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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of the 1st day of January,
2000, by and between HORIZON PHARMACEUTICALS, INC., a Delaware corporation (the
"Company") and _______________________ ("Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Executive, and the Executive
desires to accept such employment, upon the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the covenants and mutual agreements
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree
as follows:
1. Employment. Throughout the Term (as defined in Section 2
below), the Company shall employ Executive as provided herein,
and Executive hereby accepts such employment. In accepting
such employment, Executive states that, to the best of his
knowledge, he is not now, and by accepting such employment,
will not be, under any restrictions in the performance of the
duties contemplated under this Agreement as a result of the
provisions of any prior employment agreement or non-compete or
similar agreement to which Executive is or was a party.
2. Term of Employment. The term of Executive's employment by the
Company hereunder shall commence on January 1, 2000 (the
"Effective Date") and shall continue thereafter unless sooner
terminated as a result of Executive's death or in accordance
with the provisions of Section 7 below (the "Term").
3. Duties. Throughout the Term, and except as otherwise expressly
provided herein, Executive shall be employed by the Company as
the ___________________ of the Company. In such capacity,
Executive shall devote his full time to the performance of his
duties as _________________ of the Company in accordance with
the Company's By-laws, this Agreement and the directions of
the Company's Board of Directors. Without limiting the
generality of the foregoing, throughout the Term Executive
shall faithfully perform his duties as _________________ at
all times so as to promote the best interests of the Company.
4. Compensation.
(a) Salary. For any and all services performed by
Executive under this Agreement during the Term, in
whatever capacity, the Company shall pay
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to Executive an annual salary of ________________
dollars ($___________) per year (the "Salary") less
any and all applicable federal, state and local
payroll and withholding taxes. The Salary shall be
paid in the same increments as the Company's normal
payroll, but no less frequent than bi-monthly and
prorated, however, for any period of less than a full
month. The Salary will be reviewed annually by the
Compensation Committee of the Board and a
determination shall be made at that time as to the
appropriateness of an increase, if any, thereto.
b. Bonus. In addition to the Salary, Executive shall be
eligible to receive from the Company an incentive
compensation bonus (the "Bonus") based on a
percentage of his Salary. The Bonus, if any, shall be
determined based on the achievement by the Company
and/or Executive of certain specific strategic plans
and goals (the "Performance Goals") during the
preceding calendar year (the "Measurement Period") as
shall be determined by the Board in consultation with
the Executive. The initial Performance Goals will be
established by the Board within ____ (__) days of
Executive's employment hereunder. Thereafter, the
Performance Goals for each Measurement Period shall
be established as promptly as possible in each such
Measurement Period. Following each Measurement
Period, the Compensation Committee of the Board shall
review the Performance Goals for the prior
Measurement Period in light of the Company's and/or
Executive's actual performance during such
Measurement Period as reflected on the Company's
audited financial statements. Achievement of various
levels of the Performance Goals shall result in the
following payments as a percentage of Salary:
Level of Achievement Bonus as Percent of Salary
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Below Threshold __%
Threshold Goal __%
Target Goal __%
Stretch Goal __%
Payment of each year's Bonus, if any, shall
be made within thirty (30) days after the Company's
and/or Executive's performance for the Measurement
Period is established by the Compensation Committee
on the basis of the Company's audited financial
statements. In addition, and at its sole discretion,
the Board may award additional compensation to
Executive based on Executive's contributions to the
Company.
5. Benefits and Other Rights. In consideration for Executive's performance
under this Agreement, the Company shall provide to Executive the
following benefits:
(a) The Company will provide Executive with cash advances for or
reimbursement of all reasonable out-of-pocket business
expenses incurred
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by Executive in connection with his employment hereunder. Such
reimbursement, however, is conditioned upon Executive adhering
to any and all reasonable policies established by Company from
time to time with respect to such reimbursements or advances,
including, but not limited to, a requirement that Executive
submit supporting evidence of any such expenses to the
Company.
(b) The Company will provide Executive and his family with group
medical coverage under the terms of the Company's health
insurance plan, but subject to completion of normal waiting
periods. During any such waiting period, or in the event that
at the date of this Agreement the Company's group medical
coverage is not yet in effect, then, in either case, Company
will pay, or reimburse Executive for, the cost of COBRA
coverage for Executive and his family under his prior health
plan.
(c) During the Term the Executive shall be entitled to ____ (__)
weeks paid vacation, it being understood and agreed that
unused vacation shall not be carried over from one year to the
next.
