Exhibit 10.70
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated this 31st day of May, 2002 ("Effective
Date"), by and between Andrx Corporation ("Company"), a Delaware corporation
with its principal place of business at 0000 Xxxxxx Xxxxx, Xxxxx, Xxxxxxx 00000,
and Xxxxx Xxxxxxxxx ("Executive"), of Philadelphia, Pennsylvania.
WHEREAS, Company wishes to better assure itself of the continued
services of Executive for the period provided in this Agreement, and Executive
is willing to continue to serve in the employ of Company upon the terms and
conditions hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto hereby agree as follows:
1. EMPLOYMENT. Company hereby agrees to employ Executive, and Executive
agrees to enter the employ of Company, upon the terms and conditions herein
provided. For purposes of this Agreement the term "Company" shall mean and
include Andrx Corporation and any of its subsidiaries, whether now in existence
or formed during the term of this Agreement. Executive warrants to Company that
his execution of this Agreement and performance by him of the duties hereunder
will not violate the terms of any other agreements to which Executive is a
party.
2. POSITION AND RESPONSIBILITIES. During the period of his employment
hereunder, Executive agrees to serve as the Company's Executive Vice President
Sales and Marketing, whereby he will be primarily responsible for the sale and
promotion of Company's generic products, while performing such other duties as
may appropriately be delegated to him from time to time by the Company's Board
of Directors or other authorized officers. Executive shall report directly to
the Company's Chief Executive Officer or to his or her designee. Executive also
agrees to serve, if elected, as an officer and director of any subsidiary of
Company without additional compensation. For purposes of this Agreement, the
term "subsidiary" shall mean any corporation in which Company owns at least a
majority of that corporation's voting stock and at least a majority of each
class of that corporation's nonvoting stock.
3. TERM OF EMPLOYMENT AND DUTIES.
(A) TERM. Executive's employment shall commence on the
Effective Date and shall continue for a period of thirty-six (36) calendar
months thereafter ("Initial Term"), unless sooner terminated, as provided in
Paragraph 6 hereof. In the event Company and Executive
agree that Executive should continue in the employ of Company after the end of
the Initial Term, such continued employment shall be subject to the terms and
conditions of this Agreement, except as otherwise provided by the parties in
writing, and shall thereafter expire upon one hundred eighty (180) days written
notice by Company to Executive, upon ninety (90) days notice by Executive to
Company or as otherwise provided in Paragraph 6 (including the Initial Term, the
"Employment Term").
(B) DUTIES. Executive shall devote his full time, attention,
skill and best efforts to the faithful performance of his duties to Company.
Executive shall not engage in any other business or occupation without Company's
written consent; provided, however, nothing contained herein shall prohibit
Executive from making passive or personal investments, provided such investments
do not result in an undisclosed conflict of interest between Executive and
Company. Executive acknowledges that he shall travel as reasonably required
around the United States and abroad in connection with his employment.
4. COMPENSATION.
(A) BASE COMPENSATION. For all services rendered by Executive
in any capacity during his employment under this Agreement, including, without
limitation, services as an executive, officer, director, or member of any
committee of Company, Company, commencing with the Effective Date and for a
period of twelve (12) months thereafter ("base period"), shall pay a base
compensation to Executive at the rate of Two Hundred Ninety Five Thousand
($295,000.00) Dollars per year. For each twelve (12) month period thereafter his
base compensation shall be subject to upward adjustment.
(B) FRINGE COMPENSATION. In addition to the foregoing, during
each year of employment hereunder, Company shall provide Executive with the
following:
(1) AUTOMOBILE. An automobile allowance of at least $1,000.00 per
month.
(2) MEDICAL INSURANCE AND PREMIUM REIMBURSEMENT. Medical insurance
coverage for Executive, his spouse and dependent children.
(3) EXPENSE REIMBURSEMENT. Payment or reimbursement of reasonable
travel and other expenses (including without limitation entertainment expenses
incurred primarily for the benefit of Company) incurred by Executive in
performing his duties under this Agreement and in carrying out and promoting the
business of Company, upon presentation by him, from time to time, of an itemized
account ("vouchers") of such expenditures in such detail as may reasonably be
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required by Company. (4) VACATION. Four (4) weeks of vacation with full pay each
12-month period during the term of this Agreement, at such times as shall be
mutually agreed upon by Executive and the Company's Chief Executive Officer or
President. No portion of any unused vacation time shall be carried over to a
subsequent period, nor shall Executive receive any compensation in addition to
that provided herein for any unused vacation time.
