discount;
(iii) In lieu of any annual incentive compensation under Section 4(b)
for the year in which Executive's employment terminated, an amount
equal to the portion of Executive's annual target incentive
compensation potentially payable in cash to
-12-
Executive (i.e., excluding the portion payable in PERS or in other
non-cash awards) for the year of termination, multiplied by a
fraction the numerator of which is the number of days Executive
was employed in the year of termination and the denominator of
which is the total number of days in the year of termination;
(iv) Stock options held by Executive at termination, if not then vested
and exercisable, will become fully vested and exercisable at the
date of such termination, and, in other respects (including the
period following termination during which such options may be
exercised), such options shall be governed by the plans and
programs and the agreements and other documents pursuant to which
such options were granted;
(v) Any performance objectives upon which the earning of
performance-based restricted stock and deferred stock awards,
including outstanding PERS awards, and other long-term incentive
awards is conditioned shall be deemed to have been met at target
level at the date of termination, and restricted stock and
deferred stock awards, including outstanding PERS awards, and
other long-term incentive awards (to the extent then or previously
earned, in the case of performance-based awards) shall become
fully vested and non-forfeitable at the date of such termination,
and, in other respects, such awards shall be governed by the plans
and programs and the agreements and other documents pursuant to
which such awards were granted;
(vi) All deferral arrangements under Section 5(d) will be settled in
accordance with the plans and programs governing the deferral;
(vii) For purposes of the SERP, Executive shall be credited with
additional years of age and/or years of Service (as defined in the
SERP) if and to the extent required so that Executive's
termination will qualify as a "Retirement" within the meaning of
the SERP, so that Executive will be entitled to not less than the
minimum "Retirement Benefit" determined in accordance with Section
3.1 of the SERP.
(viii) For a period of two years after such termination (but not after
Executive attains age 65), Executive shall continue to participate
in those employee and executive benefit plans and programs under
Section 5(b) to the extent such plans and programs provide medical
insurance, disability insurance and life insurance benefits (but
not other benefits, such as pension and retirement benefits,
provided under Section 5(b)) in which Executive was participating
immediately prior to termination, the terms of which allow
Executive's continued participation, as if Executive had continued
in employment with the Company during such period; provided,
however, that such participation shall terminate, or the benefits
under such plans and programs shall be reduced, if and to the
extent Executive becomes covered (or is eligible to become
covered) by plans of a subsequent employer or other entity to
which Executive provides services during such period
-13-
providing comparable benefits. If the terms of the Company plans
and programs referred to in this Section 7(d)(viii) do not allow
Executive's continued participation, Executive shall be paid a
cash payment equivalent on an after-tax basis to the value of the
additional benefits described in this Section 7(d)(viii) Executive
would have received under such plans or programs had Executive
continued to be employed during such period, with such benefits
provided by the Company at the same times and in the same manner
as such benefits would have been provided to Executive under such
plans and programs (it being understood that the value of any
insurance-provided benefits will be based on the premium cost to
Executive, which shall not exceed the highest risk premium charged
by a carrier having an investment grade or better credit rating);
provided, however, that Executive must continue to satisfy the
conditions set forth in Section 10 in order to continue receiving
the benefits provided under this Section 7(d)(viii). Executive
agrees to promptly notify the Company of any employment or other
arrangement by which Executive provides services during the
benefits-continuation period and of the nature and extent of
benefits for which Executive becomes eligible during such period
which would reduce or terminate benefits under this Section
7(d)(viii); and the Company shall be entitled to recover from
Executive any payments and the fair market value of benefits
previously made or provided to Executive hereunder which would not
have been paid under this Section 7(d)(viii) if the Company had
received adequate prior notice as required by this sentence.
If any payment or benefit under this Section 7(d) is based on Base Salary or
other level of compensation or benefits at the time of Executive's termination
and if a reduction in such Base Salary or other level of compensation or benefit
was the basis for Executive's termination for Good Reason, then the Base Salary
or other level of compensation in effect before such reduction shall be used to
calculate payments or benefits under this Section 7(d).
