1
Exhibit 10.11
CHANGE IN CONTROL CONTINGENT EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of the ____ day of _______, ____, by and
between Duramed Pharmaceuticals, Inc., a Delaware corporation (the "Company"),
and _________________________, ___________________ of the Company (the
"Employee"),
W I T N E S S E T H :
---------------------
WHEREAS, sudden takeovers, acquisitions or changes of control of
domestic corporations have occurred frequently in recent years, and current
conditions may contribute to the continuation or acceleration of this trend; and
WHEREAS, the possibility of a sudden takeover, acquisition or change of
control can create uncertainty of employment and may cause the loss of valuable
Company officers, to the detriment of the Company and its shareholders; and
WHEREAS, it is believed that the detriment described can be
substantially reduced by an agreement on the terms hereinafter set forth;
NOW THEREFORE, in consideration of the foregoing premises and the
mutual covenants hereinafter set forth, IT IS AGREED:
(1) Continued Employment. If a change of control of the Company occurs
when the Employee is employed by the Company, the Company will continue
thereafter to employ the Employee, and the Employee will remain in the employ of
the Company, in accordance with the terms and provisions of this Agreement, for
a period of _______ months following the date of such change (the "Employment
Period"). As used herein, the phrase "change of control of the Company" means
the first to occur of the following:
(a) The acquisition of more than thirty percent (30%) of the
outstanding shares of voting stock of the Company by any person or entity or
group thereof acting in concert, excluding affiliates of the Company, by means
of an offer made publicly to the holders of all or substantially all of the
outstanding shares of the voting stock of the Company to acquire such shares for
cash, securities, other property or any combination thereof; or
(b) Any person or entity acquires, subsequent to the date of
this Agreement, beneficial ownership of thirty percent (30%) or more of the then
issued and outstanding voting common stock of the Company in any manner other
than a purchase of such stock directly from the Company for cash; or
(c) The sale, assignment or transfer by the Company of all or
substantially all of its business or assets, in a transaction or related series
of transactions, except any such sales to affiliates of the Company; or
(d) The Company merges or consolidates or reorganizes with or
into any other corporation or corporations other than its affiliates or engages
in any other similar business combination or reorganization; or
(e) A majority of the Board of Directors of the Company does
not consist of persons who were serving in the capacity on the date of this
Agreement, or who were appointed or nominated to serve as a Director by such
persons or by persons who were themselves so appointed or nominated.
2
(2) Duties. Unless otherwise agreed by the Company and Employee, during
the Employment Period the Employee shall be employed by the Company in the same
position as that which the Employee held on the date of the change of control of
the Company. In such employment, his duties and authority shall consist of and
include all duties and authority customarily performed and held by a person
holding an equivalent position with a corporation of similar nature and size, as
such duties and authority related to such position are reasonably defined and
delegated from time to time by the Board of Directors of the Company. However,
no change of the Employee's location of employment to outside the Cincinnati,
Ohio area, or in the Employee's title, shall be made without the prior written
consent of the Employee. The Employee shall have the powers necessary to perform
the duties assigned and shall be provided such supporting services, staff,
secretarial and other assistance, office space and accouterments as shall be
reasonably necessary and appropriate in light of the duties assigned (but in no
event, in any case, smaller in size or lesser in quality than that being
furnished to the Employee on the date of the change of control of the Company).
The Employee shall devote his entire business time, energy and skills
to such employment while so employed, but the Employee shall not be required to
devote more than an average of approximately 45 hours per calendar week to such
employment. The Employee shall be entitled to a minimum of three (3) weeks
(fifteen [15] working days) of paid vacation annually. The Employee shall have
the sole discretion to determine the time and intervals of such vacation.
(3) Compensation. During the Employment Period, the Employee shall be
compensated as follows:
(a) He shall receive a salary equal to his salary as in effect
as of the date of the change of control of the Company, subject to adjustment as
hereinafter provided.
(b) He shall be reimbursed for any and all monies advanced in
connection with his employment for reasonable and necessary expenses incurred by
him on behalf of the Company.
(c) He shall be included to the extent eligible thereunder in
any and all plans providing benefits for the Company's employees, including, but
no limited to, life, accidental death and dismemberment, long term disability,
hospitalization, medical and retirement, and be provided any and all other
benefits and perquisites (including use of an automobile) made available to
other employees of comparable status, at the expense of the Company on a
comparable basis; and
(d) He shall be included in all profit sharing, bonus,
deferred compensation, split dollar life insurance, and similar or comparable
plans customarily extended by the Company to corporate officers and key
employees of the Company.
(4) Annual Compensation Adjustments. The Board of Directors of the
Company or an appropriate committee thereof will consider and appraise the
contributions of the Employee to the Company's operating efficiency, growth,
production and profits, at least annually during the Employment Period, and in
accordance with past practice, the Employee's compensation rate shall be
annually adjusted upward to be commensurate with increases given to other
corporate officers and key employees generally and as the scope and success of
the Company's operations or the Employee's duties expand.
