WATSON PHARMACEUTICALS, INC. KEY EMPLOYEE AGREEMENT
Exhibit 10.29
XXXXXX PHARMACEUTICALS, INC.
This Key Employee Agreement (“Agreement”) is entered into as of August 2, 2007 (the “Effective
Date”), by and between Xx Xxxxxxxx III (“Executive”) and Anda, Inc. (the “Company”), a Delaware
corporation.
Whereas, the Company desires to employ Executive to provide personal services to the
Company, and wishes to provide Executive with certain compensation and benefits in return for his
services; and
Whereas, Executive wishes to be employed by the Company and provide personal services
to the Company in return for certain compensation and benefits, including the benefits provided
under this Agreement;
Now, Therefore, in consideration of the mutual promises and covenants contained
herein, it is hereby agreed by and between the parties hereto as follows:
1. Employment by the Company. Subject to terms set forth herein, the Company agrees
to employ Executive in the position of Executive Vice President and Chief Operating Officer, and
Executive hereby accepts employment effective as of the Effective Date. In this position,
Executive shall perform such duties as are assigned from time to time by the Chief Executive
Officer (“CEO”) of the Company or a designee of the CEO (the “Designated Officer”). During his
employment with the Company, Executive will devote his best efforts and substantially all of his
business time and attention (except for vacation periods as set forth herein and reasonable periods
of illness or other incapacity permitted by the Company’s general employment policies) to the
business of the Company. Executive shall perform his duties under this Agreement from the
Company’s headquarters location during at least seventy percent (70%) of his regular business
working hours (provided that travel time to visit customers or prospective customers shall be
considered as time spent at the Company’s headquarters location). Executive shall abide by the
general employment policies and procedures of the Company, except that wherever the terms of this
Agreement may differ from or are in conflict with the Company’s general employment policies or
procedures, this Agreement shall control.
2. Compensation.
2.1 Salary. For services to be rendered hereunder, Executive shall receive a base salary as
set forth in Section 1 of the Compensation and Severance Terms Schedule, attached hereto as Exhibit
A. Executive will be considered annually for adjustments in base salary in accordance with Company
policy and the terms of this Agreement and subject to review and approval by the CEO and/or the
Designated Officer, as appropriate.
2.2 Bonus. Executive shall be eligible to participate in the Company’s bonus plan at the
executive level throughout the duration of Executive’s employment with the Company. The Company
shall have the sole discretion to determine whether Executive is
entitled to any such bonus and to
determine the amount of the bonus. The amount of Executive’s bonus may be determined in part based
on Executive’s performance with respect to certain goals established by the Company and attainment
by the Company and its parent Company, Xxxxxx Pharmaceuticals, Inc. (“Xxxxxx”), of its planned
financial objectives for the bonus period. Notwithstanding the foregoing, no bonus is guaranteed
to Executive. Any bonus is subject to the approval of the CEO and/or the Designated Officer, as
appropriate. The Company retains the authority to review, grant, deny or revise any bonus in its
sole discretion. To be eligible to receive a bonus, Executive must remain in employment with the
Company throughout the entire fiscal year or as otherwise required by the applicable bonus plan as
adopted by the Company from time to time. The target level of such bonus is set forth in Section 2
of Exhibit A attached hereto.
2.3 Long Term Incentive Awards. Subject to the approval of the Board of Directors (the
“Board”) of Xxxxxx or the Compensation Committee of the Board, as appropriate, Executive shall
receive such long term incentive awards as may from time to time be granted, pursuant to the terms
and conditions set forth in the applicable award agreement and plan documents, copies of which will
be made available upon Executive’s request. For the purposes of this Agreement, all long term
incentive awards (e.g., stock options, restricted stock and restricted stock units) granted to
Executive by the Company hereunder, or granted in the future, shall be referred to hereinafter as
the “Awards.”
2.4 Paid Time Off. Executive shall be eligible to accrue paid time off (“PTO”) during the
term of this Agreement, in accordance with the Company’s standard policy regarding PTO and in an
amount commensurate with other employees at a level similar to that of the Executive.
2.5 Standard Company Benefits. Executive shall be entitled to all rights and benefits for
which he is eligible under the terms and conditions of the standard Company benefits plans (e.g.,
health and disability insurance, 401(k) retirement plan, etc.) and other benefits and incentives
which may be in effect from time to time and provided by the Company to employees at levels similar
to the Executive.
3. Proprietary Information and Inventions.
Executive agrees to execute and abide by the Employee Proprietary Information and Inventions
Agreement attached hereto as Exhibit C and made a part hereof by this reference.
