EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated August 7, 2000, between DENDRITE INTERNATIONAL,
INC., a New Jersey Corporation ("Dendrite"), having its principal place of
business at 1200 Mt. Kemble Avenue, Morristown, New Jersey 07960, and MARC
KUSTOFF ("Employee"), having an address at 44 Center Grove Road, Unit T23,
Randolph, New Jersey 07869.
WHEREAS, Dendrite, its affiliates, and subsidiaries develop and own
what is referred to as Territory Management Systems and related hardware and
equipment;
WHEREAS, Employee is or desires to be employed by Dendrite and Dendrite
desires to employ Employee; and
WHEREAS, Dendrite is willing to provide certain confidential and
proprietary information to Employee for the limited purpose of enabling Employee
to carry out duties in connection with his employment by Dendrite.
RECITAL:
NOW, THEREFORE, it is agreed as follows:
1. EMPLOYMENT AT WILL
Dendrite hereby employs Employee, and Employee hereby accepts such
employment, as Senior Vice President and Chief Technology Officer of Dendrite.
Dendrite hereby employs Employee as an at-will employee. This employment may be
terminated at any time for any reason with or without "Cause" (as defined below)
by Dendrite. Employee agrees to provide two (2) weeks notice to Dendrite before
terminating his employment.
2. DUTIES
Employee shall perform those duties as may from time to time be
assigned to him and shall carry out any assignments related to Dendrite or its
affiliates as directed. In addition, Employee shall be required to attend all
meetings of the Board of Directors of Dendrite (the "Board"). Employee shall
devote his full time attention, energy, knowledge, skill and best efforts solely
and exclusively to the duties assigned to him which he shall faithfully and
diligently perform. Employee shall report to the Chief Executive Officer of
Dendrite as may be required and will fully account for all records, data,
materials or other property belonging to Dendrite or its customers of which he
is given custody. Dendrite may, from time to time, establish rules and
regulations and Employee shall faithfully observe these in the performance of
his duties. Employee shall further comply with all policies and directives of
Dendrite.
3. COMPENSATION
(i) Base Salary. Dendrite shall pay Employee for his services
a base salary at a rate of $310,000 per annum to be paid on a semi-
monthly basis in accordance with Dendrite's regular payroll practices.
Employee's base salary shall be reviewed by Dendrite, in its sole
discretion, annually.
(ii) Sign-On Bonus. In connection with Employee's entering
into this Agreement, Employee shall receive a signing bonus in the
amount of $100,000, less all applicable withholdings, payable within
five business days of the full execution of this Agreement. It is
understood and agreed, however, that in the event that Employee
voluntarily terminates his employment with Dendrite for any reason
whatsoever or Employee's employment with Dendrite is terminated by
Dendrite for "Cause" (as defined below) before the first anniversary of
this Agreement, Employee will repay to Dendrite an amount equal to
$100,000 multiplied by the fraction, the numerator of which is 365 less
the number of days during which Employee was employed by Dendrite, and
the denominator of which is 365. Such repayment shall be made by
Employee in full within ninety (90) days of his termination of
employment with Dendrite. Notwithstanding the foregoing, Employee
hereby authorizes Dendrite to immediately offset against and reduce any
amounts otherwise due to him for any amounts in respect of his
obligation to repay the sign-on bonus.
(iii) Bonus. Upon the completion of the third fiscal quarter
of 2000, Employee shall be eligible to receive a bonus (a "Bonus") of
$57,000, payable in the next payroll period occurring at least two
weeks after Dendrite publicly discloses its financial results in such
fiscal quarter. Upon the completion of the fourth fiscal quarter of
2000, Employee shall be eligible to receive a Bonus of $57,000, payable
in the next payroll period occurring at least two weeks after Dendrite
publicly discloses its financial results in such fiscal quarter. Upon
the completion of fiscal year 2000, Employee shall be eligible to
receive a Bonus of $76,000, payable in the next payroll period
occurring at least two weeks after Dendrite publicly discloses its
financial results in fiscal year 2000. Commencing on the completion of
the first fiscal quarter of 2001 Employee shall be eligible to receive
a Bonus of $72,500, payable in the next payroll period occurring at
least two weeks after Dendrite publicly discloses its financial results
in such fiscal quarter. The payment of any Bonus hereunder is subject
in each case to: (a) Dendrite's achievement of quarterly or annual
financial goals as set forth in the Board approved annual business
plan, (b) such other objectives as mutually agreed upon, (c) Employee
remaining in the employ of Dendrite as of the end of any such quarter
or year, as the case may be, and (d) Dendrite's annual bonus "hold
back" policy as such policy pertains to all Dendrite senior executives.
