EMPLOYMENT AGREEMENT--XXXXX X. XXXXXXX
This Employment Agreement ("Agreement") between Akorn, Inc.,
a Louisiana corporation (the "Company"), and Xxxxx X. XxXxxxx
(the "Employee") is dated as of January 1, 1996 (the "Agreement
Date").
WHEREAS, Employee currently is employed by the Company;
WHEREAS, the Company desires to retain the services of
Employee pursuant to the terms of this Agreement and Employee
desires to continue in the service of the Company on such terms;
NOW, THEREFORE, for and in consideration of the continued
employment of Employee by the Company and the payment of wages,
salary and other compensation to Employee by the Company, the
parties hereto agree as follows:
Section 1.Employment Capacity and Term
1.1 Capacity and Duties of Employee. The Employee is
employed by the Company to render services on behalf of the
Company as President and Chief Executive Officer. As the
President and Chief Executive Officer, the Employee shall perform
such duties as are assigned to the individual holding such title
by the Company's Bylaws and such other duties, consistent with
the Employee's job title, as may be prescribed from time to time
by the Board of Directors of the Company (the "Board").
1.2 Employment Term. The term of this Agreement (the
"Employment Term") shall commence on the Agreement Date and shall
continue until and terminate one year after either the Company or
the Employee has notified the other of such termination of the
Employment Term; and provided, further, that the Employment Term
is subject to extension as provided in Section 5.2 and Employee's
status as an employee is subject to earlier termination to the
extent provided in this Agreement.
1.3 Devotion to Responsibilities. During the Employment
Term, the Employee shall devote all of his business time to the
business of the Company and its subsidiaries and affiliated
companies, shall use his reasonable best efforts to perform
faithfully and efficiently his duties under this Agreement, and
shall not engage in or be employed by any other business;
provided, however, that nothing contained herein shall prohibit
the Employee from (a) serving as a member of the board of
directors, board of trustees or the like of any for-profit or
non-profit entity that does not compete with the Company, or
performing services of any type for any civic or community
entity, whether or not the Employee receives compensation
therefor, (b) investing his assets in such form or manner as
shall require no more than nominal services on the part of the
Employee in the operation of the business of or property in which
such investment is made, or (c) serving in various capacities
with, and attending meetings of, industry or trade groups and
associations, as long as the Employee's engaging in any
activities permitted by virtue of clauses (a), (b) and (c) above
does not materially interfere with the ability of the Employee to
perform the services and discharge the responsibilities required
of him under this Agreement. Notwithstanding clause (b) above,
during the Employment Term, the Employee shall not perform any
services for and shall not beneficially own more than 2% of the
equity interests of a business organization that competes with
the Company or its affiliates. For purposes of this paragraph,
"beneficially own" shall have the meaning given to that term in
Rule 13d-3 under the Securities Exchange Act of 0000 (xxx
"Xxxxxxxx Xxx").
Section 2.Compensation and Benefits
During the Employment Term, the Company shall provide the
Employee with the compensation and benefits described below:
2.1 Salary. A salary ("Base Salary") at the rate of
$210,000 per year; provided, however, that Employee's Base Salary
shall increase to $225,000 per year if the closing price at which
the Company's common stock is traded on the Nasdaq National
Market or other exchange on which such stock may be designated
for trading, equals or exceeds $4.00 per share for ten or more
consecutive trading days and shall increase to $250,000 if such
price equals or exceeds $5.50 per share for ten consecutive
trading days; and provided, further, that Employee's Base Salary
shall increase as of each anniversary of the Agreement Date by a
factor equal to the increase in the Consumer Price Index
maintained by the United States Department of Labor. Employee's
Base Salary shall be payable to the Employee at such intervals as
the salaries of other salaried employees of the Company are paid.
Any increase in Employee's Base Salary shall take effect for the
payroll period next following the date on which the condition to
such increase is met.
2.2 Bonus. Employee shall be eligible to receive such
bonuses and supplementary compensation as the Board may
determine.
2.3 Benefits. The Company shall provide the Employee and,
if applicable, his family members, with the following benefits
and perquisites:
(a) The Company will continue to provide for
Employee's use a new Oldsmobile Ninety-Eight or other equivalent
new automobile of his choice, such automobile to be replaced
every other year, and to provide or reimburse Employee for all
gasoline, maintenance, repairs and insurance for such automobile.
