Ex. 10.2
EON LABS MANUFACTURING, INC.
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of this 11th day of February
2002 (the "Effective Date"), between Eon Labs Manufacturing, Inc. (the
"Company"), and Xxxxxxx X. Xxxx (the "Executive").
R E C I T A L S:
WHEREAS, the Company recognizes that the future growth,
profitability and success of the Company's business will be substantially and
materially enhanced by the employment of the Executive by the Company; and
WHEREAS, the Company desires to employ the Executive and the
Executive has indicated his willingness to provide his services, on the terms
and conditions set forth herein.
NOW, THEREFORE, on the basis of the foregoing premises and in
consideration of the mutual covenants and agreements contained herein, the
parties hereto agree as follows:
Section 1. EMPLOYMENT. The Company hereby agrees to employ
the Executive and the Executive hereby accepts employment with the Company, on
the terms and subject to the conditions hereinafter set forth. During the
Employment Term (as hereinafter defined), the Executive shall serve as Vice
President Finance, Secretary, Treasurer and Chief Financial Officer of the
Company, and in such other senior executive position or positions with the
Company and its subsidiaries commensurate with the Executive's title as Vice
President Finance, Secretary, Treasurer and Chief Financial Officer as the Board
of Directors of the Company (the "Board") shall from time to time specify.
During the Employment Term, the Executive shall have the duties,
responsibilities and obligations customarily assigned to individuals serving in
the position or positions in which Executive serves hereunder, together with
other senior executive duties, responsibilities and obligations commensurate
with the Executive's title as the Board shall from time to time specify.
Section 2. TERM. Unless sooner terminated pursuant to Section
6 hereof, the Executive's employment hereunder shall commence on the Effective
Date and shall continue during the period ending on the third anniversary of the
Effective Date (the "Initial Employment Term"). Subject to Section 6 hereof, the
Initial Employment Term shall be extended automatically without further action
by either party by one additional year (added to the end of the Initial
Employment Term) first on third anniversary of the Effective Date, and on each
succeeding anniversary thereafter, unless, not later than ninety (90) days prior
to the end of the Initial Employment Term (or extension thereof), either the
Company or the Executive shall have notified the other in writing of its
intention not to renew this Agreement. The Initial Employment Term, together
with any extension thereof pursuant to this Section 2, shall be referred to as
the "Employment Term."
Section 3. COMPENSATION. During the Employment Term, the
Executive shall be entitled to the following compensation and benefits:
(a) SALARY. As compensation for the performance of the
Executive's services hereunder, the Company shall pay to the Executive a salary
of $178,000 per annum with increases, if any, as may be approved in writing by
the Board (the "Salary"). The Salary shall be payable in accordance with the
payroll practices of the Company as the same shall exist from time to time.
(b) ANNUAL BONUS. In the sole discretion of the Board, the
Executive shall be eligible to receive an annual cash bonus; provided, however,
that in the event the Company adopts an annual bonus plan for its senior
executives, the Executive shall participate in such plan on the same basis as
other senior executives of the Company (with appropriate adjustment due to
differences in title and salary).
(c) BENEFITS. The Executive shall be entitled to an amount of
paid vacation per year as provided in the Company's vacation policy, which shall
in no event be less than four (4) weeks per year. In addition, the Executive
shall be entitled to participate in health, insurance, pension and other
benefits provided to other senior executives of the Company. The Executive shall
also be entitled to the same number of holidays, sick days and other benefits as
are generally allowed to other senior executives of the Company in accordance
with the Company policy in effect from time to time.
Section 4. EXCLUSIVITY. During the Employment Term, the
Executive shall devote his full working time to the business of the Company,
shall faithfully serve the Company, shall in all respects conform to and comply
with the lawful and reasonable directions and instructions given to him in
accordance with the terms of this Agreement, shall use his best efforts to
promote and serve the interests of the Company, and shall not engage in any
other business activity, whether or not such activity shall be engaged in for
pecuniary profit, except that the Executive may (i) participate in the
activities of professional trade organizations related to the business of the
Company, (ii) engage in personal investing activities and/or charitable
activities consistent with the Company's policy regarding investments (which may
change from time to time) or (iii) with the consent of the Board, serve as a
member of the board of directors or advisory boards (or their equivalents in the
case of a non-corporate entity) of non-competing businesses and charitable
organizations, provided that activities set forth in these clauses (i), (ii), or
(iii) either singly or in the aggregate, do not interfere in any material
respect with the services to be provided by the Executive hereunder.
