Exhibit 10.61
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated this 28th day of September, 2001 ("Effective
Date"), by and between Andrx Corporation ("Company"), a Delaware corporation
with its principal place of business at 0000 Xxxxxx Xxxxx, Xxxxx, Xxxxxxx 00000,
and Xxxxxx X. Xxxxxxxx ("Executive"), of Weston, Florida.
WHEREAS, Company wishes to better assure itself of the continued services
of Executive for the period provided in this Agreement, and Executive is willing
to continue to serve in the employ of Company upon the terms and conditions
hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto hereby agree as follows:
1. Employment. Company hereby agrees to employ Executive, and Executive
agrees to enter the employ of Company, upon the terms and conditions herein
provided. For purposes of this Agreement the term "Company" shall mean and
include Andrx Corporation and any of its subsidiaries, whether now in existence
or formed during the term of this Agreement. Executive warrants to Company that
his execution of this Agreement and performance by him of the duties hereunder
will not violate the terms of any other agreements to which Executive is a
party.
2. Position and Responsibilities. During the period of his employment
hereunder, Executive agrees to serve as the Company's Vice President and Chief
Financial Officer, whereby he will primarily responsible for the Company's
financial affairs, while performing such other duties as may appropriately be
delegated to him from time to time by the Company's Board of Directors, Chief
Executive Officer or President. Executive shall report directly to the Company's
Chief Executive Officer or President. Executive also agrees to serve, if
elected, as an officer and director of any subsidiary of Company without
additional compensation. For purposes of this Agreement, the term "subsidiary"
shall mean any corporation in which Company owns at least a majority of that
corporation's voting stock and at least a majority of each class of that
corporation's nonvoting stock.
3. Term of Employment and Duties.
(A) Term. Executive's employment shall commence on the Effective
Date and shall continue for a period of sixty (60) calendar months thereafter
("Initial Term"), unless sooner terminated, as provided in Paragraph 6 hereof.
In the event Company and Executive agree that Executive should continue in the
employ of Company after the end of the Initial Term,
such continued employment shall be subject to the terms and conditions of this
Agreement, except as otherwise provided by the parties in writing, and shall
thereafter expire upon one hundred eighty (180) days written notice by Company
to Executive, upon ninety (90) days notice by Executive to Company or as
otherwise provided in Paragraph 6 (including the Initial Term, the "Employment
Term").
(B) Duties. Executive shall devote his full time, attention,
skill and best efforts to the faithful performance of his duties to Company.
Executive shall not engage in any other business or occupation without Company's
written consent; provided, however, nothing contained herein shall prohibit
Executive from making passive or personal investments, provided such investments
do not result in an undisclosed conflict of interest between Executive and
Company.. Executive acknowledges that he shall travel as reasonably required
around the United States and abroad in connection with his employment.
4. Compensation.
(A) Base Compensation. For all services rendered by Executive in
any capacity during his employment under this Agreement, including, without
limitation, services as an executive, officer, director, or member of any
committee of Company, Company, commencing with the Effective Date and for a
period of twelve (12) months thereafter ("base period"), shall pay a base
compensation to Executive at the rate of Two Hundred Seventy Five Thousand
($275,000.00) Dollars per year. For each twelve (12) month period thereafter his
base compensation shall be subject to upward adjustment by the Compensation
Committee of the Board of Directors of Company.
(B) Fringe Compensation. In addition to the foregoing, during
each year of employment hereunder, Company shall provide Executive with the
following:
(1) Automobile. An automobile allowance of at least $500.00 per month.
(2) Medical Insurance and Premium Reimbursement. Medical insurance
coverage for Executive, his spouse and dependent children.
(3) Expense Reimbursement. Payment or reimbursement of reasonable travel
and other expenses (including without limitation entertainment expenses incurred
primarily for the benefit of Company) incurred by Executive in performing his
duties under this Agreement and in carrying out and promoting the business of
Company, upon presentation by him, from time to time, of an itemized account
("vouchers") of such expenditures in such detail as may reasonably
2
be required by Company.
(4) Vacation. Four (4) weeks of vacation with full pay each 12-month
period during the term of this Agreement, at such times as shall be mutually
agreed upon by Executive and the Company's Chief Executive Officer or President.
No portion of any unused vacation time shall be carried over to a subsequent
period, nor shall Executive receive any compensation in addition to that
provided herein for any unused vacation time.
