|
Exhibit
10.11
EXECUTION
COPY
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT is made as of July 6, 2000 (the “
Effective Date ”) by and between STEFAN AIGNER
(“ Employee ”) and RELIANT PHARMACEUTICALS,
LLC a Delaware limited liability company (“
Employer ”). Employee and Employer are sometimes
referred to individually as a “Party” and together as
the “Parties.”
R
ECITALS
A. Employer is the successor
entity to Reliant Pharmaceuticals, Inc., a Delaware corporation
f/k/a Bay City Pharmaceuticals, Inc. (the “ Prior
Entity ”), which corporation was converted into the
Employer effective on the date hereof pursuant to Section 266 of
the Delaware General Corporation Law and Section 18-214 of the
Delaware Limited Liability Company Act.
B. Employer has been
organized, among other things, to acquire, through license or
otherwise, exclusive rights to make or have made and distribute
targeted FDA approved, branded or generic pharmaceutical product
lines (“ Acquired Products ”). Employer may also
pursue the development of new pharmaceutical products and other
business activities as authorized from time to time by the
Employer’s Board of Managers (the “ Board
”).
C. Employee and the Prior
Entity are parties to that certain Employment Agreement, dated as
of September 1, 1999 (the “ Original Agreement
”), and Employee and Employer desire to amend and restate the
Original Agreement in its entirety;
D. Employer desires to
continue to hire Employee to serve as Vice President –
Business Development of Employer. As such, he shall, subject to the
general direction and control of the Board, (i) assist in
identifying proposed new pharmaceutical products for development
(“ Proposed Product Developments ”) and proposed
acquisitions (“ Proposed Acquisitions ”) from
other pharmaceutical companies (“ Sellers ”) of
the right to manufacture and distribute Acquired Products, (ii)
assist market and strategic analysis of Proposed Product
Developments that Employer elects to pursue (“ Developed
Products ”), (iii) assist in market analysis and due
diligence activities in connection with Proposed Acquisitions that
Employer elects to pursue (“ Acquisitions ”) and
(iv) perform such other duties as Employer’s Board may deem
necessary or advisable from time to time.
E. Each Party desires to
memorialize the terms under which Employee will work as an employee
of Employer and acquire equity interests in Employer.
Accordingly, Employer and
Employee hereby agree as follows:
A
GREEMENT
1. Duties.
(a) Duties to Employer
. Employer hereby agrees to continue to employ Employee, and
Employee hereby accepts such continued employment with Employer on
the terms and conditions of this Agreement. Employee shall serve as
Vice President – Business Development of Employer and perform
the services identified in Recital D. As Vice President, Employee
shall also have other such duties and responsibilities usual to the
office. Employee shall report to the Board or the Board’s
designee. Employee agrees to devote substantially all his
professional time and effort to the business of Employer. Employee
hereby agrees to follow all of Employer’s employment policies
and procedures, whether set forth in an employee manual provided to
Employee or otherwise made available to Employee in writing
(collectively, as amended from time to time, “ Employment
Policies ”).
(b) During the term of this
Agreement, Employee agrees to refer to Employer all business
opportunities, including all product development opportunities, of
which Employee becomes aware that are within the scope of the
Employer’s business and all pharmaceutical investment
opportunities of which Employee becomes aware that are within the
scope of the investment activities of either Employer or Bay City
Capital LLC and its other affiliates (the “ BCC
Entities ”). Exhibit A hereto lists the Proposed
Development Products proposed by the Employee (the “
Development Concepts ”) as well as the Sellers and
products involved in Proposed Acquisitions introduced by the
Employee (the “ Acquisition Concepts
”).
2.
Compensation.
(a) Base Salary .
Employer shall pay Employee, in accordance with its normal payroll
practices, a base salary (“ Base Salary ”) at
the rate of (i) $144,000 per year ($12,000 per month) prior to
completion of the initial Acquisition and (ii) $175,000 per year
($14,583 per month) thereafter, less all required tax
withholding.
(b) Bonus Compensation
. For each calendar year in which Employer’s revenue, EBITDA
and free cash flow targets for Acquired Products and Developed
Products, as set by the Board prior to such calendar year, are
satisfied, Employer shall pay Employee, within 90 days after the
end of that year, a bonus (“ Bonus Compensation
”) in the amount of $175,000 (less all required tax
withholding). The foregoing notwithstanding, subject to the
approval of the Employee (which shall not be unreasonably withheld
or delayed), the criteria for each of the bonuses described in this
Section 2(b) may be modified from time to time by the Board to
include alternate targets and milestones.
(c) Additional Bonus
Compensation . For each calendar year in which Employer’s
EBITDA projections for Acquired Products are exceeded by 25% or
more, Employer may pay Employee, within 90 days after the end of
that year, an additional bonus (“ Additional Bonus
Compensation ”) in a target amount of $175,000 (less all
required tax withholding), provided that the Board is otherwise
satisfied with the performance of both the Employee and the
Employer. The foregoing notwithstanding, subject to the approval of
the
2
Employee (which shall not be
unreasonably withheld or delayed), the criteria for each of the
bonuses described in this Section 2(c) may be modified from time to
time by the Board to include alternate targets and
milestones.