Section 5. REIMBURSEMENT FOR EXPENSES. The Executive is
authorized to incur reasonable expenses in the discharge of the services to be
performed hereunder, including expenses for travel, entertainment, lodging and
similar items in accordance with the Company's expense reimbursement policy, as
the same may be modified by the Board from time to time. The Company shall
reimburse the Executive for all such proper expenses upon presentation by the
Executive of itemized accounts of such expenditures in accordance with the
financial policy of the Company, as in effect from time to time.
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Section 6. TERMINATION AND DEFAULT.
(a) EARLY TERMINATION OF THE EMPLOYMENT TERM. The Employment
Term shall earlier terminate upon the earliest to occur of (i) a termination of
Executive's employment due to the Executive's death, (ii) a termination by
reason of a Disability, where "Disability" shall mean any physical or mental
disability or infirmity that prevents the performance of Executive's duties
hereunder for a period of 120 consecutive days or 180 days during any 12-month
period, (iii) a termination by the Company with or without Cause (as defined
below), or (iv) a termination by Executive with or without Good Reason (as
defined below).
(b) TERMINATION DUE TO DEATH OR DISABILITY. The Executive's
employment shall terminate upon his death, or in the event of a Disability, upon
delivery of written notice to the Executive of such termination by reason of the
Executive's Disability. Upon such event, the Executive, or Executive's estate,
as applicable, shall be entitled to receive the amounts specified in Section
6(f) below. The Board's reasoned and good faith judgment of Disability shall be
final, binding and conclusive and shall be based on such competent medical
evidence as shall be presented to it by Executive and/or by any physician or
group of physicians or other competent medical expert employed by Executive or
the Company to advise the Board.
(c) TERMINATION BY THE COMPANY WITH OR WITHOUT CAUSE. The
Company may terminate the Executive's employment at any time, with or without
Cause. Termination of the Executive's employment hereunder shall be effective
upon delivery of written notice of such termination. For purposes of this
Agreement, "Cause" shall mean: (i) the Executive's failure (except where due to
sickness or other Disability), neglect or refusal to perform his duties
hereunder which failure, neglect or refusal shall not have been corrected by the
Executive within 10 days of receipt by the Executive of written notice from the
Company of such failure, neglect or refusal, which notice shall with reasonable
specificity set forth the nature of said failure, neglect or refusal; (ii) any
willful or intentional act of the Executive that has the effect of injuring the
reputation or business of the Company or its affiliates in any material respect;
(iii) public or consistent drunkenness by the Executive or his illegal use of
narcotics which is, or could reasonably be expected to become, materially
injurious to the reputation or business of the Company or which impairs, or
could reasonably be expected to impair, the performance of the Executive's
duties hereunder; (iv) conviction of, or plea of guilty or NOLO CONTENDERE to,
the commission of a felony by the Executive; (v) the commission by the Executive
of an act of fraud or embezzlement against the Company; or (vi) the Executive's
breach of any of the covenants provided in Section 7 hereof.
(d) TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The
Executive may terminate his employment with the Company for Good Reason upon
thirty (30) days written notice, which notice shall specifically set forth the
nature of such Good Reason. The term "Good Reason" shall mean (i) any material
diminution in the nature or scope of Executive's functions, duties, position,
responsibilities, or reporting relationships that are inconsistent with the
Executive's titles or this Agreement, (ii) at any time following a Change in
Control (as defined below), without the Executive's consent, the relocation of
the Executive's principal office location more than fifty (50) miles from its
current location, (iii) delivery written notice of resignation at any time and
for any reason during the period commencing on the nine-month anniversary of a
Change in Control and ending on the twelve-month anniversary of a Change in
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Control, or (iv) the failure of the Company to obtain the assumption in writing
of its obligation to perform this Agreement by any successor to all or
substantially all of the assets of the Company; provided, however, that the term
"Good Reason" shall not include a termination pursuant to Section 2 or Section
6(b) hereof. Notwithstanding the occurrence of any such event or circumstance
above (other than clause (iii) above), such occurrence shall not be deemed to
constitute Good Reason hereunder if, within the thirty-day notice period, the
event or circumstance giving rise to Good Reason has been fully corrected by the
Company. For purposes of this Agreement, the term "Change in Control" shall have
the same meaning as "Change in Control of the Company" as provided in the
Company's Stock Option Plan (the "Option Plan").