(e) Termination by the Company Without Cause Within Two Years After a
Change in Control. The Company may terminate the employment of Executive
hereunder without Cause, simultaneously with or within two years after a
Change in Control, upon at least 90 days' written notice to Executive. The
foregoing notwithstanding, the Company may elect, by written notice to
Executive, to terminate Executive's positions specified in Sections 1 and 3
and all other obligations of Executive and the Company under Section 3 at a
date earlier than the expiration of such 90-day notice period, if so
specified by the Company in the written notice, provided that Executive
shall be treated as an employee of the Company (without any assigned
duties) for all other purposes of this Agreement, including for purposes of
Sections 4 and 5, from such specified date until the expiration of such
90-day period. An election by the Company not to extend the Term pursuant
to Section 2 hereof shall be deemed to be a termination of Executive's
employment by the Company without Cause at the date of expiration of the
Term and shall be subject to this Section 7(e) if the date of such
termination coincides with or is within two years after a Change in
Control; provided, however, that, if Executive has attained age 65 at such
date of termination, such termination shall be deemed a Retirement of
Executive. At the time Executive's employment is terminated by the Company
(i.e., at the expiration of such notice period), the Term will terminate,
all remaining obligations of the
-14-
Company and Executive under Sections 1 through 5 of this Agreement will
immediately cease (except as expressly provided below), and the Company
will pay Executive, and Executive will be entitled to receive, the
following:
(i) Executive's Compensation Accrued at Termination;
(ii) Cash in an aggregate amount equal to three times the sum of (A)
Executive's Base Salary under Section 4(a) immediately prior to
termination plus (B) an amount equal to the greater of (x) the
portion of Executive's annual target incentive compensation
potentially payable in cash to Executive (i.e., excluding the
portion payable in PERS or in other non-cash awards) for the year
of termination or (y) the portion of Executive's annual incentive
compensation that became payable in cash to Executive (i.e.,
excluding the portion payable in PERS or in other non-cash awards)
for the latest year preceding the year of termination based on
performance actually achieved in that latest year. The amount
determined to be payable under this Section 7(e)(ii) shall be paid
by the Company not later than 15 days after Executive's
termination;
(iii) In lieu of any annual incentive compensation under Section 4(b)
for the year in which Executive's employment terminated, an amount
equal to the portion of Executive's annual target incentive
compensation potentially payable in cash to Executive (i.e.,
excluding the portion payable in PERS or in other non-cash awards)
for the year of termination, multiplied by a fraction the
numerator of which is the number of days Executive was employed in
the year of termination and the denominator of which is the total
number of days in the year of termination;
(iv) Stock options held by Executive at termination, if not then vested
and exercisable, will become fully vested and exercisable at the
date of such termination, and any such options granted on or after
the date hereof shall remain outstanding and exercisable until the
stated expiration date of the Option as though Executive's
employment did not terminate, and, in other respects, such options
shall be governed by the plans and programs and the agreements and
other documents pursuant to which such options were granted;
(v) Any performance objectives upon which the earning of
performance-based restricted stock and deferred stock awards,
including outstanding PERS awards, and other long-term incentive
awards is conditioned shall be deemed to have been met at target
level at the date of termination, and restricted stock and
deferred stock awards, including outstanding PERS awards, and
other long-term incentive awards (to the extent then or previously
earned, in the case of performance-based awards) shall become
fully vested and non-forfeitable at the date of such termination,
and, in other respects, such awards shall be governed by the plans
and programs and the agreements and other documents pursuant to
which such awards were granted;
-15-
(vi) All deferral arrangements under Section 5(d) will be settled in
accordance with the plans and programs governing the deferral;
(vii) For purposes of the SERP, Executive shall be credited with
additional years of age and/or years of Service (as defined in the
SERP) if and to the extent required so that Executive's
termination will qualify as a "Retirement" within the meaning of
the SERP and so that Executive will be entitled the maximum
"Retirement Benefit" in accordance with Section 3.1 of the SERP.
(viii) For a period of three years after such termination (but not after
Executive attains age 65), Executive shall continue to participate
in those employee and executive benefit plans and programs under
Section 5(b) to the extent such plans and programs provide medical
insurance, disability insurance and life insurance benefits (but
not other benefits, such as pension and retirement benefits,
provided under Section 5(b)) in which Executive was participating
immediately prior to termination, the terms of which allow
Executive's continued participation, as if Executive had continued
in employment with the Company during such period; provided,
however, that such participation shall terminate, or the benefits
under such plans and programs shall be reduced, if and to the
extent Executive becomes covered (or is eligible to become
covered) by plans of a subsequent employer or other entity to
which Executive provides services during such period providing
comparable benefits. If the terms of the Company plans and
programs referred to in this Section 7(e)(viii) do not allow
Executive's continued participation, Executive shall be paid a
cash payment equivalent on an after-tax basis to the value of the
additional benefits described in this Section 7(e)(viii) Executive
would have received under such plans or programs had Executive
continued to be employed during such period, with such benefits
provided by the Company at the same times and in the same manner
as such benefits would have been provided to Executive under such
plans and programs (it being understood that the value of any
insurance-provided benefits will be based on the premium cost to
Executive, which shall not exceed the highest risk premium charged
by a carrier having an investment grade or better credit rating);
provided, however, that Executive must continue to satisfy the
conditions set forth in Section 10 in order to continue receiving
the benefits provided under this Section 7(e)(viii). Executive
agrees to promptly notify the Company of any employment or other
arrangement by which Executive provides services during the
benefits-continuation period and of the nature and extent of
benefits for which Executive becomes eligible during such period
which would reduce or terminate benefits under this Section
7(e)(viii); and the Company shall be entitled to recover from
Executive any payments and the fair market value of benefits
previously made or provided to Executive hereunder which would not
have been paid under this Section 7(e)(viii) if the Company had
received adequate prior notice as required by this sentence.