(b) All such (i) incentive, savings and retirement
plans, practices, policies and programs, (ii) welfare benefit
plans, practices, policies and programs (including, without
limitation, medical, prescription, dental, disability, employee
life, group life, accident health and travel accident insurance
plans and programs) and (iii) paid vacation and other fringe
benefits, plans, practices, policies and programs as are
applicable generally to other peer employees of the Company and
its affiliated companies.
2.4 Office and Support Staff. Employee shall be entitled
to an office or offices of the size and with furnishings and
other appointments, and to personal secretarial and other
assistance, at least equal to the those provided to him on the
Agreement Date.
2.5 Expenses. The Employee shall be reimbursed for
reasonable out-of-pocket expenses incurred from time to time on
behalf of the Company or any subsidiary in the performance of his
duties under this Agreement, upon the presentation of such
supporting invoices, documents and forms as the Company
reasonably requests.
Section 3.Termination of Employment
3.1 Death. The Employee's status as an employee shall
terminate immediately and automatically upon the Employee's death
during the Employment Term.
3.2 Disability. The Employee's status as an employee may
be terminated for "Disability" as follows:
(a) The Employee's status as an employee shall
terminate if the Employee has a disability that would entitle him
to receive benefits under the Company's long-term disability
insurance policy in effect at the time either because he is
Totally Disabled or Partially Disabled, as such terms are defined
in the Company's policy in effect as of the Agreement Date or as
similar terms are defined in any successor policy. Any such
termination shall become effective on the first day on which the
Employee is eligible to receive payments under such policy (or on
the first day that he would be so eligible, if he had applied
timely for such payments).
(b) If the Company has no long-term disability plan in
effect, the Employee's status as an employee shall terminate if
(i) the Employee is rendered incapable because of physical or
mental illness of satisfactorily discharging his duties and
responsibilities under this Agreement for a period of 90
consecutive days and (ii) a duly qualified physician chosen by
the Company and acceptable to the Employee or his legal
representative so certifies in writing, the Board shall have the
power to determine that the Employee has become disabled. If the
Board makes such a determination, the Company shall have the
continuing right and option, during the period that such
disability continues, and by notice given in the manner provided
in this Agreement, to terminate the status of Employee as an
employee. Any such termination shall become effective 30 days
after such notice of termination is given, unless within such 30-
day period, the Employee becomes capable of rendering services of
the character contemplated hereby (and a physician chosen by the
Company and acceptable to the Employee or his legal
representative so certifies in writing) and the Employee in fact
resumes such services.
(c) The "Disability Effective Date" shall mean the
date on which termination of employment becomes effective due to
Disability.
3.3 Cause. The Company may terminate the Employee's status
as an employee for Cause. As used herein, termination by the
Company of the Employee's status as an employee for "Cause" shall
mean termination as a result of (a) the Employee's breach of this
Agreement, or (b) the willful engaging by the Employee in gross
misconduct injurious to the Company, which in either case is not
remedied within 10 days after the Company provides written notice
to the Employee of such breach or willful misconduct.
3.4 Good Reason. The Employee may terminate his status as
an employee for Good Reason. As used herein, the term "Good
Reason" shall mean:
(a) The occurrence of any of the following during the
Employment Term:
(i) the assignment by the Board or by any
authorized person to the Employee of any duties or
responsibilities that are inconsistent with the Employee's
status, title and position as President and Chief Executive
Officer;
(ii) any removal of the Employee from, or any
failure to reappoint or reelect the Employee to, the position of
President and Chief Executive Officer of the Company, except in
connection with a termination of Employee's status as an employee
as permitted by this Agreement;
(iii)the Company's requiring the Employee to be
based anywhere other than at or within 50 miles of the Company's
headquarters in Abita Springs, Louisiana, except for required
travel in the ordinary course of the Company's business;
(b) any breach of this Agreement by the Company that
continues for a period of 10 days after written notice thereof is
given by the Employee to the Company;
(c) the failure by the Company to obtain the
assumption of its obligations under this Agreement by any
successor or assignee as contemplated by Section 6.1(c); or
(d) any purported termination by the Company of the
Employee's status as an employee for Cause that is not effected
pursuant to a Notice of Termination satisfying the requirements
of this Agreement.
