EXHIBIT 10.4
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (the "Agreement") is entered into this
15th day of June, 2004 (the "Effective Date") by and between Atrix Laboratories,
Inc., a Delaware corporation with its principal place of business at 0000
Xxxxxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxxx 00000 (the "Company"), and J. Xxxxxx
Xxxxxxx, D.D.S., an individual residing at 0000 Xxxxxx Xxxx Xx. Xx. Xxxxxxx, Xx
00000 ("Employee").
1. Definitions.
(a) "Accrued Amounts" means all amounts earned or accrued
through the date of termination of employment, including, without
limitation, (i) salary, (ii) reimbursement for expenses incurred by
Employee on behalf of the Company in accordance with Company policy in
effect at the time such expenses were incurred and (iii) vacation pay.
(b) "Affiliate" means any corporation, partnership, trust or
other entity of which the Company and/or any of its Affiliates directly
or indirectly owns a majority of the outstanding shares of any class of
equity security of such corporation, partnership, trust or other entity
and any corporation, partnership, trust or other entity which directly
or indirectly owns a majority of the outstanding shares of any class of
equity security of the Company or any of its Affiliates.
(c) "Cause" means:
(i) If Employee materially violates any term of
his/her employment or any Company policies and such violation
is not substantially remedied within 30 days of written notice
from the Company to Employee;
(ii) Willful misfeasance, gross negligence or
nonfeasance of duty by Employee that is reasonably likely to
be detrimental or damaging or that has the effect of injuring
or damaging the reputation, business or business relationships
of the Company or any of its Affiliates or any of their
respective officers, directors or employees;
(iii) Any arrest, indictment (defined as any
proceeding in which "probable cause" is found), conviction (or
the civil equivalent) of Employee or a plea of guilty or nolo
contendere by Employee to a charge based on a federal or state
felony or serious criminal or civil offense (even if the crime
is classified under the applicable law as a "misdemeanor"),
including, but not limited to (1) crimes or civil offenses
involving theft, embezzlement, fraud, dishonesty or moral
turpitude; (2) crimes or civil offenses based on banking or
securities laws (including the Xxxxxxxx-Xxxxx Act of 2002);
and (3) civil enforcement actions brought by federal or state
regulatory agencies (including the Securities and Exchange
Commission).
(iv) Willful or prolonged and unapproved absence from
work by the Employee or failure, neglect or refusal by the
Employee to perform his/her duties
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and responsibilities as determined by the chief executive
officer of the Company in his sole discretion.
(d) "Change of Control" means the occurrence of one or more of
the following:
(i) Any person (as defined in Sections 3(a)(9) and
13(d)(3) of the Securities Exchange Act of 1934, as amended)
other than an existing stockholder or an Affiliate directly or
indirectly becomes the owner of 50% or more of the Voting
Stock;
(ii) The sale of all or substantially all of the
Company's assets to a single purchaser or group of affiliated
purchasers, other than any Affiliate or Affiliates, in one or
a series of related transactions; or
(iii) The Company engages in a merger or
consolidation with another entity other than an Affiliate and
immediately after that merger or consolidation, the persons or
entities that were stockholders of the Company immediately
prior to that merger or consolidation hold, directly or
indirectly, less than 50% of the Voting Stock of the surviving
entity.
The person, purchaser or group of affiliated purchasers or
entity referenced in clauses (i), (ii) and (iii) above, as applicable,
or the person or entity that controls such person, purchaser or group
of affiliated purchasers or entity, is referred to sometimes herein as
the "Acquirer".
(e) "Good Reason" means any action on the part of the Company
or any Acquirer not consented to by Employee in writing (which action
shall not have been cured within 30 days following written notice from
Employee to the chief executive officer of the Company specifying that
such action will give rise to a termination of Employee's employment
hereunder for Good Reason) having the following effect or effects:
(i) a reduction in Employee's salary then in effect,
other than a reduction comparable to reductions generally
applicable to similarly situated employees of the Company and
the Acquirer; or
(ii) the permanent relocation of Employee's principal
place of employment to a facility or location more than 50
miles from the Company's current location.