(f) Termination by Executive for Good Reason Within Two Years After a
Change in Control. Executive may terminate her employment hereunder for
Good Reason,
-16-
simultaneously with or within two years after a Change in Control, upon 90
days' written notice to the Company; provided, however, that, if the
Company has corrected the basis for such Good Reason within 30 days after
receipt of such notice, Executive may not terminate her employment for Good
Reason, and therefore Executive's notice of termination will automatically
become null and void. At the time Executive's employment is terminated by
Executive for Good Reason (i.e., at the expiration of such notice period),
the Term will terminate, all obligations of the Company and Executive under
Sections 1 through 5 of this Agreement will immediately cease (except as
expressly provided below), and the Company will pay Executive, and
Executive will be entitled to receive, the following:
(i) Executive's Compensation Accrued at Termination;
(ii) Cash in an aggregate amount equal to three times the sum of (A)
Executive's Base Salary under Section 4(a) immediately prior to
termination plus (B) an amount equal to the greater of (x) the
portion of Executive's annual target incentive compensation
potentially payable in cash to Executive (i.e., excluding the
portion payable in PERS or in other non-cash awards) for the year
of termination or (y) the portion of Executive's annual incentive
compensation that became payable in cash to Executive (i.e.,
excluding the portion payable in PERS or in other non-cash awards)
for the latest year preceding the year of termination based on
performance actually achieved in that latest year. The amount
determined to be payable under this Section 7(f)(ii) shall be paid
by the Company not later than 15 days after Executive's
termination;
(iii) In lieu of any annual incentive compensation under Section 4(b)
for the year in which Executive's employment terminated, an amount
equal to the portion of Executive's annual target incentive
compensation potentially payable in cash to Executive (i.e.,
excluding the portion payable in PERS or in other non-cash awards)
for the year of termination, multiplied by a fraction the
numerator of which is the number of days Executive was employed in
the year of termination and the denominator of which is the total
number of days in the year of termination;
(iv) Stock options held by Executive at termination, if not then vested
and exercisable, will become fully vested and exercisable at the
date of such termination, and any such options granted on or after
the date hereof shall remain outstanding and exercisable until the
stated expiration date of the Option as though Executive's
employment did not terminate, and, in other respects, such options
shall be governed by the plans and programs and the agreements and
other documents pursuant to which such options were granted;
(v) Any performance objectives upon which the earning of
performance-based restricted stock and deferred stock awards,
including outstanding PERS awards, and other long-term incentive
awards is conditioned shall be deemed to have been met at target
level at the date of termination, and restricted stock and
deferred stock awards, including outstanding PERS awards, and
other long-term
-17-
incentive awards (to the extent then or previously earned, in the
case of performance-based awards) shall become fully vested and
non-forfeitable at the date of such termination, and, in other
respects, such awards shall be governed by the plans and programs
and the agreements and other documents pursuant to which such
awards were granted;
(vi) All deferral arrangements under Section 5(d) will be settled in
accordance with the plans and programs governing the deferral;
(vii) For purposes of the SERP, Executive shall be credited with
additional years of age and/or years of Service (as defined in the
SERP) if and to the extent required so that Executive's
termination will qualify as a "Retirement" within the meaning of
the SERP and so that Executive will be entitled the maximum
"Retirement Benefit" in accordance with Section 3.1 of the SERP.
(viii) For a period of three years after such termination (but not after
Executive attains age 65), Executive shall continue to participate
in those employee and executive benefit plans and programs under
Section 5(b) to the extent such plans and programs provide medical
insurance, disability insurance and life insurance benefits (but
not other benefits, such as pension and retirement benefits,
provided under Section 5(b)) in which Executive was participating
immediately prior to termination, the terms of which allow
Executive's continued participation, as if Executive had continued
in employment with the Company during such period; provided,
however, that such participation shall terminate, or the benefits
under such plans and programs shall be reduced, if and to the
extent Executive becomes covered (or is eligible to become
covered) by plans of a subsequent employer or other entity to
which Executive provides services during such period providing
comparable benefits. If the terms of the Company plans and
programs referred to in this Section 7(f)(viii) do not allow
Executive's continued participation, Executive shall be paid a
cash payment equivalent on an after-tax basis to the value of the
additional benefits described in this Section 7(f)(viii) Executive
would have received under such plans or programs had Executive
continued to be employed during such period, with such benefits
provided by the Company at the same times and in the same manner
as such benefits would have been provided to Executive under such
plans and programs (it being understood that the value of any
insurance-provided benefits will be based on the premium cost to
Executive, which shall not exceed the highest risk premium charged
by a carrier having an investment grade or better credit rating);
provided, however, that Executive must continue to satisfy the
conditions set forth in Section 10 in order to continue receiving
the benefits provided under this Section 7(f)(viii). Executive
agrees to promptly notify the Company of any employment or other
arrangement by which Executive provides services during the
benefits-continuation period and of the nature and extent of
benefits for which Executive becomes eligible during such period
which would reduce or terminate benefits under this Section
7(f)(viii); and the Company shall be entitled to recover from
Executive any payments and the fair market value of benefits
-18-
previously made or provided to Executive hereunder which would not
have been paid under this Section 7(f)(viii) if the Company had
received adequate prior notice as required by this sentence.
If any payment or benefit under this Section 7(f) is based on Base Salary or
other level of compensation or benefits at the time of Executive's termination
and if a reduction in such Base Salary or other level of compensation or benefit
was the basis for Executive's termination for Good Reason, then the Base Salary
or other level of compensation in effect before such reduction shall be used to
calculate payments or benefits under this Section 7(f).
(g) Other Terms Relating to Certain Terminations of Employment.
Whether a termination is deemed to be at or within two years after a Change
in Control for purposes of Sections 7(c), (d), (e), or (f) is determined at
the date of termination, regardless of whether the Change in Control had
occurred at the time a notice of termination was given. In the event
Executive's employment terminates for any reason set forth in Section 7(b)
through (f), Executive will be entitled to the benefit of any terms of
plans or agreements applicable to Executive which are more favorable than
those specified in this Section 7 (except in the case of annual incentives
in lieu of which amounts are paid hereunder). Amounts payable under this
Section 7 following Executive's termination of employment, other than those
expressly payable on a deferred basis, will be paid as promptly as
practicable after such a termination of employment, and such amounts
payable under Section 7(e) or 7(f) will be paid in no event later than 15
days after Executive's termination of employment unless not determinable
within such period.
8. Definitions Relating to Termination Events.
(a) "Cause." For purposes of this Agreement, "Cause" shall mean
Executive's
(i) willful and continued failure to substantially perform her duties
hereunder (other than any such failure resulting from incapacity due
to physical or mental illness or disability or any failure after the
issuance of a notice of termination by Executive for Good Reason)
which failure is demonstrably and materially damaging to the financial
condition or reputation of the Company and/or its subsidiaries, and
which failure continues more than 48 hours after a written demand for
substantial performance is delivered to Executive by the Board, which
demand specifically identifies the manner in which the Board believes
that Executive has not substantially performed her duties hereunder
and the demonstrable and material damage caused thereby; or
(ii) the willful engaging by Executive in conduct which is demonstrably and
materially injurious to the Company, monetarily or otherwise.