6. Options. The Company may, at its sole discretion, grant to the
Executive options pursuant to the Company's 1997 Non Qualified Stock
Option Plan (the "Option Plan"). In the event that options are granted
the Executive pursuant to the Option Plan, the Company agrees that such
options shall provide that upon a "Change of Control" (as herein
defined) all such options shall become fully vested and immediately
exercisable. For purposes of this Agreement, a Change of Control shall
mean the occurrence of any of the following events: (a) a merger,
consolidation or reorganization of the Company in which the Company
does not survive as an independent entity; (b) a sale of all or
substantially all of the assets of the Company; (c) the first purchase
of shares of common stock of the Company pursuant to a tender or
exchange offer for more than a majority of the Company's outstanding
shares of common stock by any person other than Xxxx X. Xxxxxx or an
entity affiliated with or controlled by Xxxx X. Xxxxxx; or (d) any
change of control of a nature that, if the Company were a publicly
owned company, would, in the opinion of the Board of Directors, be
required to be reported under the federal securities laws; provided
that such a change of control shall be deemed to have occurred if (i)
any person, other than Xxxx X. Xxxxxx or an entity affiliated with or
controlled by Xxxx X. Xxxxxx, is or becomes the beneficial owner,
directly or indirectly, of securities of the Company representing at
least a majority of the combined voting power of the Company's then
outstanding securities; or (ii) during any period of two consecutive
years, individuals who at the beginning of such period constitute the
Board of Directors of the Company cease for any reason to constitute a
majority thereof unless the election of any director, who was not a
director at the beginning of the period, was approved by a vote of at
least 80% of the directors then still in office who were directors at
the beginning of the period.
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7. Termination of the Term.
(a) The Company shall have the right to terminate the Term under
the following circumstances:
(i) Executive shall die; or
(ii) With or without Cause, effective upon written notice
to Executive by the Company.
(b) This Agreement may be terminated by the Executive at any time
upon sixty (60) days prior written notice to the Company.
(c) For purposes of this Agreement, "Cause" shall mean:
(i) Executive shall be charged with the commission of a
felony or a crime involving dishonesty, fraud or
moral turpitude;
(ii) Executive has engaged in acts of fraud, embezzlement,
theft or other dishonest acts against the Company;
(iii) Executive commits an act which negatively impacts the
Company or its employees including, but not limited
to, engaging in competition with the Company,
disclosing confidential information or engaging in
sexual harassment, discrimination or other human
rights-type violations;
(iv) Executive's gross neglect or willful misconduct in
the discharge of his duties and responsibilities; or
(v) Executive's repeated refusal to follow the lawful
direction of the Board of Directors or supervising
officers.
8. Effect of Expiration or Termination of the Term. Promptly following the
termination of the Term, and except as otherwise expressly agreed to by
the Company in writing, Executive shall
(a) immediately resign from any and all other positions or
committees which Executive holds or is a member of with the
Company or any subsidiary of the Company including, but not
limited to, as a director of the Company or any subsidiary of
the Company.
(b) provide the Company with all reasonable assistance necessary
to permit the Company to continue its business operations
without interruption and
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in a manner consistent with reasonable business practices;
provided, however, that such transition period shall not
exceed thirty (30) days after termination nor require more
than twenty (20) hours of Executive's time per week and
Executive shall be promptly reimbursed for all out of pocket
expenses.
(c) deliver to the Company possession of any and all property
owned or leased by the Company which may then be in
Executive's possession or under his control, including,
without limitation, any and all such keys, credit cards,
automobiles, equipment, supplies, books, records, files,
computer equipment, computer software and other such tangible
and intangible property of any description whatsoever. If,
following the expiration or termination of the Term, Executive
shall receive any mail addressed to the Company, then
Executive shall immediately deliver such mail, unopened and in
its original envelope or package, to the Company; and
(d) Other than as provided in this Section 8, upon a termination
of employment all other benefits and/or entitlements to
participate in programs or benefits, if any, will cease as of
the effective date, except medical insurance coverage that may
be continued at Executive's own expense as provided by
applicable law or written Company policy.
(e) Upon termination of Executive pursuant to ss.7(a)(ii) without
Cause, the Company shall (i) provide Executive with Salary
continuance, subject to ss.8(g), for ______ (___) months (a
"Salary Continuance"), plus (ii) a lump sum payment equal to
(______)% of the Bonus, if any, paid to Executive for the
immediately preceding calendar year, plus (iii) provide _____
(___) months of COBRA coverage for Executive which shall be
substantially equivalent to that provided by the Company prior
to termination, plus (iv) provide _______ (___) months of car
allowance at __________ dollars ($__________) per month,
pursuant to return of existing company vehicle at time of
termination, plus (v) all of Executive's then unvested options
previously issued pursuant to the Company Option Plan shall
immediately vest and be exercisable as herein provided.
(f) Upon termination of Executive pursuant to ss. 7(a)(i), ss.
7(a)(ii) with Cause or ss. 7(b), the Company shall pay
Executive or Executive's estate all Salary accrued but unpaid
as of the date of such termination.