4. Outside Activities.
4.1 Activities. Except with the prior written consent of the CEO or the Board, as
appropriate, Executive will not during his employment with the Company
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 civic and not-for-profit
activities so long as such activities do not materially interfere with the performance of his
duties hereunder. Executive will not during his employment with the Company publicly disparage the
Company or Xxxxxx or any of their affiliates, or their respective past or present products,
officers, directors, employees or agents.
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4.2 Investments and Interests. During his employment by the Company, Executive agrees not to
acquire, assume or participate in, directly or indirectly, any position, investment or interest
known by him to be adverse to or in conflict with the interest of Xxxxxx, its business or
prospects, financial or otherwise. By way of clarification, nothing contained in this Agreement
shall prevent Executive from holding, for investment purposes only, no more than one percent
(1%) of the capital stock of any publicly traded company.
4.3 Non-Competition. During his employment by the Company and for a period of one (1)
year after his termination of employment for any reason, except on behalf of the Company, Executive
will not directly or indirectly, whether as an officer, director, stockholder, employee, partner,
proprietor, associate, representative, consultant, or in any capacity whatsoever engage in, be
employed by or have any business connection with any other person, corporation, firm, partnership
or other entity whatsoever known by him to compete with the Company in any line of business engaged
in (or planned to be engaged in) by the Company.
5. Other Agreements.
Executive represents and warrants that his employment by the Company will not conflict with
and will not be constrained by any prior agreement or relationship with any third party. Executive
represents and warrants that he will not disclose to the Company or use on behalf of the Company
any confidential information governed by any agreement with any third party except in accordance
with an agreement between the Company and any such third party. During Executive’s employment by
the Company, Executive may use, in the performance of his duties, all information generally known
and used by persons with training and experience comparable to his own and all information which is
common knowledge in the industry or otherwise legally in the public domain.
6. Termination Of Employment.
6.1 At-Will Employment. Executive’s relationship with the Company is at-will. The Company
shall have the right to terminate Executive’s employment with the Company at any time with or
without Cause and with or without notice.
6.2 Termination by Company for Cause. If the Company terminates Executive’s employment at any
time for Cause, Executive’s salary shall cease on the date of termination; and Executive will not
be entitled to severance pay, pay in lieu of notice or any other such compensation.
(a) Definition of “Cause.” For purposes of this Agreement, “Cause” shall mean (i) Executive’s
conviction of any felony; (ii) Executive’s gross misconduct, material violation of Company policy,
or material breach of Executive’s duties to the Company, which Executive fails to correct within
thirty (30) days after Executive is given written notice by the CEO or the Designated Officer; or
(iii) other events or matters relating to your job performance or conduct that would ordinarily
cause an employer to seriously consider the termination of an employee’s employment.
6.3 Termination by Company Without Cause. If the Company terminates Executive’s employment at
any time without Cause, Executive shall be entitled to severance benefits as set forth in Section
4.1 of the Compensation and Severance Terms Schedule, attached hereto as Exhibit A.
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6.4 Executive’s Voluntary Resignation. Executive may terminate his employment with the
Company at any time, with or without Good Reason, and with or without notice. In the event
Executive voluntarily terminates his employment other than for Good Reason, he will not be entitled
to severance pay, pay in lieu of notice or any other such compensation.
6.5 Executive’s Resignation for Good Reason. Executive may resign his employment for Good
Reason so long as Executive tenders his resignation to the Company within sixty (60) days after the
occurrence of the event which forms the basis for his termination for Good Reason. If Executive
terminates his employment for Good Reason, Executive shall be eligible for severance benefits as
set forth in Section 4.2 of Exhibit A, attached hereto.
(a) Definition of “Good Reason.” For purposes of this Agreement, “Good Reason” shall mean any
one of the following events which occurs on or after the Effective Date: (i) after a Change of
Control (as defined in Section 7.1), any reduction of the Executive’s then existing annual base
salary, except to the extent the annual base salary of all other executive officers at levels
similar to Executive is similarly reduced (provided such reduction does not exceed fifteen percent
(15%) of Executive’s then existing annual base salary); (ii) after a Change of Control, any
material reduction in the package of benefits and incentives, taken as a whole, provided to the
Executive (except that employee contributions may be raised to the extent of any cost increases
imposed by third parties) or any action by the Company which would materially and adversely affect
the Executive’s participation or reduce the Executive’s benefits under any such plans, except to
the extent that such benefits and incentives of all other executive officers at levels similar to
Executive are similarly reduced; (iii) after a Change of Control, any material diminution of the
Executive’s duties, and responsibilities, taken as a whole, excluding for this purpose an isolated,
insubstantial or inadvertent action not taken in bad faith which is remedied by the Company
immediately after notice thereof is given by the Executive; (iv) a requirement that the Executive
relocate to a work site that would increase the Executive’s one-way commute distance by more than
thirty-five (35) miles from his then principal residence, unless the Executive accepts such
relocation opportunity; (v) any material breach by the Company of its obligations under this
Agreement; or (vi) any failure by the Company to obtain the assumption of this Agreement by
any successor or assign of the Company.