No act, or failure to act, on the part of Executive shall be deemed "willful"
unless done, or omitted to be done, by Executive not in good faith and without
reasonable belief that her action or omission was in the best interest of the
Company. Notwithstanding the foregoing, Executive
-19-
shall not be deemed to have been terminated for Cause unless and until there
shall have been delivered to Executive a copy of the resolution duly adopted by
the affirmative vote of not less than three-quarters (3/4) of the entire
membership of the Board at a meeting of the Board (after reasonable notice to
Executive and an opportunity for Executive, together with Executive's counsel,
to be heard before the Board) finding that, in the good faith opinion of the
Board, Executive was guilty of conduct set forth above in this definition and
specifying the particulars thereof in detail.
(b) "Change in Control." For purposes of this Agreement, a "Change in
Control" shall be deemed to have occurred if, during the term of this
Agreement:
(i) any "Person," as such term is used for purposes of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the
Company, or any company owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions
as their ownership of stock of the Company), becomes the
"Beneficial Owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the
Company's then-outstanding securities;
(ii) during any period of twenty-four months (not including any period
prior to the effectiveness of this Agreement), individuals who at
the beginning of such period constitute the Board, and any new
director (other than (A) a director nominated by a Person who has
entered into an agreement with the Company to effect a transaction
described in Sections (8)(b)(i), (iii) or (iv) hereof, (B) a
director nominated by any Person (including the Company) who
publicly announces an intention to take or to consider taking
actions (including, but not limited to, an actual or threatened
proxy contest) which if consummated would constitute a Change in
Control or (C) a director nominated by any Person who is the
Beneficial Owner, directly or indirectly, of securities of the
Company representing 10% or more of the combined voting power of
the Company's securities) whose election by the Board or
nomination for election by the Company's stockholders was approved
in advance by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of
the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at
least a majority thereof;
(iii) the stockholders of the Company approve any transaction or series
of transactions under which the Company is merged or consolidated
with any other company, other than a merger or consolidation (A)
which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 66 2/3% of the
combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation and (B) after which
-20-
no Person holds 20% or more of the combined voting power of the
then-outstanding securities of the Company or such surviving
entity;
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets; or
(v) the Board adopts a resolution to the effect that, for purposes of
this Agreement, a Change in Control has occurred.
(c) "Compensation Accrued at Termination." For purposes of this
Agreement, "Compensation Accrued at Termination" means the following:
(i) The unpaid portion of annual base salary at the rate payable, in
accordance with Section 4(a) hereof, at the date of Executive's
termination of employment, pro rated through such date of
termination, payable in accordance with the Company's regular pay
schedule;
(ii) All vested, nonforfeitable amounts owing or accrued at the date of
Executive's termination of employment under any compensation and
benefit plans, programs, and arrangements set forth or referred to
in Sections 4(b) and 5(a) and 5(b) hereof (including any earned
and vested annual incentive compensation and long-term incentive
award) in which Executive theretofore participated, payable in
accordance with the terms and conditions of the plans, programs,
and arrangements (and agreements and documents thereunder)
pursuant to which such compensation and benefits were granted or
accrued; and
(iii) Reasonable business expenses and disbursements incurred by
Executive prior to Executive's termination of employment, to be
reimbursed to Executive, as authorized under Section 5(f), in
accordance the Company's reimbursement policies as in effect at
the date of such termination.
(d) "Disability." For purposes of this Agreement, "Disability" means
Executive's absence from the full-time performance of Executive's duties
hereunder for six consecutive months as a result of her incapacity due to
physical or mental illness or disability, and, within 30 days after written
notice of termination is thereafter given by the Company, Executive shall
have not returned to the full-time performance of such duties.
(e) "Good Reason." For purposes of this Agreement, "Good Reason" shall
mean, without Executive's express written consent, the occurrence of any of
the following circumstances unless, in the case of subsections (i), (iv),
(vi) or (viii) hereof, such circumstances are fully corrected prior to the
date of termination specified in the notice of termination given in respect
thereof:
(i) the assignment to Executive of duties inconsistent with
Executive's position and status hereunder, or an alteration,
adverse to Executive, in the nature of
-21-
Executive's duties, responsibilities, and authorities, Executive's
positions or the conditions of Executive's employment from those
specified in Section 3 or otherwise hereunder (other than
inadvertent actions which are promptly remedied); for this
purpose, it shall constitute "Good Reason" under this subsection
(e)(i) if (A) Executive shall be required to report to and take
direction from any person or body other than the Chairman of the
Board and Chief Executive Officer of the Company and the Board;
and (B) if Executive shall be removed from the Board or from any
Board committee on which Executive has served during the Term, or
there occurs any failure of Executive to be nominated, reappointed
or reelected as a member of the Board or as a member of any Board
committee on which she has served during the Term, including a
failure of the Board or stockholders to take such actions
(notwithstanding their legal right to do so), except the foregoing
shall not constitute Good Reason if occurring in connection with
the termination of Executive's employment for Cause, Disability,
Retirement, as a result of Executive's death, or as a result of
action by or with the consent of Executive; for purposes of this
Section 8(e)(i), references to the Company (and the Board and
stockholders of the Company) refer to the ultimate parent company
(and its board and stockholders) succeeding the Company following
an acquisition in which the corporate existence of the Company
continues, in accordance with Section 12(b);
(ii) (A) a reduction by the Company in Executive's Base Salary, (B) the
setting of Executive's annual target incentive opportunity or
payment of earned annual incentive in amounts less than specified
under or otherwise not in conformity with Section 4 hereof, (C) a
change in compensation or benefits not in conformity with Section
5, or (D) a reduction, after a Change in Control in perquisites
from the level of such perquisites as in effect immediately prior
to the Change in Control or as the same may have been increased
from time to time after the Change in Control except for
across-the-board perquisite reductions similarly affecting all
senior executives of the Company and all senior executives of any
Person in control of the Company;
(iii) the relocation of the principle place of Executive's employment
not in conformity with Section 3(b) hereof; for this purpose,
required travel on the Company's business will not constitute a
relocation so long as the extent of such travel is substantially
consistent with Executive's customary business travel obligations
in periods prior to the Effective Date;
(iv) the failure by the Company to pay to Executive any portion of
Executive's compensation or to pay to Executive any portion of an
installment of deferred compensation under any deferred
compensation program of the Company within seven days of the date
such compensation is due;
(v) the failure by the Company to continue in effect any material
compensation or benefit plan in which Executive participated
immediately prior to a Change in Control, unless an equitable
arrangement (embodied in an ongoing substitute or
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alternative plan) has been made with respect to such plan, or the
failure by the Company to continue Executive's participation
therein (or in such substitute or alternative plan) on a basis not
materially less favorable, both in terms of the amounts of
benefits provided and the level of Executive's participation
relative to other participants, as existed at the time of the
Change in Control;
(vi) the failure of the Company to obtain a satisfactory agreement from
any successor to the Company to fully assume the Company's
obligations and to perform under this Agreement, as contemplated
in Section 12(b) hereof, in a form reasonably acceptable to
Executive;
(vii) any election by the Company not to extend the Term of this
Agreement at the next possible extension date under Section 2
hereof, unless Executive will have attained age 65 at or before
such extension date; or
(viii) any other failure by the Company to perform any material
obligation under, or breach by the Company of any material
provision of, this Agreement.