(5) Professional Development. During the term of this Agreement, to attend
seminars and conferences relating to the business of Company (with full pay).
Company shall pay or reimburse Executive for all fees, reasonable travel and
other expenses incurred in connection with attendance at such seminars and
conferences. Reimbursements shall be made upon presentation of vouchers by
Executive.
(6) Other Benefits. Executive shall also be entitled to receive, and
participate in, any country clubs, pension or profit sharing plan, stock
purchase plan, stock option plan, group life insurance plan, hospitalization
insurance plan, medical services plan, or any other plan of Company now,
heretofore or hereafter existing for the benefit of Executive, and other senior
executives or officers generally, including Executive's right to use the Andrx
golf membership at Weston Hills country Club.
5. Key-Man Insurance. At any time during the term of this Agreement,
Company shall have the right to insure the life of Executive for the sole
benefit of Company, in such amounts, and with such terms, as it may determine.
All premiums payable thereon shall be the obligation of Company. Executive shall
have no interest in any such policy, but shall cooperate with Company in taking
out such insurance by submitting to physical examinations, by supplying all
information required by the insurance company, and by executing all necessary
documents, provided that no financial obligation is imposed upon Executive by
any such documents.
6. Termination. This Agreement shall terminate upon the occurrence of any
one of the events set forth below:
(a) Cause. Company may, at any time and in its sole discretion, terminate
-----
the employment of Executive hereunder for Cause, effective as of the date of
written notice (a "Termination Notice") to Executive specifying the nature of
such Cause (the "Termination Date"). For purposes of this Agreement, "Cause"
shall mean (i) Executive's conviction of, or plea of nolo contendere to, a
felony involving a crime of moral turpitude; or (ii) Executive's
3
having been found guilty, by a court of competent jurisdiction, of commission of
any willfully fraudulent act that is materially adverse to the interest of
Company or of any subsidiary or parent company, provided, however, that the
-------- -------
Termination Notice shall set forth in reasonable detail the act constituting
Cause hereunder, and provided further, that if the act constituting Cause is
----------------
capable of cure, such act is not cured within thirty (30) days following
Executive's receipt of a the Termination Notice. If the employment of Executive
is terminated pursuant to this Section 6(a), Company shall have no further
obligations to Executive hereunder after the Termination Date other than the
payment of salary and benefits accrued and unpaid through the Termination Date.
(b) Termination by Company for No Reason. Company may, at any time, and in
------------------------------------
its sole discretion, terminate the employment of Executive hereunder for any or
no reason by delivery to him of a Termination Notice. Such termination shall be
effective on the date of the Termination Notice; provided, however, that Company
-------- -------
shall be obligated to pay Executive severance compensation following the
Termination Date as set forth in Section 7 hereof.
(c) Termination by Executive for Good Reason. If at any time during the
----------------------------------------
employment term Executive resigns from the employ of Company for Good Reason (as
defined in the next sentence), Company shall be obligated to pay Executive
severance compensation following the Termination Date as set forth in Section 7
hereof. For purposes of this Agreement "Good Reason" shall mean, without the
consent of Executive, if (i) in the good faith determination of Executive,
Executive is no longer designated and/or has the authority of chief financial
officer of Company or there shall be a change in Executive's status or
responsibilities (including reporting responsibilities) which does not represent
a promotion or Executive shall be assigned duties which are inconsistent with
his status, title, position or duties as chief financial officer, (ii) there
shall occur any material breach by Company of any material provision of this
Agreement which shall remain uncured for a period of thirty (30) days following
receipt by Company of notice from Executive of his intention to resign because
of such breach, or (iii) Executive is required to regularly work in a location
which is 25 or more miles from the locale at which his work is now engaged.
(d) Termination in Case of Disability or Death.
------------------------------------------
(i) If Executive, due to physical or mental injury, illness,
disability or incapacity, shall fail to render the services provided for in this
Agreement for a consecutive
4
period of six (6) months, Company may, at its option, terminate Executive's
employment hereunder upon fourteen (14) days' written notice to Executive.
Disability shall mean, for purposes of this Agreement, physical or mental
disability preventing Executive from performing his duties hereunder for the
period above specified as determined by the written opinion of a physician
selected in good faith by Company, and agreed to by Executive. If the employment
of Executive is terminated pursuant to this Section 6(d)(i), Company shall have
no further obligations to Executive hereunder after the Termination Date other
than the payment of accrued but unpaid salary and benefits for a one-year period
after the Termination Date.
