AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.41
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is entered into by
and between Santarus, Inc., a Delaware corporation (the “Company”), and Xxxxx Xxxxxx-Xxxx
(“Executive”), and shall be effective as of December 5, 2007.
WHEREAS, the Company and Executive desire to amend and restate that certain Employment
Agreement between the Executive and the Company (the “Original Agreement”), dated as of May
28, 2007 (the “Effective Date”).
(i) the commission of an act of fraud, embezzlement or dishonesty by Executive that has a
material adverse impact on the Company or any successor or affiliate thereof;
(ii) a conviction of, or plea of “guilty” or “no contest” to, a felony by Executive;
(iii) any unauthorized use or disclosure by Executive of confidential information or trade
secrets of the Company or any successor or affiliate thereof that has a material adverse impact on
any such entity;
(iv) Executive’s gross negligence, insubordination or material violation of any duty of
loyalty to the Company or any other material misconduct on the part of Executive;
(v) Executive’s ongoing and repeated failure or refusal to perform or neglect of Executive’s
duties as required by this Agreement, which failure, refusal or neglect continues for fifteen (15)
days following Executive’s receipt of written notice from the Board or the CEO stating with
specificity the nature of such failure, refusal or neglect; or
(vi) Executive’s breach of any material provision of this Agreement;
provided, however, that prior to the determination that “Cause” under this Section
1(c) has occurred, the Company shall (w) provide to Executive in writing, in reasonable detail, the
reasons for the determination that such “Cause” exists, (x) other than with respect to clause (v)
above which specifies the applicable period of time for Executive to remedy his or her breach,
afford Executive a reasonable opportunity to remedy any such breach, (y) provide the Executive an
opportunity to be heard prior to the final decision to terminate the Executive’s employment
hereunder for such “Cause” and (z) make any decision that such “Cause” exists in good faith.
The foregoing definition shall not in any way preclude or restrict the right of the Company or
any successor or affiliate thereof to discharge or dismiss Executive for any other acts or
omissions, but such other acts or omissions shall not be deemed, for purposes of this Agreement, to
constitute grounds for termination for Cause.
(i) the acquisition, directly or indirectly, by any “person” or “group” (as those terms are
defined in Sections 3(a)(9), 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and the rules thereunder) of “beneficial ownership” (as determined
pursuant to Rule 13d-3 under the Exchange Act) of securities entitled to vote generally in the
election of directors (“voting securities”) of the Company that represent fifty percent
(50%) or more of the combined voting power of the Company’s then outstanding voting securities,
other than:
(A) an acquisition by a trustee or other fiduciary holding securities under any
employee benefit plan (or related trust) sponsored or maintained by the Company or any
person controlled by the Company or by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any person controlled by the Company, or
(B) an acquisition of voting securities by the Company or a corporation owned, directly
or indirectly by the stockholders of the Company in substantially the same proportions as
their ownership of the stock of the Company;
Notwithstanding the foregoing, the following event shall not constitute an “acquisition” by
any person or group for purposes of this Section 1(d): an acquisition of the Company’s securities
by the Company that causes the Company’s voting securities beneficially owned by a person or group
to represent fifty percent (50%) or more of the combined voting power of the Company’s then
outstanding voting securities; provided, however, that if a person or group shall
become the beneficial owner of fifty percent (50%) or more of the combined
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voting power of the Company’s then outstanding voting securities by reason of share acquisitions by
the Company as described above and shall, after such share acquisitions by the Company, become the
beneficial owner of any additional voting securities of the Company, then such acquisition shall
constitute a Change of Control; or
(ii) during any period of two (2) consecutive years, individuals who, at the beginning of such
period, constitute the Board together with any new director(s) (other than a director designated by
