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EXHIBIT 10.24
SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT (the "Agreement") is made and entered into as
of December 22, 2000 by and between First Horizon Pharmaceuticals Corporation, a
Delaware corporation (the "Company") and Xxxxxxx X. Xxxxx, an individual
residing in the state of Georgia (referred to herein as "Executive").
W I T N E S S E T H:
WHEREAS, the Company and the Executive entered into an Employment
Agreement dated January 1, 2000 (the "Employment Agreement") pursuant to which
Executive has served as Vice President of Developed Products of the Company; and
WHEREAS, Executive has determined that it is in his best interests to
resign as Vice President of Developed Products so as to allow his pursuit of
other interests; and
WHEREAS, the Company and Executive wish to create a new understanding
as to the benefits and obligations that will be provided to and expected of
Executive following his separation from service with the Company and to that end
desire that the terms set forth in this Agreement shall supercede the term
governing termination of employment which are set forth in the Employment
Agreement;
NOW, THEREFORE, it is agreed by and between the Company and Executive
as follows:
1. Resignation. Executive hereby agrees to resign as Vice
President of Developed Products and as Secretary of the Company, and to also
resign from any and all other positions held by Executive with the Company,
including, but not limited to, as a director of the Company or any subsidiary of
the Company, all effective as of January 1, 2001 (the "Separation Date").
2. Compensation. The Company will, in consideration for
Executive's resignation and his agreement to abide by the restrictions and
non-compete provisions contained in this Agreement, but subject to the
limitation set forth in Subsection 2(f), cause the Company, following
Executive's resignation, to pay or provide to or on behalf of Executive the
following:
(a) One Hundred Five Thousand Dollars ($105,000.00) (the
"Separation Payment"), less any applicable federal, state and local
payroll and taxes and payable in 24 equal installments of Four Thousand
Three Hundred and Seventy-Five ($4,375.00) on the same schedule as the
Company's regular bi-weekly payroll payments in each month during
calendar year 2001, beginning with the first payroll payment in January
2001 and ending on the last payroll payment in December 2001.
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(b) A car allowance payable monthly in the amount of
Seven Hundred Fifty Dollars ($750.00) per month less any federal, state
or local applicable taxes (the "Car Allowance") for the twelve (12)
month period from January 1, 2001 to December 31, 2001.
(c) In addition to the Separation Payment and the Car
Allowance, the Company shall continue to make payments on Executive's
behalf in accordance with its existing policy for medical coverage for
Executive and his eligible dependents (the "Health Benefits") until the
earlier of twelve months (12) months after the Separation Date, the
date when Executive shall become covered by another medical plan, or
the date, if ever, at which Executive shall determined to be in breach
of the provisions of Section 3(a) or 4 of this Agreement.
(d) The Bonus provided for by Paragraph 4(b) of the
Employment Agreement shall be calculated and paid, in full, as provided
in the Employment Agreement.
(e) All stock options heretofore granted to Executive
pursuant to the Company's 1997 Non-Qualified Stock Option Plan which
have vested as of the date hereof or are scheduled to vest on or before
March 17, 2001 (the "Options"), shall vest upon Executive's resignation
and be exercisable for a period of one hundred twenty (120) days from
the Separation Date (the "Exercise period"). If Executive so elects,
the Options may be exercised on a cashless basis during the Exercise
Period.
(f) Notwithstanding the foregoing, in the event that
Executive shall accept full-time employment with another employer, the
Separation Payment, Car Allowance and Health Benefits provided for
herein shall immediately terminate and the Company will have no further
obligation to Executive with respect to same. In order the permit the
Company to be informed as to Executive's employment status, Executive
shall immediately advise the Company when he has accepted full-time
employment with another employer. Failure of Executive to promptly
report the acceptance of a new position shall entitle the Company to
terminate the remaining Separation Payment, Car Allowance payments and
Health Benefits and to seek restitution for any payments made to
Executive hereunder. For purposes of this Agreement, "full-time
employment" shall mean work for more than twenty (20) hours per week,
but shall not include charitable or other work for which Executive
receives no compensation.
Other than the foregoing, and reimbursement for documented business
related expenses incurred prior to the date hereof, Executive shall not be
entitled to any other compensation or reimbursement from the Company from and
after the Separation Date and shall not be covered by or entitled to any
benefits under any of the Company's benefits or programs, including, but not
limited to, coverage under the Company's directors and officers insurance
policy.
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3. Post Employment Covenants.
