EXHIBIT 10.24
THIS SEVERANCE AGREEMENT AND RELEASE, made as of February 28,
1997 by and between DENNIS G. SISCO(hereinafter referred to as "Employee"), and
COGNIZANT CORPORATION (hereinafter deemed to include its worldwide subsidiaries
and affiliates and referred to as "the Company").
WITNESSETH THAT:
WHEREAS, Employee has been employed by the Company since the
date specified in Appendix I; and
WHEREAS, the parties to this Agreement desire to enter into an
agreement in order to provide certain benefits and salary continuation to
Employee;
NOW, THEREFORE, in consideration of the mutual covenants and
promises hereinafter provided and of the actions taken pursuant thereto, the
parties agree as follows:
1. Employee shall assume inactive employee status with the Company
effective on the date specified in Appendix I. From and after that date,
Employee shall have no further responsibilities as an officer or employee of the
Company. Effective on the "Effective Date of Resignation" specified in Appendix
I, Employee's employment with the Company shall terminate. In furtherance of the
foregoing, Employee agrees, upon request of the Company, to execute such written
resignations as the Company may require in order that Employee's positions with
the Company, its subsidiaries and affiliates, may be terminated as of the
Effective Date of Resignation. Notwithstanding the foregoing, Employee shall be
entitled to remain on the Boards of Directors of the companies identified in
Appendix I unless and until removed by their respective shareholders. Employee
shall not be acting as a representative of the Company on any of the Boards of
Directors identified on Appendix I.
2. Effective on the date set forth in Appendix I, Employee will have
the status of an inactive employee within the meaning of Section 2.4 of the
Cognizant Corporation Executive Transition Plan (the "Plan"), a summary plan
description of which Employee hereby acknowledges receipt. On the Effective Date
of Resignation, Employee shall incur an "Eligible Termination" under the Plan
and will, accordingly, be entitled to the benefits set forth therein subject to
the terms and conditions of such Plan. In accordance with Section 2.4 of the
Plan, amounts paid to Employee during his period of inactive status will offset
any benefits payable under the Plan. A summary of the benefits to which Employee
is entitled under the Plan is set forth in Appendix I.
3. Through the Termination Date specified in Appendix I, Employee will
be reasonably available to consult on matters, and will cooperate fully with
respect to any claims, litigation or investigations, relating to the Company. No
reimbursement for expenses incurred after the commencement of a period of
inactive employee status, or if there is no such period, after termination of
employment, shall be made to Employee unless authorized in advance by the
Company.
4. Employee agrees that until the Termination Date Employee will not
become a stockholder (unless such stock is listed on a national securities
exchange or traded on a daily basis in the over-the-counter market and the
Employee's ownership interest is not in excess of 5% of the company whose shares
are being purchased), member, employee, officer, director or consultant of or to
a Competing Business (as defined below); nor if Employee becomes associated with
a company, partnership or individual which company, partnership or individual
acts as a consultant to a Competing Business will Employee provide services to
such Competing Business. The restrictions contained in this paragraph shall
apply whether or not Employee accepts any form of compensation from such
competing entity or consultant. The foregoing provisions shall not prohibit
Employee from becoming a stockholder, employee, officer, director or consultant
of or to a corporation, or a member or an employee of or a consultant to a
partnership or other business or firm, primarily engaged in venture capital,
equity or debt-based investing so long as the Employee does not act as an
executive officer (or member of senior management) of any Competing Business in
which such corporation, partnership, business or firm invests. Employee also
agrees that, until the Termination Date, Employee will not recruit or solicit
any customers of the Company to become customers of any Competing Business. In
addition, Employee agrees that until the Termination Date neither Employee nor
any company or entity Employee controls or manages, shall recruit or solicit any
employee of the Company to become an employee of any business entity. As used in
this paragraph 4, the term "Competing Business" shall mean any corporation,
partnership, business or entity which competes with any business in which the
Company owns, directly or indirectly, a controlling interest as of the Effective
Date of Resignation.