a person who shall have entered into an agreement with the Company to effect a transaction
described in clauses (i) or (iii) of this Section 1(d)) whose election by the Board or nomination
for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning of the two (2) year
period or whose election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or
(iii) the consummation by the Company (whether directly involving the Company or indirectly
involving the Company through one or more intermediaries) of (x) a merger, consolidation,
reorganization, or business combination or (y) a sale or other disposition of all or substantially
all of the Company’s assets or (z) the acquisition of assets or stock of another entity, in each
case other than a transaction:
(A) which results in the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by being converted
into voting securities of the Company or the person that, as a result of the transaction,
controls, directly or indirectly, the Company or owns, directly or indirectly, all or
substantially all of the Company’s assets or otherwise succeeds to the business of the
Company (the Company or such person, the “Successor Entity”)), directly or
indirectly, at least a majority of the combined voting power of the Successor Entity’s
outstanding voting securities immediately after the transaction, and
(B) after which no person or group beneficially owns voting securities representing
fifty percent (50%) or more of the combined voting power of the Successor Entity;
provided, however, that no person or group shall be treated for purposes of
this clause (B) as beneficially owning fifty percent (50%) or more of combined voting power
of the Successor Entity solely as a result of the voting power held in the Company prior to
the consummation of the transaction; or
(iv) the Company’s stockholders approve a liquidation or dissolution of the Company.
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(i) the relocation of the office of Executive more than fifty (50) miles from Executive’s
principal place of employment as of the Effective Date or to a location outside of San Diego
County;
(ii) a change in Executive’s position that materially reduces his or her duties or
responsibilities;
(iii) a reduction in Executive’s base salary or target bonus as an employee of the Company,
other than pursuant to a Company-wide reduction of base salaries and target bonuses for employees
of the Company generally; or
(iv) the Company’s breach of any material provision of this Agreement; provided, that
Executive shall (w) provide to the Company in writing, in reasonable detail, notice of such breach
and (x) afford the Company a reasonable opportunity to remedy any such breach.
(a) Duties and Responsibilities. Executive shall serve as the Vice President,
Regulatory Affairs and Quality Assurance of the Company. In the performance of such duties,
Executive shall report directly to the CEO and shall be subject to the direction of the CEO and to
such limits upon Executive’s authority as the Board or the CEO may from time to time impose.
Executive hereby consents to serve as an officer and/or director of the Company or any subsidiary
or affiliate thereof without any additional salary or compensation, if so requested by the Board.
Executive shall be employed by the Company on a full time basis. Executive’s primary place of work
shall be the Company’s facility in San Diego, California, or such other location within San Diego
County as may be designated by the CEO from time to time. Executive shall also render services at
such other places within or outside the United States as the CEO may direct from time to time,
however, Executive’s primary place of work shall not be relocated more than fifty (50) miles from
his or her primary place of work as of the Effective Date or outside San Diego County without
Executive’s prior consent. Executive shall be subject to and comply with the policies and
procedures generally applicable to senior executives of the Company to the extent the same are not
inconsistent with any term of this Agreement.
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(f) Equity Plans. Executive shall be entitled to participate in any equity or other
employee benefit plan that is generally available to senior executive officers, as distinguished
from general management, of the Company. Except as otherwise provided in this
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Agreement, Executive’s participation in and benefits under any such plan shall be on the terms
and subject to the conditions specified in the governing document of the particular plan.