3.5 Voluntary Termination by the Company. Subject to the
terms and conditions provided herein, the Company may terminate
the Employee's status as an employee during the Employment Term
for reasons other than death, Disability or Cause.
3.6 Voluntary Termination by the Employee. Subject to the
terms and conditions provided herein, the Employee may terminate
the Employee's status as an employee during the Employment Term
for reasons other than Good Reason.
3.7 Notice of Termination. Any termination by the Company
for Disability or Cause, or by the Employee for Good Reason,
shall be communicated by Notice of Termination to the other party
hereto given in accordance with Section 6.2. For purposes of
this Agreement, a "Notice of Termination" means a written notice
that (a) indicates the specific termination provision in this
Agreement relied upon, (b) to the extent applicable, sets forth
in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Employee's employment
under the provisions so indicated and (c) if the Date of
Termination (as defined below) is other than the date of receipt
of such notice, specifies the termination date (which date shall
be not more than 30 days after the giving of such notice). The
failure by the Employee or the Company to set forth in the Notice
of Termination any fact or circumstance that contributes to a
showing of Good Reason, Disability or Cause shall not negate the
effect of the notice nor waive any right of the Employee or the
Company, respectively, hereunder or preclude the Employee or the
Company, respectively, from asserting such fact or circumstance
in enforcing the Employee's or the Company's rights hereunder.
3.8 Date of Termination. "Date of Termination" means (a)
if Employee's employment is terminated by reason of his death or
Disability, the Date of Termination shall be the date of death of
Employee or the Disability Effective Date, as the case may be,
(b) if Employee's employment is terminated by the Company for
Cause, or by Employee for Good Reason, the date of delivery of
the Notice of Termination or any later date specified therein,
(which date shall not be more than 30 days after the giving of
such notice) as the case may be, (c) if the Employee's employment
is terminated by the Company prior to the end of the Employment
Term for reasons other than death, Disability or Cause, the Date
of Termination shall be the date on which the Company notifies
the Employee of such termination, (d) if the Employee's
employment is terminated by the Employee prior to the end of the
Employment Term for reasons other than Good Reason, the Date of
Termination shall be the date on which the Employee notifies the
Company of such termination, and (e) if the Employment Term
terminates upon notice by the Company or the Employee as provided
for in Section 1.2 or Section 5.2, the Date of Termination shall
be the date on which the Employment Term ends.
Section 4.Obligations Upon Termination
4.1 Death. If Employee's status as an employee is
terminated by reason of Employee's death, this Agreement shall
terminate without further obligations to Employee's legal
representatives under this Agreement, other than the obligation
to make any payments due pursuant to employee benefit plans
maintained by the Company or its subsidiaries.
4.2 Disability. If Employee's status as an employee is
terminated by reason of Employee's Disability, this Agreement
shall terminate without further obligation to Employee, other
than the obligation to make any payments due pursuant to employee
benefit plans maintained by the Company or its subsidiaries.
4.3 Termination by Company for Reasons other than Death,
Disability or Cause; Termination by Employee for Good Reason. If
the Company terminates the Employee's status as an employee prior
to the end of the Employment Term for reasons other than death,
Disability or Cause, or the Employee terminates his employment
prior to the end of the Employment Term for Good Reason, then
(a) within 30 days of the Date of Termination the
Company shall pay to the Employee in a lump sum an amount equal
to the Employee's Base Salary through the end of the Employment
Term had the notice contemplated by Section 1.2 been given as of
the Date of Termination; and
(b) the amount of any performance-based bonus or
options granted to the Employee shall be deemed to be the amount
to which the Employee would have been entitled if the budgeted
goals or other performance goals applicable thereto had been met
but not exceeded and, whether or not the performance goals have
been met as of the Date of Termination, such bonus shall be
payable within 30 days of the Date of Termination and such
options (if not already exercisable) shall become exercisable as
of the Date of Termination and shall expire on the date of
expiration of the options as provided in the applicable option
agreement.
4.4 Termination for Cause, Without Good Reason or at End of
Employment Term. This Agreement shall terminate without further
obligation to the Employee other than obligations imposed by law
and obligations imposed pursuant to any employee benefit plan
maintained by the Company or its subsidiaries (a) if the
Employee's status as an Employee is terminated by the Company for
Cause or by the Employee for reasons other than Good Reason or
(b), except as otherwise provided in Section 5.2, at the end of
the Employment Term. If the Company or the Employee gives notice
of termination of the Employment Term as provided for in Section
1.2, the Company may, at its option, terminate Employee's status
as an employee, in which case such termination shall be deemed a
termination by the Company without Cause for purposes of all
provisions of this Agreement.
