EXECUTIVE EMPLOYMENT AGREEMENT BY AND BETWEEN HORIZON PHARMA SERVICES LIMITED AND DAVID G. KELLY
Exhibit 10.67
EXECUTIVE EMPLOYMENT
AGREEMENT BY AND BETWEEN
HORIZON PHARMA SERVICES LIMITED AND
XXXXX X. XXXXX
This Executive Employment Agreement (hereinafter referred to as the “Agreement”), is entered into by and between Horizon Pharma Services Limited (hereinafter referred to as the “Company”) and Xxxxx X. Xxxxx (hereinafter referred as to the “Executive”). The terms of this Agreement shall be effective commencing January 1, 2016 (the “Effective Date”).
RECITALS
WHEREAS, the Executive previously entered into a service contract with Vidara Therapeutics Research Limited (f/k/a AGI Therapeutics Research Limited) (“Vidara”) on May 30, 2006, as previously amended, including as amended on August 9, 2013 (collectively, the “Prior Agreement”);
WHEREAS, the Company’s parent entity, Horizon Pharma Public Limited Company (“Horizon plc”) acquired Vidara in September 2014, and Vidara became a wholly owned subsidiary of Horizon plc., and in connection therewith Executive’s employment was transferred to the Company;
WHEREAS, the Company desires assurance of the continued association and services of the Executive in order to continue to retain the Executive’s experience, skills, abilities, background and knowledge, and is willing to continue to engage the Executive’s services on the terms and conditions set forth in this Agreement, which as of the Effective Date shall replace and supersede in its entirety the terms of the Prior Agreement; and
WHEREAS, Executive desires to be in the continued employ of the Company, and is willing to accept such continued employment on the terms and conditions set forth in this Agreement.
AGREEMENT
| 1. | Employment. |
1.1 Term. The Company hereby agrees to continue to employ the Executive, and the Executive hereby accepts continued employment by the Company, upon the terms and conditions set forth in this Agreement. The Executive originally commenced employment with Horizon Pharma Ireland ltd, September 2014 in connection with Horizon plc’s acquisition of Vidara and thereafter became an employee of Company. Executive’s employment shall be governed under the terms set forth in this Agreement beginning on the Effective Date and shall continue until it is terminated pursuant to Section 4 herein (hereinafter referred to as the “Term”).
1.2 Title. From and after the Effective Date the Executive will continue to have the title of Executive Vice President, Company Secretary and Managing Director,
Ireland such position held by Executive during such period is hereinafter referred to as “EVP MDI”) and Executive shall continue to serve in such other capacity or capacities commensurate with his position as EVP MDI as the President and CEO of Horizon Pharma plc may from time to time prescribe.
1.3 Duties. The Executive shall do and perform all services, acts or things necessary or advisable to manage and conduct the business of the Company and shall have the authority and responsibilities which are generally associated with the position of EVP MDI including being responsible for the Company’s operations in Ireland. The Executive shall report to the Horizon Pharma plc President and CEO. The Executive may be assigned duties from time to time for Group companies without further remuneration (where “Group” means the Company and any company which is a member of any “Group of Companies” within the meaning of section 8(3) of the Companies Xxx 0000 of which the Company is also a member).
1.4 Policies and Practices. The employment relationship between the Parties shall be governed by this Agreement and the policies and practices established by the Company and the Board of Directors (hereinafter referred to as the “Board”). In the event that the terms of this Agreement differ from or are in conflict with the Company’s policies or practices or the Company’s Employee Handbook, this Agreement shall control.
1.5 Location. The Executive shall perform the services the Executive is required to perform pursuant to this Agreement at the Company’s premises, currently in Dublin, Ireland. The Company may from time to time require the Executive to travel temporarily to other locations outside of the Dublin, Ireland area in connection with the Company’s business.
| 2. | Loyalty of Executive. |
2.1 Loyalty. During the Executive’s employment by the Company, the Executive shall devote the Executive’s business energies, interest, abilities and productive time to the proper and efficient performance of Executive’s duties under this Agreement. Subject to the prior written consent of the President and CEO, the Executive is permitted to serve on the board of directors of three (3) other companies, so long as none of the other companies compete with the Company.
