1
CONSULTING AGREEMENT
This Consulting Agreement is entered into as of May 1, 1999, by and
between K-V PHARMACEUTICAL COMPANY, a Delaware corporation ("KV"), and Xxxxxx
X. Xxxxxxxx ("Consultant").
WHEREAS, KV desires to retain Consultant to perform certain consulting
services for KV, and Consultant desires to perform such consulting services;
THEREFORE, in consideration of the promises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, KV and Consultant agree as follows:
1. CONSULTING SERVICES. During the Consulting Period (as
-------------------
hereinafter defined) Consultant shall provide certain consulting services as
may be reasonably requested by the Chief Executive Officer of KV. In
performing such duties, Consultant shall act as an independent contractor and
shall not be an employee or agent of KV. Consultant shall have no right or
authority to bind or contract for KV, and except as otherwise approved by KV
in advance and in writing, KV shall not be responsible for any debts or
obligations incurred by Consultant or any employee, agent or representative
of Consultant in the performance of this Agreement.
2. CONSULTING PERIOD. KV will engage Consultant on the terms and
------------------
conditions set forth herein from the date of this Agreement through April 30,
2004, and for any additional one year renewal periods as KV and Consultant
may agree in writing ("Consulting Period").
3. TERMINATION. This Agreement and the rights of Consultant
------------
hereunder shall terminate upon the earlier of the close of business on the
last business day of the Consulting Period or the death of Consultant.
4. COMPENSATION. As compensation for Consultant's services as a
-------------
consultant under this Agreement, KV shall pay to Consultant, at such times as
is mutually agreed upon by the parties, a consulting fee during the term of
this Agreement equal to One Thousand Eight Hundred Dollars ($1,800) per day
for each full day of service, or, Two Hundred Forty Dollars ($240) per hour
for any portion of less than a full day of service (collectively, the "Base
Rate"); provided, however, that the consulting fees paid to Consultant in a
one year period shall not be less than One Hundred Eight Thousand Dollars
($108,000). The Base Rate shall be increased annually by the greater of five
percent (5%) or the percentage increase in the cost of living from year to
year as reflected in the Bureau of Labor Statistics Consumer Price Index,
CPI-U A11 Items.
5. EXERCISE OF STOCK OPTIONS. In addition, during the term of this
--------------------------
Agreement, KV shall loan to Consultant, at Consultant's request, up to
one-third (33%) of the cost to exercise any outstanding stock options as of the
date of this Agreement at the Applicable Federal Rate (AFR) of interest in
effect at the time of the loan. Such loan shall not exceed $60,000 annually,
or $300,000.00 on a cumulative basis. In the event the amount requested in
any one year will exceed $60,000, consent of KV will be required. Consultant
agrees to pay back to the Company
2
anytime said option shares of KV stock are sold (in the proportion of the
number of KV option shares sold which generated the loan divided by the total
number of shares of KV sold at the time). Consultant agrees to pay 25% of such
proceeds from option shares sold to reduce the loan from the Company. Any
unpaid balances shall be due and payable at the expiration of this Agreement,
and Consultant shall have full right of prepayment without penalty at anytime.
6. INVENTIONS. All inventions, trade secrets, ideas, formulas,
-----------
source code, object code data, computer programs, other works of authorship,
know-how, improvements, upgrades, discoveries, designs and techniques
(including without limitation all patents, trademark, copyright, and trade
secret rights) (collectively "Inventions") conceived, made, devised or
discovered by Consultant, whether by Consultant or jointly with others,
during the Consulting Period or during the Consultant's prior association
with KV, relating or pertaining in any way to the business of KV or the
services provided by Consultant hereunder, shall be promptly disclosed in
writing to KV and all right, title and interest in such Inventions are hereby
assigned to KV, without any remuneration other than as set forth in Section 4
herein, amd become and remain the sole amd exclusive property of KV.
Consultant agrees to take all steps reasonably requested by KV to evidence,
maintain, defend, perfect and enforce KV's right, title and interest in and
to all such Inventions assigned by Consultant.
7. ENTIRE AGREEMENT: MODIFICATION. All discussions, understandings,
-------------------------------
and agreements heretofore made between the parties concerning the subject
matter contained in this Agreement are merged into and superseded by this
Agreement, which contains the entire agreement between the parties concerning
the subject matter contained in this Agreement. Any modification hereof may
be made only by an instrument in writing signed by or on behalf of the party
to be charged.
8. WAIVER. Any failure of either party to exercise, or to otherwise
-------
act with respect to, any of its rights hereunder in the event of a breach of
any of the terms or conditions hereof by the other party shall not be
construed as a waiver of such breach, nor prevent such party from thereafter
enforcing strict compliance with any and all of the terms and conditions
hereof. No remedy conferred herein is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and in addition to
every other remedy given hereunder or now or hereafter existing at law or in
equity, by statute or otherwise. The election of one or more remedies shall
not constitute a waiver of the right to pursue any other remedies.
9. NOTICE. All notices or other communications required or
-------
authorized hereunder shall be in writing and shall be given personally or by
prepaid registered or certified mail, return receipt requested, or next
business day courier:
if to Consultant, to: Xxxxxx X. Xxxxxxxx
0000 Xxxxxx Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
2
3
and if to KV, to: K-V Pharmaceutical Company
0000 Xxxxx Xxxxxx Xxxx
Xx. Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx, CEO
or to such other addresses as to which either party gives written notice to
the other in accordance with this Paragraph 9.
10. CHOICE OF LAW. This Agreement shall be governed by and
--------------
construed under the laws of the State of Missouri, without application of
conflict of law principles which would otherwise have the effect of causing
the law of another jurisdiction to be applicable hereto, notwithstanding the
place of execution hereof or the performance of any acts in connection
herewith or hereunder in any other jurisdiction.
11. BINDING EFFECT; ASSIGNMENT. This Agreement shall be for the sole
---------------------------
and exclusive benefit of KV and Consultant. This Agreement may not be
assigned by Consultant, whether by operation of law or otherwise, without the
prior written consent of KV. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
12. COUNTERPARTS. This Agreement may be executed in multiple
-------------
counterparts, and all documents so executed shall constitute one agreement,
binding on all of the parties hereto, notwithstanding that all of the parties
are not signatory to the original or the same counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
date and year first above written.
K-V PHARMACEUTICAL COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
--------------------------------
Title: VP, Finance
--------------------------------
/s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Xxxxxx X. Xxxxxxxx
---------------------------------------
3
