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EXHIBIT 10.3
EXECUTIVE EMPLOYMENT AGREEMENT
(AS AMENDED)
This Executive Employment Agreement is entered into as of April 2, 1999 (the
"Effective Date"), by and between United Therapeutics Corporation ("UT"), a
company organized under the laws of the State of Delaware, having a place a
business ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
("Executive"), a resident of the State of Maryland.
Whereas, UT is engaged in the development, implementation and operation of an
international pharmaceutical business (the "UT Business");
Whereas, Executive currently serves as the Chairman and Chief Executive Officer
of UT and her services and knowledge are valuable to UT in connection with the
management of UT and the UT Business;
Whereas, UT has determined that it is in the best interests of UT and its
stockholders to secure Executive's continued services, to ensure Executive's
continued dedication to UT, and to provide appropriate compensation, including
incentive compensation to Executive, and in order to further such goals, UT is
desirous of entering this Agreement; and
Whereas, Executive is desirous of entering into an employment agreement with UT
on the terms and conditions set forth herein,
Now, Therefore, in consideration of the foregoing and the mutual covenants
contained herein, UT and Executive agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the following terms shall have the respective
meanings set forth below:
1.1 "Affiliate" means any corporation, partnership or other entity,
controlling, controlled by, or under common control with UT, by virtue of direct
or indirect beneficial ownership of voting securities of or voting interest in
the controlled entity.
1.2 "Board" means the Board of Directors of UT.
1.3 "Cause" means (a) the willful and continued failure by Executive to
substantially perform her duties with UT (other than any such failure resulting
from Executive's incapacity due to physical or mental illness, or any such
actual or anticipated failure resulting from Executive's termination for Good
Reason) after a demand for substantial performance is delivered to Executive by
the Board (which demand shall specifically identify the manner in which the
Board
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believes that Executive has not substantially performed her duties); or (b) the
willful engaging by Executive in gross misconduct materially and demonstrably
injurious to UT. For purposes of this definition, no act or failure to act on
the part of Executive shall be considered "willful" unless done or omitted to be
done by Executive not in good faith and without reasonable belief that her
action(s) or omission(s) was in the best interests of UT. Notwithstanding the
foregoing, Executive shall not be deemed to have been terminated for Cause
unless and until UT provides Executive with a copy of a resolution adopted by an
affirmative vote of not less than three-quarters of the entire membership of the
Board at a meeting of the Board called and held for the purpose (after
reasonable notice to Executive and opportunity for Executive, with counsel, to
be heard before the Board), finding that in the good faith opinion of the Board
the Executive has been guilty of conduct set forth in subsections (a) or (b)
above, setting forth the particulars in detail. A determination of Cause by the
board shall not be binding upon or entitled to deference by any finder of fact
in the event of a dispute, it being the intent of the parties that such finder
of fact in the event of a dispute shall make an independent determination of
whether the termination was for "Cause" as defined in (a) and (b) above.
1.4 "Code" means the Internal Revenue Code of 1986, as amended.
1.5 "Confidential Information" means all information known to UT or learned
by Executive during the term of employment and not generally known, including
any and all general and specific knowledge, experience, information and data,
technical or non-technical, including, without limitation and whether or not
patentable, processes, skills, information, know-how, trade secrets, data,
designs, formulae, algorithms, specifications, samples, methods, techniques,
compilations, computer programs, devices, concepts, inventions, developments,
discoveries, improvements, and commercial or financial information, in any form,
including without limitation, oral, written, graphic, demonstrative, machine
recognizable, specimen or sample form.
1.6 "Conflicting Product or Service" means any product or service of any
person or organization other than UT, in existence or under development, which
resembles or competes with a product or service of UT's which is then in
existence or under development, excluding, however, the preclinical compound
AFP-07 under development by the PPH Cure Foundation.
1.7 "Conflicting Organization" means any person or organization engaged in,
or about to become engaged in, research on or development, production,
marketing, or selling of a "Conflicting Product or Service."
1.8 "Date of Termination" means (a) the effective date on which Executive's
employment by UT terminates as specified in a Notice of Termination by UT or
Executive, as the case may be, or (b) if Executive's employment by UT terminates
by reason of death, the date of death of Executive. Notwithstanding the previous
sentence, (i) if the Executive's employment is terminated for disability as
defined in Section 1.9, then such Date of Termination shall be no earlier than
thirty (30) days following the date on which a Notice of Termination is
received, and (ii) if the Executive's employment is terminated by UT other than
for Cause, then such Date of
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Termination shall be no earlier than thirty (30) days following the date on
which Notice of Termination is received.
1.9 "Disability" means Executive's failure to substantially perform her
duties with UT on a full-time basis for at least one hundred eighty (180)
consecutive days as a result of Executive's incapacity due to mental or physical
illness.