(e) RESIGNATION BY THE EXECUTIVE. The Executive shall have the
right to terminate his employment at any time by giving thirty (30) days written
notice of his resignation.
(f) PAYMENTS UPON TERMINATION. (i) In the event that the
Executive's employment terminates for any reason, the Company shall pay to the
Executive all amounts accrued but unpaid hereunder through the date of
termination in respect of Salary, any unpaid Bonus in respect to any completed
fiscal year which has ended prior to the date of termination, accrued but unused
vacation and any unreimbursed expenses. Amounts owed by the Company in respect
of the payments under Section 6(f)(i) hereof or reimbursement for expenses under
the provisions of Section 5 hereof shall be paid within five (5) business days
of any termination, except amounts payable with respect to unpaid Bonus, which
shall be paid at such time bonus amounts are paid to other senior executives.
(ii) In the event that prior to a Change in
Control, the Executive's employment is terminated by the Company without Cause
(other than upon expiration of the Employment Term pursuant to Section 2 hereof
or a termination under Section 6(b) above) or by the Executive for Good Reason,
in addition to the amounts specified in subsection (i) above, (A) the Executive
shall continue to receive the Salary (less any applicable withholding or similar
taxes) at the rate in effect hereunder on the date of such termination for a
period of twelve (12) months (the "Severance Term"); (B) the Company shall pay
the Executive an aggregate amount equal to the Bonus payable or paid to the
Executive in respect of the completed fiscal year which has ended prior to the
date of termination, multiplied by a fraction, the numerator of which equals the
number of months in the Severance Term, and the denominator of which equals 12,
such amount to be payable in substantially equal monthly installments during the
Severance Term; (C) during the Severance Term, the Company shall pay the monthly
cost of health continuation coverage for the Executive and his dependents, as
provided under COBRA, provided the Executive elects COBRA coverage; and (D) all
outstanding options then held by the Executive shall immediately vest as to the
number of covered shares which would otherwise have vested during the Severance
Term, assuming no termination of employment had occurred. Payment of any amounts
pursuant to this Section 6(f) shall be expressly conditioned upon the
Executive's execution of a general waiver and release of claims against the
Company and its officers, directors, agents, and affiliates.
(iii) In the event that in connection with or
following a Change in Control, the Executive's employment is terminated by the
Company without Cause (other than upon expiration of the Employment Term
pursuant to Section 2 hereof or a termination under
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Section 6(b) above) or by the Executive for Good Reason, in lieu of amounts
payable and benefits provided to the Executive pursuant to subsection (ii)
above, the Executive shall be entitled to receive (A) a lump-sum cash payment
equal to two (2) times the sum of (x) the Executive's then-current Salary and
(y) the Bonus payable or paid to the Executive in respect of the completed
fiscal year which has ended prior to the date of termination; (B) a lump-sum
payment equal to twenty four (24) times the monthly cost of health continuation
coverage for the Executive and his dependents, as provided under COBRA and as
determined on the date of termination, whether or not the Executive elects such
COBRA coverage; and (C) all outstanding options then held by the Executive shall
immediately vest and be fully exercisable as of the date of such termination.
(iv) Payment of any amounts pursuant to this
Section 6(f) shall be expressly conditioned upon the Executive's execution of a
general waiver and release of claims against the Company and its officers,
directors, agents, and affiliates.
(g) PAYMENT IN LIEU. In the event of termination of the
Executive's employment due to the voluntary resignation by the Executive, the
Company may, in its sole and absolute discretion, at any time after notice of
termination has been given by the Executive, terminate this Agreement, provided
that the Company shall pay to the Executive his then current Salary and continue
benefits provided pursuant to Section 3(c) for the duration of the unexpired
notice period.
(h) ADDITIONAL PAYMENTS.
(i) In the event that payments or benefits made
or provided to the Executive under this Agreement and under any other plan,
program or agreement of the Company, or any of their respective affiliates (the
"Aggregate Payment") are or become subject to the tax imposed under Section 4999
of the Internal Revenue Code of 1986, as amended (the "Code") or any similar tax
that may hereafter be imposed (the "Excise Tax"), the Company shall pay to the
Executive an additional amount (the "Additional Payment") such that the net
amount retained by the Executive with respect to the Aggregate Payment, after
deduction of any Excise Tax on the Aggregate Payment and any Federal, state and
local income tax and Excise Tax on the Additional Payment (and any interest and
penalties thereon), but before deduction for any Federal, state or local income
or employment tax withholding on such Aggregate Payment, shall be equal to the
amount of the Aggregate Payment.