2.2 Exclusive Employment. Except with the prior written consent of the Chief Executive Officer, Executive shall not, during the term of this Agreement, undertake or engage in any other employment, occupation or business enterprise, other than ones in which Executive is a passive investor. Executive may engage in any civic and not-for-profit activities so long as such activities do not materially interfere with the performance of his duties hereunder or present a conflict of interest with the Company.
2.3 Agreement not to Participate in Company’s Competitors. During the Term of this Agreement, the Executive agrees not to acquire, assume or participate in, directly or indirectly, any position, investment or interest known by Executive to be
adverse or antagonistic to the Company, its business or prospects, financial or otherwise or in any company, person or entity that is, directly or indirectly, in competition with the business of the Company or any of its affiliates. Notwithstanding the foregoing, Executive may invest and/or maintain investments in any public or private entity up to an amount of 5% of an entity’s fully diluted shares and on a passive basis.
| 3. | Compensation to Executive. |
3.1 Base Salary. The Company shall pay the Executive a base salary at the initial annualized rate of four hundred twenty seven thousand U.S. dollars ($427,000.00) gross per year, subject to standard deductions, social security contributions and withholdings, or such higher rate as may be determined from time to time by the Board or the compensation committee thereof (hereinafter referred to as the “Base Salary”). Such Base Salary shall be paid in accordance with the Company’s standard payroll practice. Payments of salary installments shall be made no less frequently than once per month. Executive’s Base Salary will be reviewed annually, typically each December, and Executive shall be eligible to receive a salary increase (but not decrease) annually in an amount to be determined by the Board or the compensation committee thereof in its sole and exclusive discretion. Once increased, the new salary shall become the Base Salary for purposes of this Agreement and shall not be reduced without the Executive’s written consent. Any material reduction in the Base Salary of the Executive, without his written consent, may be deemed Good Reason as set forth in and subject to Section 4.5.2 of this Agreement.
3.2 Discretionary Award. Provided the Executive meets the conditions stated in this Section 3.2, the Executive shall be eligible for an annual discretionary Award (hereinafter referred to as the “Award”) with a target amount of fifty percent (50%) of the Executive’s Base Salary, subject to standard deductions, social security contributions and withholdings, based on the Board’s determination, in good faith, and based upon the Executive’s individual achievement and company performance objectives as set by the Board or the compensation committee thereof, of whether the Executive has met such performance milestones as are established for the Executive by the Board or the compensation committee thereof, in good faith, in consultation with the Executive (hereinafter referred to as the “Performance Milestones”). The Performance Milestones will be based on certain factors including, but not limited to, the Executive’s performance and the Company’s financial performance. The Executive’s Award target will be reviewed annually and may be adjusted by the Board or the compensation committee thereof in its discretion, provided however, that the Award target may only be materially reduced upon Executive’s written consent. The Executive must be employed on the date the Award is awarded to be eligible for the Award, subject to the termination provisions hereof. The Award shall be paid during the calendar year following the performance calendar year.
3.3 Equity Awards.
3.3.1 Prior Equity Grants. All Horizon plc equity awards previously granted to Executive shall continue in effect from and following the Effective Date in
accordance with their existing terms. Executive may be eligible to receive additional grants of Horizon plc equity awards in the sole discretion and subject to the approval of the Board.
3.3.2 Legal Review. Upon the Executive’s submission of appropriate itemized proof and verification of reasonable and customary legal fees incurred by the Executive in obtaining legal advice associated with the review, preparation, approval, and execution of this Agreement, the Company shall pay for up to $10,000.00 of such legal fees subject to receipt of appropriate proof and verification of such legal fees no later than sixty (60) days of receipt of an invoice for legal services from the Executive and/or his attorneys. To be eligible for reimbursement, the invoice must be submitted no later than ninety (90) days after the legal fees are incurred.
3.4 Changes to Compensation. The Executive’s compensation may be changed from time to time by mutual agreement of the Executive and the Company. In the event that the Executive’s base salary is materially decreased without his written consent, said decrease will be Good Reason for the Executive to terminate the Agreement as set forth in and subject to Section 4.5.2 of this Agreement.
3.5 Taxes. All amounts paid under this Agreement to the Executive by the Company will be paid less applicable tax withholdings, social insurance contributions, and any other withholdings or deductions required by law or authorized by the Executive.