1.10 "Good Reason" means, without Executive's express written consent, the
occurrence of any of the following events:
(a) (i) The assignment to Executive of any duties inconsistent in any
material adverse respect with Executive's position(s), duties,
responsibilities or status with UT immediately prior thereto, (ii)
a material adverse change in Executive's reporting
responsibilities, titles or offices with UT as in effect
immediately prior thereto, (iii) any removal or involuntary
termination of Executive by UT otherwise than as expressly
permitted by this Agreement (including any purported termination
of employment which is not effected by a Notice of Termination),
or (iv) any failure to re-elect Executive to any position with UT
held by Executive immediately prior thereto;
(b) A reduction by UT in Executive's rate of annual base salary as in
effect immediately prior thereto or the failure of UT in any year
(commencing with calendar year 1999) to increase the Executive's
annual base salary by an amount equal to the average percentage
increases in base salary for all officers of UT during the two
full calendar years immediately preceding such year except for
across-the-board salary reductions, freezes, or reduced increases
similarly affecting all Executives of UT and all Executive or any
person in control of UT;
(c) Any requirement of UT that Executive (i) be based anywhere other
than the facilities where Executive is located on the date of this
Agreement or reasonably equivalent facilities within twenty five
(25) miles of such facilities or (iii) travel for the business of
UT to an extent substantially more burdensome than the travel
obligations of Executive immediately prior to the date of this
Agreement;
(d) The failure of UT to continue the Executive's participation in any
bonus or other incentive plans in which she was participating
immediately prior thereto or any reduction in the amount of bonus
or incentive compensation which she is able to receive, without
replacement of such bonus or incentive plans with bonus, incentive
or other compensation of at least substantially comparable value
to the Executive;
(e) The failure of UT to (i) to continue in effect any employee
benefit plan or compensation plan in which Executive is
participating immediately prior thereto, unless Executive is
permitted to participate in other plans providing Executive with
substantially comparable benefits, or the taking of any action by
UT which
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would adversely affect Executive's participation in or materially
reduce Executive's benefits under any such plan, (ii) to provide
Executive and Executive's dependents with welfare benefits
(including without limitation, medical prescription drug, dental,
disability, salary continuance, employee life, group life,
accidental death and travel accident insurance plans and programs)
in accordance with the most favorable plans, practices, programs
and policies of UT in effect for Executive immediately prior
thereto or as is in effect for other senior Executive of UT, (iii)
to provide fringe benefits and perequisites in accordance with the
most favorable plans, practices, programs and policies of UT in
effect for Executive immediately prior thereto or as is in effect
for senior Executives of UT, or (iv) to provide Executive with
paid vacation in accordance with the most favorable plans,
policies, programs and practices of UT as in effect for Executive
immediately prior thereto or as is in effect for other senior
Executives of UT.
(f) The failure of UT to pay on a timely basis any amounts owed
Executive as salary, bonus, deferred compensation or other
compensation;
(g) The failure of UT to obtain an assumption agreement from any
successor as contemplated in Section 8.8;
(h) The refusal by UT to continue to allow Executive to attend to
matters or engage in activities not directly related to the
business of UT which were permitted by UT immediately prior
thereto, including without limitation serving on the boards of
directors of other companies or entities;
(i) The purported termination of Executive's employment which is not
effected pursuant to a Notice of Termination which satisfies the
requirements of a Notice of Termination; or
(j) Any other material breach by UT of its obligations under this
Agreement.
For the purposes of this Agreement, any good faith determination of Good Reasons
made by Executive shall be conclusive on the parties; provided, however, that an
isolated and insubstantial action taken in good faith and which is remedied by
UT within ten (10) days after receipt of written notice thereof given by
Executive shall not constitute Good Reason.
1.11 "Inventions" means inventions, designs, discoveries, developments,
creations and improvements created, discovered, developed or conceived,
regardless of whether reduced to practice.
1.12 "Nonqualifying Termination" means a termination of Executive's employment
(a) by UT for Cause, (b) by Executive for any reason other than for Good Reason
with Notice of Termination, (c) as a result of Executive's death, (d) by UT due
to Executive disability, unless within thirty (30) days after Notice of
Termination is provided to Executive following such disability Executive shall
have returned to substantial performance of Executive duties on a full-time
basis, or (e) as a result of Executive's Retirement.
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1.13 "Notice of Termination" means a written notice by UT or Executive as the
case may be, to the other, which (i) indicates the specific termination
provision in this Agreement relied upon, (iii) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive's employment under the provision so
indicated, and (iii) specifies the termination date. The failure by Executive or
UT to set forth in such notice any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of Executive or UT
hereunder or preclude Executive or UT from asserting such fact or circumstance
in enforcing Executive's or UT's right hereunder.
