Exhibit 10.15
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XXXXXXX XXXXXXXX
EMPLOYMENT AGREEMENT
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This Employment Agreement entered into this 3rd day of October, 1997, by
and among Xxxxx Xxxxxxxx Company, Inc., a Delaware corporation (the "Company")
and Xxxxxxx Xxxxxxxx (the "Executive"), and as to Section 5(c) only, X.X. Xxxxx
Drug Company (the "Parent"),
WITNESSETH:
WHEREAS, the Company believes it to be in its best interest to provide for
continuity of management and to provide protection for its valuable trade
secrets and confidential information; and
WHEREAS, the Company desires to employ the Executive and the Executive is
willing to render his services to the Company on the terms and conditions with
respect to such employment hereinafter set forth.
NOW, THEREFORE, in consideration of premises and the mutual terms and
conditions hereof, the Company and the Executive hereby agree as follows:
1. Employment. The Company hereby employs the Executive and the Executive
hereby accepts employment with the Company upon the terms and conditions
hereinafter set forth.
2. Exclusive Services. The Executive shall devote his full working time,
ability and attention to the business of the Company during the term of this
Agreement and shall not, directly or indirectly, render any material services to
any business, corporation, or organization without the prior approval of the
Board of Directors of the Company (hereinafter referred to as the "Board");
provided, however, that the Executive will be free to work with civic or
charitable organizations so long as such involvement does not materially
interfere with the performance of his duties for the Company.
3. Duties. The Executive is hereby employed as President of the Company
and shall render his services at the principal business offices of the Company,
as such may be located from time to time subject to the restriction set forth in
the last sentence of this Section 3, unless otherwise agreed between the Board
and the Executive. The Executive shall have such authority and shall perform
such duties as are specified by the Company
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for the office of President subject, however, to such limitations, instructions,
directions, and control as the Board may specify from time to time in its sole
discretion. The Executive's duties shall be substantially similar to those
historically required of him in his position as President of the Company. The
Executive will not be required to relocate his personal residence outside of the
Boston, Massachusetts area in order to perform the services required hereunder.
4. Term. This Agreement shall have an initial term through February 28,
2000, and shall renew for a two year term thereafter unless either party gives
notice of nonrenewal at least 180 days prior to the end of the initial term;
provided, however, that this Agreement is always subject to termination as
provided in Paragraph 13, below.
5. Compensation. As compensation for his services rendered under this
Agreement, the Executive shall be entitled to receive the initial compensation
set forth on the attached Executive Individual Salary and Incentive Plan
Schedule ("Compensation Schedule"). The term Base Salary as used herein shall
refer to the amount initially designated as such in the Compensation Schedule as
the same may be increased from time to time hereafter pursuant to the terms of
that Compensation Schedule or otherwise. The Base Salary component of the
compensation shall not be reduced by the Company during the term hereof except
in accordance with a general Base Salary reduction implemented across all
executive level positions.
a. Base Salary. Base Salary, payable in accordance with the attached
Compensation Schedule or in effect from time to time, shall be paid in 26
equal bi-weekly installments during the term of this Agreement, prorated
for any partial employment month. Such Base Salary may be increased (but
not decreased except as provided above) by the Board in its sole
discretion.
b. Additional Compensation. The Executive shall be paid such
additional compensation and bonuses, as may be determined and authorized in
the sole discretion of Board.
c. Stock Options. The Executive shall be granted the options to
purchase shares of common stock of the Parent as described on the attached
Supplemental Benefits Schedule ("Benefits Schedule").
