**Exhibit10.6**

 

**AMENDMENT**

 

**THIS AMENDMENT** ismade as of February 13, 2006 and amends the Employment Agreement dated asof November 11, 2000 (the “Employment Agreement”) between **DENDRITE INTERNATIONAL, INC.** (“Dendrite”) and **GARRY JOHNSON** (“Employee”). Unless defined in thisAmendment, capitalized terms used in this Amendment will have the meaning setforth in the Employment Agreement.

 

WHEREAS, the Company and the Employee areparties to the Employment Agreement and wish to amend the Employment Agreement;and

 

WHEREAS, the Company considers it essentialto the best interests of its shareholders to foster the continuous employmentof key management; and

 

WHEREAS, the Compensation Committee of theBoard of Directors recognizes that, as is the case with many publicly heldcorporations, the possibility of a Change of Control always exists and thatsuch possibility, and the uncertainty it may raise among management, may resultin the departure or distraction of key management personnel, to the detrimentof the Company and its shareholders; and

 

WHEREAS, the Compensation Committee of theBoard has determined that appropriate steps should be taken to reinforce andencourage the continued attention and dedication of key members of the Company’smanagement, including the Employee, to their assigned duties withoutdistraction in the face of potentially disturbing circumstances arising fromthe possibility of any such Change of Control;

 

NOW, THEREFORE, in consideration of thepremises and mutual covenants contained in this Amendment, the Company and theEmployee agree as follows:

 

1.                                       The EmploymentAgreement is amended by adding the following new Section 3A following theend of Section 3:

 

“**3A.****CHANGEIN CONTROL**

 

(a)                                  Notwithstanding any other provision ofthis Employment Agreement, the following severance payment only applies in theevent of a Change in Control. If Employee’s employment is terminated within one(1) year following a Change in Control (i) by Dendrite for any reasonother than death, Cause, or Disability or (ii) by Employee for GoodReason, the Employee shall be entitled to receive a lump sum severance paymentequal to the sum of twenty-four (24) months base salary (calculated at thehighest base salary rate in effect during the 12 month period preceding the terminationof employment) plus two (2) times the Employee’s target bonus. Theseverance payment to be paid to Employee under this Section 3A is referredto as the “Change in Control Severance Payment”. Employee’s Change In Control Severance Payment shall be paid by Dendrite incash not later than twenty (20) days after the effective date of thetermination of the Employee’s employment, subject to the receipt by Dendrite ofthe separation agreement and general release as described in this EmploymentAgreement and the expiration of the required

 

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seven day waiting period. No interest shallaccrue or be payable on or with respect to any Change in Control SeverancePayment, except only as otherwise expressly set forth in this Amendment. In theevent of a termination of Employee’s employment described in this Section 3A,Employee shall be provided continued “COBRA” coverage pursuant to Sections 601 *et seq.* of ERISA (or COBRA-like coverage, if COBRA does notor would no longer apply) under Dendrite’s group medical and dental plans forthe twenty-four (24) month period commencing on the date of termination ofemployment. During the period in which Employee receives such coverage,Employee’s cost of coverage shall be the same as the amount paid by employeesof Dendrite for the same coverage under Dendrite’s group health and dentalplans. Notwithstanding the foregoing, in the event Employee becomes re-employedwith another employer, the payment of COBRA coverage by Dendrite as describedabove shall cease (even if the Employee is entitled under COBRA to continue toparticipate in Dendrite’s group medical and dental plans).

 

If Employee’s employment is terminated byDendrite as described in this Section 3A, in addition to the above Changein Control Severance Payment, Employee will be entitled also to receive Employee’starget bonus for the year in which employment is so terminated, assuming suchbonus has not previously been paid, which will be pro-rated to reflect thepercentage of days of the year during which Employee performed services forDendrite and which shall also be considered to be a Change in Control SeverancePayment.

 

In the event of a Change in Control all stock optionsand restricted stock or other outstanding equity awards granted to Employee byDendrite will immediately vest and all contractual sale conditions will belifted.

