Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into on May 30, 2003 (the
"Agreement"), by and between INTERPHARM HOLDINGS, INC., a Delaware corporation
("Interpharm"), and __________________ ("Executive")(collectively the
"Parties").
WITNESSETH:
WHEREAS, Interpharm is engaged in the business of manufacturing,
distributing and marketing generic pharmaceutical products (the "Business"); and
WHEREAS, Executive has represented that he has the experience,
background and expertise necessary to enable him to perform all of the duties
and execute all of the responsibilities contemplated by this Agreement; and
WHEREAS, based on such representation, Interpharm wishes to employ
Executive as its President upon the terms hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and other good and valuable
consideration, the Parties agree as follows:
1. DEFINITIONS.
1.1. "Affiliate" means any Person controlling, controlled by or
under common control with Interpharm.
1.2. "Board" means the Board of Directors of Interpharm.
1.3. "Cause" means (a) Executive is convicted of or pleads guilty
to a felony, (b) the Executive, in carrying out the
Executive's duties and responsibilities under this Agreement,
is guilty of neglect or misconduct resulting, in either case,
in economic harm to Interpharm and/or any of its subsidiaries
or Affiliates.
1.4. "Change in Control" means any transaction or series of
transactions pursuant to which a non-Affiliate obtains more
than fifty percent (50%) of Interpharm's voting securities or
obtains the ability to cast more than fifty percent (50%) of
the votes at Interpharm's shareholder meetings.
1.5. "Common Stock" means Interpharm's $.01 par value per share
common stock.
1.6. "Date of Termination" means (a) in the case of a termination
for which a Notice of Termination (as hereinafter defined in
Section 5) is required, the date of actual receipt of such
Notice of Termination or, if later, the date specified
therein, as the case may be, and (b) in all other cases, the
actual date on which the Executive's employment terminates
during the Term of Employment (as hereinafter defined in
Section 3) (it being understood that nothing contained in this
definition of "Date of Termination" shall affect any of the
cure rights provided to the Executive or Interpharm in this
Agreement).
1.7. "Disability" means the Executive's inability to render, for a
period of three consecutive months, services hereunder.
1.8. "Person(s)" means any individual or entity of any kind or
nature, including any other person as defined in Section
3(a)(9) of the Securities Exchange Act of 1934, and as used in
Sections 13(d) and 14(d) thereof.
1.9. "Prospective Customer" shall mean any corporation,
partnership, trust or Person which has either (a) entered into
a nondisclosure agreement with Interpharm or any Interpharm
subsidiary or Affiliate or (b) has within the proceeding 18
months received a currently pending and not rejected written
proposal in reasonable detail from Interpharm or any
Interpharm subsidiary or Affiliate.
2. EMPLOYMENT. Interpharm hereby agrees to employ Executive, and Executive
hereby agrees to serve, subject to the provisions of this Agreement, as an
employee of Interpharm.
2.1. DUTIES. Executive shall serve as Interpharm's President and
shall be responsible for the management of Interpharm's
business and strategic planning and responsibilities as are
from time to time assigned to him by the Chief Executive
Officer and/or the Board of Directors of Interpharm.
3. TERM OF AGREEMENT. This Agreement shall commence on May 30, 2003, and shall
continue until December 31, 2007 (the "Term" or "Term of Employment")
unless terminated as set forth herein.
4. COMPENSATION.
4.1. SALARY. Executive's salary during the Term shall be
_______________ per year (the "Salary") payable consistent
with Interpharm's regular payroll practices. All applicable
withholding taxes shall be deducted from such payments.
Executive's salary may be increased at the discretion of the
Compensation Committee of Interpharm's Board of Directors.
4.2. BONUS. Interpharm shall determine in its sole discretion to
pay Executive any bonus amount above the salary set forth
above.
4.3. AUTO ALLOWANCE. Executive shall receive an automobile
allowance equal to ___________ per month.
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4.4. HEALTH INSURANCE. During the Term, Executive shall receive
full family plan coverage under any health insurance plan that
Interpharm, Inc., a wholly-owned subsidiary of Interpharm,
may, from time to time, have in place.
4.5. TELEPHONE. Executive shall receive a reimbursement of the
cellular telephone expenses incurred by him.
