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Exhibit 10.30
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") shall be effective this 1st
day of May, 1998 between TheraTech, Inc. which is a Delaware corporation having
its principal office at 000 Xxxxxx Xxx, Xxxx Xxxx Xxxx, Xxxx 00000 ("Employer"),
and Xxxxxxxxx X. Xxxxx who is an individual having a residence at 0000 Xx. Xxxx
Xxxxxxx Xxxx., Xxxx Xxxx Xxxx, Xxxx 00000 ("Employee").
RECITALS
WHEREAS, Employee currently is employed by Employer as an executive
in its Salt Lake City, Utah offices; and
WHEREAS, Employer wishes to ensure the continued employment of
Employee in the position set forth above and to dissuade Employee from pursuing
other employment opportunities outside of Employer, and Employee wishes to be so
employed by Employer.
NOW THEREFORE, in consideration of the recitals above and the mutual
promises, covenants, and undertakings set forth below, Employer and Employee
agree as follows:
OBLIGATIONS
ARTICLE I
EMPLOYMENT
1.1 Employer hereby agrees to continue to employ Employee as an
executive with such duties as are assigned by the Chief Executive Officer
("CEO") from time to time. Such employment shall continue until terminated in
accordance with the terms of this Agreement. Employee shall, during the term of
this Agreement perform such duties and accept the election or appointment of
such additional offices and positions with Employer and any affiliates,
subsidiaries, or related entities as the CEO shall specify and direct. Employee
shall be based at the principal executive offices of the Employer in Salt Lake
City, Utah.
1.2 Employee accepts employment with Employer as set forth herein.
Employee agrees to perform fully, faithfully, competently, and effectively such
duties as shall be assigned by the CEO and to devote Employee's full time and
best efforts to the business of Employer. Employee shall be specifically
obligated to work to maximize the profitability of Employer's businesses
throughout the world. Employee shall not, except with the written consent of the
CEO, engage in any other employment during the term of Employee's employment
with Employer.
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Employee Employer
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ARTICLE II
TERM OF EMPLOYMENT
2.1 The term of Employee's employment at Employer shall continue
unless and until Employee's employment terminates pursuant to Article VI of this
Agreement.
ARTICLE III
COMPENSATION
3.1 During the term of this Agreement, Employer shall pay to Employee
for services which Employee may render to Employer an annual salary to be
determined by the CEO in its sole discretion and subject to periodic adjustment
by the CEO. For purposes of this Agreement, the term "Base Salary" shall mean
the annual salary referred to above, but shall exclude all reimbursements for
medical, professional, or transportation expenses, excess group-term life
insurance coverage, or other "fringe benefits." Employee's Base Salary shall be
paid in equal installments on Employer's regular payroll dates, but shall be
computed pro-rata in any partial year or other partial period of employment.
Employer shall also pay Employee an annual bonus (the "Bonus") to be determined
by the CEO in his sole discretion and subject to periodic adjustment by the CEO.
Employer shall withhold from all Employee's compensation, including without
limitation the Base Salary and Bonus, such sums as are required by federal,
state and local laws, including, but not limited to, federal, state, and local
income taxes, FICA and Medicare, and such other sums on which Employer and
Employee may agree from time-to-time in writing.
3.2 In addition to any compensation paid to Employee pursuant to
Section 3.1 of this Agreement, Employer shall provide Employee during the period
of Employee's employment with Employer with benefits consistent with those
generally provided to executives at Employer (the "Benefits").
3.3 Employees Base Salary, Bonus, and Benefits are set forth in
Appendix "A" to this Agreement as may be amended from time-to-time at the sole
discretion of the CEO.
ARTICLE IV
SECRET, CONFIDENTIAL AND/OR PROPRIETARY INFORMATION
4.1 Employee will hold in a fiduciary capacity for the benefit of
Employer, its affiliates, subsidiaries, related entities, and designees, and
shall not disclose to any person or entity other than Employer or persons or
entities designated by Employer, all secret, confidential or proprietary
information, knowledge, computer data and/or information, patents, trade
secrets, customer identities, marketing and other business methods, techniques,
processes, practices, procedures, plans and strategies regarding Employer, its
subsidiaries and affiliated corporations or business enterprises, and their
customers obtained by Employee during Employee's employment with Employer, and
any other secret, confidential or proprietary information pertaining to
Employer, its subsidiaries and affiliated
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corporations or business enterprises, and their customers, during the term of
this Agreement and at all times after Employee's termination of employment with
Employer, unless the Board in writing consents to the contrary.