(a) Executive hereby covenants and agrees with the
Company that for a period (the "Restricted Period") of twenty-four (24) months
after the Separation Date, Executive shall not, without the prior written
consent of the Company, which consent shall be within the sole and exclusive
discretion of the Company, either directly or indirectly, on his own account or
as an executive, consultant, agent, partner, joint venturer, owner, officer,
director or shareholder of any other person, firm, corporation, partnership,
limited liability company or other entity, or in any other capacity, in any way:
(i) Carry on, be engaged in or have any
financial interest in any business which is in competition
with the business of the Company. For purposes of this
Section 3, a business shall be deemed to be in competition
with the Company if it involves research and development work
involving any products, including, but not limited to, generic
during products, which would compete with Company products
which were, at the time of separation, being marketed by the
Company or which at such time were under study by the Company
and expected to be marketed within twelve (12) months of the
date of separation. Nothing in this Section 3 shall be
construed so as to preclude Executive from investing in any
publicly held company (though not one controlled by any member
of Executive's or Executive's spouse's family), provided
Executive's beneficial ownership of any class of such
company's securities does not exceed 5% of the outstanding
securities of such class;
(ii) solicit any current supplier, customer or
client of the Company or any affiliate of the company or
anyone who was a supplier, customer or client at any time
during the twenty-four (24) month period immediately preceding
or following separation, excluding customers such as
wholesalers, managed care agencies, shippers, commercial and
investment banks, IR/PR agencies, scientific and computer
consultants, lawyers and manufacturers; as long as
manufacturers have extra capacity; provided, however, that
where minimum alternative allocation sources would not be
available, requests for exceptions to this restriction will be
determined by the Company on a case by case basis; or
(iii) solicit, employ or engage any person who was
an employee of the Company or any affiliate of the Company at
any time during the twelve (12) month period immediately
preceding or following termination.
(b) Following the Separation Date Executive shall:
(i) For a period of twelve (12) months provide
the Company with all reasonable assistance necessary to permit
the Company to continue its business operations without
interruption and in a manner consistent with reasonable
business practices; provided, however, that such assistance
shall not require more than ten (10) hours per month of
assistance during the first three (3) months
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following the Separation Date nor more than four (4) hours per
month during the next nine (9) months following the Separation
Date, it being acknowledged and agreed that to the extent that
the Company shall require Executive to provide more consulting
time than is herein provided, then the Company shall pay
Executive a reasonable consulting fee per hour as agreed to by
the Company and Executive.
(ii) Deliver to the Company possession of any and
all property owned or leased by the Company which may then be
in Executive's possession or under his control, including
without limitation any and all such keys, credit cards,
automobiles, equipment, supplies, books, records, files,
computer equipment, computer software and other such tangible
and intangible property of any description whatsoever.
(iii) If, following the Termination Date,
Executive shall receive any mail addressed to the Company, or
the Company shall receive any personal mail addressed to
Executive, the receiving party shall immediately deliver such
mail, in its original envelope or package, to the Company or
Executive, as the case may be.
4. Confidentiality.
(a) Executive agrees that "Confidential Information" (as
herein defined) obtained or developed by him during the course of his employment
with the Company is confidential and, accordingly, agrees that for a period of
five (5) years from the date hereof, he will not disclose to any person or use
for his own account, or for the account of others, directly or indirectly, any
of the Confidential Information without the prior written consent of the
Company, unless and then only to the extent that, such matters may be otherwise
generally available for use by the public and not as a result of his acts or
omissions to act. In particular, Executive shall not use or permit the use of
any Confidential Information for the purpose of trading in the common stock of
the Company.
As used herein, "Confidential Information" means any and all
information in the possession of or disclosed to the Executive (i) that pertains
or belongs to the Company or its customers and is not generally available to the
public, including, but not limited to, personnel information, customer lists,
supplier lists, product specifications and names, trade secrets, computer and
any other processed or collated data, computer programs, pricing, marketing and
advertising data; or (ii) that is related to business development plans or
distribution and marketing plans of the Company.
(b) Executive agrees to keep the terms of this Agreement
confidential except that the source and amount of his income may be revealed as
necessary for tax, loan purposes and the like.
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5. Remedies. Executive agrees that money damages cannot
adequately compensate the Company in case of a breach or threatened
breach of the covenants contained in Sections 3(a) or 4 and that,
accordingly, the Company would be entitled to injunctive relief upon
such breach. Executive understands that it is the Company's intent to
have the covenants contained in Section 3(a) and 4 enforced to their
fullest extent. Accordingly, Executive and the Company agree that, if
any portion of the restrictions contained in Sections 3(a) or 4 are
deemed unenforceable, the court shall construe and enforce these
covenants to the fullest extent permitted by law.
