Exhibit 10.15
TERMINATION AGREEMENT
This Agreement is made as of the 9th day of August, 1994, between MGI PHARMA,
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INC., a Minnesota corporation, with its principal offices at Suite 300E Opus
Center, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the Company) and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (Employee), residing at
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇. Act. #704
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▇▇▇▇▇▇▇▇▇▇▇. ▇▇ ▇▇▇▇▇
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WITNESSETH THAT:
WHEREAS, this Agreement is intended to specify the financial
arrangements that the Company will provide to the Employee upon Employee's
separation from employment with the Company under any of the circumstances
described herein; and
WHEREAS, this Agreement is entered into by the Company in the belief
that it is in the best interests of the Company and its shareholders to provide
stable conditions of employment for Employee notwithstanding the possibility,
threat or occurrence of certain types of change in control, thereby enhancing
the Company's ability to attract and retain highly qualified people.
NOW, THEREFORE, to assure the Company that it will have the continued
dedication of Employee notwithstanding the possibility, threat or occurrence of
a bid to take over control of the Company, and to induce Employee to remain in
the employ of the Company, and for other good and valuable consideration, the
Company and Employee agree as follows:
1. Term of Agreement. The term of this Agreement shall commence on
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the date hereof as first written above and shall continue through December 31,
1994; provided that commencing on January 1, 1995 and each January 1 thereafter,
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the term of this Agreement shall automatically be extended for one additional
year unless not later than twelve months prior to such January 1, the Company
shall have given notice that it does not wish to extend this Agreement (which
notice may not, in any event, be given sooner than January 1, 1995); and
provided, further, that notwithstanding any such notice by the Company not to
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extend, this Agreement shall continue in effect for a period of 24 months beyond
the term provided herein if a Change in Control (as defined in Section 3(i)
hereof) shall have occurred during such term; and provided, further, that
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notwithstanding any such notice by the Company to extend the term of this
Agreement, the provisions of Section 2(iii) shall be effective through July 31,
1997.
2. Termination of Employment
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(i) Prior to a Change in Control. Prior to a Change in Control (as
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defined in Section 3(i) hereof), the Company may terminate Employee from
employment with the Company at will, with or without Cause (as defined in
Section 3(iii) hereof), at any time, except that in the event the Company
terminates Employee's employment on or before July 31, 1997, and prior to a
change of control, then Section 2(iii) shall apply.
(ii) After a Change in Control
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(a) From and after the date of a Change in Control (as defined in
Section 3(i) hereof) during the term of this Agreement, the Company shall not
terminate Employee from employment with the Company except as provided in this
Section 2(ii) or as a result of Employee's Disability (as defined in
Section 3(iv) hereof) or his death.
(b) From and after the date of a Change in Control (as defined in
Section 3(i) hereof) during the term of this Agreement, the Company shall have
the right to terminate Employee from employment with the Company at any time
during the term of this Agreement for Cause (as defined in Section 3(iii)
hereof), by written notice to the Employee, specifying the particulars of the
conduct of Employee forming the basis for such termination.
(c) From and after the date of a Change in Control (as defined in
Section 3(i) hereof) during the term of this Agreement: (x) the Company shall
have the right to terminate Employee's employment without Cause (as defined in
Section 3(iii) hereof), at any time; and (y) the Employee shall, upon the
occurrence of such a termination by the Company without Cause, or upon the
voluntary termination of Employee's employment by Employee for Good Reason (as
defined in Section 3(ii) hereof), be entitled to receive the benefits provided
in Section 4 hereof. Employee shall evidence a voluntary termination for Good
Reason by written notice to the Company given within 60 days after the date of
the occurrence of any event that Employee knows or should reasonably have known
constitutes Good Reason for voluntary termination. Such notice need only
identify the Employee and set forth in reasonable detail the facts and
circumstances claimed by Employee to constitute Good Reason.
(iii) Special Termination Provision Prior to
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Change in Control
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In the event the Company terminates Employee from employment without
cause on or before July 31, 1997, the Employee shall be entitled to a
termination benefit payment equal to twelve (12) times the Employee's monthly
salary (as in effect in the month preceding the month in which the termination
becomes effective).