Employee may be eligible for additional bonuses based on an
"overachievement percentage" and such additional bonus shall be based
on $290,000 in annual bonus compensation that the Employee is eligible
to receive hereunder.
(iii) Stock Options
(a) Pursuant to Dendrite's 1997 Stock Incentive Plan, as
amended (the "Stock Plan"), upon the execution of this Agreement, Dendrite shall
give Employee an option to purchase 200,000 shares of the common stock of
Dendrite as of June 24, 2000. The price for such options shall be the closing
price on June 23, 2000 ($25.875). Employee's entitlement to such options shall
be subject to (i) a four year vesting schedule, (ii) Employee's execution of a
definitive option agreement in form and substance satisfactory to Dendrite and
(iii) in all instances subject to the terms and conditions of the Stock Plan.
Notwithstanding anything to the contrary, in the event of a "Change of Control"
(as defined below), all of Employee's options owned by him at the time of such
event shall immediately vest.
(b) For purposes of this Agreement, "Change in Control" means
the occurrence of any one of the following events:
(i) any "person" (as such term is defined in Section 3(a)(9)
of the Securities Exchange Act of 1934 (the "Exchange Act") and as used
in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a
"beneficial owner" (as defined in rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of Dendrite representing 33% or
more of the combined voting power of Dendrite's then outstanding
securities eligible to vote for the election of the Board (the
"Dendrite Voting Securities"); provided, however, that the event
described in this paragraph (i) shall not be deemed to be a Change in
Control by virtue of any of the following acquisitions: (A) by Dendrite
or any of its subsidiaries, (B) by any employee benefit plan sponsored
or maintained by Dendrite or any of its subsidiaries, (C) by any
underwriter temporarily holding securities pursuant to an offering of
such securities, (D) pursuant to a Non-Qualifying Transaction (as
defined in paragraph (iii)), (E) pursuant to any acquisition by
Employee or any group of persons including Employee or any entity
controlled by Employee or such group ("Employee Holders"), or (F) a
transaction (other than one described in paragraph (iii) below) in
which Dendrite Voting Securities are acquired from Dendrite, if a
majority of the Board approves a resolution providing expressly that
the acquisition pursuant to this clause (F) does not constitute a
Change in Control under this paragraph (i). Notwithstanding the
foregoing, a transaction that would otherwise be considered a Change in
Control but for the operation of clauses D or F of this paragraph (i)
will be deemed a Change in Control if John Bailye immediately after the
consummation of such a transaction is neither Chairman, President or
Chief Executive Officer (or holds a position comparable to the
foregoing positions) of Dendrite or any successor corporation to
Dendrite as a result of such Change in Control transaction;
(ii) individuals who, on July 24, 2000, constituted the Board
(the "Incumbent Directors") cease for any reason to constitute at least
a majority thereof, provided that any person becoming a director
subsequent to July 24, 2000, whose election or nomination for election
was approved by a vote of at least a majority of the Incumbent
Directors then on the Board (either by a specific vote or by approval
of the proxy statement of Dendrite in which such person is named as a
nominee for director, without objection to such nomination) shall be an
Incumbent Director; provided, however, that no individual elected or
nominated as a director of Dendrite initially as a result of an actual
or threatened election contest with respect to directors or as a result
of any other actual or threatened solicitation of proxies or consents
by or on behalf of any person other than the Board shall be deemed to
be an Incumbent Director;
(iii) the consummation of a merger, consolidation, share
exchange or similar form of corporate reorganization (other than a
transaction with Employee, any group of persons including Employee or
any entity controlled by Employee or such a group of persons) involving
Dendrite or any of its subsidiaries that requires the approval of
Dendrite's stockholders whether for such transaction or the issuance of
securities in connection with the transaction or otherwise, (a
"Business Combination"), unless immediately following such Business
Combination: (A) more than 50% of the total voting power of (x) the
corporation resulting from such Business Combination (the "Surviving
Corporation"), or (y) if applicable, the ultimate parent corporation
that directly or indirectly has beneficial ownership of 100% of the
voting securities eligible to elect directors of the Surviving
Corporation (the "Parent Corporation"), is represented by Dendrite
Voting Securities that were outstanding immediately prior to the
consummation of such Business Combination (or, if applicable, is
represented by shares into which such Dendrite Voting Securities were
converted pursuant to such Business Combination), and such voting power
among the holders thereof is in substantially the same proportion as
the voting power of such Dendrite Voting Securities among the holders
thereof immediately prior to the Business Combination, (B) no person
(other than the Employee Holders or any employee benefit plan sponsored
or maintained by the Surviving Corporation or the Parent Corporation),
is or becomes the beneficial owner, directly or indirectly, of 33% or
more of the total voting power of the outstanding voting securities
eligible to elect directors of the Parent Corporation (or, if there is
no Parent Corporation, the Surviving Corporation) and (C) at least a
majority of the members of the board of directors of the Parent
Corporation (or if there is no Parent Corporation, the Surviving
Corporation) were Incumbent Directors at the time of the Board's
approval of the execution of the initial agreement providing for such
Business Combination (any Business Combination which satisfies all of
the criteria specified in (A), (B) and (C) above shall be deemed to be
a "Non-Qualifying Transaction"); or
(iv) the stockholders of Dendrite approve a sale of all or
substantially all of the Dendrite's assets.