1.14 "Positive Spread" means the spread between the exercise price of any
non-vested options held by Executive to acquire common stock of UT under any
stock option plan adopted by UT prior or subsequent hereto, and the average of
the bid and asked price of the common stock as reported for the Date of
Termination on the Automated Quotation System of the National Association of
Securities Dealers or if no such trades are reported on that date, the last
preceding date on which shares of UT or its Affiliates common stock were traded,
or if such common stock of UT is not publicly traded, the "Fair Market Value" of
such stock as determined pursuant to the applicable stock option plan or plans.
1.15 "Retirement" means termination of employment by either the Executive or
UT on or after the Executive's attainment of age 65.
1.16 "Works of Authorship" means all computer software programs or other
writings, including, without limitation, verbal works, designs, models, drawing,
or audio, visual or audiovisual recordings.
ARTICLE 2
EMPLOYMENT
2.1 Employment. UT agrees to employ Executive as Chief Executive Officer, and
Executive agrees to accept such employment by UT on the terms and conditions set
forth herein. Executive represents and warrants that the execution, delivery and
performance by her of this Agreement will not violate any agreement, order,
judgment or decree to which she is a party or by which she is bound.
2.2 Term. Subject to the provisions of Article 4 hereof, UT shall employ
Executive for a term of five (5) years commencing as of the Effective Date and
continuing to and including December 31, 2004. The term (as herein extended)
shall automatically be extended by one (1) additional year at the end of each
year unless at least six (6) months prior to the end of the term or any
anniversary thereof, UT shall deliver to Executive or Executive shall deliver to
UT, written notice that the term shall not be so extended.
2.3 Duties. As Chief Executive Officer of UT, Executive shall have the duties
and responsibilities as may from time to time be assigned to or vested in
Executive by UT's Board of Directors (the "Board").
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(a) Executive's employment with UT shall be full-time. During the term
of employment, Executive shall, except during periods of vacation,
sick leave or other duly authorized leave of absence, and except
for not more than a few hours per week for the activities
described in subparagraph 2.3(b) below, devote the whole of
Executive's time, attention, skill and ability during usual
business hours (and outside those hours when reasonably necessary
to Executive's duties hereunder) to the faithful and diligent
performance of Executive's duties hereunder. Executive
acknowledges and agrees that Executive may be required, without
additional compensation, to perform services for any Affiliates,
and to accept such office or position with Affiliate as the Board
may reasonably require. Executive shall comply with all applicable
polices of UT and/or its Affiliates during her term of service to
UT and/or its Affiliates.
(b) During the term of employment, it shall not be a violation of this
Agreement for Executive to serve as of Counsel to Mahon, Patusky,
▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, Chartered; President of Beacon Projects,
Inc.; an officer of UT's telemedicine affiliates; to manage
personal passive investments; to serve as an officer, manager and
a member of the board of directors of PPH Cure Foundation or World
Against Racism Foundation or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Medical Research
Foundation or, with the prior approval of the Board, the board of
directors of any other corporation or trade association; so long
as such activities (individually or collectively) do not conflict
or materially interfere with the performance of Executive's duties
hereunder.
ARTICLE 3
COMPENSATION
3.1 Base Salary. For services rendered by Executive pursuant to this
Agreement, UT agrees to pay Executive a base annual salary ("Base Salary")
commencing as of the Effective Date at the annual rate of One Hundred Eighty
Thousand Dollars ($180,000) per year, payable in accordance with UT's then
prevailing Executive payroll practices. Such Base Salary shall be subject to
review and increase at least annually by the Board (with the first such review
to occur not later than December 31, 1999) in the Board's sole discretion. In
determining any such increase, the Board shall consider any increases in the
cost of living and may provide for any performance, merit or other increase. The
term "Base Salary" as used herein shall include any increases thereto made from
time to time as permitted by this Section 3.1.
3.2 Bonuses.
(a) Annual Incentive Compensation. During each year of the initial
five-year term of this Agreement, an option to purchase such
number of shares of UT's Common Stock shall be granted to
Executive for the number of shares of Common Stock as is equal to,
for the first year, the quotient of one percent of the difference
in UT market capitalization from the date of UT's initial public
offering ("IPO") to the
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one year anniversary thereof divided by $18.00, and for each year
thereafter, the quotient of one percent of the rise in market
capitalization of UT during the preceding 365 days divided by
$18.00, all as set forth more particularly in the Option Agreement
attached hereto as Exhibit A. It is intended that each such option
will be granted pursuant to the UT Equity Incentive Plan, which
shall be amended to accommodate these grants, and will be
incentive stock options. Incentive compensation shall be vested
when earned. The maximum incentive compensation that may be earned
shall be capped for each year as follows: 500,000 in 2000; 701,353
in 2001; 681,434 in 2002; 2,757,832 in 2003; and 3,298,898 in
2004.
(b) Discretionary Bonuses. During the term of this Agreement,
Executive shall be entitled to such bonuses as may be authorized,
declared and paid by the Board, in its sole discretion. Factors
which the Board may, in its sole discretion, and without
limitation, consider with respect to any determination by the
Board with respect to the payment or amount of such bonus or
bonuses, include Executive's job performance and UT's financial
performance.