3.6 Benefits. The Executive shall, in accordance with Company policy and the terms of the applicable plan documents, be eligible to participate in benefits under any executive benefit plan or arrangement which may be in effect from time to time and made available to the Company’s executives or key management employees, including the Company’s pension benefit program., provided, however, that the Executive shall be entitled to at least twenty five (25) days of paid vacation annually.
| 4. | Termination. |
4.1 Termination by the Company. The Executive’s employment with the Company may be terminated only under the following conditions:
4.1.1 Termination for Death or Disability. The Executive’s employment with the Company shall terminate effective upon the date of the Executive’s death or “Complete Disability” (as defined in Section 4.5.1), provided, however, that this Section 4.1.1 shall in no way limit the Company’s obligations to provide such reasonable accommodations to the Executive and/or his heirs as may be required by law.
4.1.2 Termination by the Company For Cause. The Company may terminate the Executive’s employment under this Agreement for “Cause” (as defined in Section 4.5.3) by delivery of written notice to the Executive specifying the Cause or Causes relied upon for such termination, provided that such notice is delivered within two (2) months following the occurrence or discovery of any event or events constituting “Cause”. Any notice of termination given pursuant to this Section 4.1.2 shall effect termination as of the date of the notice or such date as specified in the notice. The
Executive shall have the right to appear before the CEO before any termination for Cause becomes effective and binding upon the Executive.
4.1.3 Termination by the Company Without Cause. The Company may terminate the Executive’s employment under this Agreement on one (1) months’ notice or such additional notice as is required by legislation, at any time and for any reason or no reason subject to the requirements set out in Section 4.4 of this Agreement. Such termination shall be effective on the date the Executive is so informed or as otherwise specified by the Company, pursuant to notice requirements set forth in Section 6 of this Agreement.
4.2 Termination By The Executive. The Executive may terminate his employment with the Company at any time and for any reason or no reason, including, but not limited, to the following conditions:
4.2.1 Good Reason. The Executive may terminate his employment under this Agreement for “Good Reason” (as defined below in Section 4.5.2) by delivery of written notice to the Company specifying the Good Reason relied upon by the Executive for such termination in accordance with the requirements of such section.
4.2.2 Without Good Reason. The Executive may terminate the Executive’s employment hereunder for other than Good Reason upon three (3) months written notice to the Company.
4.3 Termination by Mutual Agreement of the Parties. The Executive’s employment pursuant to this Agreement may be terminated at any time upon a mutual agreement in writing of the Parties. Any such termination of employment shall have the consequences specified in such mutual agreement.
4.4 Compensation to Executive Upon Termination. In connection with any termination of the Executive’s employment for any reason, the Executive or the Executive’s estate, as applicable, shall be entitled to any amounts payable to the Executive or the Executive’s beneficiaries subject to and accordance with the terms of the Company’s employee welfare benefit plans or policies (excluding any severance pay).
4.4.1 Death or Complete Disability. If the Executive’s employment shall be terminated by death or Complete Disability as provided in Section 4.1.1, the Company shall pay to Executive, and/or Executive’s heirs, all earned but unpaid Base Salary, any earned but unpaid discretionary Awards for any prior performance period at such time as Awards for such performance period would have been paid if the Executive remained employed, all accrued but unpaid business expenses, and all accrued but unused vacation time earned through the date of termination at the rate in effect at the time of termination (hereinafter referred to as the “Accrued Amounts”), less standard deductions and withholdings. The Executive shall also be eligible to receive a pro-rated Award for the year of termination, as determined by the Board or the Compensation Committee of the Board based on actual performance and the period of the year he was employed (hereinafter referred to as the “Pro-rata Award”), less standard deductions and
withholdings, to be paid as a lump sum within thirty (30) days after the date of termination.
4.4.2 With Cause or Without Good Reason. If the Executive’s employment shall be terminated by the Company for Cause, or if the Executive terminates employment hereunder without Good Reason, the Company shall pay the Executive’s Base Salary, accrued but unpaid business expenses and accrued and unused vacation benefits earned through the date of termination at the rate in effect at the time of termination, less standard deductions and withholdings.