For the avoidance of doubt, "Good Reason" shall not include
any other change in the title, responsibilities or reporting
relationship of Employee including the transfer of the employment of
the Employee from the Company to the Acquirer or any of their
Affiliates (so long as such transfer does not have either or both of
the effects described in
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clauses (i) and (ii) above), provided that the transferee shall agree
to assume and be bound by the terms of this Agreement as if it were the
Company.
(f) "Voting Stock" means, with respect to a corporation, the
capital stock of any class or classes of that corporation having
general voting power under ordinary circumstances, in the absence of
contingencies, to elect directors of such corporation and, with respect
to any other entity, the securities of that entity having such general
voting power to elect the members of the managing body of that entity.
2. Term. This Agreement shall be for a term beginning on the Effective
Date and terminating on the date on which Employee's employment with the Company
terminates or is terminated.
3. Current Position. Employee's current position is that indicated
beneath his/her signature below.
4. Termination after Change of Control. If the Company terminates
Employee's employment without Cause, or Employee terminates his/her employment
for Good Reason, in either case within 12 months after a Change of Control, then
(A) the Company shall pay to Employee, within ten (10) days of the date of such
termination or such shorter period as may be required by law, all Accrued
Amounts, and (B) the Company shall pay to Employee, within ten (10) days after
the execution by the Employee and delivery to the Company of the mutual release
in the form set out in Schedule A (to which the Company hereby agrees effective
upon execution by Employee) the following:
(i) the Company shall pay to Employee in either a lump-sum or
through salary continuation, at the Company's sole discretion, an
amount equal to twelve (12) months of Employee's then current annual
base salary,
(ii) if Employee elects continued coverage under the Company's
health plan pursuant to the Comprehensive Omnibus Budget Reconciliation
Act of 1985, as amended ("COBRA"), then the Company shall continue to
pay the Company's portion of the premium for Employee's continued
coverage under the Company's health plan until the first to occur of
(A) the date that is 12 months after Employee's date of termination and
(B) the date upon which Employee's COBRA continuation period terminates
in accordance with COBRA, and
(iii) if Employee elects continued coverage under the
Company's life insurance plan, then the Company shall continue to pay
the Company's portion of the premium for Employee's continued coverage
under the Company's life insurance plan, or if continued coverage under
the Company's life insurance plan is not available pursuant to the
terms of such plan, then the Company shall pay to Employee the amount
of the premium that would otherwise be payable by the Company if
Employee's employment were not terminated until the date that is 12
months after the date of termination.
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Thereafter, Employee shall not be entitled to receive, and the Company
shall have no obligation to provide Employee with any additional salary,
payments or benefits of any kind. In the event the Employee fails to execute and
deliver to the Company the release referred to above within ten (10) days after
the termination of the Employee's employment, the Company shall not be obligated
to pay or provide to the Employee the amounts and benefits set out in clauses
(i) through (iii) above.
5. Entire Agreement. The terms of this Agreement are intended by the
parties to be the final and exclusive expression of their agreement with respect
to the relationship between Employee and the Company and may not be contradicted
by evidence of any prior or contemporaneous statements or agreements. This
Agreement supersedes in its entirety any other agreement, written or oral,
between the Company and the Employee relating to the subject matter hereof. The
parties further intend that this Agreement shall constitute the complete and
exclusive statement of its terms and that no extrinsic evidence whatsoever may
be introduced in any judicial, administrative, or other legal proceeding
involving this Agreement.
6. Amendments, Waivers. This Agreement may not be modified, amended, or
terminated except by an instrument in writing, signed by Employee and by a duly
authorized representative of the Company other than Employee. No failure to
exercise and no delay in exercising any right, remedy, or power under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, or power under this Agreement preclude any other
or further exercise thereof, or the exercise of any other right, remedy, or
power provided herein or by law or in equity.