(5) PROFESSIONAL DEVELOPMENT. During the term of this Agreement, to
attend seminars and conferences relating to the business of Company (with full
pay). Company shall pay or reimburse Executive for all fees, reasonable travel
and other expenses incurred in connection with attendance at such seminars and
conferences. Reimbursements shall be made upon presentation of vouchers by
Executive.
(6) OTHER BENEFITS. Executive shall also be entitled to receive, and
participate in, any country clubs, pension or profit sharing plan, stock
purchase plan, stock option plan, group life insurance plan, hospitalization
insurance plan, medical services plan, or any other plan of Company now,
heretofore or hereafter existing for the benefit of Executive, and other senior
executives or officers generally.
5. KEY-MAN INSURANCE. At any time during the term of this Agreement,
Company shall have the right to insure the life of Executive for the sole
benefit of Company, in such amounts, and with such terms, as it may determine.
All premiums payable thereon shall be the obligation of Company. Executive shall
have no interest in any such policy, but shall cooperate with Company in taking
out such insurance by submitting to physical examinations, by supplying all
information required by the insurance company, and by executing all necessary
documents, provided that no financial obligation is imposed upon Executive by
any such documents.
6. TERMINATION. This Agreement shall terminate upon the occurrence of
any one of the events set forth below:
(a) CAUSE. Company may, at any time and in its sole discretion,
terminate the employment of Executive hereunder for Cause, effective as of the
date of written notice (a "Termination Notice") to Executive specifying the
nature of such Cause (the "Termination Date"). For purposes of this Agreement,
"Cause" shall mean (i) Executive's conviction of, or plea of nolo contendere to,
a felony involving a crime of moral turpitude; or (ii) Executive's having been
found guilty, by a court of competent jurisdiction, of commission of any
willfully
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fraudulent act that is materially adverse to the interest of Company or of any
subsidiary or parent company, PROVIDED, HOWEVER, that the Termination Notice
shall set forth in reasonable detail the act constituting Cause hereunder, and
PROVIDED FURTHER, that if the act constituting Cause is capable of cure, such
act is not cured within thirty (30) days following Executive's receipt of a the
Termination Notice . If the employment of Executive is terminated pursuant to
this Section 6(a), Company shall have no further obligations to Executive
hereunder after the Termination Date other than the payment of salary and
benefits accrued and unpaid through the Termination Date.
(b) TERMINATION BY COMPANY FOR NO REASON. Company may, at any time, and
in its sole discretion, terminate the employment of Executive hereunder for any
or no reason by delivery to him of a Termination Notice. Such termination shall
be effective on the date of the Termination Notice; PROVIDED, HOWEVER, that
Company shall be obligated to pay Executive severance compensation following the
Termination Date as set forth in Section 7 hereof.
(c) TERMINATION BY EXECUTIVE FOR GOOD REASON. If at any time during the
employment term Executive resigns from the employ of Company for Good Reason (as
defined in the next sentence), Company shall be obligated to pay Executive
severance compensation following the Termination Date as set forth in Section 7
hereof. For purposes of this Agreement "Good Reason" shall mean, without the
consent of Executive, if (i) in the good faith determination of Executive,
Executive is no longer designated and/or has the authority of an executive vice
president of sales and marketing of the Company's generic product line or there
shall be a change in Executive's status or responsibilities (including reporting
responsibilities) which does not represent a promotion or Executive shall be
assigned duties which are inconsistent with his status, title, position or
duties as executive vice president of sales and marketing, (ii) there shall
occur any material breach by Company of any material provision of this Agreement
which shall remain uncured for a period of thirty (30) days following receipt by
Company of notice from Executive of his intention to resign because of such
breach, or (iii) following the Effective Date, Executive is required to work in
South Florida materially more than he has during his prior tenure with the
Company for an extended period of time.
(d) TERMINATION IN CASE OF DISABILITY OR DEATH.