Notwithstanding the foregoing, a Change in Control of Dendrite shall not be
deemed to occur solely because any person acquires beneficial ownership of more
than 33% of Dendrite Voting Securities as a result of the acquisition of
Dendrite Voting Securities by Dendrite which, by reducing the number of Dendrite
Voting Securities outstanding, increases the percentage of shares beneficially
owned by such person; provided, that if a Change in Control of Dendrite would
occur as a result of such an acquisition by Dendrite (if not for the operation
of this sentence), and after Dendrite's acquisition such person becomes the
beneficial owner of additional Dendrite Voting Securities that increase the
percentage of outstanding Dendrite Voting Securities beneficially owned by such
person, then a Change in Control of Dendrite shall occur.
4. TERMINATION; SEVERANCE
(a) Upon Employee's termination of employment by Dendrite for any
reason other than termination by Dendrite for Cause (as defined below),
Disability (as defined below) or upon Employee's death, Employee shall solely be
entitled to (subject to repayment of any indebtedness or advances) applicable
payments and benefits in Sections 4(b) and 4(c), his base salary through the
date of his termination, and payment for any unused but accrued vacation through
the date of termination.
(b) If Employee's employment hereunder is terminated by Dendrite for
any reason other than death, Cause, or Disability or Change in Control as
contemplated by Section 4(c) below, then Employee shall be entitled to receive
severance payments in an aggregate amount equal to the annual rate of Employee's
base salary in effect as of the date of termination plus $290,000 in respect of
the Bonus that Employee may have otherwise been entitled to. The severance
payments to be paid to Employee under this Section 4(b) shall be referred to
herein as the "Severance Payment". Employee's Severance Payment shall be paid by
Dendrite in cash in twelve (12) consecutive equal monthly payments commencing
not later than thirty (30) days after the effective date of the termination of
Employee's employment. No interest shall accrue or be payable on or with respect
to any Severance Payment. In the event of a termination of Employee's employment
described in this Section 4(b), Employee shall be provided continued "COBRA"
coverage pursuant to Sections 601 et seq. of ERISA under Dendrite's group
medical and dental plans. During the period which Employee receives the
Severance Payment, Employee's cost of COBRA coverage shall be the same as the
amount paid by employees of Dendrite for the same coverage under Dendrite's
group health and dental plans. Notwithstanding the foregoing, in the event
Employee becomes re-employed with another employer and becomes eligible to
receive health coverage from such employer, the payment of COBRA coverage by
Dendrite as described herein shall cease.
(c) If Employee's employment hereunder is terminated following a Change
in Control (i) by Dendrite for any reason other than death, Cause, or Disability
or (ii) by Employee for Good Reason (as defined below), the Employee shall be
entitled to receive the following severance payments: an aggregate amount equal
to the sum of twenty-four (24) months base salary (calculated at the rate of
base salary then being paid to Employee as of the date of termination) plus
$580,000 in respect of the Bonus that Employee may have otherwise been entitled
to had he been in the employ of Dendrite for two years multiplied by the
fraction, the numerator of which is 730 less the number of days during which
Employee was employed by Dendrite, and the denominator of which is 730;
provided, however, that the minimum aggregate amount of severance payments shall
not be less then twelve (12) months base salary (calculated at the rate of base
salary then being paid to Employee as of the date of termination) plus $290,000
in respect of the Bonus that Employee may have otherwise been entitled to had he
been in the employ of Dendrite for one year. The severance payments to be paid
to Employee under this Section 4(c) shall be referred to herein as the "Change
in Control Severance Payment". Employee's Change In Control Severance Payment
shall be paid by Dendrite in cash in twenty four (24) consecutive equal monthly
payments commencing not later than thirty (30) days after the effective date of
the termination of Employee's employment. No interest shall accrue or be payable
on or with respect to any Change In Control Severance Payment. In the event of a
termination of Employee's employment described in this Section 4(c), Employee
shall be provided continued "COBRA" coverage pursuant to Sections 601 et seq. of
ERISA under Dendrite's group medical and dental plans. During the period which
Employee receives the Severance Payment, Employee's cost of COBRA coverage shall
be the same as the amount paid by employees of Dendrite for the same coverage
under Dendrite's group health and dental plans. Notwithstanding the foregoing,
in the event Employee becomes re-employed with another employer and becomes
eligible to receive health coverage from such employer, the payment of COBRA
coverage by Dendrite as described herein shall cease.