4.2 Any invention, improvement, innovation, new product, process,
and/or idea made or developed by Employee, alone or in conjunction with others,
during the course of Employee's employment with Employer and, relating to
Employer's business, shall be deemed to have been made or developed by Employee
solely for the benefit of Employer and shall be the sole and exclusive property
of Employer. Employee shall not at any time, whether during employment with
Employer or after Employee's termination of employment with Employer, use or
disclose to any third party such invention, improvement, innovation, new
product, process, and/or idea, except as expressly authorized in writing by the
Board.
4.3 Immediately upon notice of termination of employment, Employee
shall give to Employer the originals and all copies of all documents,
correspondence, memoranda, records, notes, manuals, materials, customer and
prospective customer lists and information, including without limitation
computer data, and other things relating, either directly or indirectly, to
Employer's business, including, but not limited to, secret, confidential or
proprietary information, in Employee's possession, custody or control, unless
otherwise agreed to by the Board.
ARTICLE V
AGREEMENT NOT TO COMPETE
5.1 In recognition and consideration of Employee's employment,
compensation and benefits, the training in and information regarding Employer's
business which Employer will give Employee, Employee's introduction to
Employer's customers, and the carefully guarded methods of doing business which
Employer utilizes and deems crucial to the success of its business, Employee
shall not during the term of this Agreement, and for a period of one (1) year
following the termination of Employee's employment by Employer, regardless of
the reason for termination, either directly or indirectly, own, manage, operate,
control, be employed or retained by, or in any way engage in or be connected
with any business enterprise, in any capacity whatsoever, including, but not
limited to, partner, owner, creditor, director, officer, employee, agent or
independent contractor, which has the primary business of developing alternative
drug delivery products in geographic territories served by Employer.
5.2 Employee acknowledges that any breach of any obligation contained
in this Article and the preceding Article is not adequately compensable by
monetary damages, and Employee agrees that any such breach shall cause Employer
irreparable harm for which Employer shall be entitled to a temporary restraining
order and preliminary injunction without prior notice to Employee. Any and all
attorneys' fees, costs and expenses incurred by Employer in enforcing the terms
of this Article and the preceding Article shall be reimbursed to Employer by
Employee.
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5.3 In the event that any body of competent jurisdiction shall
determine that any of the restrictive covenants in this Article V is inequitably
broad, it is the intention and agreement of the parties that the decision-maker
shall equitably adjust the obligations of Employee under this Agreement rather
than entirely eliminate any such obligations. In the event that the
decision-maker shall equitably adjust or eliminate any of the restrictive
covenants in this Agreement, all other aspects of this Agreement shall remain in
full force and effect.
5.4 The enumeration of remedies to which Employer is entitled does
not limit any rights Employer otherwise possesses, including, but not limited
to, the right to monetary damages.
ARTICLE VI
TERMINATION
6.1 This Agreement may be terminated by Employer immediately and
without notice only upon the occurrence of any of the following events (each of
which shall constitute "Reasonable Cause" for termination):
(i) Employee commits any act of gross negligence, fraud,
dishonesty, or willful violation of any law or material
violation of any significant written policy of Employer
that causes any harm to Employer;
(ii) Conviction of the Employee of a felony or serious crime
involving moral turpitude;
(iii) Habitual drunkenness or illegal narcotic drug use by
Employee;
(iv) Failure to substantially perform the duties reasonably
assigned to Employee, or any intentional refusal without
compelling reason by Employee to discharge Employee's job
responsibilities and/or respond to Employer's legitimate
job-related requests, insofar as such responsibilities
and/or requests do not contravene law;
(v) Any excessive and unexcused absenteeism by Employee;
(vi) Failure to cooperate in an investigation conducted and/or
undertaken by Employer or a governmental agency which has
reasonable and legitimate objectives; and
(vii) Any act of intentional conflict of interest by Employee to
Employer which results in economic and/or other damage to
Employer.
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6.2 This Agreement may be terminated by Employee at any time for any
or no reason upon one (1) month prior written notice to Employer. This Agreement
shall also terminate in the event of the death or incapacitating disability of
Employee. This provision, by itself, shall not be interpreted to effect the
eligibility, if any, of Employee under any disability policy maintained by
Employer under which Employee is entitled to disability benefits. Termination of
this Agreement under this Subsection 6.2 shall excuse Employer from any and all
future payments of any kind under this Agreement, provided, however, Employee
(or a personal representative) shall be entitled to all compensation and
benefits earned hereunder to the date of termination of employment.
6.3 This Agreement may be terminated by Employer at any time upon one
(1) month written notice to Employee without Reasonable Cause and at Employer's
sole discretion.