4.6. EXPENSE REIMBURSEMENT. Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by
the Executive in performing the Executive's duties and
responsibilities hereunder in accordance with the policies and
procedures of Interpharm. At the end of each fiscal year, the
Executive and Interpharm shall in good faith reconcile any
differences and disputes with respect to timing, right to
reimbursement, reasonableness or documentation of any items of
expense reimbursement, it being agreed that no good faith
dispute respecting any of the foregoing shall constitute a
basis for the Executive or Interpharm terminating or
attempting to terminate this Agreement.
4.7. VACATION.During each year of the Term of Employment, the
Executive shall be entitled to _________ weeks of paid
vacation taken at such times so as to not materially impede
his duties hereunder. Vacation days that are not taken may not
be carried over into future years.
5. Termination.
5.1. TERMINATION DUE TO DEATH OR DISABILITY.
5.1.1. DEATH. This Agreement shall terminate immediately upon the
death of Executive. Upon Executive's death, Executive's estate
or Executive's legal representative, as the case may be, shall
be entitled to only the following:
5.1.1.1. All Salary accrued, but unpaid as of the date of Executive's
death and all accrued vacation pay for the year of death; and
5.1.1.2. reimbursement pursuant to Sections 4.5 and 4.6, or any other
provision hereof, for all expenses incurred but not yet paid.
5.1.2. DISABILITY. In the event of Executive's Disability, this
Agreement shall terminate and Executive shall be entitled to
receive only the following:
5.1.2.1. continuation of Executive's Salary for Executive's
Disability period (it being understood that such period will
be six months from the first date that Executive is unable to
work) and 50% of Executive's Salary for the three (3) months
thereafter; and
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5.1.2.2. reimbursement pursuant to Sections 4.5 and 4.6, or any other
provision hereof, for all expenses incurred but not yet paid.
5.2. TERMINATION BY INTERPHARM FOR CAUSE. Interpharm may terminate the
Executive's employment hereunder for Cause as provided in this Section 5.2.
If Interpharm terminates the Executive's employment hereunder for Cause,
the Executive shall be entitled only to:
5.2.1. the Executive's accrued and unpaid Salary through the Date of
Termination; and
5.2.2. reimbursement pursuant to Sections 4.5 and 4.6 hereof or any
other provision of this Agreement for expenses incurred, but
not yet paid prior to such termination of employment.
5.3. TERMINATION WITHOUT CAUSE. Interpharm may terminate the Executive's
employment hereunder without Cause. If Interpharm terminates the
Executive's employment hereunder without Cause, other than due to death or
Disability, the Executive shall be entitled only to the following:
5.3.1. the Executive's accrued and unpaid Salary through the Date of
Termination;
5.3.2. accrued vacation pay for the year in which the termination
occurs; and
5.3.3. reimbursement pursuant to Sections 4.5 and 4.6 hereof or any
other provision of this Agreement for expenses incurred, but
not paid prior to such termination of employment; and
5.4. TERMINATION BY EXECUTIVE. Any termination of this Agreement by Executive,
by formal notice, or failure to perform under this Agreement, shall have
the same effect as a termination by Interpharm for Cause.
5.5. NOTICE OF TERMINATION. Any termination of the Executive by Interpharm shall
be communicated by a notice of termination to Executive given in accordance
with Section 8.3 of this Agreement (the "Notice of Termination"). Such
notice shall (a) indicate the specific termination provision in this
Agreement relied upon and (b) if the termination date is other than the
date of receipt of such notice, specify the dates on which the Executive's
employment is to be terminated (which date shall not be earlier than the
date on which such notice is given).
5.6. PAYMENT. Except as otherwise provided in this Agreement, any payments to
which the Executive shall be entitled under this Section 5, including,
without limitation, any economic equivalent of any benefit, shall be made
as promptly as possible following the Date of Termination. If the amount of
any payment due to the Executive cannot be finally determined within thirty
(30) days after the Date of Termination, such amount shall be estimated on
a good faith basis by Interpharm and the estimated amount shall be paid no
later than thirty (30) days after such Date of Termination. As soon as
practicable thereafter, the final determination of the amount due shall be
made and any adjustment requiring a payment to or from the Executive shall
be made as promptly as practicable.