(f) "Potential Change in Control" For purposes of this Agreement, a
"Change in Control" shall be deemed to have occurred if, during the term of
this Agreement:
(i) the Company enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control;
(ii) any Person (including the Company) publicly announces an intention
to take or to consider taking actions which if consummated would
constitute a Change in Control; or
(iii) the Board adopts a resolution to the effect that, for purposes of
this Agreement, a Potential Change in Control has occurred.
9. Rabbi Trust Obligation Upon Potential Change in Control; Excise Tax-Related
Provisions.
(a) Rabbi Trust Funded Upon Potential Change in Control. In the event
of a Potential Change in Control, the Company shall, not later than 15 days
thereafter, have established one or more rabbi trusts and shall deposit
therein cash in an amount sufficient to provide for full payment of all
potential obligations of the Company that would arise assuming consummation
of a Change in Control and a subsequent termination of Executive's
employment under Section 7(e) or 7(f). Such rabbi trust(s) shall be
irrevocable and shall provide that the Company may not, directly or
indirectly, use or recover any assets of the trust(s) until such time as
all obligations which potentially could arise hereunder have been settled
and paid in full, subject only to the claims of creditors of the Company in
the event of insolvency or bankruptcy of the Company; provided, however,
that if no Change in Control has occurred within two years after such
Potential Change in Control, such rabbi trust(s) shall at the end of such
two-year period become revocable and may thereafter be revoked by the
Company.
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(b) Gross-up If Excise Tax Would Apply. In the event Executive becomes
entitled to any amounts payable in connection with a Change in Control or
other change in control (whether or not such amounts are payable pursuant
to this Agreement) (the "Severance Payments"), if any of such Severance
Payments are subject to the tax (the "Excise Tax") imposed by Section 4999
of the Code (or any similar federal, state or local tax that may hereafter
be imposed), the Company shall pay to Executive at the time specified in
Section 9(b)(iii) hereof an additional amount (the "Gross-Up Payment") such
that the net amount retained by Executive, after deduction of any Excise
Tax on the Total Payments (as hereinafter defined) and any federal, state
and local income tax and Excise Tax upon the payment provided for by
Section 9(b)(i), shall be equal to the Total Payments.
(i) For purposes of determining whether any of the Severance Payments
will be subject to the Excise Tax and the amount of such Excise
Tax:
(A) any other payments or benefits received or to be received
by Executive in connection with a Change in Control or
Executive's termination of employment (whether pursuant to
the terms of this Agreement or any other plan, arrangement
or agreement with the Company, any Person whose actions
result in a Change in Control or any Person affiliated with
the Company or such Person) (which, together with the
Severance Payments, constitute the "Total Payments") shall
be treated as "parachute payments" within the meaning of
Section 280G(b)(2) of the Code, and all "excess parachute
payments" within the meaning of Section 280G(b)(1) of the
Code shall be treated as subject to the Excise Tax, unless
in the opinion of nationally-recognized tax counsel
selected by Executive such other payments or benefits (in
whole or in part) do not constitute parachute payments, or
such excess parachute payments (in whole or in part)
represent reasonable compensation for services actually
rendered within the meaning of Section 280G(b)(4) of the
Code in excess of the base amount within the meaning of
Section 280G(b)(3) of the Code, or are otherwise not
subject to the Excise Tax;
(B) the amount of the Total Payments which shall be treated as
subject to the Excise Tax shall be equal to the lesser of
(x) the total amount of the Total Payments and (y) the
amount of excess parachute payments within the meaning of
Section 280G(b)(1) of the Code (after applying Section
9(b)(i)(A) hereof); and
(C) the value of any non-cash benefits or any deferred payments
or benefit shall be determined by a nationally-recognized
accounting firm selected by Executive in accordance with
the principles of Sections 280G(d)(3) and (4) of the Code.