4.5 Resignation as Director. If Employee is a director of
the Company and his employment is terminated for any reason other
than death, the Employee shall, if requested by the Company,
immediately resign as a director of the Company. If such
resignation is not received when so requested, the Employee shall
forfeit any right to receive any payments pursuant to this
Agreement.
4.6 Accrued Obligations and Other Benefits. Upon
termination of employment for any reason the Employee shall be
entitled to receive promptly, and in addition to any other
benefits specifically provided, (a) the Employee's Base Salary
through the Date of Termination to the extent not theretofore
paid, (b) any accrued vacation pay, to the extent not theretofore
paid, and (c) any other amounts or benefits required to be paid
or provided or which the Employee is entitled to receive under
any plan, program, policy practice or agreement of the Company.
4.7 Stock Options. The foregoing benefits are intended to
be in addition to the value of any options to acquire Common
Stock of the Company the exercisability of which may be
accelerated pursuant to the terms of any stock option, incentive
or other similar plan heretofore or hereafter adopted by the
Company.
Section 5.Change of Control
5.1 Definitions. For purposes of this Section 5, the
following terms shall have the meanings indicated below.
(a) Company. In the event of any assignment or
succession as described in Section 6.1(c), the term "Company" as
used in this Agreement shall refer also to such successor or
assignee.
(b) Change of Control. A Change of Control shall mean
the occurrence of any of the following events:
(i) the acquisition by any individual, entity or
"person" (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) of beneficial ownership of more than 30% of the
outstanding shares of the Company's common stock, no par value
per share (the "Common Stock"); provided, however, that for
purposes of this subsection (i), the following acquisitions shall
not constitute a Change of Control:
(A) any acquisition of Common Stock directly
from the Company,
(B) any acquisition of Common Stock by the
Company,
(C) any acquisition of Common Stock by any
employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company, or
(D) any acquisition of Common Stock by any
corporation pursuant to a transaction that complies with clauses
(A), (B) and (C) of subsection (b)(iii) of this Section 5.1; or
(ii) individuals who, as of the Agreement Date,
constitute the Board (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to
the Agreement Date whose election, or nomination for election by
the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board
shall be considered a member of the Incumbent Board, unless such
individual's initial assumption of office occurs as a result of
an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a person
other than the Incumbent Board; or
(iii)the consummation of a reorganization, merger
or consolidation, or sale or other disposition of all or
substantially all of the assets of the Company (a "Business
Combination"), in any such case, unless, following such Business
Combination,
(A) all or substantially all of the
individuals and entities who were the direct or indirect
beneficial owners of the Company's outstanding common stock and
the Company's voting securities entitled to vote generally in the
election of directors immediately prior to such Business
Combination have direct or indirect beneficial ownership,
respectively, of more than 50% of the then outstanding shares of
common stock, and more than 50% of the combined voting power of
the then outstanding voting securities entitled to vote generally
in the election of directors, of the corporation resulting from
such Business Combination (which, for purposes of this paragraph
(A) and paragraphs (B) and (C), shall include a corporation which
as a result of such transaction controls the Company or all or
substantially all of the Company's assets either directly or
through one or more subsidiaries), and
(B) except to the extent that such ownership
existed prior to the Business Combination, no person (excluding
any corporation resulting from such Business Combination or any
employee benefit plan or related trust of the Company or such
corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of the
then outstanding shares of common stock of the corporation
resulting from such Business Combination or 20% or more of the
combined voting power of the then outstanding voting securities
of such corporation, and
(C) at least a majority of the members of
the board of directors of the corporation resulting from such
Business Combination were members of the board of directors of
the Company at the time of the initial action of the Board
providing for such Business Combination; or
(iv) approval by the shareholders of the Company
of a complete liquidation or dissolution of the Company.
(c) Affiliate. The term "affiliate" or "affiliated
companies" shall mean any company or other entity controlled by,
controlling, or under common control with, the Company.