4.4.3 Without Cause or For Good Reason.
(i) Not in Connection With a Change in Control. If the Company terminates the Executive’s employment without Cause or the Executive terminates his employment for Good Reason, and Section 4.4.3(ii) below does not apply, the Company shall pay the Accrued Amounts subject to standard deductions and withholdings, to be paid as a lump sum no later than thirty (30) days after the date of termination. In addition, subject to the limitations stated in this Agreement and upon the Executive’s furnishing to the Company an executed waiver and release of claims in a form acceptable to the Company (the “Release”) within the applicable time period set forth therein, but in no event later than forty-five days following termination of employment and permitting such Release to become effective in accordance with its terms (the “Release Effective Date”), and subject to Executive entering into no later than the Release Effective Date a non-competition and non-solicitation agreement to be effective during the Severance Period (as defined below), substantially similar to Section 2.3, and continuing to abide by its terms during the Severance Period, the Executive shall be entitled to:
(a) the equivalent of the Executive’s Base Salary in effect at the time of termination will continue to be paid for a period of twelve (12) months following the date of termination (hereinafter referred to as the “Severance Period”), less standard deductions and withholdings, to be paid during the Severance Period according to the Company’s regular payroll practices, subject to any delay in payment required by Section 4.6 in connection with the Release Effective Date; and
(b) in the event the Executive timely elects continued coverage, the Company will continue to pay the same portion of Executive’s health insurance premium as the percentage of health insurance premiums that it paid during the Executive’s employment, including any amounts that Company paid for benefits to the qualifying family members of the Executive, following the date of termination up until the earlier of either (i) the last day of the Severance Period or, (ii) the date on which the Executive begins full-time employment with another company or business entity which offers comparable health insurance coverage to the Executive (such period, the “Health Care Payment Period”). Notwithstanding the foregoing, if the Company determines, in its sole discretion, that the Company cannot provide the health care premium benefits without potentially incurring financial costs or penalties under applicable law (including, without limitation, Section 2716 of the Public Health Service Act or the local law
equivalent), the Company shall in lieu thereof pay Executive a taxable cash amount, which payment shall be made regardless of whether the Executive or his qualifying family members elect health care continuation coverage (the “Health Care Benefit Payment”). The Health Care Benefit Payment shall be paid in monthly or bi-weekly installments on the same schedule that the health care premiums would otherwise have been paid to the insurer. The Health Care Benefit Payment shall be equal to the amount that the Company otherwise would have paid for health care insurance premiums (which amount shall be calculated based on the premium for the first month of coverage), and shall be paid until the expiration of the Health Care Payment Period.
(ii) In Connection With a Change in Control. If the Company (or its successor) terminates the Executive’s employment without Cause or the Executive terminates his employment for Good Reason within the period commencing ninety (90) days immediately prior to a Change in Control of the Company and ending eighteen (18) months immediately following a Change in Control of the Company (as defined in Section 4.5.5 of this Agreement), the Executive shall receive the Accrued Amounts subject to standard deductions and withholdings, to be paid as a lump sum no later than thirty (30) days after the date of termination. In addition, subject to the limitations stated in this Agreement and upon the Executive’s furnishing to the Company (or its successor) an executed Release within the applicable time period set forth therein, but in no event later than forty-five days following termination of employment and permitting such Release to become effective in accordance with its terms, and subject to Executive entering into no later than the Release Effective Date a non-competition and non-solicitation agreement to be effective during the Severance Period, substantially similar to Section 2.3, and continuing to abide by its terms during the Severance Period, then in lieu of (and not additional to) the benefits provided pursuant to Section 4.4.3(i) above, the Executive shall be entitled to:
(a) the equivalent of the Executive’s Base Salary in effect at the time of termination will continue to be paid during the Severance Period, less standard deductions and withholdings, to be paid during the Severance Period according to the Company’s regular payroll practices, subject to any delay in payment required by Section 4.6 in connection with the Release Effective Date;
(b) Executive’s target Award in effect at the time of termination, or if none, the last target Award in effect for Executive, less standard deductions and withholdings, to be paid in a lump sum within ten (10) days following the later of (i) the Release Effective Date, or (ii) the effective date of the Change in Control; and
(c) in the event the Executive timely elects continued health care coverage, the Company will continue to pay the same portion of Executive’s health insurance premium as the percentage of health insurance premiums that it paid during the Executive’s employment, including any amounts that Company paid for benefits to the qualifying family members of the Executive, following the date of termination until the expiration of the Health Care Payment Period. Notwithstanding the foregoing, if the Company determines, in its sole discretion, that the Company cannot provide the health care premium benefits without potentially incurring financial costs or
penalties under applicable law (including, without limitation, Section 2716 of the Public Health Service Act or local law equivalent), the Company shall in lieu thereof pay Executive the Health Care Benefit Payment, which payment shall be made regardless of whether the Executive or his qualifying family members elect health continuation coverage. The Health Care Benefit Payment shall be paid in monthly or bi-weekly installments on the same schedule that the health care premiums would otherwise have been paid to the insurer. The Health Care Benefit Payment shall be equal to the amount that the Company otherwise would have paid for health care insurance premiums (which amount shall be calculated based on the premium for the first month of coverage), and shall be paid until the expiration of the Health Care Payment Period.