6.4 In the event that Employee's employment is terminated by Employer
while this Agreement is in effect (1) without Reasonable Cause and pursuant to
Section 6.3 above, or (2) if the Employer merges with or is acquired by another
person or entity, or another person or entity acquires sufficient power or
control to direct the voting activities of 50% or more of the Employer, and
Employee is not offered or chooses to refuse employment in an equivalent
executive position in Salt Lake County, Utah with the acquiring or merging
company, in either of those instances and only then Employer shall pay Employee
severance pay as set forth in the Schedule of Severance Benefits attached hereto
as Appendix "B." For the purpose of this definition, "control" shall also mean
the ability to cause any decision to be taken of or by the Employer through
ownership, voting rights or control of the Board of Directors as the case may
be.
6.5 Employee shall inform Employer of the identity of any new
employer promptly (no more than twenty-four (24) hours) after accepting new
employment and shall inform Employer of all changes in employment for one (1)
year following the termination, for any reason, of Employee's employment with
Employer. Employer may serve notice on any future employer of Employee that
Employee has been exposed to secret, confidential or proprietary information,
that Employee is subject to the terms of this Agreement, and that Employee has
continuing obligations to Employer under this Agreement.
6.6 Employee agrees that in the event of a dispute between Employee
and Employer and/or Employer's representatives concerning the application of any
federal, state, or local law to the termination of Employee's employment at
Employer and/or the termination of Employee's employment at Employer generally,
at Employee's option, but only in the event Employee's employment is terminated
pursuant to paragraph 6.3 of the Agreement and not otherwise, Employee agrees
that instead of filing any claim, charge, or lawsuit, Employee shall either: (a)
waive any right Employee may have to severance under paragraph 6.4 of this
Agreement and submit such claim, charge, or lawsuit to final and binding
arbitration before an arbitrator mutually selected by Employee and Employer
under the rules of the American Arbitration Association and paid for equally by
Employee and Employer; or (b) accept the severance payment otherwise due
Employee under paragraph 6.4 of the Agreement as full, final, and sole recourse
against Employer with no further rights to assert any claim, charge, or lawsuit
in any court, agency, or arbitration panel.
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ARTICLE VII
GENERAL PROVISIONS
7.1 Employee represents and warrants that Employee is not currently
subject to any restrictive covenant, any other restriction on employment, or any
confidentiality agreement with any prior employer or other party except as
already disclosed to Employer. Employee shall indemnify and hold Employer
harmless with respect to any and all claims, causes of action, damages and
liability of any kind whatsoever, including attorneys' fees and costs,
successfully brought by a third-party arising out of any acts taken by Employee
which violate any such restrictive covenant, other restriction on employment, or
confidentiality agreement.
7.2 All material furnished to Employee by Employer during the course
of employment shall remain the property of Employer and shall be returned by
Employee to Employer at any time upon demand and upon termination of employment.
7.3 Neither this Agreement nor any right or interest hereunder shall
be assignable by Employee without Employer's prior written consent.
7.4 This Agreement shall be deemed automatically assigned by Employer
in the event of any sale, transfer, merger, and/or similar disposition of its
business, and shall inure to the benefit of and bind Employer's successors and
assigns.
7.5 The validity, interpretation, performance and enforcement of this
Agreement shall be governed by and construed in accordance with the laws of the
State of Utah. All actions brought under Paragraph 7.10 or otherwise shall be
brought and occur in Salt Lake County, Utah. The parties agree that service of
notice of arbitration or any other process may be made as set forth in Paragraph
7.8 below and that service so made shall be as effective as if personally made.
7.6 The waiver by Employer of any breach by Employee of any provision
of this Agreement shall not operate or be construed as a waiver of any other
breach by Employee.
7.7 In the event that any provision of this Agreement is determined
by any body of competent jurisdiction to be unenforceable, illegal or contrary
to public policy, that body shall modify such provision to conform to public
policy, or to interpret it in such a way as to render it enforceable and legal,
in accordance with the intent of the parties as expressed herein. In the event
that a body of competent jurisdiction decides that any provision of this
Agreement is unenforceable, illegal or contrary to public policy and cannot be
reformed, only such provision shall be affected and all other provisions of this
Agreement shall remain in full force and effect.
7.8 Any notice given to Employee pursuant to this Agreement shall be
sufficiently given if sent to Employee by registered or certified mail addressed
to Employee's address set forth at the beginning of this Agreement or such other
address as Employee shall have designated in writing to Employer. Any notice
given to Employer pursuant to this Agreement shall be sufficiently given if sent
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to Employer by registered or certified mail to Employer's address set forth at
the beginning of this Agreement or such other address as Employer shall have
designated in writing to Employee.