(d) Cause. After a Change of Control, "Cause," as
used in this Agreement, shall have the following meaning and not
the meaning given in Section 3.3:
(i) the willful and continued failure of the
Employee to perform substantially the Employee's duties hereunder
(other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for
substantial performance is delivered to the Employee by the Board
of the Company which specifically identifies the manner in which
the Board believes that the Employee has not substantially
performed the Employee's duties, or
(ii) the willful engaging by the Employee in
illegal conduct or gross misconduct which is materially and
demonstrably injurious to the Company or its affiliates.
For purposes of this provision, no act or failure to act, on the
part of the Employee, shall be considered "willful" unless it is
done, or omitted to be done, by the Employee in bad faith or
without reasonable belief that the Employee's action or omission
was in the best interests of the Company or its affiliates. Any
act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or upon the instructions of
a senior officer of the Company or based upon the advice of
counsel for the Company or its affiliates shall be conclusively
presumed to be done, or omitted to be done, by the Employee in
good faith and in the best interests of the Company or its
affiliates. The cessation of employment of the Employee shall
not be deemed to be for Cause unless and until there shall have
been delivered to the Employee a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Board at a meeting of the Board
called and held for such purpose (after reasonable notice is
provided to the Employee and the Employee is given an
opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the
Employee has engaged in the conduct described in subparagraph (i)
or (ii) above, and specifying the particulars thereof in detail.
(e) Good Reason. After a Change of Control, "Good
Reason," as used in this Agreement, shall have the following
meaning and not the meaning given in Section 3.4:
(i) Any failure of the Company or its affiliates
to provide the Employee with the position, authority, duties and
responsibilities at least equivalent in all material respects
with the most significant of those held, exercised and assigned
at any time during the 120-day period immediately preceding the
Change of Control;
(ii) The assignment to the Employee of any duties
inconsistent in any respect with Employee's position (including
status, offices, titles and reporting requirements), authority,
duties or responsibilities as contemplated by Section 1.1, or any
other action that results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose
an isolated, insubstantial and inadvertent action not taken in
bad faith that is remedied within 10 days after receipt of
written notice thereof from the Employee to the Company;
(iii)Any failure by the Company or its affiliates
to comply with any of the provisions of this Agreement, other
than an isolated, insubstantial and inadvertent failure not
occurring in bad faith that is remedied within 10 days after
receipt of written notice thereof from the Employee to the
Company;
(iv) The Company or its affiliates requiring the
Employee to be based at any office or location other than as
provided in Section 3.4(a)(iii) hereof or requiring the Employee
to travel on business to a substantially greater extent than
required immediately prior to the Change of Control;
(v) Any purported termination of the Employee's
employment otherwise than as expressly permitted by this
Agreement; or
(vi) Any failure by the Company to comply with and
satisfy Sections 6.1(c) and (d) of this Agreement.
For purposes of this Section 5, any good faith determination of
"Good Reason" made by the Employee shall be conclusive. Anything
in this Agreement to the contrary notwithstanding, a termination
by the Employee for any reason during the 30-day period
immediately following the first anniversary of the Change of
Control shall be deemed to be a termination for Good Reason.
(f) Beneficial Ownership. The terms "beneficial
ownership," "beneficial owner," "beneficially owns," and similar
terms shall have the meanings set forth in Rule 13d-3 under the
Exchange Act.
5.2 Employment Capacity and Term after Change of Control.
(a) If a Change of Control occurs during the Employment Term, the
Employee's Employment Term (the "Modified Employment Term") shall
be extended until and terminate at the close of business on the
later to occur of the second anniversary of the Change of
Control; or the date one year after the date on which either the
Company or the Employee has notified the other of such
termination; and provided, further, that Employee's status as an
employee is subject to earlier termination to the extent provided
in this Agreement.
(b) After a Change of Control and during the Modified
Employment Term, (i) the Employee's position (including status,
offices, titles and reporting requirements), authority, duties
and responsibilities in and with respect to the Company shall be
at least equivalent in all material respects to the most
significant of those held, exercised and assigned at any time
during the 120-day period immediately preceding the Change of
Control and (ii) the Employee's service shall be performed at the
location where the Employee was employed immediately preceding
the Change of Control or any office or location less than 50
miles from such location.
5.3 Compensation and Benefits. During the Modified
Employment Term, in addition to the compensation and benefits
described in Section 2, the Employee shall be entitled to the
following compensation and benefits:
(a) Salary. During the Modified Employment Term,
Employee's Base Salary shall be as provided for in Section 2.1.