(d) Equity Awards.
Contemporaneously with the execution of this Agreement, Employer
will grant to Employee 4,697 unrestricted Common Units and 7,046
restricted Common Units of Employer (collectively, the “
Units ”). The restricted Units shall be granted
pursuant to a Restricted Unit Agreement annexed hereto as
Exhibit B , and will vest ratably over a period of four
years beginning on September 1, 1999. All of the restricted Units
will be granted pursuant to the Reliant Pharmaceuticals, LLC Equity
Incentive Plan (the “ Plan ”).
(f) Co-Investment
Rights . During the term of this Agreement (but only (i) prior
to and excluding any public offering of securities by the Employer
and (ii) prior to such time as the Company has issued Securities
(as defined below) for aggregate consideration of $125,000,000), at
the time Employer issues any equity interests (other than the units
or options issuable under the Plan, units or options issued in
connection with financing from commercial lenders or financial
institutions, the Amended and Restated Warrant, dated of even date
herewith, issued by the Company in favor of Bay City Capital Fund
II, L.P. (together with its permitted successors and assigns, the
“ BCC Fund ”), Series A Preferred Units of the
Company issued to BCC Fund and any equity interests of the Company
issued in respect of or underlying any of the foregoing
(collectively, “ Excluded Securities ”))
convertible or exchangeable for equity interests of the Company
(collectively, “ Securities ”), Employee shall
have the right to purchase 3.0% of the Securities so issued at the
same times and price and on the same terms and conditions as other
investors (the “ Co-Investment Right ”).
Employee shall have 10 days following receipt of notice from
Employer of Employer’s intention to issue Securities (other
than Excluded Securities) to notify Employer in writing (the
“ Notice of Election ”) that Employee elects to
exercise his Co-Investment Rights hereunder. In the event that
Employer does not receive the Notice of Election within such 10-day
period, Employee’s Co-Investment Right with respect to such
issuance of Securities shall be deemed to have been waived by
Employee.
If requested by the Employee,
the Employer shall use its reasonable best efforts to arrange for a
loan (on commercially reasonable terms and evidenced by reasonable
and customary documentation) to the Employee in an amount equal to
75% of the subscription price for the Securities to be acquired by
the Employee pursuant to the Co-Investment Right. Any such loan
shall be full recourse to Employee and secured by the Securities
acquired. Interest and principal on any such loan shall be payable
on a mutually acceptable schedule, provided that any proceeds from
the sale or disposition of any Units or other Securities securing
such loan shall be applied as prepayments thereof until the loan is
repaid in full.
(g) Limited Liability
Company Agreement . Concurrently with the execution of this
Agreement, Employee will execute a mutually acceptable limited
liability company agreement providing for, among other things,
transfer restrictions, a right of first refusal in connection with
any proposed sale or transfer of Employee’s equity interests
in the Employer (subject to customary carve-outs for estate
planning purposes), and tag-along and drag-along rights pursuant to
which Employee may sell equity interests or may be required to sell
equity interests under certain circumstances.
3
3. Fringe Benefits and
Vacations . Employee shall be entitled to participate in all
medical, life insurance, disability and similar fringe benefit
programs and to vacation time available to employees of Employer
generally and as specified in the Employment Policies, which
policies shall be substantially similar to those deemed customary
in businesses of similar size and focus. Notwithstanding any other
provision of this Agreement to the contrary, Employer and Employee
agree that Section 6 of this Agreement, rather than any general
employment policy or procedure of Employer, shall govern
Employee’s severance and post-employment
compensation.
4. Expenses . Employer
shall reimburse Employee for all reasonable expenses incurred by
him in performing his duties under this Agreement upon presentation
of supporting receipts complying with Employer’s expense
reimbursement policies in effect from time to time.
5. Term.
(a) Term . The term of
this Agreement commenced under the Original Agreement on September
1, 1999 and shall end at midnight on August 31, 2003, subject to
extension pursuant to Section 5(b) below and earlier termination
pursuant to Section 6 below (the “ Termination Date
”).
(b) Extension Term .
At least 30 days before the Termination Date, Employer and
Employee, in their sole discretion and by written notice to the
other Party, may decline to extend the term of this Agreement. If
neither Party has provided the other with such notice, the term of
this Agreement shall automatically be extended for a period of one
year from the Termination Date then in effect.
6. Termination and
Consequences.
(a) Employee’s
Rights to Terminate . Notwithstanding any other provision of
this Agreement to the contrary, Employee may terminate this
Agreement at any time, on at least 30 days’ prior written
notice, (i) for Good Reason (as defined in Subsection 6(h) below)
or (ii) without Good Reason.