5. If Employee performs services for an entity other than the Company
at any time prior to the Termination Date (whether or not such entity is in
competition with the Company), Employee shall notify the Company on or prior to
the commencement thereof. To "perform services" shall mean employment or
services as a full-time employee, consultant, owner, partner, associate, agent
or otherwise on behalf of any person, principal, partnership, firm or
corporation. For purposes of this paragraph 5 only, "Company" shall mean
Cognizant Corporation and any other affiliated entity which has been designated
to participate in The Cognizant Corporation Career Transition Plan.
6. Employee agrees that Employee will not directly or indirectly
disclose any proprietary or confidential information, records, data, formulae,
specifications and other trade secrets owned by the Company, whether oral or
written, to any person or use any such information, except pursuant to court
order (in which case Employee will first provide the Company with written notice
of such). All records, files, drawings, documents, models, disks, equipment and
the like relating to the businesses of the Company shall remain the sole
property of the Company and shall not be removed from the premises of the
Company. Employee further agrees to return to the Company any property of the
Company which Employee may have, no matter where located, and not to keep any
copies or portions thereof. However, Employee may retain his Company-provided
Macintosh personal computer system and related software, cellular telephone and
pager.
7. Neither Employee nor the Company shall make any derogatory
statements about the other. Employee shall not make any written or oral
statement, news release or other announcement relating to Employee's employment
by the Company or relating to the Company, its subsidiaries, customers or
personnel, which is designed to embarrass or criticize any of the foregoing. The
Company shall not make any written or oral statement, news release or other
announcement relating to Employee or Employee's employment by the Company which
is designed to embarrass or criticize Employee.
8. (a) (i) The stock options granted to Employee pursuant to the
Company's Replacement Plan For Certain Employees Holding The Dun & Bradstreet
Corporation Equity Based Awards (the "Replacement Plan") which are listed on
Appendix II shall be cancelled and replaced with options ("Substitute Options")
to purchase an equivalent number of shares of the Company's Common Stock under
the Company's Key Employees Stock Incentive Plan (the "Stock Incentive Plan").
Such Substitute Options shall be granted at the prices set forth in Appendix II
(which prices are not less than the fair market value on April 15, 1997, the
date of the approval of such reissuance by the Compensation and Benefits
Committee of the Company's Board of Directors) but shall otherwise have
substantially the same terms as the options they replace.
(ii) Employees' termination under this Agreement shall be
deemed to be a "Retirement" under the Stock Incentive Plan and that portion of
Employee's stock options granted pursuant to the Stock Incentive Plan that would
otherwise vest on November 6, 2002, shall be accelerated so as to vest ratably
on each of the five preceding November 6ths. The foregoing provisions shall not
apply to any other health, welfare or other benefit plan of the Company.
(iii) Notwithstanding the provisions of clauses (i) and (ii)
of this paragraph, the Employee hereby elects to forfeit options to purchase an
aggregate of 54,615 shares of the Company's Common Stock at an exercise price of
$33.375 per share which were purchased by the Employee on or about November 15,
1996. By virtue of such forfeiture, the Employee shall be entitled to a refund
by the Company of $182,278 representing the purchase price of the options being
forfeited.
(iv) For purposes of the Company's Supplemental Executive
Retirement Plan, the Employee shall be deemed to have completed 10 years of
service as of the date of his termination of employment. Amounts paid or payable
to the Employee pursuant to this Agreement or the Plan shall not be included for
purposes of computing any benefits under any benefit plan of the Company or any
of its predecessors (including the Supplemental Executive Retirement Plan). The
amount of the Employee's benefits payable at age 55 are set forth in Appendix
IV.
(b) For purposes of the acceleration provisions of Employee's stock
options granted pursuant to the Stock Incentive Plan, "Change in Control" shall
mean:
(i) any "Person," as such term is defined in Section 3(a)(9)
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 execution 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 Section (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 no Person holds 20% or more of the combined voting power of the
then-outstanding securities of the Company or such surviving entity; or
(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.