(d) The making of any severance payments under Sections 4(b) or 4(c)
hereunder is conditioned upon the signing of a general release in form and
substance satisfactory to Dendrite under which Employee releases Dendrite and
its affiliates together with their respective officers, directors, shareholders,
employees, agents and successors and assigns from any and all claims he may have
against them. In the event Employee breaches Sections 7, 8, 9, 11 or 12 of this
Agreement, in addition to any other remedies at law or in equity, Dendrite may
cease making any severance payment or any payments for COBRA coverage otherwise
due under Sections 4(b) and 4(c). Nothing herein shall affect any of Employee's
obligations or Dendrite's rights under this Agreement.
(e) For purposes of this Agreement, "Cause" as used herein shall mean
(i) any gross misconduct on the part of Employee with respect to his duties
under this Agreement, (ii) the engaging by Employee in an indictable offense
which relates to Employee's duties under this Agreement or which is likely to
have a material adverse effect on the business of Dendrite, (iii) the commission
by Employee of any willful or intentional act which injures in any material
respect or could reasonably be expected to injure in any material respect the
reputation, business or business relationships of Dendrite, including without
limitation, a breach of Sections 6, 7, 8, 9, 11, 12 or 13 of this Agreement, or
(iv) the engaging by Employee through gross negligence in conduct which injures
materially or could reasonably be expected to injure materially the business or
reputation of Dendrite.
(f) For purposes of this Agreement, "Disabled" as used herein shall
have the same meaning as that term, or such substantially equivalent term, has
in any group disability policy carried by Dendrite. If no such policy exists,
the term "Disabled" shall mean the occurrence of any physical or mental
condition which materially interferes with the performance of Employee's
customary duties in his capacity as an employee where such disability has been
in effect for a period of six (6) months (excluding permitted vacation time),
which need not be consecutive, during any single twelve (12) month period.
(g) For purposes of this Agreement, "Good Reason" means, without
Employee's express written consent, the occurrence of any of the following
events which is not corrected within ten (10) days following notice of such
event given by Employee to Dendrite:
(i) the assignment to Employee of any duties or
responsibilities materially and adversely inconsistent with Employee's
position (including any material diminution of such duties or
responsibilities) or (B) a material and adverse change in Employee's
reporting responsibilities, titles or offices (other than membership on
the Board) with Dendrite;
(ii) any material breach by Dendrite of Section 3 of this
Agreement;
(iii) the failure of Dendrite to continue in effect any
employee benefit plan, compensation plan, welfare benefit plan or
fringe benefit plan (such plans being referred to herein as "Welfare
Plans") in which Employee is participating as of the effective date of
this Agreement (or as such benefits and compensation may be increased
from time to time), or the taking of any action by Dendrite which would
materially and adversely affect Employee's participation in or
materially reduce Employee's benefits under such Welfare Plans (other
than an across-the-board reduction of such benefits affecting senior
executives of Dendrite) unless (i) Employee is permitted to participate
in other plans providing Employee with substantially comparable
benefits (at substantially comparable cost with respect to the Welfare
Plans), (ii) any such Welfare Plan does not provide material benefits
to Employee (determined in relation to Employee's compensation and
benefits package), (iii) such failure or action is taken at the
direction of Employee or with his consent, or (iv) such failure or
action is required by law;
(iv) the failure of Dendrite to obtain the assumption
agreement from any successor in the event of a sale of all or
substantially all of the assets of Dendrite in one transaction or a
series of related transactions; and
(v) any requirement of Dendrite that Employee be based
anywhere other than Dendrite's executive offices located in Morristown,
New Jersey; provided such executive offices are located within
thirty-five (35) miles of Morristown, New Jersey or within the borough
of Manhattan.
Employee must notify Dendrite of any event constituting Good Reason within
ninety (90) days following Employee's knowledge of its existence or such event
shall not constitute Good Reason under this Agreement.
(h) In the event Employee terminates his employment with Dendrite
(other than with Good Reason pursuant to subsections 4(c) and (g) above) or
Dendrite terminates Employee's employment with Dendrite for "Cause" or
Employee's employment ends as a result of his death or becoming "Disabled," it
is understood and agreed that Dendrite's only obligation is to pay Employee any
unused but accrued vacation days and his base salary through the date of his
termination.
5. BENEFITS
Dendrite shall provide Employee:
(i) Vacation. Four weeks vacation per annum in accordance with
Dendrite policy in effect from time to time.