(iii) No Duplication of Benefits. For the avoidance of doubt, in no event will Executive be entitled to benefits under Section 4.4.3(i) and Section 4.4.3(ii). If Executive commences to receive benefits under Section 4.4.3(i) due to a qualifying termination prior to a Change in Control and thereafter becomes entitled to benefits under Section 4.4.3(ii), any benefits previously provided to Executive under Section 4.4.3(i) shall offset the benefits to be provided to Executive under Section 4.4.3(ii) and shall be deemed to have been provided to Executive pursuant to Section 4.4.3(ii).
4.4.4 Equity Award Acceleration.
(i) In Connection With a Change in Control. In the event that the Executive’s employment is terminated without Cause or for Good Reason within the ninety (90) days immediately preceding or during the eighteen (18) months immediately following a Change in Control of the Company (as defined in Section 4.5.5 of this Agreement), the vesting of any time-based vesting Company equity awards granted to Executive shall be fully accelerated such that on the effective date of such termination (or, if later, the date of the Change in Control) one hundred percent (100%) of the equity award shares granted to Executive prior to such termination shall be fully vested and immediately exercisable, if applicable, by the Executive. Treatment of any performance stock unit awards granted to Executive will in all cases be governed solely by the terms of the Equity Long-Term Incentive Plan.
(ii) Release and Waiver. Any equity vesting acceleration pursuant to this Section 4.4.4 shall be conditioned upon and subject to the Executive’s delivery to the Company of a fully effective Release in accordance with the terms specified by Section 4.4.3 hereof and such vesting acceleration benefit shall be in addition to the benefits provided by Section 4.4.3 hereof.
4.4.5 Taxes. All severance benefits and other amounts paid on termination of this Agreement to the Executive will be paid less applicable tax withholdings, social insurance contributions, and any other withholdings or deductions required by law or authorized by the Executive.
4.5 Definitions. For purposes of this Agreement, the following terms shall have the following meanings:
4.5.1 Code. “Code” means the United States Internal Revenue Code of 1986, as amended.
4.5.2 Complete Disability. “Complete Disability” shall mean the inability of the Executive to perform the Executive’s duties under this Agreement, whether with or without reasonable accommodation, because the Executive has become permanently disabled within the meaning of any policy of disability income insurance covering employees of the Company then in force. In the event the Company has no policy of disability income insurance covering employees of the Company in force when the Executive becomes disabled, the term “Complete Disability” shall mean the inability of the Executive to perform the Executive’s duties under this Agreement, whether with or without reasonable accommodation, by reason of any incapacity, physical or mental, which the Board, based upon medical advice or an opinion provided by a licensed physician, determines to have incapacitated the Executive from satisfactorily performing all of the Executive’s usual services for the Company, with or without reasonable accommodation, for a period of at least one hundred eighty (180) days during any twelve (12) month period that need not be consecutive.
4.5.3 Good Reason. “Good Reason” for the Executive to terminate the Executive’s employment hereunder shall mean the occurrence of any of the following events without the Executive’s consent:
(i) a material reduction in the Executive’s duties, authority, or responsibilities relative to the duties, authority, or responsibilities in effect immediately prior to such reduction, including by way of example, having the same title, duties, authority and responsibilities at a subsidiary level following a Change in Control;
(ii) the relocation of the Executive’s primary work location to a point more than fifty (50) miles from the Executive’s current work location set forth in Section 1.5 that requires a material increase in Executive’s one-way driving distance;
(iii) a material reduction by the Company of the Executive’s base salary or annual target Award opportunity, without the written consent of the Executive, as initially set forth herein or as the same may be increased from time to time pursuant to this Agreement; and
(iv) a material breach by the Company of Section 1.2 of this Agreement.