3.3 Participation in Benefit Plans. Executive shall be eligible to
participate in any long-term incentive, stock option, employee stock ownership,
pension, thrift, profit sharing, group life or disability insurance, medical or
dental coverage, education, or other retirement or employee benefit plan or
program that UT has adopted or may adopt for the benefit of its employees, on
the same basis as other Executive employees. Such participation shall be subject
to the terms and conditions of such plans or programs, including, but not
limited to, such generally applicable eligibility provisions as may be in effect
from time to time. Executive shall be entitled to paid vacation (initially four
(4) weeks per calendar year, paid sick leave, and holidays (initially eleven
(11) days per calendar year) on the same basis as may from time to time apply to
other UT Executive employees generally.
3.4 Expenses. UT shall reimburse Executive for all reasonable, ordinary and
necessary business expenses actually incurred by Executive in connection with
her performance hereunder, including ordinary and necessary expenses incurred by
Executive in connection with travel on UT business, provided all such expenses
have been approved in advance by UT in accordance with and subject to the terms
and conditions of UT's then-prevailing expense policy. As a condition precedent
to obtaining such reimbursement, Executive shall provide to UT any and all
statements, bills or receipts evidencing the expenses for which Executive seeks
reimbursement, and such other related information or materials as UT may from
time to time reasonably require. Executive shall account to UT for any expenses
that are eligible for reimbursement under this Section 3.4 in accordance with UT
policy.
3.5 Automobile. During the term of this agreement, UT shall supply Executive
with the use of an automobile, and shall pay the cost of maintenance and
insurance for such automobile.
3.6 Withholding. Anything in this Agreement to the contrary notwithstanding,
all payments required to be made by UT hereunder to Executive or Executive's
estate or beneficiaries in
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connection with Executive's employment hereunder shall be subject to the
withholding of such amounts relating to taxes as UT may reasonably determine it
should withhold pursuant to any applicable law or regulation.
ARTICLE 4
TERMINATION
4.1 Nonqualifying Termination.
(a) If the employment of Executive shall terminate during the term of
this Agreement (including any extension of such term), by reason
of a Nonqualifying Termination, then Executive shall be paid the
Executive's unpaid base salary from UT through the Date of
Termination at the rate in effect just prior to the time a Notice
of Termination is given as well as any benefits to which Executive
was entitled through the Date of Termination. In addition, in the
event that termination of employment is due to Executive's death
or Disability, UT shall continue to pay Executive's then current
Base Salary to Executive (in the case of Disability) or
Executive's legal representatives, estate, beneficiaries or heirs
(in the case of death), in accordance with UT's then-prevailing
Executive payroll practices, through the end of the calendar year
following Executive's death or termination due to Disability, but
shall have no further obligation to Executive or Executive's legal
representatives, estate, beneficiaries or heirs for any
compensation, benefits or other payments hereunder.
(b) In the event that termination of employment is due to Executive's
Disability, the payment of benefits under UT's short-term and
long-term disability insurance programs, if any, to the extent
payable with respect to any period prior to the Date of
Termination, shall offset UT's obligations under Section 4.1(a).
(c) Except as otherwise provided herein or as may be required by law,
Executive's participation in any benefit plans of UT or any of its
Affiliates shall terminate as of her Dated Termination.
4.2 Other Than Nonqualifying Termination. If the employment of Executive
shall terminate during the term of this Agreement (including any extension of
such term), other than by reason of a Nonqualifying Termination, then Executive
shall receive the following severance as compensation for services rendered.
(a) Lump Sum Cash Payment. Within five (5) days following the Date of
Termination, Executive shall receive a lump sum cash payment in
amount equal to the sum of the following.
(i) Executive's Base Salary from UT through the Date
of Termination at the rate in effect plus any benefit
awards (including both
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the cash and stock components), bonus payments and
incentive awards which pursuant to the terms of any plans
have been earned or become payable, to the extent not
theretofore paid;
(ii) As payment in lieu of a bonus or other
incentive payment to be paid hereunder or under UT's annual
bonus plan or other incentive or other comparable plan for
the year of termination, an amount equal to the number of
days Executive was employed during the year by UT prior to
the Date of Termination divided by the number of days in
the year multiplied by 100% of the greater of either (a)
the bonus and/or other incentive payments awarded to
Executive for the immediately preceding year, or (b) the
average annual bonus and/or other incentive payments paid
to Executive over the preceding two year period;
(iii) Three (3) times (A) Executive's highest annual
rate of Base Salary from UT in effect during the 12-month
period prior to the Date of Termination, plus (B) the
greater of the bonus and/or other incentive payments
awarded to Executive for the immediately preceding year or
the average bonus and/or other incentive payments awarded
to the Executive for the previous two years.
(iv) The Positive Spread for any non-vested options
held by Executive, payable upon surrender by Executive of
such options.