7.9 This Agreement and Appendices "A" and "B" set forth the entire
understanding of the parties and the agreement they desire to reach relating to
the subject matter hereof. This Agreement supersedes all prior agreements of the
parties hereto on the subject matter hereof (excluding confidentiality
agreements between or effecting the parties) including, but not limited to, any
prior negotiations, correspondence, agreements, proposals, or understandings.
Negotiations, correspondence, agreements, proposals, or understandings not
expressly incorporated into this Agreement shall be deemed to be of no force or
effect. There are no representations, warranties, or agreements, whether express
or implied, or oral or written, with respect to the subject matter hereof,
except as set forth herein. No modification, waiver or agreement of termination
of this Agreement shall be binding upon either party unless made in writing and
signed for or on behalf of each party. Any such signature of the Employer must
be that of the CEO. In the event of any inconsistency between this Agreement and
any benefit plan of the Employer, the language of this Agreement shall control
both documents.
7.10 Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, shall be finally settled under the Commercial
Arbitration Rules of American Arbitration Association ("AAA"), as modified
below, by a neutral arbitrator appointed by the AAA in accordance with said
rules.
(a) the arbitration shall be conducted before one (1)
arbitrator selected by mutual agreement of the Employer and Employee; if no
agreement is made within ten (10) business days from the date a demand for
arbitration was filed with the AAA, then the arbitrator shall be selected by the
AAA;
(b) the arbitration hearing shall take place no later
than thirty (30) days following the AAA's notice of the selection of an
arbitrator;
(c) the arbitration hearing shall last no more than one
day;
(d) no discovery shall be permitted, including depositions,
interrogatories, requests for admissions, or production of documents, except in
the case of extreme hardship as determined by the arbitrator;
(e) the arbitrator shall give his/her decision at the
conclusion of the arbitration proceeding if possible, but no later than two
business days following the conclusion of the proceeding;
(f) any arbitration proceeding under this Agreement
shall (1) be conducted in such a manner that the proprietary or confidential
information of the Employer remains protected, and (2) occur in Salt Lake City,
Utah; and
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(g) the decision of the arbitrator is final, binding,
non-reviewable, and non-appealable, and may be entered as a final judgment in
any court having jurisdiction.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.
"EMPLOYER" "EMPLOYEE"
THERATECH, INC.
By: _________________________ By: _________________________
Xxxxxx X. Xxxxx, Ph.X. Xxxxxxxxx X. Xxxxx
Its: Chairman, President and
Chief Executive Officer
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APPENDIX "A"
Employee's Base Salary and Benefits shall be as set forth in
Paragraphs "A" through "H" below:
A. Base Salary. Employer shall pay Employee an initial annual salary
in the gross amount of One Hundred Eighty-Three Thousand One Hundred Eighty
Dollars ($183,180) as Employee's base salary ("Base Salary"). The Base Salary
may be changed from time-to-time in accordance with the normal business
practices of the Employer, however, in no instance shall the Base Salary be
decreased below the initial annual salary set forth above during the term of
this Agreement except for decreases to Base Salary applied on a equal percentage
basis to all executives of the Employer.
B. Bonus. In addition to the Base Salary and in the sole discretion
of the CEO, the Employee may be given an annual bonus of up to twenty percent
(20%) of the Base Salary (the "Bonus"). If Employee has not been discharged for
Reasonable Cause as that term is defined in Article VI of this Agreement, then
Employer shall pay to Employee on or before ninety (90) days following December
31, of the relevant year the Bonus, if any, as determined by the CEO.
C. Paid Vacation. During each twelve (12) month calendar period of
Employee's employment, Employee shall be entitled to twenty (20) days of paid
vacation. Unused vacation days during any calendar year can be carried forward
to the next calendar year only up to one-half of the above allotment of paid
vacation.
D. Other Employee Benefits. Employee shall be entitled to participate
and receive any and all other benefits that are generally available to other
executives of Employer pursuant to any benefit programs existing during the term
of this Agreement, including, among other things, participation in group life
insurance, hospital, surgical, dental, medical or other group health and
accident benefit plans. In addition, Employee shall be entitled to participate
in all bonus, profit sharing, pension or retirement plans as may be in existence
during the term of this Agreement in accordance with their respective terms and
provisions; provided, however, that to the extent participation or the amount of
participation is in the discretion of the Board or any committee thereof, then
Employee's participation shall likewise be solely in such discretion.