7. Assignment; Successors and Assigns. Employee agrees that Employee
will not assign, sell, transfer, delegate or otherwise dispose of, whether
voluntarily or involuntarily, or by operation of law, any rights or obligations
under this Agreement, nor shall Employee's rights be subject to encumbrance or
the claims of creditors. Any purported assignment, transfer, or delegation shall
be null and void. Subject to the foregoing, this Agreement shall be binding upon
Employee and the Company and shall inure to the benefit of the parties and their
respective heirs, legal representatives, successors, and permitted assigns, and
shall not benefit any person or entity other than those enumerated above. For
the avoidance of doubt, the Company's obligations hereunder may be assigned to
the Acquirer, including in connection with any transfer of employment by
Employee from the Company to the Acquirer.
8. Severability; Enforcement. If any provision of this Agreement, or
the application thereof to any person, place, or circumstance, shall be held by
a court or arbitrator of competent jurisdiction to be invalid, unenforceable, or
void, the remainder of this Agreement and such provisions as applied to other
persons, places, and circumstances shall remain in full force and effect.
9. Governing Law. The validity, interpretation, enforceability, and
performance of this Agreement shall be governed by and construed in accordance
with the laws of the State of Colorado, without regard to choice of law rules.
All disputes arising under this Agreement shall be submitted to and heard by a
state or federal court located in Denver, Colorado and each of the Company and
Employee hereby irrevocably consents to the exclusive jurisdiction and exclusive
venue of such courts.
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10. Employee Acknowledgment. The parties acknowledge (a) that they have
consulted with or have had the opportunity to consult with independent counsel
of their own choice concerning this Agreement, and (b) that they have read and
understand the Agreement, are fully aware of its legal effect, and have entered
into it freely based on their own judgment and not on any representations or
promises other than those contained in this Agreement.
11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Signatures to this
Agreement may be transmitted via facsimile and such signatures shall be deemed
to be originals.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written above.
Company Employee
/s/ Xxxxx X. Xxxxxxx /s/ J. Xxxxxx Xxxxxxx
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Name: Xxxxx X. Xxxxxxx Name: J. Xxxxxx Xxxxxxx, D.D.S.
Title: Chairman of the Board of Directors and Chief Position: Sr. Vice President Clinical
Executive Officer Research
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SCHEDULE A
FORM OF RELEASE
MUTUAL RELEASE
In exchange for good and valuable consideration set forth in that
certain
Change of Control Agreement (the "
CHANGE OF CONTROL AGREEMENT") between
the undersigned, J. Xxxxxx Xxxxxxx, D.D.S. ("EMPLOYEE") and Atrix Laboratories,
Inc., a Delaware corporation ("COMPANY"), the sufficiency of which is hereby
acknowledged, Employee, on behalf of himself, his executors, heirs,
administrators, assigns and anyone else claiming by, through or under Employee,
irrevocably and unconditionally, releases, and forever discharges COMPANY, its
predecessors, successors and related and affiliate entities, including parents
and subsidiaries, and each of their respective directors, officers, employees,
attorneys, insurers, agents and representatives (collectively, the "COMPANY
RELEASEES"), from, and with respect to, any and all debts, demands, actions,
causes of action, suits, covenants, contracts, wages, bonuses, damages and any
and all claims, demands, liabilities, and expenses (including attorneys' fees
and costs) whatsoever of any name or nature both in law and in equity (severally
and collectively, "CLAIMS") that Employee now has, ever had or may in the future
have against the Company Releasees by reason of any matter, cause or thing that
has happened, developed or occurred, and any Claims that have arisen, before the
signing of this Mutual Release, including but not limited to, any and all Claims
in tort or contract, whether by statute or common law, and any Claims relating
to salary, wages, bonuses and commissions, the breach of an oral or written
contract, unjust enrichment, promissory estoppel, misrepresentation, defamation,
and interference with prospective economic advantage, interference with
contract, wrongful termination, intentional and negligent infliction of
emotional distress, negligence, breach of the covenant of good faith and fair
dealing, and Claims arising out of, based on, or connected with Employee's
employment by the Company and the termination of that employment as set forth in
the
Change of Control Agreement, including any Claims for unlawful employment
discrimination of any kind, whether based on age, race, sex, disability or
otherwise, including specifically and without limitation, claims arising under
