Exhibit 10.63
AGREEMENT
---------
THIS AGREEMENT (the "Agreement") is made October 25, 2001 (the "Effective
--------- ---------
Date") by and between XXXX X. XXXXX ("Xxxxx") and ANDRX CORPORATION ("Company").
---- ----- -------
RECITALS
--------
WHEREAS, Xxxxx has been an employee of the Company since its inception; and
WHEREAS, Xxxxx has served as the Company's Chief Executive Officer ("CEO")
---
and Co-Chairman of the Board of Directors (the "Board");
-----
WHEREAS, Xxxxx wishes to retire from his position as CEO, as President of
Anda, Inc., and as an officer and director of each of the Company's other direct
and indirect subsidiaries, but he and the Company desire that he continue on the
Board, with the honorary title of Co-Chairman; and
WHEREAS, the parties wish to set forth all obligations liabilities and
confirm all understandings between them pursuant to or arising out of Xxxxx'x
retirement as CEO and Xxxxx'x continuing responsibilities and services as a
member of the Board, or any other obligations between the parties.
AGREEMENT
---------
NOW THEREFORE, in consideration of the premises and mutual covenants set
forth herein, it is hereby agreed as follows:
1. Recitals. The foregoing recitals are true and correct in all respects
--------
and are incorporated herein by reference.
2. General.
-------
(a) The Company and Xxxxx agree that due to Xxxxx'x retirement as CEO
and as President of Anda, Inc., his employment with the Company and any
subsidiaries is hereby terminated, effective as of the Effective Date.
(b) The Company agrees to use its best efforts to remove Xxxxx as the
Company's representative or contact from the records of all applicable
governmental agencies and regulatory authorities including, but not limited to,
the Food and Drug Administration, the Internal Revenue Service, and the
Department of Revenue. The Company agrees to also use its best efforts to
remove Xxxxx from all of the Company's federal, state and local licenses on a
timely basis if permitted by amendment or if not upon renewal of all such
licenses. The Company agrees to use its best efforts to provide Xxxxx evidence
of the undertakings set forth in this paragraph (b) within thirty (30) days of
the date first written above.
3. Stock Options. The Company and Xxxxx agree that, notwithstanding the
-------------
termination of Xxxxx'x employment with the Company, all Stock Option Agreements
and grants thereunder by and between Xxxxx and the Company shall remain in full
force and effect and shall continue to vest according
to their vesting scheduling while Xxxxx continues to serve as a member of the
Board just as though he had remained an employee of the Company.
4. Co-Chairman of the Board of Directors. Xxxxx agrees to continue
-------------------------------------
serving as the Co-Chairman of the Board of Directors of the Company. Xxxxx
acknowledges that while he remains a member of the Board of Directors of the
Company, he has fiduciary obligations to the Company and such other duties as
generally apply to directors, including the duty of care and loyalty. Xxxxx
agrees that for a period of two (2) years after his retirement as CEO or one (1)
year after the date he ceases to be a member of the Company's Board, whichever
is later, he will not directly or indirectly, whether individually or through
any form of entity, engage in the business of distributing generic
pharmaceutical products manufactured by third parties to pharmacies or physician
offices. Xxxxx further agrees that for a period of two (2) years after his
retirement as CEO or one (1) year after the date he ceases to be a member of the
Company's Board, whichever is earlier (the "Termination Date"), he will not
directly or indirectly, whether individually or through any form of entity, (i)
solicit or otherwise obtain business from any pharmacy customers of the Company
for generic products which are intended to compete with the generic products
that the Company was selling, actively in the process of developing (as
evidenced by written records), gain FDA approval to market or was in the process
of acquiring (as evidenced by written records) on the Effective Date, or (ii)
solicit, market or otherwise motivate physicians to prescribe pharmaceuticals
which are intended to compete with the brand products (whether approved by FDA
as an ANDA or an NDA) that the Company was selling, attempting to develop, gain
FDA approval to market, or was in the process of acquiring (as evidenced by
written records) on the Effective Date. Notwithstanding the foregoing, (w)
Xxxxx shall not be prohibited from providing samples to physicians of products
that he is otherwise permitted to sell pursuant to this Agreement, (x) the term
"process of acquiring" shall only include acquisitions that the Company is
considering acquiring if the Company takes actual steps to achieve such
acquisition from the seller thereof within 30 days of the Effective Date, (y)
after the Company commences the sale of its first internally developed brand
product or April 2, 2002, whichever is earlier, Xxxxx shall be permitted,
notwithstanding his continued service on the Board, to solicit, market or
otherwise motivate physicians to prescribe pharmaceuticals, and to sell such
pharmaceuticals to pharmacies, which are intended to compete with the Company's
cough and cold and pain product lines, and (z) within 30 days of the Effective
Date, the Company shall notify Xxxxx, in writing, of the products that it
believes are included in the restrictions described in sub-parts (i) and (ii)
above. While Xxxxx remains on the Board, he shall disclose any conflicts of
interest that might arise by the Company later commencing any operations that
would cause his personal endeavors to be in conflict with the Company, such as
those described in the preceding sentence, and shall remove himself from all
such discussions and votes.