(ii) If Executive shall die during the Employment Term, this Agreement and
Executive's employment hereunder shall terminate immediately upon Executive
death. If the employment of Executive is terminated pursuant to this Section
6(d)(ii), Company shall have no further obligations to Executive hereunder after
the Termination Date other than the payment of accrued but unpaid salary and
benefits for a one-year period after the Termination Date.
(e) Executive's Right to Terminate Upon Change of Control. In the event
-----------------------------------------------------
that at any time during the Employment Term, there is a "Change in Control of
Company" (as hereinafter defined), Executive shall, in the exercise of his sole
discretion and upon the provision of written notice to Company within eighteen
(18) months after the date of such event, be entitled to terminate his
employment hereunder as of the date of provision of such written notice, and
Company shall in such event pay severance compensation following the Termination
Date as set forth in Section 7. As used herein, a "Change in Control of Company"
shall be deemed to have occurred if (i) any person (including any individual,
firm, partnership or other entity) together with all Affiliates and Associates
(as defined under Rule 12b-2 of the General Rules and Regulations promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") of
such person, but excluding (A) a trustee or other fiduciary holding securities
under an Executive benefit plan of Company or any subsidiary of Company, (B) a
corporation owned, directly or indirectly, by the stockholders of Company in
substantially the proportions as their ownership of Company, (C) Company or any
subsidiary of Company, or (D) Executive, together with all Affiliates and
Associates of Executive, is or becomes the Beneficial Owner (as defined in Rule
13d-3 promulgated under the Exchange Act), directly or indirectly, of securities
of Company representing 40% of more of the combined voting power of Company's
then outstanding securities, such person being hereinafter referred to as an
Acquiring Person; (ii)
5
individuals who, on the date hereof, are Continuing Directors shall cease for
any reason to constitute a majority of the Company's Board of Directors
("Board"); or (iii) the stockholders of Company approve a merger of
consolidation of Company with any other corporation, other than a merger of
consolidation that would result in the voting securities of Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 80% of the combined voting power of the voting securities of
Company or such surviving entity outstanding immediately after such merger or
consolidation, or the stockholders or Company approve a plan of complete
liquidation of Company or an agreement for the sale or disposition by Company of
all or substantially all of Company's assets. For purposes of this Section, the
term "Continuing Director" shall mean (1) any member of the Board, while such
person is a member of the Board, who was a member of the Board prior to the date
of this Agreement, or (2) any person who subsequently becomes a member of the
Board, while such person is a member of the Board (excluding an Acquiring Person
or a representative of any Acquiring Person), if such person's nomination for
election or election to the Board is recommended or approved by a majority of
the Continuing Directors.
(f) Executive's Right to Terminate Upon Change of CEO. In the event that
-------------------------------------------------
at any time during the Employment Term, the Company's chief executive officer is
not Xxxx Xxxxx, Xxxx-Xxxx Xxxx or Xxxxxx Xxxx and Executive does not have Good
Reason to terminate his employment pursuant to Section 6(b) hereof, Executive
shall nevertheless have the right, in the exercise of his sole discretion and
upon the provision of written notice to Company within eighteen (18) months
after the date a new chief executive officer is elected, to terminate his
employment hereunder as of the date specified in such written notice. In such
event, the parties shall discuss and agree upon the severance compensation
payable to Executive, with Executive being entitled, at a minimum, to the amount
set forth in Section 7(y) below with respect to options in existence prior to
the change of CEO.
7. Severance Compensation. In the event Executive's employment hereunder
is terminated by the Company pursuant to Section 6(b) hereof, or by Executive
pursuant to Section 6(c) or 6(e) hereof, the Company shall (w) pay Executive a
lump sum payment (the "Severance Payment") of three (3.0) times the highest
annual salary and annual bonus amounts Executive received during the preceding
three years (less applicable income taxes), within thirty (30) days
6
of such written notice, (x) continue to pay and provide Executive with one year
of health and dental insurance coverage (as reflected in Section 4(B)(2) above)
for a period of at least 12 months, and allow Executive to continue to use the
country club membership, at his own cost, for a period of 36 months, (y) vest in
full any installments of shares under stock option agreements, stock, stock
appreciation rights and all other awards granted to executive between Company
and Executive which, but for this agreement, would not yet be exercisable or
vested on such date, and allow Executive to exercise said benefit, in full, for
the entire remaining period specified in such agreements (but in no event for a
period less than 3 months following such termination), and (z) pay an additional
amount representing a gross-up of any federal and state and local income tax
liability arising from any amounts payable pursuant to this Agreement which are
considered to be a "parachute payment" under Internal Revenue Code ss.280G and
the regulations promulgated thereunder.