(ii) Business Expenses. Reimbursement for all reasonable
travel, entertainment and other reasonable and necessary out-of-pocket
expenses incurred by Employee in connection with the performance of his
duties, including first-class airline travel. Reimbursement will be
made upon the submission by the Employee of appropriate documentation
and verification of the expenses.
(iii) Other. Dendrite will provide Employee other benefits to
the same extent as may be provided to other employees generally in
accordance with Dendrite policy in effect from time to time and subject
to the terms and conditions of such benefit plans.
6. INFORMATION AND BUSINESS OPPORTUNITY
During Employee's employment with Dendrite, Employee may acquire
knowledge of (i) information that is relevant to the business of Dendrite or its
affiliates or (ii) knowledge of business opportunities pertaining to the
business in which Dendrite or its affiliates are engaged. Employee shall
promptly disclose to Dendrite that information or business opportunity but shall
not disclose it to anyone else without Dendrite's written consent.
7. DENDRITE CONFIDENTIAL INFORMATION
The Employee will, as a result of his employment with Dendrite, acquire
information which is proprietary and confidential to Dendrite. This information
includes, but is not limited to, Dendrite's proprietary software, technical and
commercial information, instruction and product information, the design, "look
and feel" and capabilities of Dendrite's product, Dendrite's proprietary
training program methodology regarding the utilization of electronic territory
management software and associated customer support services, Dendrite's
methodology for promoting its products and services to its clients, Dendrite's
proprietary Graphic User Interface, the navigational paths through which
Dendrite's clients input and access information stored in the proprietary
software, the particularized needs and demands of Dendrite's clients and the
customizations Dendrite makes to its proprietary software to meet those clients'
needs, financial arrangements, salary and compensation information, competitive
status, pricing policies, knowledge of suppliers, technical capabilities,
discoveries, algorithms, concepts, software in any stage of development,
designs, drawings, specifications, techniques, models, data, technical manuals,
training guides and manuals, research and development materials, processes,
procedures, know-how and other business affairs relating to Dendrite.
Confidential information also includes any and all technical information
involving Dendrite's work. Employee will keep all such information confidential
and will not reveal it at any time without the express written consent of
Dendrite. This obligation is to continue in force after employment terminates
for whatever reason.
8. CLIENT CONFIDENTIAL INFORMATION
Dendrite may, from time to time, be furnished information and data
which is proprietary and confidential to its clients, customers or suppliers.
Employee will not, at any time for any reason, reveal any information provided
by any of Dendrite's clients, customers or suppliers to anyone, unless provided
with prior written consent by Dendrite or by the applicable client, customer or
supplier. This obligation is to continue in force after employment terminates
for whatever reason.
9. RETURN OF PROPERTY
Upon termination of employment for any reason or upon the request of
Dendrite, Employee shall return to Dendrite all property which Employee received
or prepared or helped prepare in connection with his employment including, but
not limited to, all copies of any confidential information or material, disks,
notes, notebooks, blueprints, customer lists and any and all other papers or
material in any tangible media or computer readable form belonging to Dendrite
or to any of its customers, clients or suppliers, and Employee will not retain
any copies, duplicates, reproductions or excerpts thereof.
10. INVENTIONS
All work performed by Employee and all materials, products,
deliverables, inventions, software, ideas, disclosures and improvements, whether
patented or unpatented, and copyrighted material made or conceived by Employee,
solely or jointly, in whole or in part, during the term of Employee's employment
by Dendrite which (i) relate to methods, apparatus, designs, products, processes
or devices sold, licensed, used or under development by Dendrite, (ii) otherwise
relate to or pertain to the present, proposed or contemplated business,
functions or operations of Dendrite, (iii) relate to Dendrite actual or
anticipated research or development, (iv) involve the use of Dendrite's
equipment, supplies or facilities, or (v) result from access to any Dendrite
assets, information, inventions or the like are confidential information, are
the property of Dendrite and shall be deemed to be a work made for hire. To the
extent that title to any of the foregoing shall not, by operation of law, vest
in Dendrite, all right, title and interest therein are hereby irrevocably
assigned to Dendrite. Employee agrees to give Dendrite or any person or entity
designated by Dendrite reasonable assistance required to perfect its rights
therein.
If Employee conceives any idea, makes any discovery or invention within
one (1) year after the termination of employment with Dendrite that relate to
any matters pertaining to the business of Dendrite, it shall be deemed that it
was conceived while in the employ of Dendrite.