(b) Loans. Any loans from UT that the Executive had outstanding shall
remain payable according to their terms.
(c) Benefits. UT shall maintain in full force and effect, in
substantially all material respects, all employee benefit plans,
programs and arrangements that the Executive was entitled to
participate in immediately prior to the Date of Termination for
the longer of thirty-six (36) months after the Date of Termination
or the date upon which the Executive receives comparable benefits
from a new employer. If the Executive's participation in any such
plan or program is barred, UT shall arrange to provide comparable
benefits substantially similar to those which the Executive
received under such plans and programs.
(d) Retirement Benefits. In addition to the benefits the Executive is
entitled to receive under any retirement plan in which the
Executive participates on the Date of Termination, UT shall pay
the Executive a cash payment at the Executive's attainment of age
65 (or, if later, the Date of Termination), of an amount equal to
the actuarial equivalent of the retirement pension, if any, the
Executive would have been entitled to receive under the terms of
any plan or program of UT in which Executive was participating at
the time of his termination, without regard to any vesting
requirements under the plan, had the Executive received three
additional years of service following the Date of Termination. The
rate of salary
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for those three additional years of service shall equal the
Executive's Base Salary that was in effect at the Date of
Termination.
(e) Out-Placement Services. UT shall provide the Executive with
Executive out-placement services for a period of not less than
twelve (12) months by entering into a contract with a company
chosen by the Executive specializing in such services
(f) Title to Automobile. Title to the automobile referred to in
Section 3.5 shall be transferred to the Executive within five (5)
days following the Date of Termination.
4.3 Certain Additional Payments by UT.
(a) Anything in this Agreement to the contrary notwithstanding if any
payment or distribution by UT to or for the benefit of Executive
(whether paid or payable or distributed or distributable pursuant
to this terms Agreement or otherwise, but determined without
regard to any additional payments required under this Section 4 (a
"Payment") would be subject to the excise tax imposed by Section
4999 of the code, or any successor Code provision, or any interest
or penalties are incurred by Executive with respect to such excise
tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise
Tax"), then Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after
payment by Executive of all taxes (including any interest or
penalties imposed with respect to such tax) including, without
limitation any income and employment taxes (and any interest and
penalties imposed with respect thereto) and Excise Tax, imposed
upon the Gross-Up Payment, Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.
(b) Subject to the provisions of Section 4(c), all determinations
required to be made under this Section 4, including whether and
when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at
such determination, shall be made by a nationally recognized
public accounting firm that is retained by UT (the "Accounting
Firm") which shall provide detailed supporting calculations both
to UT and Executive within fifteen (15) business days of the
receipt of notice from Executive that there has been a Payment, or
such earlier time as is requested by UT (collectively, the
"Determination"). All fees and expenses of the Accounting Firm
shall be borne solely UT. Any Gross-Up determined pursuant to this
Section 4 shall be paid by UT to Executive within five (5) days of
the receipt of the Determination. If the Accounting Firm
determines that no Excise Taxes are payable by Executive, it shall
furnish Executive with a written opinion that failure to report
the Excise Tax on Executive's applicable federal income tax return
would not result in the imposition of a negligence or similar
penalty. The Determination by the
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Accounting Firm shall be binding upon UT and Executive. As a
result of the uncertainty in the application of Section 4999 of
the Code at the time of the Determination, it is possible that
Gross-Up Payments which will not have been made by UT should have
been made ("Underpayments") consistent with the calculations
required to be made hereunder. In the event that UT exhausts its
remedies pursuant to section 4(c) and Executive thereafter is
required to make payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred
and any such Underpayments shall be promptly paid by UT to or for
the benefit of Executive.
(c) Executive shall notify UT in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by
UT of the Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than ten (10) business days after
Executive is informed in writing of such claim and shall apprise
UT of the nature of such claim and the date on which such claim is
requested to be paid. Executive shall not pay such claim prior to
the expiration of the 30-day period following the date on which
Executive gives such notice to UT (or such shorter period ending
on the date that any payment of taxes with respect to such claim
is due). If UT notifies Executive in writing prior to the
expiration of such period that it desires to contest such claim,
Executive shall:
(i) give UT any information reasonably requested by UT
relating to such claim,
(ii) take such action in connection with contesting such
claim as UT shall reasonably request in writing from time
to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by UT,
(iii) cooperate with UT in good faith in order effectively
to contest such claim, and
(iv) permit UT to participate in any proceeding relating to
such claim; provided, however, that UT shall bear and pay
directly all costs and expenses (including attorneys' fees
and any additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold
Executive harmless, on an after-tax basis, for any Excise
Tax or income or employment tax (including interest and
penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section
4(c), UT shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings,
hearings, and conferences with the taxing authority in
respect of such claim and may, at its sole option, either
direct Executive to pay the tax claimed and ▇▇▇ for a
refund or contest the
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claim in any permissible manner, and Executive agrees to
prosecute such contest to a determination; before any
administrative tribunal, in a court of initial jurisdiction
and in one or more appellate courts, as UT shall determine;
provided further, that UT directs Executive to pay such
claim and ▇▇▇ for a refund, UT shall advance the amount of
such payments to Executive on an interest-free basis and
shall indemnify and hold Executive harmless, on an
after-tax basis, from any Excise Tax or income or
employment tax (including interest or penalties with
respect thereto) imposed with respect to such advance or
with respect to such advance; and provided further, that
any extension of the statute of limitations relating to
payment of taxes for the taxable year of Executive with
respect to which such contested amount is claimed to be due
is limited solely to such contested amount. Furthermore,
UT's control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable
hereunder and Executive shall be entitled to settle or
contest, as the case may be, any other issued raised by the
Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by Executive of an amount advanced by UT
pursuant to this Section 4, Executive becomes entitled to receive,
and receives, any refund with respect to such claim, Executive
shall (subject to UT's complying with the requirements of Section
4) promptly pay to UT the amount of such refund (together with any
interest paid or credited thereon after tax applicable thereto).