(g) In the extent that Executive shall be entitled to receive a
Salary Continuance and COBRA benefit pursuant to ss.8(e), such
Salary Continuance and COBRA benefit shall continue only until
such time as Executive shall have accepted another full-time
position. In addition, in the event that Executive shall
perform consulting or other services for
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which he shall receive compensation, all compensation shall be
reported to the Company and shall be offset against any
remaining Salary Continuance payments. Failure of Executive to
promptly report the receipt of any compensation from a third
party or the acceptance of a new position shall entitle the
Company to terminate all remaining Salary Continuance and
COBRA benefits and to seek restitution for any payments made
to Executive subsequent to such job acceptance or compensation
receipt;
(h) Upon the expiration or termination of this Agreement for any
reason, Executive, or Executive's estate, will have a period
of 120 days from the date of such expiration or termination in
which to exercise any vested option.
(i) Any dollar amounts which are to be paid at the time of
termination under this Section 8, other than Salary
Continuance and COBRA payments, shall be paid within thirty
(30) days after the date of termination. Any Salary
Continuance or COBRA payments shall be made in accordance with
the usual payroll practice which were applicable prior to
termination. Any and all payments made pursuant to this
Agreement shall be net of any and all applicable federal,
state and local payroll and withholding taxes.
9. Restrictive Covenants for Executive. Executive hereby covenants and
agrees with the Company that for so long as Executive is employed by
the Company and for a period (the "Restricted Period") of thirty-six
(36) months thereafter, Executive shall not, without the prior written
consent of the Company, which consent shall be within the sole and
exclusive discretion of the Company, either directly or indirectly, on
his own account or as an executive, consultant, agent, partner, joint
venturer, owner, officer, director or shareholder of any other person,
firm, corporation, partnership, limited liability company or other
entity, or in any other capacity, in any way:
(a) Carry on, be engaged in or have any financial interest in any
business which is in competition with the business of the
Company. For purposes of this Section 9, a business shall be
deemed to be in competition with the Company if it involves
research and development work involving products which were,
at the time of termination, being marketed by the Company or
which at such time were under study by the Company and
expected to be marketed within six (6) months of the date of
termination. Nothing in this Section 9 shall be construed so
as to preclude Executive from investing in any publicly held
company, provided Executive's beneficial ownership of any
class of such company's securities does not exceed 5% of the
outstanding securities of such class;
(b) solicit any current supplier, customer or client of the
Company or any affiliate of the Company or anyone who was a
supplier, customer or client
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at any time during the twelve (12) month period immediately
preceding termination, excluding customers such as
wholesalers, managed care agencies, shippers, commercial and
investment banks, IR/PR agencies, scientific and computer
consultants, lawyers and manufacturers; as long as
manufacturers have extra capacity, provided, however, that
where minimum alternative allocation sources would not be
available, requests for exceptions to this restriction will be
determined by the Company on a case by case basis; or
(c) solicit, employ or engage any person who was an employee of
the Company or any affiliate of the Company at any time during
the twelve (12) month period immediately preceding
termination.
10. Confidentiality. The Executive acknowledges that during the period of
his employment by the Company, and in his performance of services
hereunder, he will be placed in a relationship of trust and confidence
regarding the Company and its affairs. In the course of and due to that
relationship he will have contact with the Company's customers,
suppliers, affiliates, and distributors and their personnel. In the
course of the aforesaid relationship, he will have access to and will
acquire confidential information relating to the business and
operations of the Company, including, without limitation, information
relating to processes, plans and methods of operation of the Company.
The Executive acknowledges that any such information that is not a
trade secret, nonetheless constitutes confidential information as
between himself and the Company, that the disclosure thereof (or of any
information which he knows relates to confidential, trade, or other
secret aspects of the Company's business) would cause substantial loss
to the goodwill of the Company, and will continue to be made known to
Executive only because of the position of trust and confidence which he
will continue to occupy hereunder. In view of the foregoing, and in
consideration of the covenants and premises of this Agreement, the
Executive agrees that he will not, at any time during the term of his
employment, and for a period of twelve (12) months thereafter, disclose
to any person, firm or company any trade secrets or confidential
information or such ideas which he may have acquired or developed or
may acquire or develop relating to the business of the Company while
serving the Company.
11. Remedies.
(a) The covenants of Executive set forth in Sections 9 and 10 are
separate and independent covenants for which valuable
consideration has been paid, the receipt, adequacy and
sufficiency of which are acknowledged by Executive, and have
also been made by Executive to induce the Company to enter
into this Agreement. Each of the aforesaid covenants may be
availed of, or relied upon, by the Company in any court of
competent jurisdiction, and shall form the basis of injunctive
relief and damages
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including expenses of litigation (including, but not limited
to, reasonable attorneys fees upon trial and appeal) suffered
by the Company arising out of any breach of the aforesaid
covenants by Executive. The covenants of Executive set forth
in this Section 11 are cumulative to each other and to all
other covenants of Executive in favor of the Company contained
in this Agreement and shall survive the termination of this
Agreement for the purposes intended.