11. RESTRICTION ON FUTURE EMPLOYMENT
Employee acknowledges (i) the highly competitive nature of the business
and the industry in which Dendrite competes; (ii) that as a key employee of
Dendrite he has participated in and will continue to participate in the
servicing of current clients and/or the solicitation of prospective clients,
through which, among other things, Employee has obtained and will continue to
obtain knowledge of the "know-how" and business practices of Dendrite, in which
matters Dendrite has a substantial proprietary interest; (iii) that his
employment hereunder requires the performance of services which are special,
unique, extraordinary and intellectual in character, and his position with
Dendrite placed and places him in a position of confidence and trust with the
clients and employees of Dendrite; and (iv) that his rendering of services to
the clients of Dendrite necessarily requires the disclosure Employee of
confidential information (as described in Section 7 above) of Dendrite. In the
course of the Employee's employment with Dendrite, Employee has and will
continue to develop a personal relationship with the clients of Dendrite and a
knowledge of those clients' affairs and requirements, and that the relationship
of Dendrite with their established clientele will therefore be placed in
Employee's hands in confidence and trust. Employee consequently agrees that it
is reasonable and necessary for the protection of the confidential information,
goodwill and business of Dendrite that Employee makes the covenants contained
herein and that Dendrite would not have entered into this Agreement unless the
covenants set forth in this Section 11 were contained in this Agreement.
Accordingly, Employee agrees that during the period that he is employed by
Dendrite and for a period of two (2) years thereafter, he shall not, as an
individual, employee, consultant, partner, shareholder, or in association with
any other person, business or enterprise, except on behalf of Dendrite, directly
or indirectly, and regardless of the reason for his ceasing to be employed by
Dendrite:
(i) perform services that compete with the business or
businesses conducted by Dendrite or any of its affiliates or render
services to any person or entity which competes with the business or
businesses conducted by Dendrite or any of its affiliates (or which
business Dendrite can at the time of Employee's termination of
employment establish it will likely conduct within one (1) year
following the date of Employee's termination) as listed in Exhibit A,
which Exhibit may be modified periodically by Dendrite, in its sole
discretion, and consistent with the subsection (i) upon written notice
to Employee;
(ii) attempt in any manner to solicit or accept from any
client business of the type performed by Dendrite or to persuade any
client to cease to do business or to reduce the amount of business
which any such client has customarily done or is reasonably expected to
do with Dendrite, whether or not the relationship between Dendrite and
such client was originally established in whole or in part through
Employee's efforts;
(iii) employ, attempt to employ or assist anyone else in
employing any employee or contractor of Dendrite or induce or attempt
to induce any employee or contractor of Dendrite to terminate their
employment or engagement with Dendrite; or
(iv) render to or for any client any services of the type
rendered by Dendrite.
As used in this Section 11, the term "client" shall mean (1) anyone
who is a client of Dendrite on the date of Employee's termination or, if
Employee's employment shall not have terminated, at the time of the alleged
prohibited conduct (any such applicable date being called the "Determination
Date"); (2) anyone who was a client of Dendrite at any time during the one (1)
year period immediately preceding the Determination Date; (3) any prospective
client to whom Dendrite had made a new business presentation (or similar
offering of services) at any time during the one (1) year period immediately
preceding the Determination Date; and (4) any prospective client to whom
Dendrite made a new business presentation (or similar offering of services) at
any time within six (6) months after the date of Employee's termination (but
only if the initial discussions between Dendrite and such prospective client
relating to the rendering of services occurred prior to the date of Employee's
termination, and only if Employee actively participated in or supervised such
discussions). For purposes of this clause, it is agreed that a general mailing
or an incidental contact shall not be deemed a "new business presentation or
similar offering of services" or a "discussion". In addition, if the client is
part of a group of companies which conducts business through more than one
entity, division or operating unit, whether or not separately incorporated (a
"Client Group"), the term "client" as used herein shall also include each
entity, division and operating unit of the Client Group where the same
management group of the Client Group has the decision making authority or
significant influence with respect to contracting for services of the type
rendered by Dendrite.
For a two (2) year period after the termination of Employee's
employment for any reason whatsoever, Employee agrees to promptly notify
Dendrite in writing the identity of all subsequent employers.
12. NON-DISPARAGEMENT
The parties agree that they will not at any time make any
statement, observation or opinion, or communicate any information (whether oral
or written), which statement is derogatory of or casts in a negative light the
other party (including, in the case of Dendrite, its officers, directors, or
employees), or otherwise engage in any activity which is inimical to the
interests of the other party.