Provided, however that, such termination by the Executive shall only be deemed for Good Reason pursuant to the foregoing definition if (i) the Company is given written notice from the Executive within sixty (60) days following the first occurrence of the condition that he considers to constitute Good Reason describing the condition and the Company fails to satisfactorily remedy such condition within thirty (30) days following such written notice, and (ii) the Executive terminates employment within thirty (30) days following the end of the period within which the Company was entitled to remedy the condition constituting Good Reason but failed to do so.
4.5.4 Cause. “Cause” for the Company to terminate Executive’s employment hereunder shall mean the occurrence of any of the following events, as determined reasonably and in good faith by the Board or a committee designated by the Board:
(i) the Executive’s gross misconduct, gross negligence or willful failure to substantially perform his duties and responsibilities to the Company or willful and deliberate violation of a Company policy;
(ii) the Executive’s conviction of a criminal offence (other than an offence which in the reasonable opinion of the Board does not affect his position with the Company) or the Executive’s commission of any act of fraud, embezzlement or dishonesty against the Company or involving moral turpitude that is likely to inflict or has inflicted material injury on the business of the Company, to be determined by the sole discretion of the Company;
(iii) the Executive’s unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party that the Executive owes an obligation of nondisclosure as a result of the Executive’s relationship with the Company;
(iv) the Executive’s willful and deliberate breach of the obligations under this Agreement that causes material injury to the business of the Company; and
(v) the Executive ceasing to be a director of the Company without the prior written agreement of the Company.
4.5.5 Change in Control. For purposes of this Agreement, “Change in Control” means: (i) a sale of all or substantially all of the assets of the Company; (ii) a merger or consolidation in which the Company is not the surviving entity and in which the holders of the Company’s outstanding voting stock immediately prior to such transaction own, immediately after such transaction, securities representing less than fifty percent (50%) of the voting power of the entity surviving such transaction or, where the surviving entity is a wholly-owned subsidiary of another entity, the surviving entity’s parent; (iii) a reverse merger in which the Company is the surviving entity but the shares of Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities of the surviving entity’s parent, cash or otherwise, and in which the holders of the Company’s outstanding voting stock immediately prior to such transaction own, immediately after such transaction, securities representing less than fifty percent (50%) of the voting power of the Company or, where the Company is a wholly-owned subsidiary of another entity, the Company’s parent; or (iv) an acquisition by any person, entity or group (excluding any employee benefit plan, or related trust, sponsored or maintained by the Company or subsidiary of the Company or other entity controlled by the Company) of the beneficial ownership of securities of the Company representing at least seventy-five percent (75%) of the combined voting power entitled to vote in the election of Directors; provided,
however, that nothing in this paragraph shall apply to a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company.
4.6 Application Code Section 280G. If any payment or benefit Executive would receive pursuant to a Change in Control from the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the manner that results in the greatest economic benefit for Executive. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata.
In the event it is subsequently determined by the U.S. Internal Revenue Service that some portion of the Reduced Amount as determined pursuant to clause (x) in the preceding paragraph is subject to the Excise Tax, Executive agrees to promptly return to the Company a sufficient amount of the Payment so that no portion of the Reduced Amount is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount is determined pursuant to clause (y) in the preceding paragraph, Executive will have no obligation to return any portion of the Payment pursuant to the preceding sentence.
Unless Executive and the Company agree on an alternative accounting firm, the accounting firm engaged by the Company for general tax compliance purposes as of the day prior to the effective date of the Change in Control shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Company shall appoint a nationally recognized accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.
The Company shall use commercially reasonable efforts to cause the accounting firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to Executive and the Company within fifteen (15) calendar days after the date on which Executive’s right to a Payment is triggered (if requested at that time by Executive or the Company) or such other time as requested by Executive or the Company.
4.7 Indemnification Agreements. Executive has previously executed the Company’s indemnification agreements, copies of which are attached hereto as Exhibit A-1 and Exhibit A-2.