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6. EXECUTIVE'S REPRESENTATION. The Executive represents and warrants to
Interpharm that: (a) he is subject to no contractual, fiduciary or other
obligation which may affect the performance of his duties under this
Agreement; and (b) his employment with Interpharm will not require him to
use or disclose proprietary or confidential information of any other person
or entity.
7. NON-COMPETITION: NON-DISCLOSURE.
7.1. TRADE SECRETS. Executive acknowledges that his employment
position with Interpharm is one of trust and confidence. The
Executive further understands and acknowledges that, during
the course of the Executive's employment with Interpharm, the
Executive will be entrusted with access to certain
confidential information, specialized knowledge and trade
secrets which belong to Interpharm, or its subsidiaries,
including, but not limited to, their methods of operation and
developing customer base, its manner of cultivating customer
relations, its practices and preferences, current and future
market strategies, formulas, patterns, patents, devices,
secret inventions, processes, compilations of information,
records, and customer lists, all of which are regularly used
in the operation of their business and which the Executive
acknowledges have been acquired, learned and developed by them
only through the expenditure of substantial sums of money,
time and effort, which are not readily ascertainable, and
which are discoverable only with substantial effort, and which
thus are the confidential and the exclusive Property of
Interpharm and its subsidiaries (hereinafter "Trade Secrets").
The Executive covenants and agrees to use his best efforts and
utmost diligence to protect those Trade Secrets from
disclosure to third parties. The Executive further
acknowledges that, absent the protections afforded Interpharm
and its subsidiaries in this paragraph, the Executive would
not be entrusted with any of such Trade Secrets. Accordingly,
the Executive agrees and covenants (which agreement and
covenant shall survive the termination of this Agreement,
regardless of the reason) as follows:
7.1.1. The Executive will at no time take any action or make any
statement that will discredit Interpharm, any of its
subsidiaries or their products or services.
7.1.2. During the period of the Executive's employment with
Interpharm and for 60 months immediately following the
termination of such employment, the Executive will not
disclose or reveal to any person, firm or corporation other
than in connection with the business of Interpharm and its
subsidiaries or as may be required by law, any Trade Secret
used or useable by Interpharm or any of its subsidiaries,
divisions or affiliated companies (collectively the
"Companies") in connection with their respective businesses,
known to Executive as a result of his employment by
Interpharm, or other relationship with the Companies, and
which is not otherwise publicly available. Executive further
agrees that during the term of this Agreement and at all times
thereafter, he will keep confidential and not disclose or
reveal to any person, firm or corporation other than in
connection with the business of the Companies or as may be
required by applicable law, any information received by him
during the course of his employment with regard to the
financial, business, or other affairs of the Companies, their
respective officers, directors, customers or suppliers which
is not publicly available.
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7.1.3. Upon the termination of the Executive's employment with
Interpharm, the Executive will return to Interpharm all
documents, customer lists, customer information, product
samples, presentation materials, drawing specifications,
equipment and other materials relating to the business of any
of the Companies, which the Executive hereby acknowledges are
the sole and exclusive property of the Companies or any one of
them.
7.1.4. During the term of the Agreement and, subject to the
provisions of Subsection 7.1.6 hereof, for a period of 36
months immediately following the termination of the
Executive's employment with Interpharm, Executive will not:
7.1.4.1. solicit or accept competing business from any customer of
any of the Companies or any person or entity known by the
Executive to be or have been, during the term of the
Executive's employment with Interpharm, a customer or
Prospective Customer (as hereinafter defined) of any of the
Companies without the prior written consent of Interpharm;
7.1.4.2. encourage, request or advise any such customer or
prospective customer of any of the Companies to withdraw or
cancel any of their business from or with any of the
Companies; or
7.1.4.3. compete, or participate as a shareholder, director, officer,
partner (limited or general), trustee, holder of a beneficial
interest, employee, agent of or representative in any business
competing directly with the Companies without the prior
written consent of Interpharm, which may be withheld in
Interpharm's sole discretion; provided, however, that nothing
contained herein shall be construed to limit or prevent the
purchase or beneficial ownership by Executive of less than
five percent of any security registered under Section 12 or 15
of the Securities Exchange Act of 1934.