5. Director and Officer Insurance Policies. The Company agrees to
---------------------------------------
maintain all Director and Officer Insurance Policies (the "D & O Policies") and
--------------
the applicable limits in existence at the time of this Agreement. The Company
further agrees to maintain tail coverage pertaining to the D & O Policies
covering past actions by Xxxxx for a period of five (5) years subsequent to the
Effective Date, or the date Xxxxx ceases to be the Co-Chairman, whichever is
later.
6. Indemnification Agreements. The Company agrees to maintain in full
--------------------------
force and effect all indemnification agreements in existence as of the Effective
Date as they relate to Directors and Officers of the Company ("Indemnification
---------------
Agreements"). The Indemnification Agreements shall remain in effect without any
----------
limitation as to time.
2
7. Duty to Provide Information. The Company agrees to immediately inform
---------------------------
Xxxxx, after being informed itself, of any actions, claims, demands,
investigations, lawsuits, proceedings and formal or informal inquiries by any
regulating authorities brought against the Company, arising out of any alleged
actions of Xxxxx occurring during any period of time in which Xxxxx served the
Company in any capacity.
8. Cooperation with Actions, Investigations, etc.
---------------------------------------------
Xxxxx agrees to assist the Company, as is reasonably necessary, in its
defense or prosecution of any legal action or suit, formal or informal inquiry
by any regulatory body which is currently existing or commenced in the future
and based on facts or subjects of which Xxxxx has knowledge. Xxxxx shall make
himself reasonably available, for information requests and consultation
regarding business affairs and transactions of the Company occurring or
commenced during Xxxxx'x employment by the Company in connection with the
prosecution or defense of any actions, claims, demands or proceedings filed
against the Company, or to cooperate with any investigation or formal or
informal inquiry by any regulating authorities governing the activities of the
Company. This provision shall not require Xxxxx to serve as an expert in any
manner, but only as a fact witness connection with providing testimony.
9. Right to Hire Counsel. Xxxxx shall have the right to hire counsel of
---------------------
his choosing, at the Company's cost, for representation in connection with any
and all assistance all actions previously described in paragraph 8.
10. The Company's Property. In connection with Xxxxx'x retirement, Xxxxx
----------------------
shall return all the Company's property including credit cards and portable
communication devices within ten (10) days of the execution of this Agreement
which shall not be used by Xxxxx as the Co-Chairman. The Company's property
shall not include the items enumerated in Exhibit "A" to this Agreement.
-----------
11. Right to Hire Certain Employees. Xxxxx agrees that for a period of
-------------------------------
two (2) years after his retirement or one (1) year after he ceases to be a
member of the Board, whichever is later, Xxxxx shall not, either directly or
indirectly, for his own account or either as agent, servant or employee or as
shareholder of any corporation, or member of any firm, engage, hire, employ or
solicit the employment of any person who, at the time of termination of Xxxxx'x
employment, was an employee of the Company or its subsidiaries whose duties
required such employee to be familiar with the operation of the business of the
Company or its subsidiaries. Notwithstanding the foregoing, at any time, Xxxxx
shall be entitled to hire Xxxxxx Xxxxx or such other persons agreed to by the
Company, as evidenced by a written document signed by an officer of the Company.
12. Confidential Information. Xxxxx'x rolodex, all of its contents,
------------------------
including telephone number and addresses to be taken by him from the Company
shall not be deemed confidential information or trade secrets of the Company.
All such other information proposed to be taken by Xxxxx, if any, including his
personal files, shall first be determined solely by the Company whether or not
such information is confidential information or trade secrets before they are
taken by Xxxxx. Xxxxx agrees not to remove any information deemed by the
Company to be confidential information.
13. Notices. All notices, requests, consents and other communications
-------
required or permitted under this Agreement shall be in writing (including
electronic transmission) and shall be (as elected by the person giving such
notice) hand delivered by messenger or courier service (including overnight mail
3
service), electronically transmitted, or mailed (airmail if international) by
registered or certified mail (postage prepaid), return receipt requested,
addressed to:
With a copy to:
Xxxx X. Xxxxx Xxxxxxx X. Xxxxxxx, Esq.