6.6 Termination for Death or Disability. Executive’s employment with the Company will be
terminated in the event of Executive’s death, or any illness, disability or other incapacity in
such a manner that Executive is physically rendered unable regularly to perform his duties
hereunder for a period in excess of one hundred eighty (180) consecutive days or more than one
hundred eighty (180) days in any consecutive twelve (12) month period. The determination regarding
whether Executive is physically unable regularly to perform his duties shall be made by the CEO.
Executive’s inability to be physically present on the Company’s premises shall not constitute a
presumption that Executive is unable to perform such duties. In the event that Executive’s
employment with the Company is terminated for death or disability as described in this Section 6.6,
Executive or Executive’s heirs, successors, and assigns shall not receive any compensation or
benefits other than payment of accrued salary and PTO and such other benefits as expressly required
in such event by applicable law or the terms of applicable benefit plans.
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6.7 Cessation. If Executive violates any provision of Section 4.3 or Section 8 of this
Agreement or the Employee Proprietary Information and Inventions Agreement and Executive fails to
correct such violation within ten (10) days after Executive is given written notice by the CEO or
the Designated Officer, then any severance payments or other benefits being provided to Executive
will cease immediately, and Executive will not be entitled to any further compensation from the
Company.
7. Change of Control.
7.1 Definition. For purposes of this Agreement, Change of Control means the occurrence of any
of the following:
(a) a sale of assets representing fifty percent (50%) or more of the net book value and of the
fair market value of Xxxxxx’x consolidated assets (in a single transaction or in a series of
related transactions);
(b) a liquidation or dissolution of Xxxxxx;
(c) a merger or consolidation involving Xxxxxx or any subsidiary of Xxxxxx after the
completion of which: (i) in the case of a merger (other than a triangular merger) or a
consolidation involving Xxxxxx, the shareholders of Xxxxxx immediately prior to the completion of
such merger or consolidation beneficially own (within the meaning of Rule 13d-3 promulgated under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or comparable successor
rules), directly or indirectly, outstanding voting securities representing less than fifty percent
(50%) of the combined voting power of the surviving entity in such merger or consolidation, and
(ii) in the case of a triangular merger involving Xxxxxx or a subsidiary of Xxxxxx, the
shareholders of Xxxxxx immediately prior to the completion of such merger beneficially
own (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable
successor rules), directly or indirectly, outstanding voting securities representing less than
fifty percent (50%) of the combined voting power of the surviving entity in such merger and less
than fifty percent (50%) of the combined voting power of the parent of the surviving entity in such
merger;
(d) an acquisition by any person, entity or “group” (within the meaning of Section 13(d) or
14(d) of the Exchange Act or any comparable successor provisions), other than any employee benefit
plan, or related trust, sponsored or maintained by Xxxxxx or an affiliate of Xxxxxx and other than
in a merger or consolidation of the type referred to in clause “(c)” of this sentence, of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or
comparable successor rules) of outstanding voting securities of Xxxxxx representing more than fifty
percent (50%) of the combined voting power of Xxxxxx (in a single transaction or series of related
transactions); or
(e) in the event that the individuals who, as of the Effective Date, are members of the Board
(the “Incumbent Board”) of Xxxxxx, cease for any reason to constitute at least fifty percent (50%)
of the Board. (If the election, or nomination for election by Xxxxxx’x shareholders, of any new
member of the Board is approved by a vote of at least fifty percent (50%) of the Incumbent Board,
such new member of the Board shall be considered as a member of the Incumbent Board.)
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7.2 Termination After a Change of Control. In the event Executive’s employment with the
Company is terminated without Cause, or Executive resigns for Good Reason, within ninety (90) days
prior to or twenty-four (24) months following a Change of Control (a “Change of Control
Termination”), then Executive shall be eligible for severance benefits as set forth in Section 4.3
of Exhibit A, attached hereto.