7.1.4.4. The Executive will not during the period of his employment
with Interpharm and, subject to the provisions hereof for a
period of 36 months immediately following the termination of
Executive's employment with Interpharm,
7.1.4.4.1. conspire with any person employed by any of the Companies with
respect to any of the matters covered hereunder;
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7.1.4.4.2. encourage, induce or solicit any person employed by any of
the Companies to facilitate the Executive's violation of the
covenants contained hereunder;
7.1.4.4.3. assist any entity to solicit the employment of any
employee of any of the Companies; or
7.1.4.4.4. employ or hire any employee of any of the Companies, or
solicit or induce any such person to join the Executive as a
partner, investor, coventurer, or otherwise encourage or
induce them to terminate their employment with any of the
Companies.
7.2. The Executive expressly acknowledges that all of the provisions of this
Section 7 of this Agreement have been bargained for and the Executive's
agreement hereto is an integral part of the consideration to be rendered by
the Executive which justifies the rate and extent of the compensation
provided for hereunder.
7.3. The Executive acknowledges and agrees that a violation of any one of the
covenants contained in this Section 7 shall cause irreparable injury to
Interpharm, that the remedy at law for such a violation would be inadequate
and that Interpharm shall thus be entitled to injunctive relief to enforce
that covenant.
7.4. SUCCESSORS.
7.4.1. THE EXECUTIVE. This Agreement is personal to the Executive
and, without the prior express written consent of Interpharm,
shall not be assignable by the Executive, except that the
Executive's rights to receive any compensation or benefits
under this Agreement may be transferred or disposed of
pursuant to testamentary disposition, intestate succession or
a qualified domestic relations order or in connection with a
Disability. This Agreement shall inure to the benefit of and
be enforceable by the Executive's estate, heirs,
beneficiaries, and/or legal representatives.
7.4.2. INTERPHARM. This Agreement shall inure to the benefit of and
be binding upon Interpharm and its successors and assigns.
8. MISCELLANEOUS.
8.1. APPLICABLE LAW. Except as may be otherwise provided herein,
this Agreement shall be governed by and construed in
accordance with the laws of the State of New York, applied
without reference to principles of conflict of laws.
8.2. AMENDMENTS. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties
hereto or their respective successors or legal
representatives.
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8.3. NOTICES. All notices and other communications hereunder shall
be in writing and shall be given by hand-delivery to the other
party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
If to Interpharm:
Interpharm Holdings, Inc.
00 Xxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
Facsimile: 000-000-0000
With a copy to:
Guzov Ofsink, LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 212-688-7273
Or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notices and communications
shall be effective when actually received by the addressee.
8.4. WITHHOLDING. Interpharm may withhold from any amounts payable under the
Agreement, such federal, state and local income, unemployment, social
security and similar employment related taxes and similar employment
related withholdings as shall be required to be withheld pursuant to any
applicable law or regulation.
8.5. SEVERABILITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, and any such provision which is not valid or
enforceable in whole shall be enforced to the maximum extent permitted by
law.
8.6. CAPTIONS.The captions of this Agreement are not part of the provisions and
shall have no force or effect.
8.7. ENTIRE AGREEMENT. This Agreement contains the entire agreement among the
parties concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations and undertakings,
whether written or oral, between the parties with respect thereto.
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8.8. SURVIVORSHIP. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement or the
Executive's employment hereunder to the extent necessary to the intended
preservation of such rights and obligations.
8.9. WAIVER. Either Party's failure to enforce any provision or provisions of
this Agreement shall not in any way be construed as a waiver of any such
provision or provisions, or prevent that party thereafter from enforcing
each and every other provision of this Agreement.
8.10.JOINT EFFORTS/COUNTERPARTS. Preparation of this Agreement shall be deemed
to be the joint effort of the parties hereto and shall not be construed
more severely against any party. This Agreement may be signed in two or
more counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.
8.11.REPRESENTATION BY COUNSEL. Each Party hereby represents that it has had the
opportunity to be represented by legal counsel of its choice in connection
with the negotiation and execution of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
INTERPHARM HOLDINGS, INC.
a Delaware corporation
By: _____________
Title:
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