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(A) the Company shall pay to Executive his or her fully earned but unpaid base salary,
when due, through the date of termination at the rate then in effect, plus all other amounts
to which Executive is entitled under any compensation plan or practice of the Company at the
time of termination;
(B) Executive shall be entitled to receive severance pay in an amount equal to the sum
of:
(1) Executive’s base salary as in effect immediately prior to the date
of termination for the twelve (12) month
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period following the date of termination, payable in a lump sum as soon as
administratively practicable but in any event no later than two and one-half
(2 1/2) months following the date of termination, plus
(2) an amount equal to Executive’s Bonus for the year in which the date
of termination occurs prorated for the period during such year Executive was
employed prior to the date of termination, payable in a lump sum as soon as
administratively practicable but in any event no later than two and one-half
(2 1/2) months following the date of termination;
(C) The vesting and/or exercisability of each of Executive’s outstanding Stock Awards
shall be automatically accelerated on the date of termination as to the number of Stock
Awards that would vest over the twelve (12) month period following the date of termination
had Executive remained continuously employed by the Company during such period;
(D) for the period beginning on the date of termination and ending on the date which is
twelve (12) full months following the date of termination (or, if earlier, the date on which
Executive accepts employment with another employer that provides comparable benefits in
terms of cost and scope of coverage), the Company shall pay for and provide Executive and
his or her dependents with healthcare and life insurance benefits which are substantially
the same as the benefits provided to Executive immediately prior to the date of termination,
including, if necessary, paying the costs associated with continuation coverage pursuant to
COBRA; and
(E) Executive shall be entitled to executive-level outplacement services at the
Company’s expense, not to exceed $15,000. Such services shall be provided by a firm
selected by Executive from a list compiled by the Company.
(A) the Company shall pay to Executive his or her fully earned but unpaid base salary,
when due, through the date of termination at the rate then in effect, plus all other amounts
to which Executive is entitled under any compensation plan or practice of the Company at the
time of termination;
(B) Executive shall be entitled to receive severance pay in an amount equal to the sum
of:
(1) Executive’s base salary as in effect immediately prior to the date of
termination for the twelve (12) month period following the date of termination,
payable in a lump sum as soon as administratively practicable but in
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any event no later than two and one-half (2 1/2) months following the date of
termination (or, in the event the date of termination precedes the consummation of a
Change of Control, with respect to those amounts the payment of which is not
administratively practicable by the foregoing date because it is not yet known
whether a Change of Control will occur within three (3) months following the date of
termination, such amounts shall be paid as soon as administratively practicable but
in any event no later than two and one-half (2 1/2) months following the consummation
of the Change of Control), plus
(2) an amount equal to Executive’s Bonus for the year in which the date of
termination occurs prorated for the period during such year Executive was employed
prior to the date of termination, payable in a lump sum as soon as administratively
practicable but in any event no later than two and one-half (2 1/2) months following
the date of termination (or, in the event the date of termination precedes the
consummation of a Change of Control, with respect to those amounts the payment of
which is not administratively practicable by the foregoing date because it is not
yet known whether a Change of Control will occur within three (3) months following
the date of termination, such amounts shall be paid as soon as administratively
practicable but in any event no later than two and one-half (2 1/2) months following
the consummation of the Change of Control);
(C) The vesting and/or exercisability of all of Executive’s outstanding unvested Stock
Awards shall be automatically accelerated on the date of termination;
(D) for the period beginning on the date of termination and ending on the date which is
twelve (12) full months following the date of termination (or, if earlier, the date on which
Executive accepts employment with another employer that provides comparable benefits in
terms of cost and scope of coverage), the Company shall pay for and provide Executive and
his or her dependents with healthcare and life insurance benefits which are substantially
the same as the benefits provided to Executive immediately prior to the date of termination,
including, if necessary, paying the costs associated with continuation coverage pursuant to
COBRA;
(E) Executive shall be entitled to executive-level outplacement services at the
Company’s expense, not to exceed $15,000. Such services shall be provided by a firm
selected by Executive from a list compiled by the Company; and
(F) The payments and benefits provided for in this Section 4(d)(ii) shall only be
payable in the event Executive’s employment is terminated by the Company without Cause or by
Executive for Good Reason within three (3) months prior to or twelve (12) months following a
Change of Control. If Executive’s employment is terminated by the Company without Cause or
by Executive for Good Reason prior to a Change of Control and such Change of Control is not
consummated within three (3) months following such termination, then Executive shall receive
the payments and benefits described in Section 4(d)(i) and shall not be eligible to receive
any of the payments and benefits described in this Section 4(d)(ii).