(b) Benefit Plans. During the Modified Employment
Term, the Employee and his family, if any, shall be entitled to
participate in and receive applicable benefits under all such (i)
incentive, savings and retirement plans, practices, policies and
programs, (ii) welfare benefit plans, practices, policies and
programs (including, without limitation, medical, prescription,
dental, disability, employee life, group life, accidental health
and travel accident insurance plans and programs) and (iii) paid
vacation and other fringe benefits, plans, practices, policies
and programs as are applicable generally to other peer employees
of the Company and its affiliated companies in effect generally
after the Change of Control or, if more favorable to the
Employee, as in effect for the Employee at any time during the
120-day period immediately preceding the Change of Control.
(c) Expenses. During the Modified Employment Term,
the Employee shall be entitled to receive prompt reimbursement
for all reasonable expenses incurred by the Employee in
accordance with the most favorable policies, practices and
procedures of the Company and its affiliated companies in effect
generally after the Change of Control with respect to other peer
employees of the Company and its affiliated companies or, if more
favorable to the Employee, as in effect for the Employee at any
time during the 120-day period immediately preceding the Change
of Control.
(d) Office and Support Staff. During the Modified
Employment Term, the Employee shall be entitled to an office or
offices of a size and with furnishings and other appointments,
and to personal secretarial and other assistance, at least equal
to the most favorable of the foregoing provided generally after
the Change of Control with respect to other peer employees of the
Company and its affiliated companies or, if more favorable to the
Employee, as in effect for the Employee at any time during the
120-day period immediately preceding the Change of Control.
5.4 Termination of Employment after a Change of Control.
After a Change of Control and during the Modified Employment
Term, the Employee's status as an employee shall terminate or may
be terminated as provided in Section 3 of this Agreement;
provided, however, that after a Change of Control and during the
Modified Employment Term the terms "Cause" and "Good Reason," as
used in Section 3 and elsewhere in this Agreement, shall have the
meanings given to them in this Section 5 and not the meanings
given to them in Section 3.
5.5 Obligations of the Company upon Termination after a
Change of Control. (a) If, after a Change of Control and prior
to the end of the Modified Employment Term, the Company
terminates the Employee's employment other than for Cause, death
or Disability, or the Employee terminates employment for Good
Reason, then
(i) within 30 days of the Date of Termination the
Company shall pay to the Employee in a lump sum an amount equal
to the Employee's Base Salary through the end of the Modified
Employment Term had such termination not occurred; and
(ii) Employee shall be entitled to the benefits
provided in Section 4.3(b) and the amounts, if any, contemplated
by Sections 4.6 and 4.7.
(b) If, after a Change of Control and prior to the end
of the Modified Employment Term, the Employee's employment is
terminated (i) for death, (ii) for Disability or (iii) for Cause
(as defined in this Section 5), by the Employee for reasons other
than Good Reason (as defined in this Section 5) or at the end of
the Modified Employment Term, then the Employee shall be entitled
to the benefits described in Section 4.1, Section 4.2 or Section
4.4, as the case may be, and shall be entitled to the benefits
described in Sections 4.6 and 4.7. If the Company or the
Employee gives notice of termination of the Modified Employment
Term as provided for in Section 5.2, the Company may, at its
option, terminate Employee's status as an Employee, in which case
such termination shall be deemed a termination without Cause for
purposes of all provisions of this Agreement.
(c) The rights and obligations of the Company and
Employee contained in Section 4.5 ("Resignation as Director")
shall continue to apply after a Change of Control.
5.6 Certain Additional Payments. If after a Change of
Control Employee is subjected to an excise tax as a result of the
"excess parachute payment" provisions of section 4999 of the
Internal Revenue Code of 1986, as amended, whether by virtue of
the benefits of this Agreement or by virtue of any other benefits
provided to Employee in connection with a Change of Control
pursuant to Company plans, policies or agreements (including the
value of any options to acquire Common Stock of the Company the
exercisability of which is accelerated pursuant to the terms of
any stock option, incentive or similar plan heretofore or
hereafter adopted by the Company), the Company shall pay to
Employee (whether or not his employment has terminated) such
amounts as are necessary to place Employee in the same position
after payment of federal income and excise taxes and state and
local income taxes as he would have been if such provisions had
not been applicable to him.