(ii) The determination of whether the Aggregate
Payment will be subject to the Excise Tax and, if so, the amount to be paid to
the Executive and the time of payment pursuant to this Section 6(h) shall be
made by an independent auditor (the "Auditor") jointly selected by the Company
and the Executive and paid by the Company. The Auditor shall be a nationally
recognized United States public accounting firm which has not, during the two
years preceding the date of its selection, acted in any way on behalf of the
Company. If the Executive and the Company cannot agree on the firm to serve as
the Auditor, then the Executive and the Company shall each select one accounting
firm and those two firms shall jointly select the accounting firm to serve as
the Auditor. All fees and expenses of the Auditor shall be borne solely by the
Company.
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(iii) For purposes of determining the amount of
the Additional Payment, the Executive shall be deemed to pay:
(A) Federal income taxes at the highest
applicable marginal rate of Federal income taxation for the calendar
year in which the Additional Payment is to be made, and
(B) Any applicable state and local income taxes
at the highest applicable marginal rate of taxation for the calendar
year in which the Additional Payment is to be made, net of the maximum
reduction in Federal incomes taxes which could be obtained from the
deduction of such state or local taxes if paid in such year.
(iv) In the event that the Excise Tax is
subsequently determined by the Auditor or pursuant to any proceeding or
negotiations with the Internal Revenue Service to be less than the amount taken
into account hereunder in calculating the Additional Payment made, the Executive
shall repay to the Company, at the time that the amount of such reduction in the
Excise Tax is finally determined, the portion of such prior Additional Payment
that would not have been paid if such Excise Tax had been applied in initially
calculating such Additional Payment, plus interest on the amount or such
repayment at the rate provided in Section 1274(b)(2)(B) of the Code.
Notwithstanding the foregoing, in the event any portion of the Additional
Payment to be refunded to the Company has been paid to any Federal, state or
local tax authority, repayment thereof shall not be required until actual refund
or credit of such portion has been made to the Executive, and interest payable
to the Company shall not exceed interest received or credited to the Executive
by such tax authority for the period it held such portion. The Executive and the
Company shall mutually agree upon the course of action to be pursued if the
Executive's good faith claim for refund or credit is denied.
(v) In the event that the Excise Tax is later
determined by the Auditor or pursuant to any proceeding or negotiations with the
Internal Revenue Service to exceed the amount taken into account hereunder at
the time the Tax Reimbursement Payment is made (including, but not limited to,
by reason of any payment the existence or amount of which cannot be determined
at the time of the Additional Payment), the Company shall make an additional
payment in respect of such excess (plus any interest or penalty payable with
respect to such excess) at the time that the amount of such excess is finally
determined.
(i) SURVIVAL OF OPERATIVE SECTIONS. Upon any termination of
the Executive's employment, the provisions of Section 6(f), Section 6(g),
Section 6(h) and Section 7 through Section 19 of this Agreement shall survive to
the extent necessary to give effect to the provisions thereof.
Section 7. RESTRICTIVE COVENANTS. The Executive acknowledges
and agrees that the agreements and covenants contained in this Section 7 are (i)
reasonable and valid in geographical and temporal scope and in all other
respects, and (ii) essential to protect the value of the Company's business and
assets and by his employment with the Company, the Executive will obtain
knowledge, contacts, know-how, training and experience and there is a
substantial probability that such knowledge, know-how, contacts, training and
experience could be used to the substantial advantage of a competitor of the
Company and to the Company's substantial
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detriment. For purposes of this Section 7, references to the Company shall be
deemed to include its subsidiaries.