(ii) For purposes of determining the amount of the Gross-Up Payment,
Executive shall be deemed to pay federal income taxes at the
highest marginal rate of
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federal income taxation in the calendar year in which the Gross-Up
Payment is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of
Executive's residence on the Date of Termination, net of the
maximum reduction in federal income taxes which could be obtained
from deduction of such state and local taxes. In the event that
the Excise Tax is subsequently determined to be less than the
amount taken into account hereunder at the time of termination of
Executive's employment, Executive shall repay to the Company
within ten days after the time that the amount of such reduction
in Excise Tax is finally determined the portion of the Gross-Up
Payment attributable to such reduction (plus the portion of the
Gross-Up Payment attributable to the Excise Tax and federal and
state and local income tax imposed on the Gross-Up Payment being
repaid by Executive if such repayment results in a reduction in
Excise Tax and/or federal and state and local income tax
deduction) plus interest on the amount of such repayment at the
rate provided in Section 1274(b)(2)(B) of the Code. In the event
that the Excise Tax is determined to exceed the amount taken into
account hereunder at the time of the termination of Executive's
employment (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Gross-Up
Payment), the Company shall make an additional gross-up payment in
respect of such excess within ten days after the time that the
amount of such excess is finally determined.
(iii) The payments provided for in this Section 9(b) shall be made not
later than the fifteenth day following the date of Executive's
termination of employment; provided, however, that if the amount
of such payments cannot be finally determined on or before such
day, the Company shall pay to Executive on such day an estimate,
as determined in good faith by the Company, of the minimum amount
of such payments and shall pay the remainder of such payments
(together with interest at the rate provided in Section
1274(b)(2)(B) of the Code) as soon as the amount thereof can be
determined but in no event later than the thirtieth day after the
date of Executive's termination of employment. In the event that
the amount of the estimated payments exceeds the amount
subsequently determined to have been due, such excess shall
constitute a loan by the Company to Executive, payable on the
fifteenth day after the demand by the Company (together with
interest at the rate provided in Section 1274(b)(2)(B) of the
Code).
(iv) All determinations under this Section 9(b) shall be made at the
expense of the Company by a nationally recognized public
accounting firm selected by Executive, and such determination
shall be binding upon Executive and the Company.
10. Non-Competition and Non-Disclosure; Executive Cooperation;
Non-Disparagement.
(a) Non-Competition. Without the consent in writing of the Board,
Executive
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will not, at any time during the Term and for a period of two years
following termination of Executive's employment for any reason, acting
alone or in conjunction with others, directly or indirectly (i) engage
(either as owner, investor, partner, stockholder, employer, employee,
consultant, advisor, or director) in any business in which he has been
directly engaged on behalf of the Company or any affiliate, or has
supervised as an executive thereof, during the last two years prior to such
termination, or which was engaged in or planned by the Company or an
affiliate at the time of such termination, in any geographic area in which
such business was conducted or planned to be conducted; (ii) induce any
customers of the Company or any of its affiliates with whom Executive has
had contacts or relationships, directly or indirectly, during and within
the scope of her employment with the Company or any of its affiliates, to
curtail or cancel their business with the Company or any such affiliate;
(iii) induce, or attempt to influence, any employee of the Company or any
of its affiliates to terminate employment; or (iv) solicit, hire or retain
as an employee or independent contractor, or assist any third party in the
solicitation, hire, or retention as an employee or independent contractor,
any person who during the previous 12 months was an employee of the Company
or any affiliate; provided, however, that the limitation contained in
clause (i) above shall not apply if Executive's employment is terminated as
a result of a termination by the Company without Cause within two years
following a Change in Control or is terminated by Executive for Good Reason
within two years following a Change in Control; and provided further, that
activities engaged in by or on behalf of the Company are not restricted by
this covenant. The provisions of subparagraphs (i), (ii), (iii), and (iv)
above are separate and distinct commitments independent of each of the
other subparagraphs. It is agreed that the ownership of not more than one
percent of the equity securities of any company having securities listed on
an exchange or regularly traded in the over-the-counter market shall not,
of itself, be deemed inconsistent with clause (i) of this Section 10(a).
(b) Non-Disclosure; Ownership of Work. Executive shall not, at any
time during the Term and thereafter (including following Executive's
termination of employment for any reason), disclose, use, transfer, or
sell, except in the course of employment with or other service to the
Company, any proprietary information, secrets, organizational or employee
information, or other confidential information belonging or relating to the
Company and its affiliates and customers so long as such information has
not otherwise been disclosed or is not otherwise in the public domain,
except as required by law or pursuant to legal process. In addition, upon
termination of employment for any reason, Executive will return to the
Company or its affiliates all documents and other media containing
information belonging or relating to the Company or its affiliates.
Executive will promptly disclose in writing to the Company all inventions,
discoveries, developments, improvements and innovations (collectively
referred to as "Inventions") that Executive has conceived or made during
the Term; provided, however, that in this context "Inventions" are limited
to those which (i) relate in any manner to the existing or contemplated
business or research activities of the Company and its affiliates; (ii) are
suggested by or result from Executive's work at the Company; or (iii)
result from the use of the time, materials or facilities of the Company and
its affiliates. All Inventions will be the Company's property rather than
Executive's. Should the Company request it, Executive agrees to sign any
document that the Company may reasonably require to establish ownership in
any Invention.
-26-
(c) Cooperation With Regard to Litigation. Executive agrees to
cooperate with the Company, during the Term and thereafter (including
following Executive's termination of employment for any reason), by making
herself available to testify on behalf of the Company or any subsidiary or
affiliate of the Company, in any action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, and to assist the
Company, or any subsidiary or affiliate of the Company, in any such action,
suit, or proceeding, by providing information and meeting and consulting
with the Board or its representatives or counsel, or representatives or
counsel to the Company, or any subsidiary or affiliate of the Company, as
requested. The Company agrees to reimburse the Executive, on an after-tax
basis, for all expenses actually incurred in connection with her provision
of testimony or assistance.