Section 6.Miscellaneous
6.1 Binding Effect.
(a) This Agreement shall be binding upon and inure to
the benefit of the Company and any of its successors or assigns.
(b) This Agreement is personal to the Employee and
shall not be assignable by the Employee without the consent of
the Company (there being no obligation to give such consent)
other than such rights or benefits as are transferred by will or
the laws of descent and distribution.
(c) The Company shall require any successor to or
assignee of (whether direct or indirect, by purchase, merger,
consolidation or otherwise) all or substantially all of the
assets or businesses of the Company (i) to assume unconditionally
and expressly this Agreement and (ii) to agree to perform all of
the obligations under this Agreement in the same manner and to
the same extent as would have been required of the Company had no
assignment or succession occurred, such assumption to be set
forth in a writing reasonably satisfactory to the Employee. In
the event of any such assignment or succession, the term
"Company" as used in this Agreement shall refer also to such
successor or assign.
(d) The Company shall require all entities that
control, or that after the Change of Control will control,
directly or indirectly, any such successor or assignee to agree
to cause to be performed all of the obligations under this
Agreement in the same manner and to the same extent as would have
been required of the Company had no assignment or succession
occurred, such agreement to be set forth in writing reasonably
satisfactory to the Employee.
6.2 Notices. All notices hereunder must be in writing and
shall be deemed to have given upon receipt of delivery by: (a)
personal delivery to the designated individual, (b) certified or
registered mail, postage prepaid, return receipt requested, (c) a
nationally recognized overnight courier service (against a
receipt therefor) or (d) facsimile transmission with confirmation
of receipt. All such notices must be addressed as follows or
such other address as to which any party hereto may have notified
the other in writing:
If to the Company, to:
Akorn, Inc.
000 Xxxxx Xxxxx
Xxxxx Xxxxxxx, Xxxxxxxxx 00000
Attn: Chairman of the Board
Facsimile transmission No. (000) 000-0000
If to the Employee, to:
Xxxxx X. XxXxxxx
00 Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Facsimile transmission No. (000) 000-0000
6.3 Governing Law. This Agreement shall be construed and
enforced in accordance with and governed by the internal laws of
the State of Louisiana.
6.4 Withholding. The Employee agrees that the Company has
the right to withhold, from the amounts payable pursuant to this
Agreement, all amounts required to be withheld under applicable
income and/or employment tax laws, or as otherwise stated in
documents granting rights that are affected by this Agreement.
6.5 Severability. If any term or provision of this Agree-
ment or the application thereof to any person or circumstance,
shall at any time or to any extent be invalid, illegal or
unenforceable in any respect as written, Employee and the Company
intend for any court construing this Agreement to modify or limit
such provision temporally, spatially or otherwise so as to render
it valid and enforceable to the fullest extent allowed by law.
Any such provision that is not susceptible of such reformation
shall be ignored so as to not affect any other term or provision
hereof, and the remainder of this Agreement, or the application
of such term or provision to persons or circumstances other than
those as to which it is held invalid, illegal or unenforceable,
shall not be affected thereby and each term and provision of this
Agreement shall be valid and enforced to the fullest extent
permitted by law.
6.6 Waiver of Breach. The waiver by either party of a
breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach thereof.
6.7 Remedies Not Exclusive. No remedy specified herein
shall be deemed to be such party's exclusive remedy, and
accordingly, in addition to all of the rights and remedies
provided for in this Agreement, the parties shall have all other
rights and remedies provided to them by applicable law, rule or
regulation.
6.8 Company's Reservation of Rights. Employee acknowledges
and understands that the Employee serves at the pleasure of the
Board and that the Company has the right at any time to terminate
Employee's status as an employee of the Company, or to change or
diminish his status during the Employment Term, subject to the
rights of the Employee to claim the benefits conferred by this
Agreement.
6.9 Survival. Following the Date of Termination, each
party shall have the right to enforce all rights, and shall be
bound by all obligations, of such party that are continuing
rights and obligations under this Agreement.
6.10 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the Company and the Employee have caused
this Agreement to be executed as of the Agreement Date.
AKORN, INC.
By: ____________________________
Xxxxxx X. Xxxxx, M.D.
Compensation Committee Chairman
EMPLOYEE:
____________________________
Xxxxx X. XxXxxxx