4.8 Confidential Information and Invention Assignment Agreement. The Executive has previously executed the Company’s Confidential Information and Invention Assignment Agreement the terms of which shall continue to govern the terms of Executive’s employment following the Effective Date, and a copy of which is attached as Exhibit B
4.9 No Mitigation or Offset. The Executive shall not be required to seek or accept other employment, or otherwise to mitigate damages, as a condition to receipt of the Severance Benefits, and the Severance Benefits shall not be offset by any amounts received by the Executive from any other source, except to the extent that the Executive’s rights to the benefits described in Sections 4.4.3(i)(b) or 4.4.3(ii)(c), as applicable, are terminated by reason of the Executive obtaining full-time employment with another company or business entity which offers comparable health insurance coverage, or except to the extent that the Executive is entitled to a termination payment under statute (including but not limited to a statutory redundancy payment).
4.10 Notice and Garden Leave. The Company may pay the Executive’s pro-rated Base Salary in lieu of all or part of any notice period which he or the Company is required to give. Where payment is made in lieu the Executive’s employment shall terminate with immediate effect. For the avoidance of doubt, the payment in lieu shall not include any element in relation to:
(i) any Award or commission payments that might otherwise have been due during the period for which the payment in lieu is made;
(ii) any payment in respect of any additional benefits which the Executive would have been entitled to receive during the period for which the payment in lieu is made; and
(iii) any payment in respect of any holiday entitlement that would have accrued during the period for which the payment in lieu is made.
The Executive agrees that the Company may be entitled at its absolute discretion to require him not to attend at work and/or not to undertake all or any of his duties during any period of notice (“garden leave”). However, during the notice period, he shall continue to be required to hold himself available to assist with answering any questions or dealing with any other matters relating to his work and he shall remain an employee of the Company. During the notice period the Company shall continue to pay the Executive’s Base Salary and contractual benefits. During this time, he shall remain bound by the terms of this Agreement and any other duties owed to the Company. The Employee may also be subject to such other conditions during the notice period as the Company considers appropriate.
| 5. | Assignment and Binding Effect. |
This Agreement shall be binding upon the Executive and the Company and inure to the benefit of the Executive and the Executive’s heirs, executors, personal representatives, assigns, administrators and legal representatives. Because of the unique and personal nature of the Executive’s duties under this Agreement, neither this Agreement nor obligations under this Agreement shall be assignable by the Executive. This Agreement shall be binding upon and inure to the benefit of the Company and its successors, assigns and legal representatives, provided that the Agreement may only be assigned to an acquirer of all or substantially all of the Company’s assets. Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes. For this purpose, “successor” means any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company.
| 6. | Notice. |
For the purposes of this Agreement, notices, demands, and all other forms of communication provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or (unless otherwise specified) mailed by registered mail, return receipt requested, postage prepaid, or by confirmed facsimile, addressed as set forth below, or to such other address as any party may have furnished to the other in writing in accordance herewith, except that notices of address shall be effective only upon receipt, as follows:
If to the Company:
Horizon Pharma, Inc.
000 X. Xxxxxxxx Xxxx
Xxxx Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Chairman, President & CEO
Fax: 000-000-0000
If to the Executive:
Any such written notice shall be deemed given on the earlier of the date on which such notice is personally delivered or ten (10) days after its deposit in the mail as specified above. Either Party may change its address for notices by giving written notice to the other Party in the manner specified in this section.
| 7. | Data Protection. |
All personal information which the Company holds about Executive is protected by data protection laws. The Company take its responsibilities under these laws seriously and holds some or all of the following personal data about Executive: address, date of birth, marital status, educational or previous employment background, history and details of current position, CVs, applications and interview records, references, performance ratings or reviews, bank details, salary, Awardes, records of internet or email usage, CCTV images, records of disciplinary investigations/meetings or grievances, stock option, pension and other insurance documentation, payroll details and other related data. This information is required for the management and administration of the Employment and to protect Executive’s rights under various employment laws. For these purposes it may from time to time be necessary to disclose Executive’s personal information to third parties, including (but not limited to) payroll processors, pension brokers/trustees, or insurers. It may also be necessary to disclose information in order to comply with any legal or regulatory obligations. The Company takes all reasonable steps as required by law to ensure the safety, privacy and integrity of Executive’s personal information. The Company may need to share personal data including sensitive personal data with other related entities which are based abroad. This may involve a transfer of data, including Executive’s personal sensitive data to a country which may not have the same data protection laws as Ireland. By signing this Agreement, Executive hereby consents to the Company holding, processing, transferring or disclosing such personal data.