(a) CONFIDENTIAL INFORMATION. At any time during and after the
end of the Employment Term, without the prior written consent of the Board,
except to the extent required by an order of a court having jurisdiction or
under subpoena from an appropriate government agency, in which event, the
Executive shall use his best efforts to consult with the Board prior to
responding to any such order or subpoena, and except as required in the
performance of his duties hereunder, the Executive shall not disclose any
confidential or proprietary trade secrets, customer lists, drawings, designs,
information regarding product development, marketing plans, sales plans,
manufacturing plans, management organization information, operating policies or
manuals, business plans, financial records, packaging design or other financial,
commercial, business or technical information (i) relating to the Company, or
(ii) that the Company or any of its affiliates may receive belonging to
suppliers, customers or others who do business with the Company ("Confidential
Information"). Executive's obligation under this Section 7(a) shall not apply to
any information which (i) is known publicly; (ii) is in the public domain or
hereafter enters the public domain without the breach of the Executive of this
Section 7(a); (iii) is known to the Executive prior to the Executive's receipt
of such information from the Company any of its subsidiaries, as evidenced by
written records of the Executive; or (iv) is disclosed after termination of the
Executive's employment to the Executive by a third party not under an obligation
of confidence to the Company.
(b) NON-COMPETITION. The Executive covenants and agrees that
during the Employment Term and for a period extending to the first anniversary
of the Executive's termination of employment for any reason (the "Restricted
Period"), with respect to any State in which the Company is engaged in business
at the time of such termination, the Executive shall not, directly or
indirectly, individually or jointly, own any interest in, operate, join, control
or participate as a partner, director, principal, officer, or agent of, enter
into the employment of, act as a consultant to, or perform any services for (i)
any entity which competes to a material extent with the business activities in
which the Company is engaged at the time of such termination or in which
business activities the Company has documented plans to become engaged in and as
to which Executive has knowledge at the time of Executive's termination of
employment, or (ii) any entity in which any such relationship with the Executive
would result in the inevitable use or disclosure of Confidential Information.
Notwithstanding anything herein to the contrary, this Section 7(b) shall not
prevent the Executive from acquiring as an investment securities representing
not more than three percent (3%) of the outstanding voting securities of any
publicly-held corporation.
(c) NON-SOLICITATION; NON-INTERFERENCE. During the Restricted
Period, the Executive shall not, directly or indirectly, for his own account or
for the account of any other individual or entity (i) solicit or induce, or in
any manner attempt to solicit or induce, any person employed by, an agent of, or
a service provider to, the Company to terminate such person's employment, agency
or service, as the case may be, with the Company; or (ii) divert, or attempt to
divert, any person, concern, or entity from doing business with the Company or
any of its subsidiaries, or attempt to induce any such person, concern or entity
to cease being a customer or supplier of the Company.
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(d) NON-DISPARAGEMENT. The Executive agrees that, except as
required by applicable law, or compelled by process of law, at any time
following the date hereof, neither he, nor anyone acting on his behalf, shall
hereafter (i) make any derogatory, disparaging or critical statement about the
Company, or any of the Company's current officers, directors, employees,
shareholders or lenders or any persons who were officers, directors, employees,
shareholders or lenders of the Company; or (ii) without the Company's prior
written consent, communicate, directly or indirectly, with the press or other
media, concerning the past or present employees or business of the Company.
(e) RETURN OF DOCUMENTS; COMPANY PROPERTY. In the event of the
termination of Executive's employment for any reason, the Executive shall
deliver to the Company all of (i) the property of the Company and (ii) the
documents and data of any nature and in whatever medium of the Company in his
possession, and he shall not take with him any such property, documents or data
or any reproduction thereof, or any documents containing or pertaining to any
Confidential Information.
(f) WORKS FOR HIRE. The Executive agrees that the Company
shall own all right, title and interest (including patent rights, copyrights,
trade secret rights, mask work rights and other rights throughout the world) in
any inventions, works of authorship, mask works, ideas or information made or
conceived or reduced to practice, in whole or in part, by the Executive (either
alone or with others) during the Employment Term ("Developments"); provided,
however, that the Company shall not own Developments for which no equipment,
supplies, facility, trade secret information or Confidential Information of the
Company was used and which were developed entirely on Executive's time, AND (i)
which do not relate (A) to the business of the Company or its affiliates or (B)
to the Company's or its affiliates actual or demonstrably anticipated research
or development, and (ii) which do not result from any work performed by the
Executive for the Company. Subject to the foregoing, Executive will promptly and
fully disclose to the Company, or any persons designated by it, any and all
Developments made or conceived or reduced to practice or learned by the
Executive, either alone or jointly with others during the Employment Term. The
Executive hereby assigns all right, title and interest in and to any and all of
these Developments to the Company. The Executive agrees to assist the Company,
at the Company's expense, to further evidence, record and perfect such
assignments, and to perfect, obtain, maintain, enforce, and defend any rights
specified to be so owned or assigned. The Executive hereby irrevocably
designates and appoints the Company and its agents as attorneys-in-fact to act
for and on the Executive's behalf to execute and file any document and to do all
other lawfully permitted acts to further the purposes of the foregoing with the
same legal force and effect as if executed by the Executive. In addition, and
not in contravention of any of the foregoing, the Executive acknowledges that
all original works of authorship which are made by him (solely or jointly with
others) within the scope of employment and which are protectable by copyright
are "works made for hire," as that term is defined in the United States
Copyright Act (17 USC ` 101). To the extent allowed by law, this Section 7(f)
includes all rights of paternity, integrity, disclosure and withdrawal and any
other rights that may be known as or referred to as "moral rights" ("Moral
Rights"). To the extent Executive retains any such Moral Rights under applicable
law, the Executive hereby waives such Moral Rights and consents to any action
consistent with the terms of this Agreement with respect to such Moral Rights,
in each case, to the full extent of such applicable law. The Executive will
confirm any such waivers and consents from time to time as requested by the
Company.