(5) Retirement. If, during the Employment Period, or during the
applicable period, if any, described in paragraph (7), the Employee shall
deliver to the Company a statement signed by
- 2 -
3
him, stating that the Employee voluntarily chooses to retire early from the
Company, or if the Employee shall reach the age of 65, or shall with the mutual
agreement of the Company agree in writing on early retirement, then this
Agreement shall terminate on the effective date of such event and the terms of
the Company's retirement policies or such mutual agreement shall immediately
become effective.
(6) Termination Other Than for Cause.
(a) If, during the Employment Period, the Company shall
terminate the employment of the Employee for any reason other than the reasons
set forth in paragraph (5) above or paragraph (7) below, thereafter he or his
personal representatives shall continue to be paid monthly an amount equal to
his then current monthly base salary plus one-twelfth (1/12th) of the annual
average of the executive incentive program payments and all bonuses paid to the
Employee in the preceding five (5) years, and he shall be entitled to continue
live, accidental death and dismemberment, long term disability and
hospitalization and medical insurances and shall receive the other employee
benefits and perquisites described in subparagraphs (3)(c) and (3)(d) hereof,
for the remainder of the Employment Period or as specified by Federal law,
whichever time period is longer.
(b) If during the Employment Period the Employee's duties
shall be changed substantially without his written consent from those specified
in paragraph (2) or he shall fail to be reelected or he shall be removed as a
corporate officer of the Company, or if the Company violates this Agreement, the
Employee shall have the right to elect to terminate his employment under this
Agreement; and if he so elects, he or his personal representatives shall
continue to be paid monthly an amount equal to his then current monthly base
salary plus one-twelfth (1/12th) of the average of the executive incentive
program payments and all bonuses paid to the Employee in the preceding five (5)
years, and he shall be entitled to participate in group life, hospitalization
and medical insurance and shall receive the other employee benefits and
perquisites described in subparagraphs (3)(c) and (3)(d) hereof, for the
remainder of the Employment Period.
(7) Termination for Cause. Employee agrees that this Agreement may be
terminated by the Company at any time for cause, which shall mean only death,
conviction for criminal fraud, the commission of a felony, or becoming the
subject of a final nonappealable judgment of a court of competent jurisdiction
holding that the Employee is liable to the Company for damages for obtaining a
personal benefit in a transaction adverse to the interest of the Company. In the
event this Agreement is terminated for cause, the Employee shall forfeit his
right to any and all benefits he would otherwise have been entitled thereafter
to receive under the Agreement.
(8) Enforceability. The parties agrees that nothing in this Agreement
shall in any way abrogate the right of the Company and the Employee to enforce
by injunction or otherwise the due and proper performance and observance of the
several covenants herein contained to be performed by the Employee or the
Company or to recover damages for breach thereof.
(9) Successors and Assigns. If the Company sells, assigns or transfers
all or substantially all of its business and assets to any person, excluding
affiliates of the Company, or if the Company merges into or consolidates or
otherwise combines with any person which is a continuing or successor entity,
then the Company shall assign all of its right, title and interest in this
Agreement as of the date of such event to the person which is either the
acquiring or successor corporation, and such person(s) shall assume and perform
from and after the date of such assignment all of the terms, conditions and
provisions imposed by this Agreement upon the Company. In case of such
assignment by the Company and of assumption and agreement by such person(s), all
further rights as well as all other obligations of the Company under this
- 3 -
4
Agreement thenceforth shall cease and terminate and thereafter the expression
"the Company" wherever used herein shall be deemed to mean such person(s).
(10) Affiliate. The term "affiliate" as used in this Agreement means
any corporation more than fifty (50%) percent of the outstanding voting common
stock of which is owned at the time by the Company or an affiliate of the
Company.
(11) Supplemental Compensation. This Agreement supplements, and is not
an amendment to or in derogation of, any other agreement between the Company and
the Employee relating to the employment or the terms and conditions thereof. No
person, other than such person as may be designated by the Board of Directors of
the Company, shall have any authority on behalf of the Company to agree to
modify or change this Agreement.
(12) Severability. This Agreement is to be governed by and construed
under the laws of the State of Ohio. If any provision of this Agreement shall be
held invalid and unenforceable for any reason, such provision shall be deemed
deleted and the remainder of the Agreement shall be valid and enforceable
without such provision.
(13) Termination of Agreement. The Company has the right to terminate
the employment of the Employee except in contemplation of a change in control of
the Company, and the Employee may elect at his discretion to terminate his
employment, at any time prior to a change in control of the Company, in either
of which events this Agreement shall terminate.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and its corporate seal affixed and attested by its duly authorized
officers, and the Employee has hereunto set his hand and seal as of the date
first above written.
DURAMED PHARMACEUTICALS, INC.
By
-----------------------------------------
(Corporate Seal) Attest:
------------------------------------
-------------------------------------------
, Employee
- 4 -