7.3 Parachute Payments. In the event that it shall be determined under this Section 7.3 that
any payment or benefit to Executive or for the benefit of Executive or on Executive’s behalf
(whether paid or payable or distributed or distributable) pursuant to the terms of this Agreement
or any other agreement, arrangement or plan with Xxxxxx or any Affiliate (as defined below)
(including, without limitation, the severance benefits as set forth in Section 4.3 of Exhibit A,
attached hereto) (individually, a “Payment” and collectively, the “Payments”) would be subject to
the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
“Code”), or any successor provision thereto (the “Excise Tax”), then Executive shall be entitled to
receive from Xxxxxx one or more additional payments (individually, a “Gross-Up Payment” and
collectively, the “Gross-Up Payments”) in an aggregate amount such that the net amount of the
Payments and the Gross-Up Payments retained by Executive after the payment of all Excise Taxes (and
any interest and penalties imposed with respect to such Excise Taxes) on the Payments and all
federal, state and local income tax, employment taxes and Excise Taxes (including any interest and
penalties imposed with respect to such taxes and Excise Taxes) on the Gross-Up Payments provided
for in this Section 7.3, and taking into account any lost or reduced tax deductions on account of
the Gross-Up Payments, shall be equal to the Payments. For purposes of this Section 7.3, an
“Affiliate” shall mean any successor to all or substantially all of the business and/or assets of
Xxxxxx, any person acquiring ownership or effective control of Xxxxxx or ownership of a substantial
portion of the assets of the Xxxxxx’x assets, or any other person whose relationship to Xxxxxx,
such successor or such person acquiring ownership or control is such as to require attribution
between the parties under Section 318(a) of the Code.
(a) All determinations required to be made under this Section 7.3, including whether and when
any Gross-Up Payment is required and the amount of such Gross-Up Payment, and the assumptions to be
utilized in arriving at such determinations, shall be made by the Accountants (as defined below),
which shall provide Executive and the Company with detailed supporting calculations with respect to
such Gross-Up Payment within thirty (30) days of the receipt of notice from Executive or the
Company that Executive has received or will receive a Payment. For the purposes of this Section
7.3, the “Accountants” shall mean Xxxxxx’x independent certified public accounting firm serving
immediately prior to the Change of Control (or other change in ownership or effective control, or
change in ownership of a substantial portion of the assets, of a corporation, as defined in Section
280G of the Code) with respect to which such determination is being made. In the event that the
Accountants are also serving as the accountants, auditors or consultants for the individual, entity
or group effecting the Change of Control (or other change in ownership or effective control, or
change in ownership of a substantial portion of the assets, of a corporation, as defined in Section
280G of the Code), Xxxxxx shall appoint another nationally recognized independent certified public
accounting firm, reasonably acceptable to Executive, to make the determinations required hereunder
(which accounting firm shall then be referred to as the “Accountants” hereunder). All fees and
expenses of the Accountants shall be borne solely by Xxxxxx.
(b) For the purposes of determining whether any of the Payments will be subject to the Excise
Tax and the amount of such Excise Tax, such Payments will be treated as “parachute payments” within
the meaning of section 280G of the Code, and all “parachute payments” in excess of the “base
amount” (as defined under Section 280G(b)(3) of the Code) of
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Executive shall be treated as subject to the Excise Tax,
unless and except to the extent that, in the opinion of the Accountants, such Payments (in whole or
in part) either do not constitute “parachute payments” or represent reasonable compensation for
services actually rendered (within the meaning of section 280G(b)(4) of the Code) in excess of the
“base amount,” or such “parachute payments” are otherwise not subject to such Excise Tax.
(c) For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed
to pay federal income taxes at the highest applicable marginal rate of federal income taxation for
the calendar year in which the Gross-Up Payment is to be made and to pay any applicable state and
local income taxes at the highest applicable marginal rate of taxation for the calendar year in
which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes
which could be obtained from the deduction of such state or local taxes if paid in such year
(determined without regard to limitations on deductions based upon the amount of Executive’s
adjusted gross income); and to have otherwise allowable deductions for federal, state and local
income tax purposes at least equal to those disallowed because of the inclusion of the Gross-Up
Payment in Executive’s adjusted gross income.
(d) Any determination by the Accountants shall be binding upon Xxxxxx and Executive. As a
result of uncertainty in the application of Section 4999 of the Code at the time of the initial
determination by the Accountants hereunder, it is possible that the Gross-Up Payment made will have
been an amount less than Xxxxxx should have paid pursuant to this Section 7.3 (the “Underpayment”).
In the event that Xxxxxx exhausts its remedies pursuant to Section 7.3(f) and Executive is
required to make a payment of any Excise Tax, the Underpayment shall be promptly paid by Xxxxxx to
or for Executive’s benefit.