 

In the event Employee is entitled to the Change inControl Severance Payment as set forth in this Section 3A, Employee shallnot be entitled to any other severance payments from Dendrite, under thisEmployment Agreement or otherwise.

 

(b)                                 The making of any Change in ControlSeverance Payment under this Employment Agreement is conditioned upon thesigning of a general release in form and substance satisfactory toDendrite under which Employee releases Dendrite and its affiliates togetherwith their respective officers, directors, shareholders, employees, agents andsuccessors and assigns from any and all claims Employee may have againstthem. Nothing herein shall affect any of the Employee’s obligations or Dendrite’srights under this Employment Agreement.

 

(c)                                  Notwithstanding anything else herein tothe contrary, in the event that the Company’s certified public accountants (oranother certified public accounting firm, if the Company’s certified publicaccountants may not provide such service due to independence or otherconsiderations) (the “Accountants”) determine that any actual or potentialpayment or distribution by the Company to or for the benefit of the Employee(whether paid, payable, distributed or distributable to the Employee, whetherunder this Agreement or otherwise) (a “Payment”) would likely subject theEmployee to the imposition of an excise tax under Section 4999 of the Code(or any similar successor provision) (“Section 4999”), then theCompensation Committee of the Company’s Board of Directors, in its solediscretion, may determine and agree to, but need not,

 

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(1)                                  reduce (but not below zero) the Change inControl Severance Payment to the Reduced Amount. For this purpose, the “ReducedAmount” shall be an amount which is designed and calculated to maximize theChange in Control Severance Payment without causing any Payment to be subjectto the excise tax under Section 4999; or

 

(2)                                  pay to the Employee an amount (the “Tax Gross-UpPayment”), to be calculated by the Accountants, designed and calculated tofully negate the tax impact of any excise tax imposed (or to be imposed) uponthe Employee as a result of Section 4999. Any such Tax Gross-Up Paymentwill take into account the federal, state and local income, employment andexcise tax consequences of the Tax Gross-Up Payment, including the additionalimpact of Section 4999 on the Tax Gross-Up Payment itself.”

 

2.                                       Notwithstandinganything in this Amendment or in the Employment Agreement to the contrary, anyseverance payment under the Employment Agreement may be delayed, for nomore than six (6) months following termination of employment, pursuant to Section 409Aof the Internal Revenue Code (the “Code”), and, to the extent any delay inseverance payment is attributable to Code Section 409A, interest on suchseverance payment shall accrue from the date otherwise scheduled for suchpayment under the terms of this Employment Agreement until the date of actualpayment at an annual rate of six percent (6%).

 

3.                                       For purposes of this Section 3A ofthe Employment Agreement, “target bonus” means the annual target bonusestablished for the Employee for the fiscal year in which the Employee’semployment terminates, or if the annual target bonus has not been establishedfor the Employee for such fiscal year, then the annual target bonus for theprior fiscal year shall be used; *provided that*,in connection with a Change in Control Severance Payment, in no event shalltarget bonus be less than the annual target bonus most recently established forthe Employee prior to the occurrence of the Change in Control.

 

4.                                       Certain capitalized terms used herein aredefined in Appendix A attached hereto.

 

5.                                       Except as expressly modified by this Amendment, all of theterms and conditions of the Employment Agreement shall remain in full force andeffect.

 

**IN WITNESSWHEREOF,**the parties have signed this Amendment as ofthe first date written above.

 
|   | **DENDRITE INTERNATIONAL, INC.** |
|--------|---------------------------------------|
|   |                                  |
|   |                                  |
|   | CHRISTINE PELLIZZARI                  |   |
|   | Name:                                 | Christine Pellizzari |
|   | Title:                                | Senior Vice President, General Counsel  and Secretary |
|   |                                  |
|   | GARRY JOHNSON                         |   |
|   | Garry Johnson                         |
|        |                                       |  |  |  |

 

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**APPENDIX A**

 

1.                                       “Change inControl” shall mean the occurrence of any one of the following events:

 

(i)                                     any“person” (as such term is defined in Section 3(a) (9) of theSecurities and Exchange Act of 1934, as amended (the “Exchange Act”), and asused in Sections 13(d) (3) and 14 (d) (2) of the ExchangeAct) is or becomes a “beneficial owner” (as defined in Rule 13d-3 underthe Exchange Act), directly or indirectly, of securities of Dendriterepresenting 33-1/3% or more of the combined voting power of Dendrite’s thenoutstanding securities eligible to vote for the election of the Board (the “DendriteVoting Securities”); provided, however, that the event described in thisparagraph (i) shall not be deemed to be a Change in Control by virtue ofany of the following acquisitions: (A) by Dendrite or any subsidiary, (B) byany employee benefit plan sponsored or maintained by Dendrite or anysubsidiary, (C) by any underwriter temporarily holding securities pursuantto an offering of such securities, (D) pursuant to a Non—ControlTransaction (as defined in paragraph (iii)), or (E) a transaction (otherthan one described in (iii) below) in which Dendrite Voting Securities areacquired from Dendrite, if a majority of the Incumbent Board (as defined below)approves a resolution providing expressly that the acquisition pursuant to thisclause (E) does not constitute a Change in Control under this paragraph(i);

 

(ii)                                  individualswho, on the effective date of this Agreement, constitute the Board (the “IncumbentBoard”) cease for any reason to constitute at least a majority thereof,provided that any person becoming a director subsequent to the Effective Date,whose election or nomination for election was approved by a vote of at leasttwo—thirds of the directors comprising the Incumbent Board (either by aspecific vote or by approval of the proxy statement of Dendrite in which suchperson is named as a nominee for director, without objection to suchnomination) shall be considered a member of the Incumbent Board; provided,however, that no individual initially elected or nominated as a director ofDendrite as a result of an actual or threatened election contest with respectto directors or any other actual or threatened solicitation of proxies orconsents by or on behalf of any person other than the Board shall be deemed tobe a member of the Incumbent Board;

 

(iii)                               theshareholders of Dendrite approve a merger, consolidation, share exchange orsimilar form of corporate reorganization of Dendrite or any such type oftransaction involving Dendrite or any of its subsidiaries (whether for suchtransaction or the issuance of securities in the transaction or otherwise) (a “BusinessCombination”), unless immediately following such Business Combination: (A) morethan 50% of the total voting power of the publicly traded corporation resultingfrom such Business Combination (including, without limitation, any corporationwhich directly or indirectly has beneficial ownership of 100% of DendriteVoting Securities or all or substantially all of the assets of Dendrite and itssubsidiaries) eligible to elect directors of such corporation would berepresented by shares that were Dendrite Voting Securities immediately prior tosuch Business Combination (either by remaining outstanding or

 

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being converted) , and such voting powerwould be in substantially the same proportion as the voting power of suchDendrite Voting Securities immediately prior to the Business Combination, (B) noperson (other than any publicly traded holding company resulting from suchBusiness Combination, any employee benefit plan sponsored or maintained byDendrite (or the corporation resulting from such Business Combination), or anyperson which beneficially owned, immediately prior to such BusinessCombination, directly or indirectly, 33-1/3% or more of Dendrite VotingSecurities (a “Dendrite 33-1/3% Stockholder”)) would become the beneficial owner,directly or indirectly, of 33-1/3% or more of the total voting power of theoutstanding voting securities eligible to elect directors of the corporationresulting from such Business Combination and no Dendrite 33-1/3% Stockholderwould increase its percentage of such total voting power, and (C) at leasta majority of the members of the board of directors of the corporationresulting from such Business Combination would be members of the IncumbentBoard at the time of the Board’s approval of the execution of the initialagreement providing for such Business Combination (a “Non-Control Transaction”);or

 

(iv)                              the shareholders of Dendrite approve a plan of completeliquidation or dissolution of Dendrite or the sale or disposition of all orsubstantially all of Dendrite’s assets.