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by Executive as a result of the payments and benefits received by Executive pursuant to this
Section 4, including, without limitation, any excise tax imposed by Section 4999 of the Code.
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States and/or any foreign country in a business which competes directly or indirectly (as
determined by the Board) with the Company’s business in such county, city or part thereof, so long
as the Company, or any successor in interest of the Company to the business and goodwill of the
Company, remains engaged in such business in such county, city or part thereof or continues to
solicit customers or potential customers therein; provided, however, that Executive
may own, directly or indirectly, solely as an investment, securities of any entity which are traded
on any national securities exchange if Executive (x) is not a controlling person of, or a member of
a group which controls, such entity; or (y) does not, directly or indirectly, own one percent (1%)
or more of any class of securities of any such entity.
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of the Restrictive Covenants shall not thereby be affected and shall be given full effect,
without regard to the invalid portions. If any court determines that any of the Restrictive
Covenants, or any part thereof, are unenforceable because of the duration of such provision or the
area covered thereby, such court shall have the power to reduce the duration or area of such
provision and, in its reduced form, such provision shall then be enforceable and shall be enforced.
Executive hereby waives any and all right to attack the validity of the Restrictive Covenants on
the grounds of the breadth of their geographic scope or the length of their term.
7. Arbitration. Except as provided in Section 5, any claim or controversy arising out
of or relating to this Agreement shall be settled by arbitration in San Diego, California, in
accordance with the Commercial Arbitration Rules of the American Arbitration Association, and
judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction.
Each party shall select one arbitrator and the two arbitrators so chosen will select a third
arbitrator who shall act as the sole arbitrator of any dispute. Each party shall pay the fees of
its own attorneys, the expenses of its witnesses and all other expenses connected with presenting
its case; however, Executive and the Company agree that, except as may be prohibited by
law, the arbitrator may, in his or her discretion, award reasonable attorneys’ fees to the
prevailing party. Other costs of the arbitration, including the cost of any record or transcripts
of the arbitration, administrative fees, the fee of the sole arbitrator, and all other fees and
costs, shall be borne by the Company.
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If to the Company or the Board:
Santarus, Inc.
00000 Xxxx Xxxxx Xxx Xxxxx
00000 Xxxx Xxxxx Xxx Xxxxx
00
Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Legal Affairs Department
Xxx Xxxxx, XX 00000
Attention: Legal Affairs Department
If to Executive:
At the residence address
on file with the Company
on file with the Company
All notices, requests and other communications shall be deemed given on the date of actual receipt
or delivery as evidenced by written receipt, acknowledgement or other evidence of actual receipt or
delivery to the address. In case of service by telecopy, a copy of such notice shall be personally
delivered or sent by registered or certified mail, in the manner set forth above, within three
business days thereafter. Any party hereto may from time to time by notice in writing served as
set forth above designate a different address or a different or additional person to which all such
notices or communications thereafter are to be given.
(i) Governing Law and Venue. This Agreement is to be governed by and construed in
accordance with the laws of the State of California applicable to contracts made and to be
performed wholly within such State, and without regard to the conflicts of laws principles thereof.
Except as provided in Sections 5 and 7, any suit brought hereon shall be brought in the state or
federal courts sitting in San Diego, California, the parties hereto hereby waiving any claim or
defense that such forum is not convenient or proper. Each party hereby agrees that any such court
shall have in personam jurisdiction over it and consents to service of process in any manner
authorized by California law.
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(Signature Page Follows)
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SANTARUS, INC. |
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By: | /s/ Xxxxxx X. Xxxxxx | |||
Xxxxxx X. Xxxxxx | ||||
President and Chief Executive Officer | ||||
/s/ Xxxxx Xxxxxx-Xxxx | ||||
Xxxxx Xxxxxx-Xxxx | ||||