(i) If Executive, due to physical or mental injury, illness,
disability or incapacity, shall fail to render the services provided for in this
Agreement for a consecutive period of six (6)
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months, Company may, at its option, terminate Executive's employment hereunder
upon fourteen (14) days' written notice to Executive. Disability shall mean, for
purposes of this Agreement, physical or mental disability preventing Executive
from performing his duties hereunder for the period above specified as
determined by the written opinion of a physician selected in good faith by
Company, and agreed to by Executive. If the employment of Executive is
terminated pursuant to this Section 6(d)(i), Company shall have no further
obligations to Executive hereunder after the Termination Date other than the
payment of accrued but unpaid salary and benefits for a one-year period after
the Termination Date.
(ii) If Executive shall die during the Employment Term, this Agreement
and Executive's employment hereunder shall terminate immediately upon Executive
death. If the employment of Executive is terminated pursuant to this Section
6(d)(ii), Company shall have no further obligations to Executive hereunder after
the Termination Date other than the payment of accrued but unpaid salary and
benefits for a one-year period after the Termination Date.
(e) EXECUTIVE'S RIGHT TO TERMINATE UPON CHANGE OF CONTROL. In the event
that at any time during the Employment Term, there is a "Change in Control of
Company" (as hereinafter defined), Executive shall, in the exercise of his sole
discretion and upon the provision of written notice to Company within eighteen
(18) months after the date of such event, be entitled to terminate his
employment hereunder as of the date of provision of such written notice, and
Company shall in such event pay severance compensation following the Termination
Date as set forth in Section 7. As used herein, a "Change in Control of Company"
shall be deemed to have occurred if (i) any person (including any individual,
firm, partnership or other entity) together with all Affiliates and Associates
(as defined under Rule 12b-2 of the General Rules and Regulations promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") of
such person, but excluding (A) a trustee or other fiduciary holding securities
under an Executive benefit plan of Company or any subsidiary of Company, (B) a
corporation owned, directly or indirectly, by the stockholders of Company in
substantially the proportions as their ownership of Company, (C) Company or any
subsidiary of Company, or (D) Executive, together with all Affiliates and
Associates of Executive, is or becomes the Beneficial Owner (as defined in Rule
13d-3 promulgated under the Exchange Act), directly or indirectly, of securities
of Company representing 40% of more of the combined voting power of Company's
then outstanding securities, such person being hereinafter referred to as an
Acquiring Person; (ii)
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individuals who, on the date hereof, are Continuing Directors shall cease for
any reason to constitute a majority of the Company's Board of Directors
("Board"); or (iii) the stockholders of Company approve a merger of
consolidation of Company with any other corporation, other than a merger of
consolidation that would result in the voting securities of Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 80% of the combined voting power of the voting securities of
Company or such surviving entity outstanding immediately after such merger or
consolidation, or the stockholders or Company approve a plan of complete
liquidation of Company or an agreement for the sale or disposition by Company of
all or substantially all of Company's assets. For purposes of this Section, the
term "Continuing Director" shall mean (1) any member of the Board, while such
person is a member of the Board, who was a member of the Board prior to the date
of this Agreement, or (2) any person who subsequently becomes a member of the
Board, while such person is a member of the Board (excluding an Acquiring Person
or a representative of any Acquiring Person), if such person's nomination for
election or election to the Board is recommended or approved by a majority of
the Continuing Directors.
7. SEVERANCE COMPENSATION. In the event Executive's employment
hereunder is terminated by the Company pursuant to Section 6(b) hereof, or by
Executive pursuant to Section 6(c) or 6(e) hereof, the Company shall (w) pay
Executive a lump sum payment (the "Severance Payment") of one and one-half (1.5)
times the highest annual salary and annual bonus amounts Executive received
during the preceding three years (less applicable income taxes), within thirty
(30) days of such written notice, (x) continue to pay and provide Executive with
one year of health and dental insurance coverage (as reflected in Section
4(B)(2) above) for a period of at least 12 months, (y) vest in full any
installments of shares under stock option agreements, stock, stock appreciation
rights and all other awards granted to executive between Company and Executive
which, but for this agreement, would not yet be exercisable or vested on such
date, and allow Executive to exercise said benefit, in full, for the entire
remaining period specified in such agreements (but in no event for a period less
than 3 months following such termination), and (z) pay an additional amount
representing a gross-up of any federal and state and local income tax liability
arising from any amounts payable pursuant to this Agreement which are considered
to be a "parachute payment" under Internal Revenue Code ss.280G and the
regulations promulgated thereunder.