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(g) BLUE PENCIL. If any court of competent jurisdiction shall
at any time deem the duration or the geographic scope of any of the provisions
of this Section 7 unenforceable, the other provisions of this Section 7 shall
nevertheless stand and the duration and/or geographic scope set forth herein
shall be deemed to be the longest period and/or greatest size permissible by law
under the circumstances, and the parties hereto agree that such court shall
reduce the time period and/or geographic scope to permissible duration or size.
Section 8. INJUNCTIVE RELIEF. Without intending to limit the
remedies available to the Company, the Executive acknowledges that a breach of
any of the covenants contained in Section 7 hereof may result in material
irreparable injury to the Company or its subsidiaries or affiliates for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of such a breach or
threat thereof, the Company shall be entitled to obtain a temporary restraining
order and/or a preliminary or permanent injunction, without the necessity of
proving irreparable harm or injury as a result of such breach or threatened
breach of Section 7 hereof, restraining the Executive from engaging in
activities prohibited by Section 7 hereof or such other relief as may be
required specifically to enforce any of the covenants in Section 7 hereof.
Notwithstanding any other provision to the contrary, the Restricted Period shall
be tolled during any period of violation of any of the covenants in Section 7(b)
or Section 7(c) hereof and during any other period required for litigation
during which the Company seeks to enforce this covenant against the Executive if
it is ultimately determined that such person was in breach of such covenants.
Section 9. REPRESENTATIONS AND WARRANTIES OF THE EXECUTIVE.
The Executive represents that:
(a) the Executive is entering into this Agreement voluntarily
and that his employment hereunder and compliance with the terms and conditions
hereof will not conflict with or result in the breach by him of any agreement to
which he is a party or by which he may be bound,
(b) he has not, and in connection with his employment with the
Company will not, violate any non-solicitation or other similar covenant or
agreement by which he is or may be bound, and
(c) in connection with his employment with the Company he will
not use any confidential or proprietary information he may have obtained in
connection with employment with any prior employer.
Section 10. TAXES. The Company may withhold from any payments
made under this Agreement all applicable taxes, including but not limited to
income, employment and social insurance taxes, as shall be required by law.
Section 11. INDEMNIFICATION. The Company shall indemnify the
Executive (and his legal representatives or other successors) to the fullest
extent permitted (including payment of expenses in advance of final disposition
of the proceeding) by the laws of the State of New York, as in effect at the
time of the subject act or omission, or the Certificate of Incorporation and
By-Laws of the Company as in effect at such time or on the date of this
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Agreement, whichever affords or afforded greater protection to the Executive,
and the Executive shall be entitled to the protection of any insurance policies
the Company may elect to maintain generally for the benefit of its directors and
officers, against all costs, charges and expenses whatsoever incurred or
sustained by him or his legal representatives in connection with any action,
suit or proceeding to which he (or his legal representatives or other
successors) may be made a party by reason of his being or having been a
director, officer or employee of the Company or any of its subsidiaries. If any
action, suit or proceeding is brought or threatened against the Executive in
respect of which indemnity may be sought against the Company pursuant to the
foregoing, the Executive shall notify the Company promptly in writing of the
institution of such action, suit or proceeding and the Company shall assume the
defense hereof and the employment of counsel and payment of all fees and
expenses.