Any notice given by Employee pursuant to this Section 2 shall be
effective five business days after the date it is given by Employee.
3. Definitions
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(i) A "Change in Control" shall mean:
(a) a change in control of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or successor provision thereto, whether or not the Company
is then subject to such reporting requirement;
(b) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly,
of securities of the Company representing 35% or more of the combined
voting power of the Company's then outstanding securities;
(c) the Continuing Directors (as defined in Section 3(v) hereof)
cease to constitute a majority of the Company's Board of Directors;
provided that such change is the direct or indirect result of a proxy fight
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and contested election or elections for positions on the Board of
Directors; or
(d) the majority of the Continuing Directors (as defined in
Section 3(v) hereof) determine in their sole and absolute discretion that
there has been a change in control of the Company.
(ii) "Good Reason" shall mean the occurrence of any of the following
events, except for the occurrence of such an event in connection with the
termination or reassignment of Employee's employment by the Company for Cause
(as defined in Section 3(iii) hereof), for Disability (as defined in Section
3(iv) hereof) or for death:
(a) the assignment to Employee of employment responsibilities
which are not of comparable responsibility and status as the employment
responsibilities held by Employee immediately prior to a Change in Control;
(b) a reduction by the Company in Employee's base salary as in
effect immediately prior to a Change in Control;
(c) an amendment or modification of the Company's incentive
compensation program (except as may be required by applicable law) which
affects the terms or administration of the program in a manner adverse to
the interest of Employee as compared to the terms and administration of
such program immediately prior to a Change in Control;
(d) the Company's requiring Employee to be based anywhere other
than within 50 miles of Employee's office location immediately prior to a
Change in Control, except for requirements of temporary travel on the
Company's business to an extent substantially consistent with Employee's
business travel obligations immediately prior to a Change in Control;
(e) except to the extent otherwise required by applicable law,
the failure by the Company to continue in effect any benefit or
compensation plan, stock ownership plan, stock purchase plan, bonus plan,
life insurance plan, health-and-accident plan or disability plan in which
Employee is participating immediately prior to a Change in Control (or
plans providing Employee with substantially similar benefits), the taking
of any action by the Company which would adversely affect Employee's
participation in, or materially reduce Employee's benefits under, any of
such plans or deprive Employee of any material fringe benefit enjoyed by
Employee immediately prior to such Change in Control, or the failure by the
Company to provide Employee with the number of paid vacation days to which
Employee is entitled immediately prior to such Change in Control in
accordance with the Company's vacation policy as then in effect; or
(f) the failure by the Company to obtain, as specified in Section
5(i) hereof, an assumption of the obligations of the Company to perform
this Agreement by any successor to the Company.
(iii) "Cause" shall mean termination by the Company of Employee's
employment based upon (a) the willful and continued failure by Employee
substantially to perform his duties and obligations (other than any such failure
resulting from his incapacity due to physical or mental illness or any such
actual or anticipated failure resulting from Employee's termination for Good
Reason) or (b) the willful engaging by Employee in misconduct which is
materially injurious to the Company, monetarily or otherwise. For purposes of
this Section 3(iii), no action or failure to act on Employee's part shall be
considered "willful" unless done, or omitted to be done, by Employee in bad
faith and without reasonable belief that his action or omission was in the best
interests of the Company.
(iv) "Disability" shall mean any physical or mental condition which
would qualify Employee for a disability benefit under the Company's long-term
disability plan.
(v) "Continuing Director" shall mean any person who is a member of the
Board of Directors of the Company, while such person is a member of the Board of
Directors, who is not an Acquiring Person (as hereinafter defined) or an
Affiliate or Associate (as hereinafter defined) of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or Associate, and
who (a) was a member of the Board of Directors on the date of this Agreement as
first written above or (b) subsequently becomes a member of the Board of
Directors, if such persons initial nomination for election or initial election
to the Board of Directors is recommended or approved by a majority of the
Continuing Directors. For purposes of this Section 3(v): "Acquiring Person"
shall mean any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) who or which, together with all Affiliates and Associates of such
person, is the "beneficial owner" (as defined in Rule 13d-3 promulgated under
the Exchange Act) of 20% or more of the shares of Common Stock of the Company
then outstanding, but shall not include the Company, any subsidiary of the
Company or any employee benefit plan of the Company or of any subsidiary of the
Company or any entity holding shares of Common Stock organized, appointed or
established for, or pursuant to the terms of, any such plan; and "Affiliate" and
"Associate" shall have the respective meanings ascribed to such terms in Rule
12b-2 promulgated under the Exchange Act.