E. Benefits Solely from General Assets. The benefits provided
hereunder shall be paid solely from the general assets of Employer. Nothing
herein shall be construed to require Employer to maintain any fund or segregate
any amount for the benefit of employee, and neither Employee nor any other
person shall have any claim against, right to, or security or other interest in,
any fund, account or asset of Employer from which any payment under this
Agreement may be made.
F. Withholding for Taxes. Employer makes no commitment that any
amounts paid to or for the benefit of Employee under Paragraphs A through E
above will be excluded from Employee's gross income for federal, state, and
local income tax purposes, or that any other federal, state, or local tax
treatment will apply to such payments or be available to Employee. Employer may
make such provisions as it deems appropriate for the withholding of any taxes
which Employer determines it is required to withhold in connection with this
Agreement and the payments contemplated hereby.
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G. Incapacity of Payee. If the CEO should determine that any person
to whom a payment is payable under this Agreement, including Employee, is unable
to care for his or her affairs because of illness or accident, or is a minor,
any payment due (unless a prior claim therefor shall have been made by a duly
appointed guardian, committee or other legal representative) may be paid to the
spouse, a child, a parent, or a brother or sister of the payee, or any person
determined by the CEO in his sole discretion, to have incurred expenses for such
payee, in such manner and proportions as the CEO may determine. Any such payment
shall completely discharge the liabilities of Employer under this Agreement for
such payment.
H. Effect on Computation of Benefits. Any reimbursement of expenses
payable under this Agreement shall not be deemed salary or other compensation to
Employee for purposes of computing benefits to which Employee may be entitled
under any 401(k) plan, bonus, deferred compensation plan, or other arrangement
of Employer for the benefit of its employees.
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APPENDIX "B"
SCHEDULE OF SEVERANCE BENEFITS
A. Entitlement to Severance Benefit. If the Employer
terminates the Employee without Reasonable Cause, or if the Employer merges with
or is acquired by another person or entity and Employee is not offered or
chooses to refuse employment with the acquiring or merging company, then in
addition to any other benefits payable under this Agreement the Employer shall
provide to the Employee the severance benefits set forth below. No severance
benefits shall be payable under the Agreement for the Employee's termination of
employment for any other reason, including, but not limited to, voluntary
termination of employment by Employee or termination of employment for
Reasonable Cause, death or incapacitating disability.
B. Term of Benefits. The Employer shall provide to
Employee the severance benefits described in Paragraph C below commencing on the
Employee's termination of employment that qualifies under the terms of Paragraph
6.3 and 6.4 of the Employment Agreement for severance benefits and with such
severance benefits continuing for a period of twenty-four (24) months. In the
event that Employee becomes eligible for severance benefits due to a change in
control as set forth in 26 U.S.C. Section 280G or any similar statute then the
twenty-four (24) month period for severance benefits shall be reduced to the
maximum period of months such as will not trigger the imposition of any excise
tax or penalty on the Employee.
C. Amount of Benefits. Severance benefits shall consist of
the following:
1. Base. The Employer shall pay to Employee a
monthly cash payment in an amount that is
equivalent to one-twelfth of the Base Salary of
Employee that is then in effect or if a new,
higher Base Salary has been set by the Employer
for an upcoming year, by that higher Base Salary.
The monthly cash payment above shall also include
an amount that is equivalent to one-twelfth of
any cash Bonus that was paid to Employee for the
last full calendar year prior to the termination
of employment. Payment shall commence in the
first regular pay period following the date of
termination. The monthly cash payments may be
made monthly or otherwise (e.g., on a two week
cycle) under the then existing regular payroll
payments dates of Employer.
2. Non-Compensation Benefits. The Employer shall
continue to cover the Employee and Employee's
dependents for a period of twenty-four (24)
months under the group medical plan covering
other employees in positions similar to that of
Employee.
(a) Legal Continuation Restrictions.
The Employer shall pay to the Employee, in cash
at the beginning of each month in the twenty-four
(24) month period, the cash equivalent value of
the monthly cost to Employer for such coverage
described above in Paragraph 2 that, due to
insurance or other
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contract language or any other legal
restrictions, cannot be continued "in kind"
for the Employee following the termination of
employment.
(b) COBRA Continuation. Any benefits
provided under this Paragraph 2 following the
Employee's termination of employment shall count
against the continuation period the Employee is
otherwise entitled to under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA"), or any similar federal or
state statute, as a result of the termination of
employment.
D. No Death Benefit. If the Employee dies prior to
completion of any payments under Paragraph C above, all such severance benefits
shall cease.
E. Status During Benefit Period. Commencing upon the
Employee's termination of employment, the Employee shall cease to be an employee
of the Employer for any purpose. The payment of severance benefits under this
Agreement shall be deemed payments to a former employee.
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