If, after the receipt by Executive of an amount advanced by UT
pursuant to Section 4, a determination is made that Executive
shall not be entitled to any refund with respect to such claim and
UT does not notify Executive in writing of its intent to contest
such denial of refund prior to the expiration of thirty (30) days
after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.
ARTICLE 5
RESTRICTIVE COVENANTS
5.1 Confidentiality. Except as authorized or directed by UT, Executive shall
not, at any time during or subsequent to the term of this Agreement, directly or
indirectly publish or disclose any Confidential Information of UT or of any of
its Affiliates, or confidential information of others that has come into the
possession of UT or of any of its Affiliates, or into Executive's possession in
the course of her employment with UT or any of its Affiliates or of her services
and duties hereunder (whether prior to or during the term of this Agreement), to
any other person or entity, and Executive shall not use any such Confidential
Information for Executive's own personal use or advantage or make it available
to others for use. All Confidential Information, whether oral or written,
regarding the business or affairs of UT or any of its Affiliates, including,
without limitation, information as to their products, services, systems,
designs, inventions, software, finance (including prices, costs and revenues),
marketing plans, programs, methods of operation, prospective and existing
contracts, customers and other business arrangements or
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business plans, procedures, and strategies, shall all be deemed Confidential
Information, except to the extent the same shall have been lawfully and without
breach of confidential obligation made available to the general public without
restriction. UT shall be under no obligation to identify specifically any
information as to which the protection of this Section 5.1 extends by any notice
or other action. Upon expiration or termination of this Agreement for any
reason, Executive shall return all records of Confidential Information,
including all copies thereof in Executive's possession, whether prepared by her
or others, to UT.
5.2 Unfair competition. During the period in which Executive is receiving any
payment under this Agreement and for a period of five (5) years thereafter,
Executive shall not, directly or indirectly, and whether or not for
compensation, as a stockholder owning beneficially or of record more than five
percent (5%) of the outstanding shares of any class of stock of an issuer, or as
an officer, director, employee, consultant, partner, joint venturer, proprietor
or otherwise, engage in or become interested in any Conflicting Organization in
connection with research, development, consulting, manufacturing, purchasing,,
accounting, engineering, marketing, merchandising or selling of any Conflicting
Product or Service. During the period in which Executive is receiving any
payments under this Agreement and for a period of five (5) years thereafter,
Executive shall not, without the prior written consent of UT, solicit or hire or
induce the termination of employment of any employees or other personnel
providing services to UT or any of its Affiliates, for any business activity,
other than a business activity owned or controlled, directly or indirectly, by
UT or any of its Affiliates.
5.3 Injunctive Relief.
(a) Executive acknowledges and warrants that she will be fully able to
earn an adequate livelihood for herself and her dependents if
Section 5.2 should be specifically enforced against her, and that
such Section 5.2 merely prevents unfair competition against UT for
a limited period of time. Executive agrees and acknowledges that,
by virtue of Executive's employment with UT, Executive shall have
access to and maintain an intimate knowledge of UT's activities
and affairs, including Confidential Information and other
confidential matters. As a results of such access and knowledge,
and because of the unique service that Executive is capable of
performing for UT or one of its competitors, Executive
acknowledges that the services to be rendered by Executive
pursuant to this Agreement are of a character giving them a
peculiar value, the loss of which cannot adequately or reasonably
be compensated by money damages. Consequently, Executive agrees
that any breach or threatened breach by Executive of Executive's
obligations under this Article 5 would cause irreparable injury to
UT, and that UT shall be entitled to (i) preliminary and permanent
injunctions enjoining Executive from violating such provisions,
and (ii) money damages in the amount of any fees, compensation,
benefits, profits or other remuneration earned by Executive or any
competitor of UT as a result of such breach, together with
interest, and costs and attorneys' fees expended to collect such
damages or secure such injunctions. Nothing in this Agreement,
however, shall be construed to prohibit UT from pursuing any other
remedy, UT and Executive having agreed that all such remedies
shall be cumulative.