(e) Executive shall notify Xxxxxx in writing of any claim by the Internal Revenue Service or
other taxing authority that, if successful, would require the payment by Xxxxxx of a Xxxxx-Up
Payment. Such notification shall be given as soon as practicable after Executive is informed in
writing of such claim and shall apprise Xxxxxx of the nature of such claim and the date on which
such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of
the 30-day period following the date on which Executive gives such notice to Xxxxxx (or such
shorter period ending on the date that any payment of taxes, interest and/or penalties with respect
to such claim is due). If Xxxxxx notifies Executive in writing prior to the expiration of such
period that Xxxxxx desires to contest such claim, Executive shall: (i) give Xxxxxx any information
reasonably requested by Xxxxxx relating to such claim; (ii) take such action in connection with
contesting such claim as Xxxxxx shall reasonably request in writing from time to time, including,
without limitation, engaging legal representation with respect to such claim by an attorney
selected by Xxxxxx and reasonably acceptable to Executive; (iii) cooperate with Xxxxxx in good
faith in order to effectively contest such claim; and (iv) permit Xxxxxx to participate in any
proceedings relating to such claims; provided, however, that Xxxxxx shall bear and pay directly all
costs and expenses, including attorneys’ fees (including additional interest and penalties)
incurred in connection with such contest and shall indemnify Executive for and hold Executive harmless
from, on an after-tax basis, any Excise Tax or income, employment or other taxes (including
interest and penalties with respect thereto) imposed as a result of such representation and payment
of all related costs and expenses.
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(f) Without limiting the foregoing provisions of this Section 7.3, Xxxxxx shall control all
proceedings taken in connection with such contest and, at the Company’s sole option, may pursue or
forgo any and all administrative appeals, proceedings, hearings and conferences with the Internal
Revenue Service or other taxing authority in respect of such claim and may, at Xxxxxx’x sole
option, either direct Executive to pay the amount claimed and xxx for a refund or contest the claim
in any permissible manner, and Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as Xxxxxx shall determine; provided, however, that if Xxxxxx directs Executive to pay such
claim and xxx for a refund, Xxxxxx shall advance the amount of such payment to Executive, on an
interest-free basis, and shall indemnify Executive for and hold Executive harmless from, on an
after-tax basis, any Excise Tax or income, employment or other taxes (including interest or
penalties with respect thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance (including as a result of any forgiveness by Xxxxxx of such
advance); provided, further, that any extension of the statute of limitations relating to the
payment of taxes, interest and penalties for the taxable year of Executive with respect to which
such contested amount is claimed to be due shall be limited solely to such contested amount.
Furthermore, Xxxxxx’x control of the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest,
as the case may be, any other issue raised by the Internal Revenue Service or any other taxing
authority.
(g) The Gross-Up Payments provided for in this Section 7.3 shall be paid to Executive as soon
as practicable after the Accountants have determined the amount of such payments, but not earlier
than the date the severance benefits are due to Executive under Section 4.4 of the Compensation and
Severance Terms Schedule, attached hereto as Exhibit A and in no event later than the later of (i)
the end of the calendar year following the date of termination and (ii) the third calendar month
following the date of termination, as permitted under Code Section 409(A); provided, however, that
if the amounts of such Gross-Up Payments cannot be finally determined by the Accountants before the
end of this period, Xxxxxx shall pay to Executive as of the last day of the period described above
an estimate, as determined in good faith by Xxxxxx, of the amount of such Gross-Up Payments. In
the event that the amount of the estimated payments exceeds the amount subsequently determined by
the Accountants to have been due to the Executive, such excess shall constitute a loan by the
Company to Executive, payable not later than 30 days after such determination and demand by Xxxxxx
(together with interest at the rate provided in Section 1274(b)(2)(B) of the Code).
8. Nonsolicitation. While employed by the Company, and for one (1) year following
the termination of Executive’s employment with the Company, Executive agrees not to solicit,
attempt to solicit, induce, or otherwise cause any employee or independent contractor of Xxxxxx or
the Company to terminate his or her employment or contractual relationship in order to become an
employee or independent contractor to or for Executive or any other person or entity.
9. Release. In exchange for the severance compensation and benefits provided under
this Agreement to which Executive would not otherwise be entitled, Executive shall enter into and
execute a release substantially in the form attached hereto as Exhibit B, as may be revised and
updated as determined to be appropriate by the Company (the “Release”). Unless the Release is
executed by Executive following termination of employment, delivered to the
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Company within
twenty-one (21) days after the Release has been provided to Executive (or forty-five (45) days
following Executive’s receipt of the informational package required in the event of a group
termination), and not revoked, Executive shall not receive any severance benefits provided under
this Agreement, any vesting acceleration of Executive’s Awards as provided in this Agreement shall
not apply, and Executive’s Awards in such event shall vest or, in the case of stock options, be
exercisable following the date of Executive’s termination only to the extent provided under their
original terms in accordance with the applicable plan and Award agreements.
10. General Provisions.
10.1 Notices. Any notices provided hereunder must be in writing and shall be deemed effective
upon personal delivery (including, personal delivery by facsimile transmission) or the third day
after mailing by first class mail, to the Company at its primary office location, with a copy to
Xxxxxx at its primary office location, and to Executive at his address as listed on the Company
payroll (which address may be changed by written notice).