4. Benefits upon Termination under Section 2(ii)(c)
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(i) Upon the termination (voluntary or involuntary) of the employment
of Employee pursuant to Section 2(ii)(c) hereof, Employee shall be entitled to
receive the benefits specified in this Section 4. The amounts due to Employee
under subparagraphs (a), (b) and (c) of this Section 4(i) shall be paid to
Employee not later than one business day prior to the date that the termination
of Employee's employment becomes effective. All benefits to Employee pursuant to
this Section 4(i) shall be subject to any applicable payroll or other taxes
required by law to be withheld.
(a) The Company shall pay to Employee any and all amounts payable
to Employee pursuant to any standard or general severance policy of the
Company or its Board of Directors;
(b) In lieu of any further base salary payments to Employee for
periods subsequent to the date that the termination of Employee's
employment becomes effective, the Company shall pay as severance pay to
Employee a lump-sum cash amount equal to thirty-six (36) times the
Employee's monthly base salary (as in effect in the month preceding the
month in which the termination becomes effective or as in effect in the
month preceding the Change in Control, whichever is higher);
(c) The Company shall also pay to Employee all legal fees and
expenses incurred by Employee as a result of such termination of employment
(including all fees and expenses, if any, incurred by Employee in seeking
to obtain or enforce any right or benefit provided to Employee by this
Agreement whether by arbitration or otherwise); and
(d) Any and all contracts, agreements or arrangements between the
Company and Employee prohibiting or restricting the Employee from owning,
operating, participating in, or providing employment or consulting services
to, any business or company competitive with the Company at any time or
during any period after the date the termination of Employee's employment
becomes effective, shall be deemed terminated and of no further force or
effect as of the date the termination of Employee's employment becomes
effective, to the extent, but only to the extent, such contracts,
agreements or arrangements so prohibit or restrict the Employee; provided
that the foregoing provisions shall not constitute a license or right to
use any proprietary information of the Company and shall in no way affect
any such contracts, agreements or arrangements insofar as they relate to
nondisclosure and nonuse of proprietary information of the Company
notwithstanding the fact that such nondisclosure and nonuse may prohibit or
restrict the Employee in certain competitive activities.
(ii) Employee shall not be required to mitigate the amount of any
payment provided for in this Section 4 by seeking other employment or otherwise.
The amount of any payment or benefit provided in this Section 4 shall not be
reduced by any compensation earned by Employee as a result of any employment by
another employer or from any other source.
(iii) In the event that any payment or benefit received or to be
received by Employee in connection with a Change in Control of the Company or
termination of Employee's employment (whether payable pursuant to the terms of
this Agreement or any other plan, contract, agreement or arrangement with the
Company, with any person whose actions result in a Change in Control of the
Company or with any person constituting a member of an "affiliated group" as
defined in Section 280G(d)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), with the Company or with any person whose actions result in a
Change in Control of the Company) (collectively, the "Total Payments") would not
be deductible (in whole or in part) by the Company or such other person making
such payment or providing such benefit solely as a result of Section 280G of the
Code, the amount payable to Employee pursuant to Section 4(i)(b) hereof shall be
reduced until no portion of the Total Payments is not deductible
solely as a result of Section 280G of the Code or such amount payable to
Employee pursuant to Section 4(i)(b) is reduced to zero. For purposes of this
limitation, (a) no portion of the Total Payments shall be taken into account
which in the opinion of tax counsel selected by the Company and acceptable to
Employee does not constitute a "parachute payment" within the meaning of Section
280G(b)(2) of the Code (such as payments payable pursuant to the Company's
standard or general severance policies); (b) the payment pursuant to Section
4(i)(b) shall be reduced only to the extent necessary so that the Total Payments
(other than those referred to in the immediately preceding clause (a)) in their
entirety constitute reasonable compensation within the meaning of Section
280G(b)(4)(B) of the Code, in the opinion of the tax counsel referred to in the
immediately preceding clause (a); and (c) the value of any other noncash benefit
or of any deferred cash payment included in the Total Payments shall be
determined by the Company's independent auditors in accordance with the
principles of Sections 280G(d)(3) and (4) of the Code. In case of uncertainty as
to whether all or some portion of a payment is or is not payable to Employee
under this Agreement, the Company shall initially make the payment to the
Employee, and Employee agrees to refund to the Company any amounts ultimately
determined not to have been payable under the terms hereof.