Section 12. BINDING ARBITRATION. Without limiting the remedies
available to the Company pursuant to Section 8, any controversy arising out of
or relating to this Agreement or the breach hereof shall be settled by binding
arbitration in accordance with the Employment Dispute Resolution Rules of the
American Arbitration Association (with the exception that there will be a panel
of three arbitrators rather than a single arbitrator) and judgment upon the
award rendered may be entered in any court having jurisdiction thereof. The
costs of any such arbitration proceedings shall be borne equally by the Company
and Executive, and neither party shall be entitled to recover attorney's fee or
costs expended in the course of such arbitration or enforcement of the awarded
rendered thereunder. The location for the arbitration shall be New York City,
New York. Any award made by such arbitrator shall be final, binding and
conclusive on the parties for all purposes, and judgment upon the award rendered
by the arbitrators may be entered in any court having jurisdiction thereof.
Section 13. SUCCESSORS AND ASSIGNS; NO THIRD-PARTY
BENEFICIARIES.
(a) THE COMPANY. This Agreement shall inure to the benefit of
and be enforceable by, and may be assigned by the Company to, any purchaser of
all or substantially all of the Company's business or assets, any successor to
the Company or any assignee thereof (whether direct or indirect, by purchase,
merger, consolidation or otherwise). The Company will require any such
purchaser, successor or assignee to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such purchase, succession or assignment had taken
place.
(b) THE EXECUTIVE. The Executive's rights and obligations
under this Agreement shall not be transferable by the Executive by assignment or
otherwise, without the prior written consent of the Company; PROVIDED, HOWEVER,
that if the Executive shall die, all amounts then payable to the Executive
hereunder shall be paid in accordance with the terms of this Agreement to the
Executive's devisee, legatee or other designee or, if there be no such designee,
to the Executive's estate.
Section 14. WAIVER AND AMENDMENTS. Any waiver, alteration,
amendment or modification of any of the terms of this Agreement shall be valid
only if made in writing and signed by the parties hereto; PROVIDED, HOWEVER,
that any such waiver, alteration, amendment or modification is consented to on
the Company's behalf by the Board. No waiver by either of the parties hereto of
their rights hereunder shall be deemed to constitute a waiver with respect to
any
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subsequent occurrences or transactions hereunder unless such waiver specifically
states that it is to be construed as a continuing waiver.
Section 15. SEVERABILITY AND GOVERNING LAW. If any covenants
or such other provisions of this Agreement are found to be invalid or
unenforceable by a final determination of a court of competent jurisdiction (a)
the remaining terms and provisions hereof shall be unimpaired and (b) the
invalid or unenforceable term or provision hereof shall be deemed replaced by a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision
hereof. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CHOICE OF LAW
PRINCIPLES THEREOF) APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE.
Section 16. NOTICES.
(a) Every notice or other communication relating to this
Agreement shall be in writing, and shall be mailed to or delivered to the party
for whom it is intended at such address as may from time to time be designated
by it in a notice mailed or delivered to the other party as herein provided,
provided that, unless and until some other address be so designated, all notices
or communications by the Executive to the Company shall be mailed or delivered
to the Company at its principal executive office, and all notices or
communications by the Company to the Executive may be given to the Executive
personally or may be mailed to Executive at the Executive's last known address,
as reflected in the Company's records.
(b) Any notice so addressed shall be deemed to be given: (i)
if delivered by hand, on the date of such delivery; (ii) if mailed by courier,
on the first business day following the date of such mailing; and (iii) if
mailed by registered or certified mail, on the third business day after the date
of such mailing.
Section 17. SECTION HEADINGS. The headings of the sections and
subsections of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part thereof, affect the meaning or interpretation of
this Agreement or of any term or provision hereof.
Section 18. ENTIRE AGREEMENT. This Agreement constitutes the
entire understanding and agreement of the parties hereto regarding the
employment of the Executive. This Agreement supersedes all prior negotiations,
discussions, correspondence, communications, understandings and agreements
between the parties relating to the subject matter of this Agreement.
Section 19. COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original and all of
which together shall be considered one and the same agreement.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
EON LABS MANUFACTURING, INC.
By: /s/Xxxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxxx Xxxxx
Title: President and CEO
EXECUTIVE
/s/ Xxxxxxx X. Xxxx
------------------------------------------
Xxxxxxx X. Xxxx
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