| 8. | Disciplinary procedure |
In the event of any disciplinary issue arising in relation to the Executive’s employment it will be dealt with in the following manner:
(i) The disciplinary issue will be investigated by the Company during which time the Executive may be suspended on full pay;
(ii) The allegations made will be put to the Executive at a specially convened disciplinary meeting and he will be given an opportunity to respond. The Executive will be entitled to be accompanied by a fellow staff member at that meeting;
(iii) Following investigation, the Company will decide whether the issues alleged have been proven and if so what the appropriate sanction is in the circumstances. For minor misconduct sanctions may include a verbal warning or a written warning where appropriate. For more serious misconduct or if the Executive’s conduct fails, following warnings, to improve the Company may issue him with a final written warning, demote him or suspend him without pay. If termination is the appropriate sanction, then this Agreement may be terminated in accordance with Section 4 above; and
(iv) The Executive may appeal against the sanction, within 5 days of notification to him, to the Chairperson of the Board (or some other person as will
be informed to him who will not have been involved in the disciplinary procedure prior to the appeal stage).
| 9. | Medical Examination |
If so requested by the Company, the Executive shall at any reasonable time participate in a medical examination(s) by a practitioner or practitioners nominated by the Company, the result of such examination(s) to be advised directly by such practitioner to the Company. The Executive shall then be notified of the result. By signing this letter the Executive indicates his consent to disclosure by his own GP (or other medical attendant) to the medical practitioner(s) nominated by the Company of all information necessary to allow him/her to prepare a comprehensive medical report and to the disclosure of that report and all relevant background information to the Company. Failure to attend at a medical examination when requested to do so may result in disciplinary action and/or termination of sick pay.
| 10. | Choice of Law. |
This Agreement shall be governed by the laws of the Republic of Ireland, without regard to any conflicts of law principals thereof that would call for the application of the laws of any other jurisdiction, and the courts of the Republic of Ireland shall have non exclusive jurisdiction.
| 11. | Integration. |
This Agreement, including Exhibit A, Exhibit B-1, and Exhibit B-2 contains the complete, final and exclusive agreement of the Parties relating to the terms and conditions of the Executive’s employment and the termination of Executive’s employment, and supersedes all prior and contemporaneous oral and written employment agreements or arrangements between the Parties, including but not limited to the Prior Agreement.
| 12. | Amendment. |
This Agreement cannot be amended or modified except by a written agreement signed by the Executive and the Company.
| 13. | Waiver. |
No term, covenant or condition of this Agreement or any breach thereof shall be deemed waived, except with the written consent of the Party against whom the wavier is claimed, and any waiver or any such term, covenant, condition or breach shall not be deemed to be a waiver of any preceding or succeeding breach of the same or any other term, covenant, condition or breach.
| 14. | Severability. |
The finding by a court of competent jurisdiction of the unenforceability, invalidity or illegality of any provision of this Agreement shall not render any other provision of this Agreement unenforceable, invalid or illegal. Such court shall have the authority to modify or replace the invalid or unenforceable term or provision with a valid and enforceable term or provision, which most accurately represents the Parties’ intention with respect to the invalid, unenforceable, or illegal term or provision.
| 15. | Interpretation; Construction. |
The headings set forth in this Agreement are for convenience of reference only and shall not be used in interpreting this Agreement. This Agreement has been drafted and negotiated by legal counsel representing the Company and the Executive. The Parties acknowledge that each Party and its counsel has reviewed and revised, or had an opportunity to review and revise, this Agreement, and any rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.
| 16. | Execution by Facsimile Signatures and in Counterparts. |
The parties agree that facsimile signatures shall have the same force and effect as original signatures. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
| 17. | Survival. |
The provisions of this Agreement, and of all other agreements referenced herein, shall survive the termination of this Agreement, and of the Executive’s employment by the Company for any reason, to the extent necessary to enable the parties to enforce their respective rights hereunder.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREFORE, the parties have signed this Agreement on the date first written above.
COMPANY:
HORIZON PHARMA SERVICES LIMITED
| By: | /s/ Xxxxxxx X. Xxxxxxx | |
| Title: |
| |
| Print Name: |
| |
As authorized agent of the Company
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Date
EXECUTIVE:
Xxxxx X. Xxxxx
| /s/ Xxxxx X. Xxxxx |
Xxxxx X. Xxxxx, individually
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Date