0000 Xxxxxxxxx Xxxx Comiter & Singer
Xxxxxx, Xxxxxxx 00000 0000 XXX Xxxx., Xxxxx 000
Facsimile: (000) 000-0000 Palm Beach Gardens, Florida
Facsimile (000) 000-0000
Andrx Corporation
0000 Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxx Xxxxx, Esq.
or to such other address as any party may designate by notice complying with the
terms of this Section. Each such notice shall be deemed delivered (a) on the
date delivered, if by personal delivery or courier; (b) on the date of
transmission with confirmation of receipt, if by electronic transmission; and
(c) on the date three (3) business days following the deposit of the notice in a
U.S. Mail depository (or, if applicable, in an appropriate airmail deposition),
properly addressed and with necessary postage.
14. Arbitration. Notwithstanding anything to the contrary in this
-----------
Agreement, the parties irrevocably agree that all claims for monetary damages
and disputes relating in any way to the performance, interpretation, validity or
breach of this Agreement shall be referred to final and binding arbitration,
before a single arbitrator, under the Florida Arbitration Code. The arbitrator
shall be selected by the parties, but if the parties are unable to reach
agreement on selection of the arbitrator within thirty (30) days after the date
on which the notice of arbitration is sent to the parties to the arbitration,
then either party may petition the circuit court within Broward County, Florida
and each party may submit up to three arbitrators to the court for the court's
consideration. The court's selection of an arbitrator shall be final and non-
appealable. In no event shall a party be entitled to punitive, treble or
special damages, or injunctive relief in any arbitration or judicial proceeding
and all parties hereby waive their rights to any punitive, treble or special
damages, or injunctive relief. In the event an arbitration panel or a court
concludes that the punitive, treble or special damages, or injunctive relief
waiver contained in the previous sentence is unenforceable, then the parties
agree that the court with subject matter jurisdiction over the confirmation of
the award shall have sole and exclusive jurisdiction to determine issues of
entitlement and amount of punitive, treble or special damages, or injunctive
relief. The arbitrator shall not have subject matter jurisdiction to decide any
issues relating to the statute of limitations or to any request for injunctive
relief, and the parties hereby stipulate to stay the arbitration proceeding
(without the need of a bond) until any such issues in dispute are resolved.
Judgment upon the award rendered by the arbitrator shall be final, binding and
conclusive upon the parties and their respective administrators, executors,
legal representatives, heirs, successors and permitted assigns, and may be
entered in any court of competent jurisdiction. All questions as to the meaning
of the provisions of this paragraph, or as to the arbitrability of any dispute
under this paragraph shall be resolved by the arbitrator, shall be absolutely
binding, and not subject to judicial review. The costs and expenses of
arbitration shall be borne ultimately as the arbitrator directs but each party
shall pay the costs and expenses of its own counsel and of any witnesses and
evidence presented by such party.
4
15. Jurisdiction and Venue. Any arbitration, civil action or legal
----------------------
proceeding arising out of or relating to this Agreement shall be brought in the
courts of record in Broward County, Florida. Each party irrevocably consents to
the personal jurisdiction of such court in any such arbitration, civil action or
legal proceeding and waives any objection to the laying of venue of any such
arbitration, civil action or legal proceeding in such court. Service of any
court paper may be effected on such party by any method for notice, as provided
in this Agreement, or in such other manner as may be provided under applicable
laws, rules of procedure or local rules.
16. Counterparts. This Agreement may be signed in two counterparts which
------------
together shall constitute an original instrument.
17. Severability. Any term or provision of this Agreement that is invalid
------------
or unenforceable in any situation in any jurisdiction shall not effect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
18. Entire Agreement. This Agreement, including the exhibits referred to
----------------
herein and which form a part of this Agreement, sets forth all obligations
liabilities and understandings between the parties to the other pursuant to or
arising out of Xxxxx'x retirement as the Chief Executive Officer and continued
responsibilities to the Company, and supersedes all prior and contemporaneous
agreements understandings, inducements or conditions, express or implied, oral
or written, except as herein contained.
IN WITNESS WHEREOF, Xxxxx and the Company have caused this Agreement to be
executed and delivered as of the Effective Date.
Andrx Corporation
/s/ Xxxx X. Xxxxx By: /s/ Xxxxx Xxxxx
---------------------------- ------------------------------
Xxxx X. Xxxxx Xxxxx Xxxxx
Executive Vice President & General Counsel
5