10.2 Severability. Whenever possible, each provision of this Agreement will be interpreted in
such manner as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid or unenforceable in any respect under any applicable law or rule in
any jurisdiction, such invalidity or unenforceability will not affect any other provision or any
other jurisdiction, and such invalid or unenforceable provision shall be reformed, construed and
enforced in such jurisdiction so as to render it valid and enforceable consistent with the intent
of the parties insofar as possible.
10.3 Waiver. If either party should waive any breach of any provisions of this Agreement, he
or it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or
any other provision of this Agreement.
10.4 Entire Agreement. This Agreement, together with the Employee Proprietary Information and
Inventions Agreement, constitute the final, complete, and exclusive embodiment of the entire
agreement between Executive and the Company regarding the subject matter hereof and supersede any prior agreement, promise,
representation, or statement, written or otherwise, between Executive and the Company or any of its
affiliates with regard to this subject matter. Without limiting the generality of the foregoing,
this Agreement supersedes any and all agreements, written or otherwise, between Executive and
Andrx Corporation or its subsidiaries concerning Executive’s employment. This Agreement is entered
into without reliance on any promise, representation, statement or agreement other than those
expressly contained or incorporated herein, and it cannot be modified or amended except in a
writing signed by Executive and a duly authorized officer of the Company.
10.5 Counterparts. This Agreement may be executed in separate counterparts, any one of which
need not contain signatures of more than one party, but all of which taken together will constitute
one and the same Agreement.
10.6 Headings. The headings of the sections hereof are inserted for convenience only and
shall not be deemed to constitute a part hereof nor to affect the meaning thereof.
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10.7 Successors and Assigns. This Agreement is intended to bind and inure to the benefit of
and be enforceable by Executive, the Company (and Xxxxxx to the extent applicable) and their
respective successors, assigns, heirs, executors and administrators, except that Executive may not
assign any of his duties hereunder and he may not assign any of his rights hereunder without the
written consent of the Company.
10.8 Attorneys’ Fees. If either party hereto brings any action to enforce his or its rights
hereunder, the prevailing party in any such action shall be entitled to recover his or its
reasonable attorneys’ fees and costs incurred in connection with such action.
10.9 Arbitration. To provide a mechanism for rapid and economical dispute resolution,
Executive and the Company agree that any and all disputes, claims, or causes of action, in law or
equity, arising from or relating to this Agreement (including the Release) or its enforcement,
performance, breach, or interpretation, will be resolved, to the fullest extent permitted by law,
by final, binding, and confidential arbitration held in Broward County, Florida and conducted
before a single arbitrator by Judicial Arbitration & Mediation Services/Endispute (“JAMS”), under
its then-existing Rules and Procedures. The arbitrator shall be required to apply the laws of
Florida in the conduct and determination of all such proceedings. Nothing in this Section 10.9 or
in this Agreement is intended to prevent either Executive or the Company from obtaining injunctive
relief in court to prevent irreparable harm pending the conduct of any such arbitration.
10.10 Remedies. Executive’s duties under Section 4.3 and Section 8 and the Employee
Proprietary Information and Inventions Agreement shall survive termination of Executive’s
employment with the Company. Executive acknowledges that a remedy at law for any breach or
threatened breach by Executive of the provisions of these sections and the Employee Proprietary
Information and Inventions Agreement would be inadequate, and that such a breach would cause
irreparable harm to the Company; and Executive therefore agrees that the Company shall be entitled
to injunctive relief in case of any such breach or threatened breach. Executive waives any
requirement for the posting of a bond in connection with obtaining such injunctive relief.
10.11 Governing Law. All questions concerning the construction, validity and interpretation
of this Agreement will be governed by the law of the State of Florida as applied to contracts made
and to be performed entirely within Florida.
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In Witness Whereof, the parties have executed this Agreement effective as of the
Effective Date above written.
Anda, Inc.
| By: | /s/ Xxxxx X. Xxxxx | |||
| Name: Xxxxx X. Xxxxx | ||||
| Title: SVP, Human Resources | ||||
Executive:
/s/ Xx Xxxxxxxx, III
Name: Xx Xxxxxxxx, III
Name: Xx Xxxxxxxx, III
Solely with respect to Section 7.3:
XXXXXX PHARMACEUTICALS, INC.
| By: | Xxxxx X. Xxxxx | |||
| Name: Xxxxx X. Xxxxx | ||||
| Title: SVP, Human Resources | ||||
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Exhibit A
COMPENSATION AND SEVERANCE TERMS SCHEDULE
1. BASE SALARY
For services to be rendered under this Agreement, Executive shall receive an initial
base salary at an annualized rate of $360,018, payable in accordance with the Company’s
standard payroll practices, and subject to adjustments as set forth in the Agreement.