or based on Title VII of the Civil Rights Act of 1964, as amended; the Age
Discrimination in Employment Act, as amended; the Civil Rights Act of 1991; the
Family and Medical Leave Act; the Americans with Disabilities Act; the Fair
Labor Standards Act; the Employee Retirement Income Security Act of 1974; the
Equal Pay Act of 1963; the
Colorado Civil Rights Act, the
Colorado
Anti-Discrimination Act, the
Colorado Wage Act; and any other local, state or
federal equal employment opportunity or anti-discrimination law, statute,
policy, order, ordinance or regulation affecting or relating to Claims that
Employee ever had, now has, or claims to have against the Company Releasees,
provided, however, the Employee does not release the Company Releasees with
respect to claims arising out of or relating to their fraud, gross negligence or
willful misconduct.
Employee warrants and represents that Employee has not assigned or
transferred to any person or entity any of the Claims released by this Mutual
Release, and Employee agrees to defend (by counsel of the Company Releasees's
choosing), and to indemnify and hold harmless, the Company Releasees from and
against any claims based on, in connection with, or arising out of any such
assignment or transfer made, purported or claimed.
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Except for obligations created by this Mutual Release and the
Change of
Control Agreement, the Company Releasees hereby covenant not to xxx and fully
release Employee and Employee's successors and assigns (the "EMPLOYEE
RELEASEES"), with respect to and from all actions, and claims of any kind, known
or unknown, suspected or unsuspected, which Company Releasees may now have, has
ever had or may in the future have against any of the Employee Releasees, by
reason of any matter, cause or thing that has happened, developed or occurred,
and any Claims that have arisen, before the signing of this Mutual Release,
including but not limited to, any and all Claims in tort or contract, whether by
statute or common law, including all claims arising from Employee's position as
an employee of the Company and the termination of that relationship, as of the
date of this Mutual Release; provided, however, the Company Releasees do not
release the Employee Releasees with respect to claims arising out of or relating
to their fraud, gross negligence or willful misconduct.
The Company, at its sole cost and expense, shall indemnify and defend
Employee in any threatened, pending, or contemplated action, suit or proceeding,
whether civil or criminal, administrative or investigative, or whether formal or
informal which arises by reason of the fact that Employee was an officer,
employee or a member of the board of directors of the Company prior to the date
of this Mutual Release, against expenses, including attorney's fees, judgments,
penalties, fines and amounts to be paid in settlement in connection with such
action, suit or proceeding if it is determined by the Company that Employee
conducted himself in good faith and that Employee reasonably believed (i) in the
case of conduct in Employee's official capacity with the Company, that
Employee's conduct was in the Company's best interests, or (ii) in all other
cases (except criminal cases), that Employee's conduct was at least not opposed
to the Company's best interests, or (iii) in the case of any criminal
proceeding, that Employee had no reasonable cause to believe that Employee's
conduct was unlawful ("INDEMNIFIED CLAIMS"). The Company shall have the sole and
exclusive right to select legal counsel to represent the Company Releasees and
Employee, and to control the defense and/or settlement of any Indemnified
Claims. Employee agrees to cooperate with the Company in the defense of any
Indemnified Claims, and make available to the Company any and all documents in
Employee's possession and/or control that may be necessary or useful to such
defense and/or settlement. No indemnification shall be made to Employee under
this paragraph with respect to any claim, issue or matter in connection with a
proceeding by or on behalf of the Company Releasees or any other entity in which
Employee's actions giving rise to the action, suit, proceeding or claim
constituted fraud, gross negligence and/or willful misconduct on Employee's
part. [to be used for individuals to who Section 6.9 of the Merger Agreement
does not apply]
As further consideration for Employee's entering into the
Change of
Control Agreement and this Mutual Release, the Company Releasees covenant and
agree that for one year after the date of this Mutual Release, it will not
disparage Employee in any manner harmful to Employee's business or personal
reputation. As further consideration for the Company entering into the
Change of
Control Agreement and this Mutual Release, Employee covenants and agrees that
for one year after the date of this Mutual Release, Employee will not disparage
the Company or its employees in any manner harmful to the Company's business
reputation or the business or personal reputation of its employees.