 

Notwithstanding the foregoing, a Change in Control of Dendrite shallnot be deemed to occur solely because any person acquires beneficial ownershipof more than 33-1/3% of Dendrite Voting Securities as a result of theacquisition of Dendrite Voting Securities by Dendrite which, by reducing thenumber of Dendrite Voting Securities outstanding, increases the percentage ofshares beneficially owned by such person; provided, that if a Change in Controlof Dendrite would occur as a result of such an acquisition by Dendrite (if notfor the operation of this sentence), and after Dendrite’s acquisition suchperson becomes the beneficial. owner of additionalDendrite Voting Securities that increases the percentage of outstandingDendrite Voting Securities beneficially owned by such Person then a Change inControl of Dendrite shall occur.

 

2.                                       “Cause” as usedherein shall mean (i) any gross misconduct on the part of Employeewith respect to his duties under this Agreement, (ii) the engaging byEmployee in an indictable offense which relates to Employee’s duties under thisAgreement or which is likely to have a material adverse effect on the businessof Dendrite, (iii) the commission by Employee of any willful orintentional act which injures in any material respect or could reasonably beexpected to injure in any material respect the reputation, business or businessrelationships of Dendrite, including without limitation, a breach of any of hiscovenants or agreements of this Agreement, or (iv) the engaging byEmployee through gross negligence in conduct which injures materially or couldreasonably be expected to injure materially the business or reputation ofDendrite.

 

3.                                       “Good Reason” asused herein shall mean, without Employee’s express written consent,concurrently with or within one (1) year following a “Change in Control”(as defined above), the occurrence of any of the following events which is notcorrected within ten (10) days following notice of such event given byEmployee to Dendrite:

 

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(i)                                     theassignment to Employee of any duties or responsibilities materially andadversely inconsistent with Employee’s position (including any materialdiminution of such duties or responsibilities) or a material and adverse changein Employee’s reporting responsibilities, titles or offices with Dendrite;

 

(ii)                                  any material breach by Dendrite of this Agreement withrespect to the making of any compensation payments;

 

(iii)                               anyrequirement of Dendrite that Employee be based anywhere other than in a thirty-five(35) mile radius of the Dendrite office Employee is based in on the date ofconsummation of the Change in Control;

 

(iv)                              thefailure of Dendrite to continue in effect any employee benefit plan,compensation plan, welfare benefit plan or fringe benefit plan (such plansbeing referred to herein as “Welfare plans”) in which Employee is participatingas of the effective date of this Agreement (or as such benefits andcompensation may be increased from time to time) or the taking of anyaction by Dendrite which would materially and adversely affect Employee’sparticipation in or materially reduce Employee’s benefits under such WelfarePlans (other than an across-the-board reduction of such benefits affectingsenior executives of Dendrite) unless (i) Employee is permitted toparticipate in other plans providing Employee with substantially comparablebenefits (at substantially comparable cost with respect to the Welfare Plans), (ii) anysuch Welfare Plan does not provide material benefits to Employee (determined inrelation to Employee’s compensation and benefits package), (iii) suchfailure or action is taken at the direction of Employee or with his consent, or(iv) such failure or action is required by law; or

 

(v)                                 the failure of Dendrite to obtain an agreement from asuccessor employer to assume Dendrite’s obligations under this Agreement in theevent of a “Change in Control”.

 

Employee must notify Dendrite of any event constituting Good Reasonwithin ninety (90) days following Employee’s knowledge of its existence, itbeing understood that Employee’s failure to do so shall deem such event not toconstitute Good Reason.

 

4.                                       “Disabled” asused herein shall have the same meaning as that term, or such substantiallyequivalent term, has in any group disability policy carried by Dendrite. If nosuch policy exists, the term “Disabled” shall mean the occurrence of anyphysical or mental condition which materially interferes with the performanceof Employee’s customary duties in his capacity as an employee where suchdisability has been in effect for a consecutive six (6) month period(excluding permitted vacation time), the existence of which is supported bycredible medical evidence.

 

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