13. OUTSIDE CONTRACTING
Employee shall not enter into any agreements to provide programming
or other services to any company, person or organization outside of his
employment by Dendrite (an "Outside Agreement") without the prior written
express consent from Dendrite. Employee must notify Dendrite of his intent to
enter into an Outside Agreement specifying therein the other party to such
Outside Agreement and the type of programming and/or services to be provided by
Employee. Dendrite shall not unreasonably withhold permission to Employee to
enter into Outside Agreements unless such Outside Agreements (i) are with
competitors or potential competitors of Dendrite, or (ii) as determined in
Dendrite's sole discretion, shall substantially hamper or prohibit Employee from
satisfactorily carrying out all duties assigned to Employee by Dendrite.
14. AFTER-HOURS DEVELOPMENT
In the event that Employee shall develop any software which,
pursuant to Section 10 herein, is not the property of Dendrite, Dendrite shall
have a right of first refusal to publish and/or purchase the rights to such
software. Employee shall notify Dendrite of any such After-Hours Development as
soon as reasonably possible before or during the development process including a
description of the intended functions of the After-Hours Development and the
estimated date of completion.
15. PRIOR EMPLOYMENT
Employee represents and warrants that Employee has not taken or
otherwise misappropriated and does not have in Employee's possession or control
any confidential and proprietary information belonging to any of Employee's
prior employers or connected with or derived from Employee's services to prior
employers. Employee represents and warrants that Employee has returned to all
prior employers any and all such confidential and proprietary information.
Employee further acknowledges, represents and warrants that Dendrite has
informed Employee that Employee is not to use or cause the use of such
confidential or proprietary information in any manner whatsoever in connection
with Employee's employment by Dendrite. Employee agrees, represents and warrants
that Employee will not use such information. Employee shall indemnify and hold
harmless Dendrite from any and all claims arising from any breach of the
representations and warranties in this Section.
16. REMEDIES
The parties agree that in the event Employee breaches or threatens
to breach this Agreement, money damages may be an inadequate remedy for Dendrite
and that Dendrite will not have an adequate remedy at law. It is understood,
therefore, that in the event of a breach of this Agreement by Employee, Dendrite
shall have the right to obtain from a court of competent jurisdiction restraints
or injunctions prohibiting Employee from breaching or threatening to breach this
Agreement. In that event, the parties agree that Dendrite will not be required
to post bond or other security. It is also agreed that any restraints or
injunctions issued against Employee shall be in addition to any other remedies
which Dendrite may have available to it.
17. APPLICABLE LAW
This Agreement shall be governed by and construed in accordance
with the laws of the State of New Jersey.
18. NOTICES
In the event any notice is required to be given under the terms of
this Agreement, it shall be delivered in the English language, in writing, as
follows:
If to Employee: Marc Kustoff
-----------------------
If to Dendrite: Attn: General Counsel
Dendrite International, Inc.
1200 Mt. Kemble Avenue
Morristown, New Jersey 07960
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of changes of address shall
be effective only upon receipt.
19. NON-ASSIGNABILITY
Employee's rights or obligations under the terms of this Agreement
or of any other agreement with Dendrite may not be assigned. Any attempted
assignment will be void as to Dendrite. Dendrite may, however, assign its rights
to any affiliated or successor entity.
20. BINDING AGREEMENT
This Agreement shall be binding upon and inure to the benefit of
Employee's heirs and personal representatives and to the successors and assigns
of Dendrite.
21. INTEGRATION
This Agreement sets forth the entire agreement between the parties
hereto and fully supersedes any and all prior negotiations, discussions,
agreements or understandings between the parties hereto pertaining to the
subject matter hereof. No representations, oral or otherwise, with respect to
the subject matter of this Agreement have been made by either party.
22. WAIVER
This Agreement may not be modified or waived except by a writing
signed by both parties. No waiver by either party of any breach by the other
shall be considered a waiver of any subsequent breach of the Agreement.
23. ARBITRATION
(a) If any dispute arises between Employee and Dendrite that the
parties cannot resolve themselves, including any dispute over the application,
validity, construction, or interpretation of this Agreement, arbitration in
accordance with the then-applicable rules of the American Arbitration
Association shall provide the exclusive remedy for resolving any such dispute,
regardless of its nature; provided, however, that Dendrite may enforce
Employee's obligation to provide services under this Agreement and Employee's
obligations under Sections 6 through 13 hereof by an action for injunctive
relief and damages in a court of competent jurisdiction at any time prior or
subsequent to the commencement of an arbitration proceeding as herein provided.
(b) This Section 23 shall apply to claims arising under state and
federal statutes, local ordinances, and the common law. The arbitrator shall
apply the same substantive law that a court with jurisdiction over the parties
and their dispute would apply under the terms of this Agreement. The
arbitrator's remedial authority shall equal the remedial power that a court with
jurisdiction over the parties and their dispute would have. The arbitrator
shall, upon an appropriate motion, dismiss any claim brought in arbitration if
he or he determines that the claim could not properly have been pursued through
court litigation. If the then-applicable rules of the American Arbitration
Association conflict with the procedures of this Section 23, the latter shall
apply.