(d) Non-Disparagement. Executive shall not, at any time during the
Term and thereafter, make statements or representations, or otherwise
communicate, directly or indirectly, in writing, orally, or otherwise, or
take any action which may, directly or indirectly, disparage or be damaging
to the Company or any of its subsidiaries or affiliates or their respective
officers, directors, employees, advisors, businesses or reputations.
Notwithstanding the foregoing, nothing in this Agreement shall preclude
Executive from making truthful statements that are required by applicable
law, regulation or legal process.
(e) Release of Employment Claims. Executive agrees, as a condition to
receipt of any termination payments and benefits provided for in Sections 6
and 7 herein (other than Compensation Accrued at Termination), that she
will execute a general release agreement, in a form satisfactory to the
Company, releasing any and all claims arising out of Executive's employment
(other than enforcement of this Agreement).
(f) Forfeiture of Outstanding Options. The provisions of Sections 6
and 7 notwithstanding, if Executive willfully and materially fails to
substantially comply with any restrictive covenant under this Section 10 or
willfully and materially fails to substantially comply with any material
obligation under this Agreement, all options to purchase Common Stock
granted by the Company and then held by Executive or a transferee of
Executive shall be immediately forfeited and thereupon such options shall
be cancelled. Notwithstanding the foregoing, Executive shall not forfeit
any option unless and until there shall have been delivered to her, within
six months after the Board (i) had knowledge of conduct or an event
allegedly constituting grounds for such forfeiture and (ii) had reason to
believe that such conduct or event could be grounds for such forfeiture, a
copy of a resolution duly adopted by a majority affirmative vote of the
membership of the Board (excluding Executive) at a meeting of the Board
called and held for such purpose (after giving Executive reasonable notice
specifying the nature of the grounds for such forfeiture and not less than
30 days to correct the acts or omissions complained of, if correctable, and
affording Executive the opportunity, together with her counsel, to be heard
before the Board) finding that, in the good faith opinion of the Board,
Executive has engaged and continues to engage in conduct set forth in this
Section 10(f) which constitutes grounds for forfeiture of Executive's
options; provided, however, that if any option is exercised after delivery
of such notice and the Board subsequently makes the determination described
in this sentence, Executive shall be required to pay to the Company an
amount equal to the difference between the aggregate value of the shares
acquired upon such exercise at the date of the Board determination and the
aggregate exercise price paid by Executive. Any such
-27-
forfeiture shall apply to such options notwithstanding any term or
provision of any option agreement.
(g) Survival. The provisions of this Section 10 shall survive the
termination of the Term and any termination or expiration of this
Agreement.
11. Governing Law; Disputes; Arbitration.
(a) Governing Law. This Agreement is governed by and is to be
construed, administered, and enforced in accordance with the laws of the
State of Connecticut, without regard to conflicts of law principles, except
insofar as federal laws and regulations and the Delaware General
Corporation Law may be applicable. If under the governing law, any portion
of this Agreement is at any time deemed to be in conflict with any
applicable statute, rule, regulation, ordinance, or other principle of law,
such portion shall be deemed to be modified or altered to the extent
necessary to conform thereto or, if that is not possible, to be omitted
from this Agreement. The invalidity of any such portion shall not affect
the force, effect, and validity of the remaining portion hereof. If any
court determines that any provision of Section 10 is unenforceable because
of the duration or geographic scope of such provision, it is the parties'
intent that such court shall have the power to modify the duration or
geographic scope of such provision, as the case may be, to the extent
necessary to render the provision enforceable and, in its modified form,
such provision shall be enforced.
(b) Reimbursement of Expenses in Enforcing Rights. All reasonable
costs and expenses (including fees and disbursements of counsel) incurred
by Executive in seeking to interpret this Agreement or enforce rights
pursuant to this Agreement shall be paid on behalf of or reimbursed to
Executive promptly by the Company, whether or not Executive is successful
in asserting such rights; provided, however, that no reimbursement shall be
made of such expenses relating to any unsuccessful assertion of rights if
and to the extent that Executive's assertion of such rights was in bad
faith or frivolous, as determined by arbitrators in accordance with Section
11(c) or a court having jurisdiction over the matter.
(c) Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
in Westport CT by three arbitrators in accordance with the rules of the
American Arbitration Association in effect at the time of submission to
arbitration. Judgment may be entered on the arbitrators' award in any court
having jurisdiction. For purposes of entering any judgment upon an award
rendered by the arbitrators, the Company and Executive hereby consent to
the jurisdiction of any or all of the following courts: (i) the United
States District Court for the District of Connecticut, (ii) any of the
courts of the State of Connecticut, or (iii) any other court having
jurisdiction. The Company and Executive further agree that any service of
process or notice requirements in any such proceeding shall be satisfied if
the rules of such court relating thereto have been substantially satisfied.
The Company and Executive hereby waive, to the fullest extent permitted by
applicable law, any objection which it may now or hereafter have to such
jurisdiction and any defense of inconvenient forum. The Company and
Executive hereby agree that a judgment upon an award rendered by the
arbitrators may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Subject to Section 11(b), the
Company shall
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bear all costs and expenses arising in connection with any arbitration
proceeding pursuant to this Section 11. Notwithstanding any provision in
this Section 11, Executive shall be entitled to seek specific performance
of Executive's right to be paid during the pendency of any dispute or
controversy arising under or in connection with this Agreement.
(d) Interest on Unpaid Amounts. Any amount which has become payable
pursuant to the terms of this Agreement or any decision by arbitrators or
judgment by a court of law pursuant to this Section 11 but which has not
been timely paid shall bear interest at the prime rate in effect at the
time such amount first becomes payable, as quoted by the Company's
principal bank.
