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EXHIBIT 10.4
PRIVATE AND CONFIDENTIAL
SEVERANCE AND NON-DISCLOSURE AGREEMENT
THIS AGREEMENT, effective the 7th day of May 2004, by and between
King
Pharmaceuticals, Inc., a Tennessee
corporation, having its offices at 501 Fifth
Street, Bristol, Tennessee ("Company") and
Kyle P. Macione (hereinafter referred
to as "Mr. Macione").
WITNESSETH:
WHEREAS, Mr. Macione was employed by the Company as President
and
serves as a director and/or officer of each
of the Company's subsidiaries; and
WHEREAS, Mr. Jefferson J. Gregory, Chairman and Chief Executive
Officer
of King, has notified Mr. Macione of the
Company's intent to combine the
functions and responsibilities of Mr.
Macione's positions with the Company and
its subsidiaries with and among other
executive officer positions; and
WHEREAS, pursuant to the Company's decision to combine the
functions
and responsibilities of Mr. Macione's
positions with the Company and its
subsidiaries with and among other executive
officer positions, Mr. Macione
resigned from his employment with the
Company and each of the Company's
subsidiaries effective May 7th 2004;
and
WHEREAS, the Company is willing to provide monetary remuneration to
Mr.
Macione in return for certain covenants,
agreements, releases and waivers all as
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual agreements and
covenants
hereinafter set forth, the parties agree as
follows:
1. Effective Date of Separation. The effective date of Mr.
Macione's
resignation from the Company and each of
the Company's subsidiaries is May 7,
2004 (the "Effective Date"). Mr. Macione
and the Company are executing this
agreement on May 28, 2004. The Company is
accepting Mr. Macione's resignation
effective May 7, 2004 and agrees that Mr.
Macione shall continue to be covered
by the Company's health insurance until May
6, 2006. Mr. Macione shall have such
rights as he may have under applicable law
to continue health coverage at his
own expense for such additional periods of
time as is available under applicable
law or to terminate such coverage or to
procure his own separate coverage as he
may elect after his company health coverage
expires as of midnight on May 6,
2006.
2. Consideration. Upon the full execution of this Agreement,
the
Company shall pay to Mr. Macione a lump sum
which represents two (2) years of
his current annual salary and Target Bonus
(60% of annual salary), as defined in
the Company's 2004 Management Incentive
Plan (the "Separation Payment"). The
total
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gross amount due Mr. Macione is One Million
Five Hundred Twenty-Six Thousand
Four Hundred Dollars ($1,526,400.00). If
required, applicable withholding taxes
shall be deducted from such gross amount.
The Company shall hold Mr. Macione
harmless for any excise tax that may be
assessed by the Internal Revenue Service
against the Separation Payment, including
without limitation any reasonable
expenses incurred by Mr. Macione in
defending against the assessment thereof
3. Payment. The Separation Payment shall be fully due and payable
to
Mr. Macione upon the expiration of the
seven (7) day revocation period set forth
in Paragraph 9 of this Agreement. Such
payment in full shall be delivered by the
Company in the form of a check made payable
to Mr. Macione which shall be hand
delivered to Mr. Macione, or by wire
transfer to an account designated by Mr.
Macione, at the expiration of said
revocation period.
4. Company Property. Also, in consideration of the payment of
the
amount specified in Paragraph 2 above, Mr.
Macione agrees that all ideas,
inventions, trade secrets, know how,
documents and data ("Creative Property")
developed either during, in connection
with, or pursuant to his employment with
the Company or in connection with or
pursuant to the terms and conditions of
this Agreement with the Company always have
been and shall remain the exclusive
property of the Company. Mr. Macione agrees
to provide all reasonable assistance
to the Company in perfecting and
maintaining its rights to Creative Property.
Mr. Macione further agrees that the Company
shall have the right to use the
Creative Property for any purpose without
additional compensation to Mr.
Macione.
Further, Mr. Macione agrees to return and surrender possession of
all
property of the Company, of any nature
whatsoever, including but not limited to
keys, other methods of entry or access to
the Company's physical premises,
identification badges, memoranda, notes,
records, reports, computer hardware or
software, cellular phones and other
communication devices, and any other Company
information, material, or equipment (or
copies thereof) in Mr. Macione's control
or possession as of the date of his
resignation as set forth in Paragraph 1
above.
5. Confidential Information. Mr. Macione agrees that he will not
use or
disclose any confidential information,
trade secret, or proprietary information,
whatever their form, obtained from or by
virtue of his association with the
Company including but not limited to
information about costs, profits, budgets,
finances, markets, sales, customers,
potential customers, products,
formulations, pricing policies, operational
methods or technical processes. Mr.
Macione agrees not to communicate to any
other person or entity about the
nature, quality or quantity of work. Mr.
Macione agrees not to display for any
purpose any document or portion thereof or
any copy or reproduction thereof,
belonging to, or pertaining to the Company
without due written authorization
from the Company. To the extent not
inconsistent with this Paragraph 5, nothing
herein shall in any way prevent Mr. Macione
from utilizing his general business,
management and financial skills, techniques
and abilities.