(b) Each of the covenants contained in Sections 9 and 10 above
shall be construed as agreements which are independent of any
other provision of this Agreement, and the existence of any
claim or cause of action by any party hereto against any other
party hereto, of whatever nature, shall not constitute a
defense to the enforcement of such covenants. If any of such
covenants shall be deemed unenforceable by virtue of its scope
in terms of geographical area, length of time or otherwise,
but may be made enforceable by the imposition of limitations
thereon, Executive agrees that the same shall be enforceable
to the fullest extent permissible under the laws and public
policies of the jurisdiction in which enforcement is sought.
The parties hereto hereby authorize any court of competent
jurisdiction to modify or reduce the scope of such covenants
to the extent necessary to make such covenants enforceable.
(c) In the event that Executive believes that the Company is in
violation of a material obligation owed to Executive under
this Agreement, and the Executive has given notice of such
violation to the Company requesting that the Company cure such
violation, and within twenty (20) business days the Company
has not undertaken steps to cure such violation or to provide
information to Executive demonstrating that the Company is not
in violation of the Agreement, and as a result of such failure
to cure or dispute such violation, the Executive terminates
the Agreement in accordance with Section 7(b), Executive shall
not be barred from seeking employment with a competitor
notwithstanding the restriction of Section 8(a); provided,
however, that all other restrictions contained in this
Agreement, including, but not limited to, the covenants in
Section 8(b) and in Section 9, shall remain in full force and
effect.
12. Enforcement Costs. If any legal action or other proceeding is brought
for the enforcement of this Agreement, or because of an alleged
dispute, breach, default or misrepresentation in connection with any
provisions of this Agreement, the successful or prevailing party or
parties shall be entitled to recover reasonable attorney's fees, court
costs and all expenses even if not taxable as court costs (including,
without limitation, all such fees, costs and expenses incident to
appeal and other post-judgment proceedings), incurred in that action or
proceeding, in addition to any other relief to which such party or
parties may be entitled. Attorney's fees shall include, without
limitation, paralegal fees, investigative fees,
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administrative costs, sales and use taxes and all other charges billed
by the attorney to the prevailing party.
13. Notices. Any and all notices necessary or desirable to be served
hereunder shall be in writing and shall be
(a) personally delivered, or
(b) sent by certified mail, postage prepaid, return receipt
requested, or guaranteed overnight delivery by a nationally
recognized express delivery company, in each case addressed to
the intended recipient at the address set forth below.
(c) For notices sent to the Company:
Horizon Pharmaceuticals, Inc.
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(d) For notices sent to Executive:
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Either party hereto may amend the addresses for notices to such party
hereunder by delivery of a written notice thereof served upon the other
party hereto as provided herein. Any notice sent by certified mail as
provided above shall be deemed delivered on the third (3rd) business
day next following the postmark date which it bears.
14. Entire Agreement. This Agreement sets forth the entire agreement of the
parties hereto with respect to the subject matter hereof, and all prior
negotiations, agreements and understandings are merged herein. This
Agreement may not be modified or revised except pursuant to a written
instrument signed by the party against whom enforcement is sought.
15. Severability. The invalidity or unenforceability of any provision
hereof shall not affect the enforceability of any other provision
hereof, and except as otherwise provided in Section 11 above, any such
invalid or unenforceable provision shall be severed from this
Agreement.
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16. Waiver. Failure to insist upon strict compliance with any of the terms
or conditions hereof shall not be deemed a waiver or such term or
condition, and the waiver or relinquishment of any right or remedy
hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or remedy at any other time or times.
17. Governing Law. This Agreement and the rights and obligations of the
parties hereto shall be governed by and construed in accordance with
the laws of the State of Illinois, without regard to its conflicts of
laws provisions. Each party hereto hereby (a) agrees that any
litigation which may be initiated with respect to this Agreement or to
enforce rights granted hereunder shall be initiated in a court located
in Xxxx County, -Illinois and (b) consents to personal jurisdiction of
such courts for such purpose.
18. Benefit and Assignability. This Agreement shall inure to the benefit of
and be binding upon the Company and its successors and assigns. The
rights and obligations of Executive hereunder are personal to him, and
are not subject to voluntary or involuntary alienation, transfer,
delegation or assignment.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the day and year first above written.
HORIZON PHARMACEUTICALS, INC.
By:
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Name:
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Title:
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EXECUTIVE:
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