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(b) The restrictions set forth in this Article 5 and the following
Article 6 shall be construed as independent covenants, and shall
survive the termination or expiration of this Agreement, and the
existence of any claim or cause of action against UT, whether
predicated upon this Agreement or otherwise, shall not constitute
a defense to the enforcement by UT of the restrictions contained
in this Article 5 or the following Article 6. Executive hereby
consents and waives any objection to the jurisdiction over her
person or the venue of any courts within the state of Maryland
with respect to any proceedings in law or in equity arising out of
this Article 5 or the following Article 6. If any court of
competent jurisdiction shall hold that any of the restrictions
contained in Section 5.2 are unreasonable as to time, geographical
area or otherwise, said restrictions shall be deemed to be reduced
to the extent necessary in the opinion of such court to make their
application reasonable.
ARTICLE 6
INVENTIONS, WORKS OF AUTHORSHIP,
PATENTS AND COPYRIGHTS
6.1 Ownership of Inventions and Works of Authorship. Executive agrees that
all Inventions made, conceived, discovered, developed or reduced to practice by
Executive and all software and other Works of Authorship created by Executive,
either alone or with others, at any time within or without normal working hours,
during or prior to the term of this Agreement, arising out of Executive's
employment with UT or based upon Confidential Information, or pertinent to any
field of business or research in which, during such employment, UT or any
Affiliate thereof is engaged or (if such is known or ascertainable by Executive)
is considering engaging whether or not patented or patentable, shall be and
remain the sole property of UT or its Affiliates with respect to all rights of
Executive arising from any discovery, conception, development, reduction to
practice, or creation by Executive. UT shall have the full right to assign,
license or transfer all rights thereto.
6.2 Disclosure of Inventions and Works of Authorship. Executive shall
promptly make full disclosure to UT or to an authorized representative thereof
of all information relating to the making, conception, discovery, development,
creation or reduction to practice of inventions, or of software and other Works
of Authorship owned by UT pursuant to Section 6.1 above.
6.3 Patent and Copyright Applications. At the request of UT and at UT's
expense, Executive shall execute such documents and perform such other acts as
UT deems necessary to obtain patents or the like on such Inventions or copyright
registrations for such software and other Works of Authorship in any
jurisdiction or jurisdictions. Such obligations shall continue beyond the term
of this Agreement. Executive further agrees not to file any patent applications
relating to or describing or otherwise describing any Confidential Information
or any such Inventions, or to claim any copyright or file any applications to
register any copyright in such software or other Works of Authorship, except
with the prior written consent of UT.
6.4 Assignment of Inventions and Works of Authorship. Executive agrees to
assign to UT or its Affiliates all of Executive's right, title and interest in
and to any and all such inventions and the patent applications and patents
relating thereto and to the copyright in any and all such
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software and other Works of Authorship and any copyright applications and
registrations relating thereto conceived, reduced to practice, discovered,
created or otherwise developed by Executive and owned by UT pursuant to Section
8.1 above.
ARTICLE 7
DISPUTE RESOLUTION
7.1 General. The parties agree to perform the terms of this Agreement in good
faith, and to attempt to resolve any disputes that may arise between them
through good faith negotiations.
7.2 Binding Arbitration. Failing resolution by good faith negotiation between
the parties as contemplated by Section 7.1, all claims, disputes, and
controversies arising out of or in relation to the performance, interpretation,
application or enforcement of this Agreement, including but not limited to
breach thereof (except any dispute relating to Article 5 or 6 of this
Agreement), not resolved by the parties shall be referred to arbitration before
a single, independent third party arbitrator who will be selected by mutual
agreement of the parties or, if such agreement is not reached within one week of
either party seeking such agreement, then in accordance with Employment Dispute
Resolution Rules of the American Arbitration Association. Judgment upon the
award rendered by the arbitrator may be entered in any court or competent
jurisdiction. Any arbitration pursuant to this Article 7 shall take place in the
State of Maryland, or such other place as the parties shall mutually agree.
ARTICLE 8
MISCELLANEOUS
8.1 Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when hand delivered, sent by overnight courier,
or mailed by first class, registered, or certified mail, return receipt
requested, postage prepaid, or transmitted by telegram or telecopy, addressed as
follows:
If to Executive:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇ ▇▇▇, #▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to UT:
United Therapeutics
Attn: General Counsel
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
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8.2 Entire Agreement. From and after the Effective Date, this Agreement
constitutes the entire agreement between the parties hereto, and expressly
supersedes all prior oral or written agreements, commitments or understandings
with respect to the matters provided for herein.
8.3 Heading. Article and Section headings contained in this Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of
this Agreement for any purpose, and shall not in anyway define or affect the
meaning construction or scope of any of the provisions hereof.