12. Miscellaneous.
(a) Integration. This Agreement cancels and supersedes any and all
prior agreements and understandings between the parties hereto with respect
to the employment of Executive by the Company, any parent or predecessor
company, and the Company's subsidiaries during the Term, except for
contracts relating to compensation under executive compensation and
employee benefit plans of the Company and its subsidiaries. The foregoing
notwithstanding, Executive shall not participate in the Company's Employee
Protection Plan. This Agreement constitutes the entire agreement among the
parties with respect to the matters herein provided, and no modification or
waiver of any provision hereof shall be effective unless in writing and
signed by the parties hereto. Executive shall not be entitled to any
payment or benefit under this Agreement which duplicates a payment or
benefit received or receivable by Executive under such prior agreements and
understandings or under any benefit or compensation plan of the Company.
(b) Successors; Transferability. The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of
the Company to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise and, in
the case of an acquisition of the Company in which the corporate existence
of the Company continues, the ultimate parent company following such
acquisition. Subject to the foregoing, the Company may transfer and assign
this Agreement and the Company's rights and obligations hereunder. Neither
this Agreement nor the rights or obligations hereunder of the parties
hereto shall be transferable or assignable by Executive, except in
accordance with the laws of descent and distribution or as specified in
Section 12(c).
(c) Beneficiaries. Executive shall be entitled to designate (and
change, to the extent permitted under applicable law) a beneficiary or
beneficiaries to receive any compensation or benefits provided hereunder
following Executive's death.
(d) Notices. Whenever under this Agreement it becomes necessary to
give notice, such notice shall be in writing, signed by the party or
parties giving or making the same,
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and shall be served on the person or persons for whom it is intended or who
should be advised or notified, by Federal Express or other similar
overnight service or by certified or registered mail, return receipt
requested, postage prepaid and addressed to such party at the address set
forth below or at such other address as may be designated by such party by
like notice:
If to the Company:
IMS HEALTH INCORPORATED
000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
If to Executive:
Xxxxxxxx X. Xxxx
000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
If the parties by mutual agreement supply each other with telecopier
numbers for the purposes of providing notice by facsimile, such notice
shall also be proper notice under this Agreement. In the case of Federal
Express or other similar overnight service, such notice or advice shall be
effective when sent, and, in the cases of certified or registered mail,
shall be effective two days after deposit into the mails by delivery to the
U.S. Post Office.
(e) Reformation. The invalidity of any portion of this Agreement shall
not deemed to render the remainder of this Agreement invalid.
(f) Headings. The headings of this Agreement are for convenience of
reference only and do not constitute a part hereof.
(g) No General Waivers. The failure of any party at any time to
require performance by any other party of any provision hereof or to resort
to any remedy provided herein or at law or in equity shall in no way affect
the right of such party to require such performance or to resort to such
remedy at any time thereafter, nor shall the waiver by any party of a
breach of any of the provisions hereof be deemed to be a waiver of any
subsequent breach of such provisions. No such waiver shall be effective
unless in writing and signed by the party against whom such waiver is
sought to be enforced.
(h) No Obligation To Mitigate. Executive shall not be required to seek
other employment or otherwise to mitigate Executive's damages upon any
termination of employment; provided, however, that, to the extent Executive
receives from a subsequent employer health or other insurance benefits that
are substantially similar to the benefits referred to in Section 5(b)
hereof, any such benefits to be provided by the Company to Executive
following the Term shall be correspondingly reduced.
(i) Offsets; Withholding. The amounts required to be paid by the
Company to Executive pursuant to this Agreement shall not be subject to
offset other than with respect to any amounts that are owed to the Company
by Executive due to her receipt of funds as a result of her fraudulent
activity. The foregoing and other provisions of this Agreement
notwithstanding, all payments to be made to Executive under this Agreement,
including under Sections 6 and 7, or otherwise by the Company, will be
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subject to withholding to satisfy required withholding taxes and other
required deductions.
(j) Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of Executive, her heirs, executors,
administrators and beneficiaries, and shall be binding upon and inure to
the benefit of the Company and its successors and assigns.
(k) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
13. Indemnification.
All rights to indemnification by the Company now existing in favor of the
Executive as provided in the Company's Certificate of Incorporation or By-laws
or pursuant to other agreements in effect on or immediately prior to the
Effective Date shall continue in full force and effect from the Effective Date
(including all periods after the expiration of the Term), and the Company shall
also advance expenses for which indemnification may be ultimately claimed as
such expenses are incurred to the fullest extent permitted under applicable law,
subject to any requirement that the Executive provide an undertaking to repay
such advances if it is ultimately determined that the Executive is not entitled
to indemnification; provided, however, that any determination required to be
made with respect to whether the Executive's conduct complies with the standards
required to be met as a condition of indemnification or advancement of expenses
under applicable law and the Company's Certificate of Incorporation, By-laws, or
other agreement shall be made by independent counsel mutually acceptable to the
Executive and the Company (except to the extent otherwise required by law).
After the date hereof, the Company shall not amend its Certificate of
Incorporation or By-laws or any agreement in any manner which adversely affects
the rights of the Executive to indemnification thereunder. Any provision
contained herein notwithstanding, this Agreement shall not limit or reduce any
rights of the Executive to indemnification pursuant to applicable law. In
addition, the Company will maintain directors' and officers' liability insurance
in effect and covering acts and omissions of Executive during the Term and for a
period of six years thereafter on terms substantially no less favorable than
those in effect on the Effective Date.
IN WITNESS WHEREOF, Executive has hereunto set her hand and the Company has
caused this instrument to be duly executed as of the day and year first above
written.
IMS HEALTH INCORPORATED
By: ______________________________
Name:
Title:
EXECUTIVE
______________________________
Xxxxxxxx X. Xxxx
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