(b) Employer’s Right
to Terminate. Notwithstanding any other provision of this
Agreement to the contrary, Employer may terminate this Agreement at
any time during the term thereof, on at least 30 days’ prior
written notice, (i) with Cause (as defined in Subsection 6(i)
below) or (ii) without Cause.
(c) Consequences of
Termination without Cause or for Good Reason. If Employer
terminates this Agreement without Cause or if Employee terminates
this Agreement with Good Reason (and Employer would not otherwise
have the right to terminate Employee for Cause), Employer shall (a)
continue to pay Employee Base Salary for a period (the “
Payment Period ”) equal the greater of (i) one year
from the Termination Date or (ii) the Termination Date through
September 1, 2003 and (b) pay Employee any Bonus Compensation (but
not Additional
4
Bonus Compensation) that Employee would
be entitled to receive during the Payment Period in the absence of
his termination without Cause or for Good Reason. The periods for
which Employer is required to make payments to Employee pursuant to
this Section 6(c) is hereinafter referred to as a “
Severance Period ”. If within any Severance Period
Employee receives compensation for services rendered from any
person or entity, whether as an employee or otherwise, such
compensation shall reduce the payments due under Section 6(c),
dollar for dollar. Employee shall promptly inform Employer of all
such compensation received by him on a monthly basis during the
applicable Severance Period.
(d) Consequences of
Termination With Cause, Without Good Reason or by Expiration .
If Employer terminates this Agreement with Cause, Employee
terminates this Agreement without Good Reason or the applicable
term of this Agreement expires unextended, then Employee’s
Base Salary shall be discontinued on the Termination Date, and no
Bonus Compensation or Additional Bonus Compensation shall be
payable for the year in which the termination with Cause or without
Good Reason occurs.
(e) Consequences of
Termination for Death or Disability . If Employee dies during
the term of this Agreement, then the Agreement shall terminate, but
Base Salary shall be paid to Employee’s estate throughout the
Payment Period, together with any Bonus Compensation (but not
Additional Bonus Compensation) that Employee would otherwise have
been entitled to receive during the Payment Period. If Employee is
unable to perform his functions because of disability and the
Agreement is terminated for that reason, Employee or his estate
shall be entitled to receive the same amount that Employer would be
obligated to pay if Employee had died during the term of this
Agreement, less the amount of payments under any disability policy
maintained by Employer.
(f) Fringe Benefits.
In the case of termination under Sections 6(a) through (e) above,
inclusive, subject to applicable law, Employer shall discontinue
fringe benefits under Section 3 above on the date that
Employer’s obligation to pay Base Salary
terminates.
(g) Proprietary Rights
. In the case of termination under Sections 6(a)(i), 6(b)(ii) or
upon the death or disability of Employee, the right to pursue
Development Concepts and Acquisition Concepts will revert on a
non-exclusive basis to Employee, except to the extent that Employer
elects to continue pursuit of one or more Product Developments or
Acquisitions that constitute Development Concepts (“
Continued Product Developments ”) or Acquisition
Concepts (“ Continued Acquisitions ”). In that
event, if Employer initiates development of Proposed Product
Development not later than 180 days after the Termination Date, its
exclusive right to pursue the Continued Product Development for
that product will continue after the Termination Date but will be
subject to Employer’s obligation to pay monthly royalties to
Employee for a period of four (4) years following FDA approval of
the resulting Developed Product in amounts equal to the percentage
of monthly net sales of the Developed Product set forth on
Exhibit C . In addition, if Employer elects to actively
pursue a Continued Acquisition after the Termination Date, its
exclusive right to complete the Continued Acquisition will continue
for one year after the Termination Date but will be subject to
Employer’s obligation to pay a fee to Employee, upon the
closing of the Continued Acquisition, in an amount equal to
the
5
percentage of the consideration payable
in the Continued Acquisition (“ Consideration ”)
set forth on Exhibit C , payable in cash at closing in
proportion to any cash Consideration and in kind in proportion to
any non cash Consideration. If any part of the Consideration is
payable on a contingent or installment basis after the closing, the
fee will also include the applicable percentage of that deferred
Consideration, payable at the time that the deferred Consideration
is paid, also to be payable in cash in proportion to any deferred
cash Consideration and in kind in proportion to any deferred non
cash Consideration.
(h) Definition of Good
Reason . “ Good Reason ” means
Employer’s (i) relocation of Employee beyond a seventy-five
mile radius of New York City for a continuous period of more than
one month, (ii) material reduction or change of Employee’s
duties and responsibilities materially inconsistent with those in
effect immediately prior to the reduction or change and (iii)
material breach of any provision of this Agreement after receipt of
written notice thereof from Employee and failure by Employer to
cure the breach within ten days thereafter. A termination by
Employee will not be considered a termination for Good Reason
unless Employee furnishes Employer with a written statement
specifying the reason or reasons why he believes he is entitled to
terminate his employment for Good Reason within one month of the
last event relied upon by Employee to establish Good Reason and
affords Empl
| 