2. BONUS
Executive’s annual bonus, if granted, shall be at a target level of not less than 45% of
Executive’s then current base salary. Executive’s annual bonus shall be based on the
attainment of certain goals and initiatives approved by the CEO and, as applicable, the
Compensation Committee.
3. LONG TERM INCENTIVE AWARDS
From time to time, Executive may receive Awards of Xxxxxx stock options, restricted
stock, restricted stock units, or other forms of equity awards. The terms and conditions of
any such Awards, including the applicable vesting periods of such Awards, shall be set forth
in the applicable award agreements and shall otherwise be subject to the terms and
conditions of the applicable plan documents. Any Awards, if granted, shall be subject to
the approval of the Compensation Committee of the Board or the CEO, as applicable.
4. SEVERANCE BENEFITS
4.1 Termination By Company without Cause. If the Company terminates Executive’s
employment at any time without Cause, the Company shall provide to Executive, within thirty
(30) days after the Effective Date of the Release attached hereto as Exhibit B (as
“Effective Date” is defined in the Release), as the only severance compensation and benefits
all of the following:
(a) A lump sum severance payment, subject to standard withholdings or deductions, in an
amount equal to the sum of: (i) twenty four (24) months of Executive’s then base salary; and
(ii) Executive’s prorated bonus for the year in which the termination occurs, at the
Company’s discretion.
(b) Continued group health insurance benefits (e.g., medical, dental, vision, etc.) for
Executive and Executive’s eligible dependents for a period of up to
1.
eighteen(18) months under COBRA; provided, however, that in any event the Company’s
obligation to provide any health benefits pursuant to this sentence ends when Executive
becomes eligible for subsidized health insurance with a new employer or other third party
(and Executive agrees to promptly notify the Company in writing of any such event of
eligibility). To satisfy its obligations hereunder, the Company, at its election, shall
either (i) arrange commercial health care coverage for Executive and Executive’s eligible
dependents (which is (x) comparable to the health benefits provided to Executive and his
eligible dependents immediately prior to commencement of such commercial health care
coverage, (y) subject to change if such coverage is no longer available, and (z) mutually
agreeable to the Company and Executive), or (ii) provide Executive and his eligible
dependents continued coverage under the Company’s health plans.
(c) Outplacement services for one year with a nationally recognized service selected by
the Company.
4.2 Executive’s Resignation for Good Reason. If Executive terminates his employment
with the Company for Good Reason in the absence of a Change of Control, the Company shall
provide to Executive, within thirty (30) days after the Effective Date of the Release
attached hereto as Exhibit B (as “Effective Date” is defined in the Release), as the only
severance compensation and benefits, the same severance compensation and benefits provided
in Section 4.1 hereof.
4.3 Change of Control Termination. In the event of a Change of Control Termination or
if the Executive resigns for Good Reason within ninety (90) days prior to or twenty-four
(24) months following a Change of Control, the Company shall provide to Executive, within
thirty (30) days after the Effective Date of the Release attached hereto as Exhibit B (as
“Effective Date” is defined in the Release), as the only severance compensation and
benefits, (a) the same severance compensation and benefits provided in Section 4.1 hereof,
(b) two times Executive’s target bonus to be earned for the year in which termination
occurs or the bonus amount paid to the Executive in the prior year, whichever is greater;
and, (c) any unvested Awards held by Executive shall have their vesting accelerated in full
so as to become one hundred percent (100%) vested and, in the case of stock options,
immediately exercisable in full, as of the date of such termination.
4.4 Delayed Payments. Notwithstanding anything in this Section 4 to the contrary, if
the Company determines in good faith that any payment or benefit under this Section 4, that
is payable to Executive on account of a termination of employment with the Company,
constitutes a “deferral of compensation” under Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”) (as set forth in IRS Notice 2005-1, or successor Temporary or
Final Treasury Regulations), and that Executive is a “specified employee” within the meaning
of Code Section 409A(a)(2)(B)(i), then the Company shall delay commencement of any such
payment or benefit until six months after the Effective Date of the Release attached hereto
as Exhibit B (as “Effective Date” is defined in the Release) (the “409A Suspension Period”).
With respect to any benefits to be provided by the Company (such as continued health care
benefits, if any), Executive
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shall pay for such benefits directly during the 409A Suspension Period. Within 15
calendar days after the end of the 409A Suspension Period, the Company shall pay to
Executive a lump sum payment in cash equal to any payments and benefits (including interest
on any such payments and benefits, at an interest rate of not less the prime interest rate,
as published in the Wall Street Journal, for the 409A Suspension Period) that the Company
would otherwise have been required to provide under this Section 4 but for the imposition of
the 409A Suspension Period. Thereafter, Executive shall receive any remaining payments and
benefits due under this Section 4 in accordance with the terms of this Section 4 (as if
there had not been any suspension period).