(c) Employee has served at the request of the Company as a director of
certain companies in which the Company has an investment. While Employee will no
longer serve as the Company's representative with respect to those Companies,
Employee agrees that any stock options or other remuneration received prior to
the date he assumed inactive employment status in the course of such
representation will continue to be held by Employee on behalf of the Company in
accordance with the Company's policies. Specifically, in the case of options
granted to Employee by Aspect Development, Inc. and Oacis Healthcare Systems,
Inc., Employee will exercise such options only upon the instruction of the
Company and the advance by the Company of the exercise price therefor and will
surrender to the Company any shares so acquired on exercise. Employee also will
not to take any action which would cause such options to terminate without the
prior consent of the Company. To the extent Employee is treated as having
received taxable income with respect to any cash or property he is required to
surrender to the Company, the Company will indemnify and hold Employee harmless
for any taxes due as a result thereof.
9. The Company shall also reimburse Employee for the reasonable costs
of seeking and securing new employment. Such costs may include telephone, travel
and lodging not reimbursed by others, mail and courier services, secretarial
services, legal services, and career counselling (collectively, and together
with office space "Outplacement Services"). The aggregate value of Outplacement
Services shall not exceed $60,000.
10. Employee agrees that in the event of any material breach of the
covenants contained in paragraphs 3, 4, 5, 6 or 7, in addition to any remedies
that may be available to the Company, the Company may cease all payments
required to be made to Employee under the Plan, recover all such payments
previously made to Employee pursuant to the Plan and treat options granted
pursuant to the Stock Incentive Plan and the Replacement Plan as expiring
pursuant to Sections 7(f) and 6(g) thereof, respectively. The parties agree that
any such breach would cause injury to the Company which cannot reasonably or
adequately be quantified and that such relief does not constitute in any way a
penalty or a forfeiture.
11. Employee, for Employee, Employee's family, representatives,
successors and assigns releases and forever discharges the Company and its
successors, assigns, subsidiaries, affiliates, directors, officers, employees,
attorneys, agents and trustees or administrators of any Company plan from any
and all claims, demands, debts, damages, injuries, actions or rights of action
of any nature whatsoever, whether known or unknown, which Employee had, now has
or may have against the Company, its successors, assigns, subsidiaries,
affiliates, directors, officers, employees, attorneys, agents and trustees or
administrators of any Company plan, from the beginning of Employee's employment
to and including the date of this Agreement relating to or arising out of
Employee's employment with the Company or the termination of such employment
other than a claim with respect to a vested right Employee may have to receive
benefits under any plan maintained by the Company or any of Employee's rights or
the Company's obligations under this Agreement. Employee represents that
Employee has not filed any action, complaint, charge, grievance or arbitration
against the Company or any of its successors, assigns, subsidiaries, affiliates,
directors, officers, employees, attorneys, agents and trustees or administrators
of any Company plan.
12. Employee covenants that neither Employee, nor any of Employee's
respective heirs, representatives, successors or assigns, will commence,
prosecute or cause to be commenced or prosecuted against the Company or any of
its successors, assigns, subsidiaries, affiliates, directors, officers,
employees, attorneys, agents and trustees or administrators of any Company plan
any action or other proceeding based upon any claims, demands, causes of action,
obligations, damages or liabilities which are being released by this Agreement,
nor will Employee seek to challenge the validity of this Agreement, except that
this covenant not to sue does not affect Employee's future right to enforce
appropriately the terms of this Agreement in a court of competent jurisdiction.