5. Successors and Binding Agreement
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(i) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company), by agreement in
form and substance satisfactory to Employee, 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 succession had taken place.
Failure of the Company to obtain such agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle
Employee to compensation from the Company in the same amount and on the same
terms as Employee would be entitled hereunder if employee terminated Employee's
employment after a Change in Control for Good Reason, except that for purposes
of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the date that the termination of Employee's employment
becomes effective. As used in this Agreement, "Company" shall mean the Company
and any successor to its business and/or assets which executes and delivers the
agreement provided for in this Section 5(i) or which otherwise becomes bound by
all the terms and provisions of this Agreement by operation of law.
(ii) This Agreement is personal to Employee, and Employee may not
assign or transfer any part of Employee's rights or duties hereunder, or any
compensation due to Employee hereunder, to any other person. Notwithstanding the
foregoing, this Agreement shall inure to the benefit of and be enforceable
by Employee's personal or legal representatives, executors, administrators,
heirs, distributees, devisees and legatees.
6. Arbitration. Any dispute or controversy arising under or in
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connection with this Agreement shall be settled exclusively by arbitration in
the Minneapolis-St. ▇▇▇▇ metropolitan area, in accordance with the applicable
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrators award in any court having jurisdiction.
7. Modification: Waiver. No provisions of this Agreement may be
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modified, waived or discharged unless such waiver, modification or discharge is
agreed to in a writing signed by Employee and such officer as may be
specifically designated by the Board of Directors of the Company. No waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
8. Notice. All notices, requests, demands and all other
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communications required or permitted by either party to the other party by this-
Agreement (including, without limitation, any notice of termination of
employment and any notice of intention to arbitrate) shall be in writing and
shall be deemed to have been duly given when delivered personally or received by
certified or registered mail, return receipt requested, postage prepaid, at the
address of the other party, as first written above (directed to the attention of
the Board of Directors and Corporate Secretary in the case of the Company).
Either party hereto may change its address for purposes of this Section 8 by
giving 15 days prior notice to the other party hereto.
9. Severability. If any term or provision of this Agreement or the
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application hereof to any person or circumstances shall to any extent be invalid
or unenforceable, the remainder of this Agreement or the application of such
term or provision to persons or circumstances other than those as to which it is
held invalid or unenforceable shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
10. Counterparts. This Agreement may be executed in several
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11. Governing Law. This Agreement has been executed and delivered in
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the State of Minnesota and shall in all respects be governed by, and construed
and enforced in accordance with, the laws of the State of Minnesota, including
all matters of
construction, validity and performance, and without taking into consideration
the conflict of law provisions of such state.
12. Effect of Agreement: Entire Agreement. The Company and the
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Employee understand and agree that this Agreement is intended to reflect their
agreement only with respect to payments and benefits upon termination in certain
cases and is not intended to create any obligation on the part of either party
to continue employment. This Agreement supersedes any and all other oral or
written agreements or policies made relating to the subject matter hereof and
constitutes the entire agreement of the parties relating to the subject matter
hereof; provided that this Agreement shall not supersede or limit in any way
Employee's rights under any benefit plan, program or arrangements in accordance
with their terms.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed, all as of the date first written above.
MGI PHARMA, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Its Vice President, CFO
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EMPLOYEE
/s/ RC Schrotriya
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 8/23/94