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Exhibit B
RELEASE AGREEMENT
I understand that my position with Anda, Inc. (the “Company”) terminated effective
(the “Separation Date”). The Company has agreed that if I choose to sign this Release, the Company
will, within thirty (30) days after the Effective Date of this Release, pay me certain severance
benefits (minus the standard withholdings and deductions) pursuant to the terms of the Key Employee
Agreement (the “Agreement”) entered into as of , 2007, between myself and the
Company, and any agreements incorporated therein by reference. I understand that I am not entitled
to such severance benefits unless I sign this Release. I further understand that, regardless of
whether I sign this Release, the Company will pay me all of my accrued salary and paid time off
through the Separation Date, to which I am entitled by law.
In consideration for the severance benefits I am receiving under the Agreement, I hereby release
the Company, its parents, subsidiaries, and affiliates, and their respectiveofficers, directors,
agents, attorneys, employees, and shareholders (“Releasees”) from any and all claims, liabilities,
demands, causes of action, attorneys’ fees, damages, or obligations of every kind and nature,
whether they are now known or unknown, arising at any time prior to the date I sign this Release.
This general release includes, but is not limited to: all federal and state statutory and common
law claims, claims related to my employment or the termination of my employment or related to
breach of contract, tort, wrongful termination, discrimination, harassment, defamation, fraud,
wages or benefits, or claims for any form of equity or compensation. Without limiting the
foregoing, the above general release includes, but is not limited to, all “wrongful discharge,”
“whistleblower” and discrimination claims; all claims relating to any contracts of employment,
express or implied; any claims for defamation, misrepresentation or negligence; any claim for wages
or severance pay; any tort claim of any nature; any claim under federal, state or municipal statute
or ordinance; any claim under any laws or regulations relating to employment matters including, but
not limited to, claims under the Age Discrimination in Employment Act of 1967, the California Fair
Employment & Housing Act and similar statutes in other jurisdictions, the Civil Rights Act of 1964
and 1991, the Employee Retirement Income Security Act, the Americans with Disabilities Act, the
Fair Labor Standards Act, the Family and Medical Leave Act, the Civil False Claim Act, the Florida
Civil Rights Act, Florida’s Whistleblower Law, the Florida Human Relations Act, and any amendments
thereto. Notwithstanding the release in the preceding sentence, I am not releasing any right of
indemnification I may have for any liabilities and costs of defense (including without limitation
reasonable attorneys’ fees) arising from my actions within the course and scope of my employment
with the Company.
In releasing claims unknown to me at present, I am waiving all rights and benefits under Section
1542 of the California Civil Code, and any law or legal principle of similar effect in any
jurisdiction: “A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor.”
Because I am forty (40) years of age or older as of the Separation Date, I acknowledge that I am
knowingly and voluntarily waiving and releasing any rights I may have under the federal Age
Discrimination in Employment Act of 1967, as amended (“ADEA”). I also acknowledge that the
consideration given for the waiver in the above paragraph is in addition to anything of value to
which I was already entitled. I have been advised by this writing, as required by the ADEA that:
(a) my waiver and release do not apply to any claims that may arise after my signing of this
Release; (b) I should consult with an attorney prior to executing this Release; (c) I have
twenty-one (21) days (forty-five (45) days in the event of a group termination) within which to
consider this Release (although I may choose to voluntarily execute this Release earlier); (d) I
have seven (7) days following the execution of this release to revoke the Release; and (e) this
Release will not be effective until the eighth day after this Release has been signed both by me
and by the Company (“Effective Date”).
I acknowledge that I remain bound by the Employee Proprietary Information and Invention Agreement
which I signed in connection with my employment (“Invention Agreement”) and that the provisions of
the Invention Agreement shall remain in full force and effect. In accordance with my existing and
continuing obligations under the Invention Agreement, I have returned to the Company all materials
required to be returned pursuant to the Invention Agreement, as well as any other Company property
in my possession. In consideration for the severance benefits I am receiving hereunder, I agree
that I will reasonably cooperate with the Company after the Separation Date to assure the smooth
transition of pending matters and to answer questions which may arise from time to time regarding
my former duties and responsibilities. Effective as of the Separation Date, I resign any and all
offices and directorships with the Company and any of its affiliates, and will execute all
documents reasonably requested by the Company or its affiliates to effectuate such resignations.
Further, I agree that I will not hereafter disparage the Company or any of the Releasees, either
orally or in writing, to any person or entity. The Company agrees that its officers and directors
will not disparage me, either orally or in writing, to any person or entity.
Agreed:
Date
|
[Employee] |
Date
|
ANDA, INC. |
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Exhibit C
EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