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8. CONFIDENTIAL INFORMATION. Executive recognizes and acknowledges that
the list of Company's customers, as it may exist from time to time, its
financial data, and its future plans and its trade secrets are valuable, special
and unique assets of the Company. At no time will Executive disclose any such
list or information, or any part thereof to any person, firm, corporation,
association or other entity for any unauthorized reason or purpose whatsoever.
In the event of a breach or threatened breach by Executive of the provisions of
this Paragraph, Company shall notify Executive, in writing, of the nature of his
breach of the provisions hereof, and if such breach is repeated and continuing,
shall be entitled to an injunction restraining Executive from disclosing, in
whole or in part, such list or information, or from rendering any services to
any person, firm, corporation, association or other entity to whom such list or
information, in whole or in part, has been disclosed or is threatened to be
disclosed. Nothing herein shall be construed as prohibiting Company from
pursuing any other remedies available to it for such breach or threatened
breach, including recovery of damages from Executive.
9. NO DUTY TO MITIGATE; SET-OFF. The Company agrees that if the
Executive's employment is terminated during the term of this Agreement, the
Executive shall not be required to seek other employment or to attempt in any
way to reduce any amounts payable to the Executive by the Company pursuant to
this Agreement. Further, the amount of the Severance Compensation provided for
in this Agreement shall not be reduced by any compensation earned by the
Executive or benefit provided to the Executive as the result of employment by
another employer or otherwise. Except as otherwise provided herein, the
Company's obligations to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
circumstances, including without limitation, any set-off, counterclaim,
recoupment, defense or other right which the Company may have against the
Executive. The Executive shall retain any and all rights under all pension
plans, welfare plans, equity plans and other plans, including other severance
plans, under which the Executive would otherwise be entitled to benefits.
10. NOTICES. All notices required to be given under this Agreement
shall be in writing, sent certified mail, return receipt requested, postage
prepaid, to the following addresses or to such other addresses as either may
designate in writing to the other party:
(A) If to Company, then:
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0000 Xxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Att: Chief Executive Officer
with a copy to:
0000 Xxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Att: Chief Legal Officer
(B) If to Executive, then:
0000 Xxxxxxxx Xx.
Xxxxx Xxxx, XX 00000
11. ARBITRATION. Any disputes arising out of or in connection with this
Agreement or any of its provisions, including but not limited to the alleged
breach of the provisions of this Agreement, shall be submitted to and determined
by arbitration conducted in accordance with the Rules of the American
Arbitration Association. The award rendered by the Arbitrator may be entered as
a judgment (with full binding, force and effect) in any court having
jurisdiction thereof. This Agreement shall constitute a written agreement to
submit any such dispute or controversy to arbitration within the meaning of the
Florida Arbitration Code and shall confer jurisdiction on the Courts of the
State of Florida to enforce such agreement to arbitrate and to enter judgment on
an award in accordance with said Florida Arbitration Code.
12. ATTORNEYS' FEES. The successful party to any arbitration or
litigation between or among any of the parties to this Agreement shall be
entitled to recovery a reasonable attorney's fees, arbitration fees and court
costs. The court or arbitrator may apportion fees or award fees based upon
success in various claims or parts of any arbitration or litigation.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Florida. Any arbitration,
lawsuits or other proceedings related to this Agreement or the transactions
herein described shall be commenced and held in Dade or Broward County, Florida.
14. WAIVER. The waiver by either party hereto of any breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by either party hereto.
15. ENTIRE UNDERSTANDING. This Agreement contains the entire
understanding of the parties relating to the employment of Executive by Company.
It may not be changed orally but
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only by an agreement in writing signed by the party or parties against whom
enforcement of any waiver, change, modification, extension or discharge is
sought.
16. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of Company, its successors and assigns and Executive and his heirs
and legal representatives.
17. ASSIGNMENT. Executive acknowledges that the services to be rendered
by him are unique and personal. Accordingly, Executive may not assign any of his
rights (except as specifically permitted herein) or delegate any of his duties
or obligations under this Agreement, except with the written permission of
Company.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals the date and year first above written.
Attest: ANDRX CORPORATION
_____________________________ By: __________________________
In the presence of:
----------------------------- ----------------------------
Xxxxx Xxxxxxxxx
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