WPI » Topics » Employment Agreements

This excerpt taken from the WPI 8-K filed Nov 6, 2006.

Employment Agreements

The Company has entered into employment agreements with certain of its executive officers and employees.  These agreements generally provide, among other things, for the payment of an amount to such employees, ranging from 50% to 300% of the employee’s annual salary or annual salary plus bonus, and in some cases the vesting of some or all of the employee’s stock based compensation, in the event the employee’s employment is terminated by Andrx without cause, as therein defined, or by the employee for good reason, as therein defined.  Unless such termination is for cause, if such termination occurs within a specified period following a change in control of the Company, as therein defined, the agreements require Andrx to vest all of the employee’s stock based compensation.  If the Company’s president terminates his employment, without good reason, within an 18-month period following the date the Board of Directors appoints a new chief executive officer, his agreement requires the Company to vest all of the executive’s stock based compensation and to negotiate a cash severance compensation amount.  The president’s agreement expires in September 2006, but may be extended by mutual agreement of the parties.

In 2004, a former chief executive officer received severance of $1,700, the continuation of benefits for an 18-month period, and 17 shares of common stock, which was the vested portion of the 100 RSUs he was granted in connection with his hiring.

On September 15, 2005, the Company entered into a separation agreement and a non-competition agreement with its Former General Counsel, entitling him to severance, the continuation of certain benefits for an 18-month period, acceleration of vesting of all unvested stock options; and the acceleration of vesting of 35 RSUs.  This resulted in the Company recording a charge of $9,334 to SG&A in the Corporate and Other Segment, $7,024 of which was a non-cash charge (see Note 16).

On March 11, 2006, the Compensation Committee of the Board of Directors extended the employment agreements of the Company’s President and the President of Andrx Pharmaceuticals, Inc. through September 28, 2008 and December 31, 2007, respectively.

On March 11, 2006, the Compensation Committee of the Board of Directors amended the CEO’s employment agreement to provide for additional severance payments if the CEO is (i) terminated by the Company upon a change of control as defined, or (ii) resigns for good reason, as defined, to include six months’ base salary and 50% of the most recent annual bonus paid to the CEO prior to the termination.  In addition, on March 11, 2006, the Compensation Committee of the Board of Directors approved a change of control transaction bonus for the CEO.  Pursuant to the provisions of such bonus, upon closing of the merger with Watson, the CEO will become entitled to $1,701, payable in a single lump sum.

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This excerpt taken from the WPI DEF 14A filed Apr 4, 2006.
Employment Agreements

The Company has entered into employment agreements with each of the Named Executive Officers. Each of the agreements provides for an annual base salary and eligibility to receive a bonus. Target bonuses, if granted, range between 25% and 40% of annual base salary for the Named Executive Officers other than Dr. Chao. Pursuant to the employment agreements, annual increases to base salary and determination of bonuses are at the discretion of the Compensation Committee. Furthermore, stock options and restricted stock may be granted at the discretion of the Compensation Committee and in accordance with the Company’s policies regarding equity incentive grants. Dr. Chao’s annual salary and bonuses, stock option grants and restricted stock awards, if any, are determined by the Compensation Committee. (See “Report of the Compensation Committee on Executive Compensation”).

Each Named Executive Officer’s employment may be terminated at any time with or without cause, or by reason of death or disability, or each Named Executive Officer may voluntarily resign at any time with or without good reason. In the event of termination of employment without cause, or if the Named Executive Officer resigns for good reason, the Company will provide the Named Executive Officer with severance compensation and benefits (“Severance Benefits”). Severance Benefits consist of: (a) a lump sum severance payment, subject to standard withholdings or deductions, in an amount equal to the sum of: (i) twenty-four (24) months of the Named Executive Officer’s then base salary; and (ii) two times the Named Executive Officer’s target bonus to be earned for the year in which termination occurs or two times the bonus amount paid to the Named Executive Officer in the prior year, whichever is greater; (b) continued group health insurance benefits (e.g., medical, dental, vision, etc.) for the Named Executive Officer and the Named Executive Officer’s eligible dependents for a period of up to eighteen (18) months under COBRA, and if the Named Executive Officer is not covered under the Company’s group health insurance plan at the end of eighteen (18) months, the Company will use its best efforts to provide the Named Executive Officer and the Named Executive Officer’s eligible dependents with comparable health insurance coverage for an additional period of up to six (6) months, but the Company shall not be obligated to pay more than one hundred fifty percent (150%) of the cost of COBRA coverage for such comparable coverage; provided, however, that in any event the Company’s obligation to provide any health benefits pursuant to this sentence ends when the Named Executive Officer becomes eligible for health insurance with a new employer; and (c) outplacement services for one year with a nationally recognized service selected by the Company.