6. Benefits. In addition to the compensation to be paid to the Executive
pursuant to Paragraph 5 hereof, the Executive shall further be entitled to
receive the following:
a. Participation in Employee Plans. The Executive shall be entitled
to participate in any health, disability, group term life insurance plan,
any pension, retirement or profit sharing plan, executive bonus plan or any
other fringe benefits
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which may be extended generally from time to time to senior management
employees of the Parent. The health insurance benefits provided to the
Executive shall not be substantially less than those provided by the
Company at the effective date of this Agreement. In addition, the Executive
shall be entitled to the supplemental benefits described on the Benefits
Schedule.
b. Disability Salary Continuation. If the Executive becomes
disabled during the term of this Agreement, the Company shall continue to
pay the Executive his Base Salary during the first 90 day period of such
disability and shall continue to pay the Executive, but at the rate of
forty percent (40%) of his Base Salary, for second 90 day period of such
disability. "Disability" as used herein shall have the same meaning as
given that term in the long term disability insurance policy of the Company
as in effect from time to time. All payments under this Paragraph shall
cease upon the expiration or other termination of this Agreement or of the
Executive's employment; however, disability payments shall continue as
provided under this Section 6(b) if the Cause of termination is "permanent
disability" as the phrase is used in Section 13(d)(iii). Notwithstanding
the foregoing, the Executive shall also be entitled to any disability
benefits accorded for senior management employees of the Parent under any
disability insurance plans which the Parent may have from time to time.
c. Vacation. The Executive shall be entitled to three weeks vacation
with full salary and benefits each year, measured from the anniversary of
his original employment with the Company. No cash or other payment will be
due, however, for unused vacation and vacation may not be carried over from
each such year to the next.
7. Reimbursement of Expenses. Subject to such rules and procedures as
from time to time are specified by the Company, the Company shall reimburse the
Executive on a monthly basis for reasonable business expenses necessarily
incurred in the performance of his duties under this Agreement.
8. Confidentiality/Trade Secrets. The Executive acknowledges that his
position with the Company is one of the highest trust and confidence both by
reason of his position and by reason of his access to and contact with the trade
secrets and confidential and proprietary business information of the Company and
its affiliates. Both during the term of this Agreement and thereafter, the
Executive covenants and agrees as follows:
a. he shall use his best efforts and exercise utmost diligence to
protect and safeguard the trade secrets and confidential and proprietary
information of the Company and its affiliates including but not limited to
the identity of its customers and suppliers, its arrangements with
customers and suppliers, and its technical and
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financial data, records, compilations of information, processes, recipes
and specifications relating to its customers, suppliers, products and
services;
b. he shall not disclose any of such trade secrets and confidential
and proprietary information, except as may be required in the course of his
employment with the Company or by law; and
c. he shall not use, directly or indirectly, for his own benefit or
for the benefit of another, any of such trade secrets and confidential and
proprietary information.
All files, records, documents, drawings, specifications, memoranda, notes,
or other documents relating to the business of the Company and its affiliates,
whether prepared by the Executive or otherwise coming into his possession, shall
be the exclusive property of the Company and its affiliates and shall be
delivered to the Company and not retained by the Executive upon termination of
his employment for any reason whatsoever or any other time upon request of the
Board.
9. Discoveries. The Executive covenants and agrees that he will fully
inform the Company of and disclose to the Company all inventions, designs,
improvements, discoveries and processes ("Discoveries") which he has now or may
hereafter have during his employment with the Company and which pertain or
relate to the wholesale pharmaceutical business of the Company or its affiliates
or to any experimental work, products, services or processes of the Company in
progress or planned for the future, whether conceived by the Executive alone or
with others, and whether or not conceived during regular working hours or in
conjunction with the use of any Company assets. All such Discoveries shall be
the exclusive property of the Company whether or not patent or trademark
applications are filed thereon. The Executive shall assist the Company, at any
time during or after his employment, in obtaining patents on all such
Discoveries deemed patentable by the Company and shall execute all documents and
do all things necessary to obtain letters patent, vest the Company with full and
exclusive title thereto, and protect the same against infringement by others.
If such assistance takes place after his employment is terminated the Executive
shall be paid by the Company at a reasonable rate for any time actually spent in
rendering such assistance at the request of the Company.