(c) If the parties cannot agree upon an arbitrator, the parties shall
select a single arbitrator from a list of seven arbitrators provided by the
Newark, New Jersey office of the American Arbitration Association. All seven
listed arbitrators shall be retired judges experienced in employment law and/or
persons actively involved in hearing private cases. If the parties cannot agree
on selecting an arbitrator from that list, then the parties shall alternately
strike names from the list, with the first party to strike being determined by
lot. After each party has used three strikes, the remaining name on the list
shall be the arbitrator.
(d) Each party may be represented by counsel or by another
representative of the party's choice, and each party shall pay the costs and
fees of its counsel or other representative and its own filing or administrative
fees. The non-prevailing party (as determined by the arbitrator) shall bear the
fees and costs of the arbitrator.
(e) The arbitrator shall render an award and opinion in the form
typical of those rendered in labor arbitrations, and that award shall be final
and binding and non-appealable. To the extent that any part of this Section 23
is found to be legally unenforceable for any reason, that part shall be modified
or deleted in such a manner as to render this Section 23 (or the remainder of
this Section) legally enforceable and as to ensure that except as provided in
clause (b) of this Section 23, all conflicts between Dendrite and Employee shall
be resolved by neutral, binding arbitration. The remainder of this Section 23
shall not be affected by any such modification or deletion but shall be
construed as severable and independent. If a court finds that the arbitration
procedures of this Section 23 are not absolutely binding, then the parties
intend any arbitration decision to be fully admissible in evidence, given great
weight by any finder of fact, and treated as determinative to the maximum extent
permitted by law.
(f) Unless the parties agree otherwise, any arbitration shall take
place in Newark, New Jersey in such location as agreed to by Dendrite and
Employee. If the parties cannot agree upon a location for the arbitration, the
arbitrator shall determine the location within the State of New Jersey.
(g) Employee has read and understands this Section 23 which discusses
arbitration. Employee understands that by signing this Agreement, Employee
agrees to submit any claims arising out of, relating to, or in connection with
this Agreement, or the interpretation, validity, construction, performance,
breach or termination thereof, or his employment or the termination thereof, to
binding arbitration, and that this arbitration provision constitutes a waiver of
Employee's right to a jury trial and relates to the resolution of all disputes
relating to all aspects of the employer/employee relationship, including but not
limited to the following:
(i) Any and all claims for wrongful discharge of employment,
breach of contract, both express and implied; breach of the covenant of
good faith and fair dealing, both express and implied; negligent or
intentional infliction of emotional distress; negligent or intentional
misrepresentation; negligent or intentional interference with contract
or prospective economic advantage; and defamation;
(ii) Any and all claims for violation of any federal. state or
municipal statute, including, without limitation, Title VII of the
Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the
Equal Pay Act, the Employee Retirement Income Security Act, as amended,
the Age Discrimination in Employment Act of 1967, the Americans with
Disabilities Act of 1990, the Family and Medical Leave Act of 1993, the
Fair Labor Standards Act, the New Jersey Family Leave Act, the New
Jersey Conscientious Employee Protection Act and the New Jersey Law
Against Discrimination; and
(iii) Any and all claims arising out of any other federal,
state or local laws or regulations relating to employment or employment
discrimination.
24. SEVERABILITY
If any provision of this Agreement shall be declared invalid or illegal
for any reason whatsoever, then notwithstanding such invalidity or illegality,
the remaining terms and provisions of this Agreement shall remain in full force
and effect in the same manner as if the invalid or illegal provision had not
been contained herein.
25. JURISDICTION
The State of New Jersey shall have exclusive jurisdiction to entertain
any legal or equitable action with respect to Sections 6 through 13 of this
Agreement except that Dendrite may institute any such suit against the Employee
in any jurisdiction in which the Employee may be at the time. In the event suit
is instituted in New Jersey, it is agreed that service of summons or other
appropriate legal process may be effected upon any party by delivering it to the
address in this Agreement specified for that party in Section 18.
IN WITNESS WHEREOF, the parties have signed this Agreement as of
the first date written above.
DENDRITE INTERNATIONAL, INC.
GEORGE T. ROBSON
By: ______________________________
Name: George T. Robson
Title: Executive V.P.
Chief Financial Officer
MARC KUSTOFF
-------------------------------
Marc Kustoff
Exhibit A
Siebel
Strategic Technologies
Winsoft
TVF/Cegedim
C3i
IMS
Quintiles
NDC
Web-MD
Allscripts
Skila
Cardinal
McKesson HBOC
IBM
SAP
Oracle