Notwithstanding anything to the contrary in this Mutual Release or the
Change of Control Agreement, the foregoing release shall not cover, and Employee
does not intend to release, any
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rights of indemnification under the Company's Certificate of Incorporation (the
"CERTIFICATE") or Bylaws (the "BYLAWS"), rights to directors and officers
liability insurance, or any rights and obligations under the
Change of Control
Agreement. Employee further acknowledges that the Company's obligations under
the Certificate and Bylaws are conditioned upon receipt by the Company of an
undertaking by Employee to repay the amount if it shall be determined by a court
of competent jurisdiction that Employee is not entitled to be indemnified by the
Company under the Certificate or Bylaws.
EMPLOYEE HAS READ THIS MUTUAL RELEASE AND BEEN PROVIDED A FULL AND
AMPLE OPPORTUNITY TO STUDY IT, AND EMPLOYEE UNDERSTANDS THAT THIS IS A FULL,
COMPREHENSIVE AND MUTUAL RELEASE AND INCLUDES ANY CLAIM UNDER THE AGE
DISCRIMINATION IN EMPLOYMENT ACT. EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS BEEN
ADVISED IN WRITING TO CONSULT WITH LEGAL COUNSEL BEFORE SIGNING THIS MUTUAL
RELEASE AND THE CHANGE OF CONTROL AGREEMENT, AND EMPLOYEE HAS CONSULTED WITH AN
ATTORNEY. EMPLOYEE WAS GIVEN A PERIOD OF AT LEAST TWENTY-ONE DAYS TO CONSIDER
SIGNING THIS MUTUAL RELEASE, AND EMPLOYEE HAS SEVEN DAYS FROM THE DATE OF
SIGNING TO REVOKE EMPLOYEE'S ACCEPTANCE BY DELIVERING TIMELY NOTICE OF HIS
REVOCATION TO THE COMPANY RELEASEES'S HUMAN RESOURCES DEPARTMENT AT ITS
PRINCIPAL PLACE OF BUSINESS. EMPLOYEE IS SIGNING THIS MUTUAL RELEASE
VOLUNTARILY, WITHOUT COERCION, AND WITH FULL KNOWLEDGE THAT IT IS INTENDED, TO
THE MAXIMUM EXTENT PERMITTED BY LAW, AS A COMPLETE AND FINAL RELEASE AND WAIVER
OF ANY AND ALL CLAIMS. EMPLOYEE ACKNOWLEDGES AND AGREES THAT THE PAYMENTS SET
FORTH IN THE CHANGE OF CONTROL AGREEMENT ARE CONTINGENT UPON EMPLOYEE SIGNING
THIS MUTUAL RELEASE AND WILL BE PAYABLE ONLY IF AND AFTER THE REVOCATION PERIOD
HAS EXPIRED.
[SIGNATURE PAGE(S) TO FOLLOW]
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Employee has read this Mutual Release, fully understand it and freely
and knowingly agree to its terms.
Dated this _______ day of ____________, 200__.
-----------------------------------
Signature
-----------------------------------
Printed Name
AGREED AND ACCEPTED:
, INC.
------------------------
By:
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Title:
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Date:
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