8. Confidential Information. Executive recognizes and acknowledges that
the list of Company's customers, as it may exist from time to time, its
financial data, and its future plans and its trade secrets are valuable, special
and unique assets of the Company. At no time will Executive disclose any such
list or information, or any part thereof to any person, firm, corporation,
association or other entity for any unauthorized reason or purpose whatsoever.
In the event of a breach or threatened breach by Executive of the provisions of
this Paragraph, Company shall notify Executive, in writing, of the nature of his
breach of the provisions hereof, and if such breach is repeated and continuing,
shall be entitled to an injunction restraining Executive from disclosing, in
whole or in part, such list or information, or from rendering any services to
any person, firm, corporation, association or other entity to whom such list or
information, in whole or in part, has been disclosed or is threatened to be
disclosed. Nothing herein shall be construed as prohibiting Company from
pursuing any other remedies available to it for such breach or threatened
breach, including recovery of damages from Executive.
9. No Duty to Mitigate; Set-off. The Company agrees that if the
Executive's employment is terminated during the term of this Agreement, the
Executive shall not be required to seek other employment or to attempt in any
way to reduce any amounts payable to the Executive by the Company pursuant to
this Agreement. Further, the amount of the Severance Compensation provided for
in this Agreement shall not be reduced by any compensation earned by the
Executive or benefit provided to the Executive as the result of employment by
another
7
employer or otherwise. Except as otherwise provided herein, the Company's
obligations to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any circumstances,
including without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Executive. The Executive
shall retain any and all rights under all pension plans, welfare plans, equity
plans and other plans, including other severance plans, under which the
Executive would otherwise be entitled to benefits.
10. Notices. All notices required to be given under this Agreement shall
be in writing, sent certified mail, return receipt requested, postage prepaid,
to the following addresses or to such other addresses as either may designate in
writing to the other party:
(A) If to Company, then:
0000 Xxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Att: Chief Executive Officer
with a copy to:
0000 Xxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Att: Chief Legal Officer
(B) If to Executive, then:
0000 Xxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
11. Arbitration. Any disputes arising out of or in connection with this
Agreement or any of its provisions, including but not limited to the alleged
breach of the provisions of this Agreement, shall be submitted to and determined
by arbitration conducted in accordance with the Rules of the American
Arbitration Association. The award rendered by the Arbitrator may be entered as
a judgment (with full binding, force and effect) in any court having
jurisdiction thereof. This Agreement shall constitute a written agreement to
submit any such dispute or controversy to arbitration within the meaning of the
Florida Arbitration Code and shall confer jurisdiction on the Courts of the
State of Florida to enforce such agreement to arbitrate and to enter judgment on
an award in accordance with said Florida Arbitration Code.
12. Attorneys' Fees. The successful party to any arbitration or litigation
between or among any of the parties to this Agreement shall be entitled to
recovery a reasonable attorney's
8
fees, arbitration fees and court costs. The court or arbitrator may apportion
fees or award fees based upon success in various claims or parts of any
arbitration or litigation.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Florida. Any arbitration,
lawsuits or other proceedings related to this Agreement or the transactions
herein described shall be commenced and held in Dade or Broward County, Florida.
14. Waiver. The waiver by either party hereto of any breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by either party hereto.
15. Entire Understanding. This Agreement contains the entire understanding
of the parties relating to the employment of Executive by Company. It may not be
changed orally but only by an agreement in writing signed by the party or
parties against whom enforcement of any waiver, change, modification, extension
or discharge is sought.
16. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of Company, its successors and assigns and Executive and his heirs and
legal representatives.
17. Assignment. Executive acknowledges that the services to be rendered by
him are unique and personal. Accordingly, Executive may not assign any of his
rights (except as specifically permitted herein) or delegate any of his duties
or obligations under this Agreement, except with the written permission of
Company.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals the date and year first above written.
Attest: ANDRX CORPORATION
_____________________________ By: /s/ Xxxxxx X. Xxxx
------------------------------
In the presence of:
/s/ Xxxxx Xxx /s/ Xxxxxx X. Xxxxxxxx
------------------------------ ----------------------------------
Xxxxxx X. Xxxxxxxx
9