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6. Agreement Not to Compete. Mr. Macione agrees that for a period
of
six (6) months after the Effective Date he
will not accept any employment,
whether as an owner, partner, director,
officer, employee, agent, independent
contractor, consultant, or in any other
capacity (collectively referred to as
"Employment" for purposes of this
paragraph) with any entity the business of
which directly competes with the Company's
business. Should Mr. Macione wish to
accept Employment which potentially would
be in violation of this provision, he
must request permission to do so from the
Company by seeking and obtaining
written permission from the Chief Executive
Officer of the Company and its Board
of Directors to accept such Employment. The
Chief Executive Officer of the
Company and its Board of Directors may not
unreasonably withhold such
permission.
7. Solicitation of the Company's Employees. Mr. Macione agrees that
for
a period of twenty-four (24) months from
the effective date of this Agreement,
he will not participate in recruiting or
soliciting any Company employee, with
the exception of Mr. Macione's executive
assistant, Kathy Hale. Should Mr.
Macione wish to discuss possible employment
with any then-current Company
employee during the twenty-four (24) month
period set forth above, he may
request permission to do so by seeking and
obtaining a written exception to this
provision from the Chief Executive Officer
of the Company and its Board of
Directors; provided, however, Mr. Macione
agrees that he will not discuss any
employment possibility with such employees
prior to securing the Company's
permission. Should the Company decline to
grant such permission, Mr. Macione
agrees that he will not at any time, either
during or after the non-solicitation
period set forth above, advise the employee
concerned that he/she was the
subject of a request under this paragraph
or that the Company refused to grant
Mr. Macione the right to discuss an
employment possibility with him/her.
8. Covenant to Protect the Company. Mr. Macione agrees: (i) not to
make
any public statement or statements to the
press concerning Company business
objectives, status of its securities, its
management practices, or other
sensitive information without first
receiving the Company's written approval;
(ii) that he will not divulge or disclose
any proprietary or confidential
information to any third party, except his
personal legal advisor, without the
prior written consent of the Company (any
disclosure of such information by any
of Mr. Macione's advisors shall be
considered a disclosure by Mr. Macione) (iii)
that he will not make to any third party,
including without limitation the news
media, any written or oral statement which
he knows or reasonably should know
will cause harm to the Company, its
employees or agents.
The Company agrees that the Company's director's and officers who
are
subject to the reporting requirements of
Section 16 of the Securities Exchange
act of 1934 ("Section 16 Officers") will
not make to any third party or any
employee of the Company, including without
limitation the news media, any
written or oral statements critical of Mr.
Macione's character, integrity, or
job performance, or request any other
person to do so.
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9. Release. Except for obligations of the Company arising under
or
continuing pursuant to this Agreement,
including specifically but not limited to
the provisions of Paragraph 11,
Indemnification, Mr. Macione hereby forever
waives for himself, his attorneys, heirs,
executors, administrators, successors
and assigns fully and forever any claims
against the Company, its partners, any
related or affiliated company (including,
without limitation King
Pharmaceuticals, Inc., Monarch
Pharmaceuticals, Inc., Jones Pharma Incorporated,
Parkedale Pharmaceuticals, Inc., King
Pharmaceuticals Research and Development,
Inc., Meridian Medical Technologies, Inc.,
their predecessors, successors,
assigns, partners, officers, directors,
agents, representatives, attorneys or
employees), for any action or inaction,
loss, expense or any damages of whatever
nature arising from any occurrence or
occurrences, known or unknown, from the
beginning of time until the effective date
of this Agreement. Without
limitation, Mr. Macione specifically waives
any claim arising under the FAIR
LABOR STANDARDS ACT ("FLSA"), the AMERICANS
WITH DISABILITIES ACT ("ADA"), the
AGE DISCRIMINATION IN EMPLOYMENT ACT
("ADEA"), and the REHABILITATION ACT (as
codified in 29 U.S.C. Sections 701 et
seq.), or their state counterparts; claims
under TITLE VII OF THE CIVIL RIGHTS ACT OF
1964, as amended, TITLE VII OF THE
CIVIL RIGHTS ACT OF 1991, as amended, the
FAMILY MEDICAL LEAVE ACT ("FMLA"), the
NATIONAL LABOR RELATIONS ACT ("NLRA"), or
any state counterpart; or any other
claims or causes of action emanating from
common law, breach of contract,
statute or code, ordinance, rule or
regulation. Further, Mr. Macione represents
and warrants, with the understanding that
such representation and warranty is
material to this transaction, that he has
no current intention to, and will not
in the future, assert, in any manner or by
any means, any such claim before any
federal, state or local judicial or
administrative agency or body.
Mr. Macione, by his signature, represents and acknowledges that
the
Company has advised him to consult with an
attorney; that he has twenty-one (21)
days from the date this Agreement is
presented to him within which to consider
this Agreement; and that he has seven (7)
days following the execution of this
Agreement within which to revoke this
Agreement. Further, Mr. Macione
acknowledges by his signature that he
intends for this Agreement to become
effective upon its execution and that the
Separation Payment identified herein
will be paid in accordance with Paragraph 3
of this Agreement.
10.
Covenant Not to Sue. Except as required to enforce obligations
of
Mr. Macione arising under this Agreement,
the Company, on behalf of