13. Employee acknowledges that (a) Employee has been advised to consult
with an attorney at Employee's own expense before executing this Agreement and
that Employee has been advised by an attorney or has knowingly waived Employee's
right to do so, (b) Employee has had a period of at least twenty-one (21) days
within which to consider this Agreement, (c) Employee has a period of seven (7)
days from the date that Employee signs this Agreement within which to revoke it
and that this Agreement will not become effective or enforceable until the
expiration of this seven (7) day revocation period, (d) Employee fully
understands the terms and contents of this Agreement and freely, voluntarily,
knowingly and without coercion enters into this Agreement, (e) Employee is
receiving greater consideration hereunder than Employee would receive had
Employee not signed this Agreement and that the consideration hereunder is given
in exchange for all of the provisions hereof and (f) the waiver or release by
Employee of rights or claims Employee may have under Title VII of the Civil
Rights Act of 1964, The Employee Retirement Income Security Act of 1974, the Age
Discrimination in Employment Act of 1967, the Older Workers Benefit Protection
Act, the Fair Labor Standards Act, the Americans with Disabilities Act, the
Rehabilitation Act, the Worker Adjustment and Retraining Notification Act (all
as amended) and/or any other local, state or federal law dealing with employment
or the termination thereof is knowing and voluntary and, accordingly, that it
shall be a breach of this Agreement to institute any action or to recover any
damages that would be in conflict with or contrary to this acknowledgment or the
releases Employee has granted hereunder. Employee understands and agrees that
the Company's payment of money and other benefits to Employee and Employee's
signing of this Agreement does not in any way indicate that Employee has any
viable claims against the Company or that the Company admits any liability
whatsoever.
14. This Agreement constitutes the entire agreement of the parties and
all prior negotiations or representations are merged herein. It shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors, assigns, heirs and legal representatives but neither this Agreement
nor any rights hereunder shall be assignable by Employee without the Company's
written consent. In addition, this Agreement supersedes any prior employment or
compensation agreement, whether written, oral or implied in law or implied in
fact between Employee and the Company, other than those contracts and agreements
excepted from the application of section 5.7 of the Plan pursuant to the terms
of such section, which prior agreements are hereby terminated.
15. If for any reason any one or more of the provisions of this
Agreement shall be held or deemed to be inoperative, unenforceable or invalid by
a court of competent jurisdiction, such circumstances shall not have the effect
of rendering such provision invalid in any other case or rendering any other
provisions of this Agreement inoperative, unenforceable or invalid.
16. This Agreement shall be construed in accordance with the laws of
the State of Connecticut, except to the extent superseded by applicable federal
law.
17. This Agreement shall terminate in its entirety the Change in
Control Severance Agreement between the Company and Employee.
IN WITNESS WHEREOF, Employee and Cognizant Corporation, by its
duly authorized agent, have hereunder executed this Agreement.
--------------------------------
Employee
COGNIZANT CORPORATION
--------------------------------
Title:
Appendix I
Summary of Benefit Entitlements
Under The Cognizant Corporation
Executive Transition Plan
Employment with December 19, 1989
Company Since:
Effective Date of February 28, 1997
Inactive Status:
Effective Date April 18, 1997
of Resignation:
Positions Resigned: See Appendix III
Retained Board Seats Gartner Group, Inc.
Aspect Development, Inc.
Oacis Healthcare Systems, Inc.
Paragren Technologies
TSI International
Effective Date of April 18, 1997
Eligible Termination:
Termination Date: February 28, 1999
Salary Continuation: $12,538.46 per week for 104 weeks
Welfare Benefit Continuation: Medical Plan (safety net)
Dental Plan
Life Insurance
(coverage in
effect as of
effective date of
inactive status)
Health Care
Spending Account
Annual Bonus Payment: 2/12 of the annual bonus otherwise payable to you at
time of normal payment.
Executive Outplacement: As provided by the Company.
Financial Planning/ As provided by the Company.
Counseling:
The description of benefits contained in this Appendix is only a
summary and is subject to the terms and conditions of the Plan. Refer to your
summary plan description for more detail.
Appendix III
Directorships and Officerships
Corporation/Title
Cognizant Corporation
Executive Vice President
Cognizant Enterprises Corporation
Director
President
Cognizant Enterprises, Inc.
Director
President
Dataquest (Korea), Inc.
Director
Chairman
Dun & Bradstreet HealthCare Information, Inc.
Director
Dun & Bradstreet-Satyam Software Private Limited
Director
LexHealth, Inc.
Director
Pilot Software, Inc.
Director
Chairman