10. Non competition. Taking into consideration the nature, scope and
volume of the Company's operations, the Executive agrees that during the period
of his employment and (i) if he elects to receive a Severance Payment pursuant
to Section 13(b) or 13(f) then also for the Severance Payment Period, or (ii) if
he resigns other than for Good Reason, as defined below, or if he is terminated
for Cause as defined below, then for a period of two years after such
resignation or termination, he will not, within the United States, directly or
indirectly, own, manage, operate, control, or be employed by, participate in, or
be connected in any matter with the ownership (other than ownership
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of securities of publicly held corporations of which Executive owns less that 2%
of any class of outstanding securities), management, operation, or control of
any business engaged in the distribution or wholesale of pharmaceuticals,
medicines, or health aids.
11. Nonsolicitation. The Executive agrees that if he resigns other than
for Good Reason, as defined below, or if he is terminated for Cause, as defined
below, then during the period of his employment and for two years thereafter he
will not, either directly or indirectly, for himself or for any third party,
solicit, induce, recruit, or cause another person in the employ of the Company
to terminate his/her employment for the purpose of joining, associating or
becoming employed with any other business or activity. The Company and the
Executive specifically acknowledge and agree that the foregoing covenants of the
Executive in Sections 10 and 11 are reasonable in content and scope and are
given by the Executive for adequate consideration.
12. Remedies for Breach of Covenants of the Executive. The covenants set
forth in Paragraphs 8, 9 and 11 of this Agreement shall continue to be binding
upon the Executive, notwithstanding the termination of his employment with the
Company for any reason whatsoever. Such covenants and the covenant contained in
Section 10 shall be deemed and construed as separate agreements independent of
any other provisions of this Agreement and any other agreement between the
Company and the Executive. The existence of any claim or cause of action by the
Executive against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
any or all such covenants. It is expressly agreed that the remedy at law for
the breach of any such covenant is inadequate and injunctive relief shall be
available to prevent the breach or any threatened breach thereof.
13. Termination.
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a. The Company may terminate this Agreement and the Executive's
employment hereunder at any time, with or without Cause, upon written
notice to the Executive. The Executive may either resign upon 30 days
written notice to the Company or may terminate this agreement and his
employment hereunder with Good Reason at any time. Upon any termination of
this Agreement and the Executive's employment hereunder, all benefits
provided pursuant to Paragraph 6 hereof shall cease, except as expressly
provided otherwise herein.
b. In the event of termination by the Company without Cause, the
effective date thereof shall be stated in a written notice to the
Executive, which shall not be earlier than 30 days from the date such
notice is delivered to the Executive. In the event the Company effects a
termination without Cause, the Executive shall be entitled to receive (i)
any bonus amounts as may be payable and accrued but held back pursuant to
the terms of any written plans in which the Executive was a participant
prior to the effective date of the termination, (ii) all bonus payments
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determined as of the end of the fiscal year in which the termination
occurred, as if the Executive had remained employed throughout such year,
(iii) a Severance Payment for each month through the remaining initial term
of this Agreement as provided in Paragraph 4, above, beginning with and
prorated for the month in which the termination occurs, and (iv) continued
participation, at the Company's expense, in all group health insurance
plans for 12 months and thereafter such continuation at his own expense as
provided by COBRA.
c. Upon the effective date of any termination by the Company for
Cause, or upon the resignation of the Executive, the Executive shall only
be entitled to receive his Base Salary through such date and any bonus
amounts as may be payable pursuant to the terms of any written plans in
which the Executive was a participant immediately prior to the effective
date of the termination. The Executive shall also be entitled to exercise
his rights under COBRA.
d. The following shall constitute "Cause":
(i) The Executive is convicted of or pleads "nolo contendre" to a
criminal offense constituting a felony or involving dishonesty, deceit or
moral turpitude; or
(ii) The Executive breaches any material provision of this
Agreement or materially fails to perform his duties, or breaches his
fiduciary duty to the Company, and such breach or neglect is not corrected
within 10 days after receipt of written notice from the Company; or
(iii) The Executive dies or becomes permanently disabled from
continuing to provide the level of service required under this Agreement.