8.4 Severability. In the event any provision of this Agreement, or any
portion thereof, is determined by any arbitrator or court of competent
jurisdiction to be unenforceable as written such provision or portion shall be
interpreted to be enforceable. In the event any provision of this Agreement, or
any portion thereof is determined by any arbitrator or court of competent
jurisdiction to be void, the remaining portions of this Agreement shall
nevertheless be binding upon UT and Executive with the sum effect as though the
void provision or portion thereof had been severed and deleted.
8.5 Governing Law. This Agreement, the rights and obligations of the parties
hereto, and any claims or disputes relating thereto, shall be governed by and
construed in accordance with the substantive laws of the State of Maryland
(excluding the choice of law rules thereof).
8.6 Amendment Modification; Waiver. No amendment, modification or waiver of
the terms of this Agreement shall be valid unless made in writing and duly
executed by Executive and UT. No delay or failure at any time on the part of UT
or Executive in exercising any right, power or privilege under this Agreement,
or in enforcing any provision of this Agreement, shall impair any such right,
power, or privilege, or be construed as a waiver of any default or as any
acquiescence therein, or shall affect the right of UT or Executive thereafter to
enforce each and every provision of this Agreement in accordance with its terms.
8.7 Additional Obligations. Both during and after the term of employment,
Executive shall, upon reasonable notice, furnish UT with such information as may
be in Executive's possession or control, and cooperate with UT, as may
reasonably be requested by UT (and, after the term or employment, with due
consideration for Executive's obligations with respect to any new employment or
business activity) in connection with any litigation or other adversarial
proceeding in which UT or any Affiliate is or may become a party. UT shall
reimburse Executive for all reasonable expenses incurred by Executive in
fulfilling Executive's obligations under this Article 8.7.
8.8 Successors; Binding Agreement
(a) This Agreement shall not be terminated by any merger or
consolidation of UT whereby UT is or is not the surviving or
resulting corporation or as a result of any transfer of all or
substantially all of the assets of UT. In the event of any such
merger, consolidation, or transfer of assets, the provisions of
this Agreement shall be binding upon the surviving or resulting
corporation or the person or entity to which such assets are
transferred.
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(b) UT agrees that concurrently with any merger, consolidation or
transfer of assets referred to in this Section 8.8, it will cause
any successor or transferee unconditionally to assume, by written
instrument delivered to Executive (or his beneficiary or estate),
all of the obligations of UT hereunder. Failure of UT to obtain
such assumption prior to the effectiveness of any such merger,
consolidation, or transfer of assets shall be breach of this
Agreement and shall constitute Good Reason hereunder and shall
entitle Executive to compensation and other benefits from UT in
the same amount and on the same terms as Executive would be
entitled hereunder if Executive's employment were terminated other
than by reason of a Nonqualifying Termination. For purposes of
implementing the foregoing, the date on which any such merger,
consolidation or transfer becomes effective shall be deemed the
date Good Reason occurs and shall be the Date of Termination if
requested by Executive.
(c) This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors,
administrator, successors, heirs, distributees, devises and
legatees. If Executive shall die while any amounts would be
payable to Executive hereunder had Executive continued to live,
any such amounts, unless otherwise provided herein, shall be paid
in accordance with the terms of this Agreement to such person or
persons appointed in writing by Executive to receive such amounts
or, if no person is so appointed, to Executive's estate.
8.9 Obligation to Make Payments
(a) UT's obligation to make any payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense
or other claim, right or action which UT and/or its Affiliates may
have against Executive or others. In no event shall Executive be
obligated to seek other employment or take other action by way of
mitigation of the amounts payable to Executive under any of the
provisions of this Agreement, and such amounts shall not be
reduced whether or not Executive obtains other employment.
(b) If there shall be any dispute between UT and Executive in the
event of any termination of Executive's employment then, until
there is a final, nonappealable determination pursuant to
arbitration declaring that such termination was for Cause, that
the determination by Executive of the existence of Good Reason was
not made in good faith, or that UT is not otherwise obligated to
pay any amount or provide any benefit to Executive and her
dependents or other beneficiaries, as the case may be, under
Article 4, UT shall pay all amounts, and provide all benefits, to
Executive and her dependents or other beneficiaries, as the case
may be, that UT would be required to pay or provide pursuant to
Article 4 as though such termination were by UT without Cause or
by Executive with Good Reason; provided, however, that UT shall
not be required to pay any disputed amounts
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pursuant to this Section 8.9 except upon receipt of an undertaking
by or on behalf of Executive to reply all such amounts to which
Executive is ultimately determined by the arbitrator not to be
entitled.
8.10 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original and all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, UT has caused this Agreement to be executed by a duly
authorized officer of UT. Executive has executed this Agreement as of the day
and written below.
ACCEPTED AND AGREED TO: UNITED THERAPEUTICS
BY: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇
President & Chief Operating Officer
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