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In the event of a change of control of the Company, and if the Named Executive Officer is terminated without cause or the Named Executive Officer resigns for good reason within ninety (90) days prior to or twenty-four (24) months following such change of control, the Company will provide to the Named Executive Officer the Severance Benefits and any unvested options held by the Named Executive Officer will become one hundred percent (100%) vested and immediately exercisable as of the date of termination. Additionally, under the terms of the restricted stock agreements for each Named Executive Officer, unvested restricted stock held by a Named Executive Officer is subject to accelerated vesting in such circumstances. Each Named Executive Officer is also entitled to receive a gross-up payment on any payments made to the Named Executive Officer that are subject to the excise tax imposed by Section 4999 of the Internal Revenue Code (the “Code”).

This excerpt taken from the WPI DEF 14A filed Apr 1, 2005.

Employment Agreements

        The Company has entered into employment agreements with each of the Named Executive Officers. Mr. Papa's employment agreement with the Company was terminated effective November 19, 2004. Each of the agreements provides for an annual base salary and eligibility to receive a bonus. The target bonus, if granted, for each of Mr. Buchen, Dr. Ebert and Mr. Slacik is 25%, 30% and 40% of his annual base salary, respectively. Pursuant to the employment agreements, annual increases to base salary and determination of bonuses are at the discretion of the Compensation Committee or the Chief Executive Officer of the Company, as appropriate. Furthermore, stock options may be granted at the discretion of the Compensation Committee and in accordance with the Company's policies regarding stock option grants. Dr. Chao's annual salary and bonuses and stock option grants, if any, are determined by the Compensation Committee. (See "Report of the Compensation Committee on Executive Compensation").

        Each Named Executive Officer's employment may be terminated at any time with or without cause, or by reason of death or disability, or each Named Executive Officer may voluntarily resign at any time with or without good reason. In the event of termination of employment without cause, or if the Named Executive Officer resigns for good reason, the Company will provide Named Executive Officer with severance compensation and benefits (the "Severance Benefits"). Severance Benefits consist of: (a) a lump sum severance payment, subject to standard withholdings or deductions, in an amount equal to the sum of: (i) twenty-four (24) months of Named Executive Officer's then base salary; and (ii) two times Named Executive Officer's target bonus to be earned for the year in which termination occurs or two times the bonus amount paid to the Named Executive Officer in the prior year, whichever is greater; (b) continued group health insurance benefits (e.g., medical, dental, vision, etc.) for Named Executive Officer and Named Executive Officer's eligible dependents for a period of up to eighteen (18) months under COBRA, and if Named Executive Officer is not covered under the Company's group health insurance plan at the end of eighteen (18) months, the Company will use its best efforts to provide Named Executive Officer and Named Executive Officer's eligible dependents with comparable health insurance coverage for an additional period of up to six (6) months, but the Company shall not be obligated to pay more than one hundred fifty percent (150%) of the cost of COBRA coverage for such comparable coverage; provided, however, that in any event the Company's obligation to provide any health benefits pursuant to this sentence ends when Named Executive Officer becomes eligible for health insurance with a new employer; and (c) outplacement services for one year with a nationally recognized service selected by the Company. In the event of a change of control of the Company and if Named Executive Officer is terminated without cause or Named Executive Officer resigns for good reason within ninety (90) days prior to or twenty-four (24) months following such change of control, the Company will provide to Named Executive Officer the Severance Benefits and any unvested options held by Named Executive Officer will become one hundred percent (100%) vested and immediately exercisable as of the date of termination. The Named Executive Officer is also entitled to receive a gross-up payment on any payments made to the Named Executive Officer that are subject to the excise tax imposed by Section 4999 of the Internal Revenue Code (the "Code").

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