For purposes hereof, the phrase "permanently disabled" shall mean the
inability to perform his duties hereunder for a period of six (6)
consecutive months or six (6) months in any twelve (12) consecutive months
as the result of physical or mental incapacity, as certified by a
physician.
e. The provisions of Paragraphs 8, 9, 10, 11, 12, 14, and 15 shall
survive any termination for Cause; except that in the case of termination
under Section 13(d)(iii) the provisions of Sections 10 and 11 will not
survive.
f. The Executive shall have Good Reason to effect a termination in
the event the Company (i) breaches its obligations to pay any salary,
benefit or bonus due hereunder, as the same may be adjusted from time to
time or the Company fails to continue the Executive's participation in any
incentive compensation plan (or any substitute comparable arrangement),
(ii) substantially reduces, without the Executive's written consent, the
Executive's working conditions, perquisites or
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status, resulting in a significant adverse change in the nature or scope of
the Executive's authority, functions, duties, or responsibilities, or (iii)
requires that the Executive relocate to a location outside of the Boston,
Massachusetts area. Upon any such termination, the Executive shall be
entitled to receive a lump sum payment equal to a Severance Payment
multiplied by 12, and the provisions of Paragraphs 8, 9, 10, 12, 14, and 15
shall survive the termination. If the Executive waives his right to receive
such lump sum payment, only the provisions of Paragraphs 8, 9, 11, 12, 14,
and 15 shall survive the termination. The Executive shall also be entitled
to continue at the Company's expense his participation in all group health
insurance plans for 12 months and thereafter will be entitled to exercise
his rights under COBRA. No termination may be effected by the Executive for
Good Reason unless he shall have delivered written notice to the Company of
the breach and the Company shall not have cured such breach within 10 days
thereafter.
g. A "Severance Payment" is an amount equal to one-twelfth of the
sum of the Executive's base salary at the last effective annual rate.
h. A "Severance Payment Period" is any month in which the Executive
receives a Severance Payment or in the event of a termination under
Paragraph 13(f), the Severance Payment Period is 12 months.
14. Notices. Any notices to be given hereunder by either party to
the other may be effected either by personal delivery in writing or by
mail, registered or certified, postage prepaid, with return receipt
requested. Mailed notices shall be addressed as follows:
a. If to the Company:
Xxxxx Xxxxxxxx Company, Inc.
c/o X.X. Xxxxx Drug Company
0000 X. 00xx Xxxxxxx
Xx. Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
b. If to the Executive:
Xxxxxxx Xxxxxxxx
_______________________
_______________________
_______________________
Either party may change its address for notice by giving notice in
accordance with the terms of this Paragraph 14.
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15. General Provisions.
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a. Law Governing. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts.
b. Invalid Provisions. If any provision of this Agreement is held
to be illegal, invalid, or unenforceable, such provision shall be fully
severable and this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part
hereof; and the remaining provisions hereof shall remain in full force and
effect and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance herefrom. Furthermore, in lieu of such
illegal, invalid, or unenforceable provision there shall be added
automatically as a part of this Agreement a provision as similar in terms
to such illegal, invalid, or unenforceable provision as may be possible and
still be legal, valid or enforceable.
c. Entire Agreement. This Agreement sets forth the entire
understanding of the parties and supersedes all prior agreements or
understandings, whether written or oral, with respect to the subject matter
hereof including, but not limited to, that certain Employment Agreement
dated February 11, 1994 (the "1994 Employment Agreement"), by and between
the Brudnick Acquisition Corp. and the Executive. No terms, conditions,
warranties, other than those contained herein, and no amendments or
modifications hereto shall be binding unless made in writing and signed by
the parties hereto. All pre-existing employment agreements (including
earlier versions of this agreement) are hereby superseded and null and
void.
d. Binding Effect. This Agreement shall extend to and be binding
upon and inure to the benefit to the parties hereto, their respective
heirs, representatives, successors and assigns. This Agreement may not be
assigned by the Executive.
e. Waiver. The waiver by either party hereto of a breach of any
term or provision of this Agreement shall not operate or be construed as a
waiver of a subsequent breach of the same provision by any party or of the
breach of any other term or provision of this Agreement.
f. Titles. Titles of the paragraphs herein are used solely for
convenience and shall not be used for interpretation or construing any
work, clause, paragraph, or provision of this Agreement.