6. Enforcement Costs. If any legal action or other
proceeding is brought for the enforcement of this Agreement, or because
of an alleged dispute, breach, default or misrepresentation in
connection with any provisions of this Agreement, the successful or
prevailing party or parties shall be entitled to recover reasonable
attorney's fees, court costs and all expenses even if not taxable as
court costs (including, without limitation, all such fees, costs and
expenses incident to appeal and other post-judgment proceedings),
incurred in that action or proceeding, in addition to any other relief
to which such party or parties may be entitled. Attorney's fees shall
include, without limitation, paralegal fees, investigative fees,
administrative costs, sales and use taxes and all other charges billed
by the attorney to the prevailing party.
7. Notices. Any and all notices necessary or desirable
to be served hereunder shall be in writing and shall be
(a) personally delivered, or
(b) sent by certified mail, postage prepaid,
return receipt requested, or guaranteed overnight delivery by
a nationally recognized express delivery company, in each case
addressed to the intended recipient at the address set forth
below.
(c) For notices sent to the Company:
Horizon Pharmaceuticals, Inc.
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(d) For notices sent to Executive:
Xxxxxxx X. Xxxxx
0000 Xxxxxxxxx Xx.
Xxxxxxx, Xxxxxxx 00000
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Either party hereto may amend the addresses for notices to such party
hereunder by delivery of a written notice thereof served upon the other party
hereto as provided herein. Any notice sent by certified mail as provided above
shall be deemed delivered on the third (3rd) business day next following the
postmark date which it bears.
8. Non-Assignability; Assignment in the Event of Acquisition or
Merger. This Agreement, and the benefits hereunder are not assignable or
transferable by Executive and the rights and obligations of the Company under
this Amendment will automatically be deemed to be assigned by the Company to any
corporation or entity acquiring all or substantially all of the assets of the
Company or to any corporation or entity with or into which the Company may be
merged or consolidated; provided, however, that in the event of Executive's
death, the Company shall make such payments as may then be due and owing to the
Executive, if any, to the Executive's estate.
9. Miscellaneous.
(a) Entire Agreement; Amendment. This Agreement, and all
documents delivered herewith, constitute the entire Agreement and
understanding among the parties with respect to the matters contained
herein, shall supersede all prior oral or written agreements or
covenants of the parties, including, but not limited to, the Employment
Agreement (it being acknowledged and agreed that in the event of any
conflict between the provisions of this Agreement and the Employment
Agreement, the provisions of this Agreement shall govern) and this
Agreement shall be binding upon and insure to the benefit of the
parties and their respective heirs, predecessors, personal
representatives, successors and assigns, present or future. This
Agreement shall not be modified or changed except by instrument in
writing signed by or on behalf of each of the parties hereto.
(b) Counterparts. This Agreement and all documents
delivered pursuant hereto may be executed in one or more counterparts
and each of every fully executed counterpart may be deemed to be an
original hereof.
(c) Headings. This descriptive headings in this Agreement
are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
(d) Waiver. The failure of any party hereto to enforce at
any time any of the provisions of this Agreement shall in no way be
construed to be a waiver of any such provision, nor in any way to
affect the validity of this Agreement or any provision, it being agreed
that each provision hereof is, material, significant and essential to
each of the party's agreements and undertakings hereunder. No waiver of
any breach of this Agreement shall be held to be a waiver of any other
or subsequent breach.
(e) Invalidity. If any provision of this Agreement, or
the application thereof to any person or circumstance, shall be
construed for any reason and to any extent to be
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invalid or unenforceable, but the extent of the invalidity or
unenforceability does not destroy the basis of the bargain between the
parties contained herein, the remainder of this Agreement, and the
application of such provision to other persons or circumstances, shall
not be affected thereby, but shall be enforced to the greatest extent
permitted by law.
(f) Expenses. Each of the parties hereto shall pay its
own expenses, including, but not limited to, the fees of its separate
counsel, in connection with this Agreement.
(g) Choice of Law. This Agreement shall be construed in
accordance with the laws of the State of Georgia, and the rights and
obligations of the parties hereunder shall be construed and enforced in
accordance with, and governed by the laws of the State of Georgia,
without regard to principals of conflict of laws. Regardless of the
residence of the parties, venue and forum shall be in the federal or
state courts located in Xxxxxx County, Georgia.
The Company and Executive, having read and understood this
Amendment, and having consulted with advisors as appropriate, hereby
each agree to be bound by its terms.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and date first above written.
FIRST HORIZON PHARMACEUTICALS CORPORATION
By: /s/ Xxxxxx Xxxxxxxxxxxx
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Its: VP/CFO
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/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
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