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g. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.
16. Change of Control.
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a. Notwithstanding anything to the contrary herein, if Executive
resigns from the Company or is terminated by the Company without Cause upon
or within six (6) months following a Change of Control as defined below,
Company will pay to Executive one times the Executive's Base Salary plus
bonus for the year in which such Change of Control occurs (calculated as if
the maximum bonus for that year is earned), as of the date of the Change of
Control as severance pay and the provisions of Sections 10 and 11 shall be
null and void.
b. For purposes of this Agreement, "Change of Control" means any one
of the following: (i) any person or group (as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934 as in effect on August 1, 1997
acquiring beneficial ownership of 30% or more of the Parent's or the
Company's then outstanding Common Stock or 30% or more of the combined
voting power of the Parent's or the Company's then outstanding securities
(calculated in accordance with section 13(d)(3) or 14(d) of the Exchange
Act) entitled generally to vote for the election of the Parent's Directors;
(ii) the approval by the Parent's or the Company's stockholders of the
merger or consolidation of the Parent or of the Company with any other
corporation (except for a corporation owned or controlled by the Parent),
the sale of substantially all of the assets of the Parent or the
liquidation or dissolution of the Parent or of the Company, unless, in the
case of a merger or consolidation, the then Continuing Directors in office
immediately prior to such merger or consolidation will constitute at least
2/3 of the Board of Directors of the surviving corporation of such merger
or consolidation and any parent (as such term is defined in Rule 12b-2
under the Exchange Act) of such corporation; (iii) at least 2/3 of the then
Continuing Directors in office immediately prior to any other action
proposed to be taken by the Parent's stockholders or by the Parent's Board
of Directors determine that such proposed action, if taken, would
constitute a Change in Control of the Parent and such action is taken, or
(iv) Continuing Directors no longer constitute at least 2/3 of the Board of
Directors.
c. "Continuing Director" means any individual who either (i) was
member of the Parent's Board of Directors on the date hereof, or (ii) was
designated (before initial election as a Director) as a Continuing Director
by 2/3 of the then Continuing Directors.
d. If any payment or the receipt of any benefit under this Agreement
shall be deemed to constitute an "excess parachute payment" as such term is
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described in Section 280G of the Internal Revenue Code of 1986 ("Code"), so
as to result in the loss of a deduction to the Company under Code Section
280G or in the imposition of an excise tax on the Executive under Code
Section 4999, or any successor section thereto, then the amounts payable or
the benefits provided under this Agreement shall be reduced to the minimum
extent necessary so that no such deduction will be lost by the Company and
no such excise tax will be imposed on the Executive. The Company, in its
sole discretion, shall determine whether or not an "excess parachute
payment" would otherwise occur and shall determine the amount and method of
the foregoing reduction.
17. Enforceability. The parties acknowledge that this Agreement is
being executed in connection with the acquisition by Parent of Xxxxxx Investor
Group L.P. or G.D. Holdings of Delaware, Inc. and that this Agreement shall not
be deemed effective unless and until such acquisition has been consummated
pursuant to that certain Acquisition Agreement dated September 11, 1997 and upon
the satisfaction in full of the obligations to the Executive under Section 5 of
the 1994 Employment Agreement as acknowledged in writing by the Executive.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date and year first above written above.
EXECUTIVE: XXXXX XXXXXXXX COMPANY, INC.
/s/ Xxxxxxx Xxxxxxxx By:/s/ Xxxxxx X. Xxxxxx
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Xxxxxxx Xxxxxxxx
Name: Xxxxxx X. Xxxxxx
X. X. XXXXX DRUG COMPANY, INC.
(as to Section 5(c) only)
By:/s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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