This Employment Agreement (the "AGREEMENT"), dated November 28, 1997
(the "EFFECTIVE DATE"), is entered into between IVAX Corporation (the "COMPANY")
and Phillip Frost, M.D. (the "EXECUTIVE").
The Board of Directors of the Company desires to employ the Executive
and to assure the Executive's continued employment by the Company on the terms
and conditions of this Agreement, and the Executive desires to be employed by
the Company on the terms and conditions of this Agreement.
In consideration of the Recital and of the mutual promises set forth in
this Agreement, the Company and the Executive agree as set forth below.
(A) EMPLOYMENT AND TERM. The Company agrees to employ the Executive and
the Executive agrees to be employed by the Company, on the terms and conditions
of this Agreement, for a period (the "INITIAL TERM") commencing on the Effective
Date and expiring on the fifth anniversary of the Effective Date. The term of
this Agreement shall automatically be extended for a period of two years (a
"RENEWAL TERM"), on the fifth anniversary of the Effective Date and on each
subsequent second anniversary of the fifth anniversary of the Effective Date
unless at least six months prior to any such anniversary, the Executive or the
Company shall have delivered to the other a written notice stating that the term
of the Agreement will not be extended. For purposes of this Agreement, the word
"TERM" means the Initial Term and all Renewal Terms.
(B) DUTIES. The Executive shall serve as the Chief Executive Officer of
the Company and shall have powers and authority superior to any other officer or
employee of Company. The Executive shall solely report to and solely be subject
to the supervision and direction of the Board of Directors of the Company or a
committee thereof (the "BOARD OF DIRECTORS"). The Executive shall devote his
full business time and energies to the business and affairs of the Company and
shall use his best efforts, skills and abilities to promote the interests of the
Company and to diligently and competently perform the duties of his position.
The Executive shall have the right to (i) serve on civic, charitable or
corporate boards, (ii) deliver lectures, fulfill speaking engagements, or teach
at educational institutions, and (iii) manage personal investments; provided
that such activities do not unreasonably interfere with the Executive's duties
to the Company under this Agreement.
(C) PLACE OF PERFORMANCE. The Executive will perform his duties from
the Company's principal place of business, which is currently located in
, Miami , except for travel reasonably necessary in connection with the Company's Florida
(A) BASE SALARY. The Executive will be paid a base salary at the annual
rate of not less than $575,000 (the "BASE SALARY"). The Base Salary shall be
paid in installments consistent with the Company's normal payroll policies. The
Company shall review the Base Salary annually for merit increases, which shall
be made subject to and at the discretion of the Board of Directors. Once
increased, the Base Salary shall not thereafter be decreased.
(B) BONUS. The Executive shall be entitled to participate in all bonus
plans, practices, policies and programs, if any, generally made available by the
Company to other key executives of the Company based in the
. United States
(C) STOCK OPTIONS. The Executive shall be entitled to receive stock
options and such other long term compensation as may be determined by the Board
of Directors from time to time in its discretion. In making any determinations
concerning the award of stock options to the Executive, the Board of Directors
will apply the same criteria as it applies in making awards to the other key
executives of the Company.
3. BENEFITS. During the Term, the Executive shall be entitled to the
benefits described below.
(A) EXPENSE REIMBURSEMENT. Upon submission of appropriate supporting
documentation and in specific accordance with such guidelines as may be
established from time to time by the Company for senior executives, the
Executive shall be reimbursed by the Company for all reasonable business
expenses (including travel and entertainment and including air-fare for his
spouse if a legitimate business reason exists for her to accompany him) actually
and necessarily incurred by the Executive on behalf of the Company in connection
with the performance of his duties under this Agreement.
(B) INCENTIVE SAVINGS AND RETIREMENT PLANS. The Executive shall be
entitled to participate in all savings, incentive and retirement plans,
practices, policies and programs, if any, generally made available by the
Company to other key executives of the Company based in the
. United States
(C) WELFARE PLANS. The Executive shall be entitled to participate in
all welfare benefit plans, practices, policies and programs, if any, generally
made available by the Company to other key executives of the Company based in
. United States
(D) VACATION. The Executive shall be entitled to paid vacation in
accordance with the most favorable plans, practices, policies and programs, if
any, generally made
available by the Company to other key executives of the Company based in the
United States; provided that the Executive shall be entitled to at least four
weeks paid vacation each year.
(A) TERMINATION WITHOUT CAUSE. Notwithstanding any other provision of
this Agreement, the Board of Directors shall have the right to terminate this
Agreement at any time upon written notice to the Executive; provided that the
Company shall pay to the Executive in a cash lump sum within 30 days after the
effective date of the termination (the "TERMINATION DATE") an amount equal to
(i) if the Termination Date is a date within three years after the Effective
Date, three times the Base Salary as of the Termination Date, or (ii) if the
Termination Date is a date after the third anniversary of the Effective Date,
two times the Base Salary as of the Termination Date. In addition, the Company
shall continue to provide benefits to the Executive pursuant to Section 3(c) for
the applicable period.
(B) TERMINATION FOR GOOD REASON. The Company shall be deemed to have
terminated this Agreement pursuant to Section 4(a) if the Executive terminates
this Agreement for Good Reason. For purposes of this Agreement, the term "GOOD
(i) the assignment to the Executive of any duties inconsistent
in any respect with the Executive's position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities as
contemplated by Section 1(b), or any other action by the Company which results
in a diminution in such position, authority, duties or responsibilities, in each
case if not remedied within 30 days after receipt of written notice thereof from
(ii) any failure by the Company to comply with any of the
provisions of Sections 2 or 3 which is not remedied within 30 days after receipt
of written notice thereof from the Executive;
(iii) the Company's requiring the Executive to be based at any
office or location other than in
, except for travel Dade County, Florida
reasonably required in the performance of the Executive's responsibilities;
(iv) any termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or
(v) any failure by the Company to comply with and satisfy the
penultimate sentence of Section 7(c)(iii).
For purposes of this Section, any good faith determination of Good Reason made
by the Executive shall be conclusive.
(C) TERMINATION FOR CAUSE. Notwithstanding any other provision of this
Agreement, this Agreement may be terminated by the Company at any time for
Cause. For purposes of this Agreement, the word "CAUSE" means: (i) an act or
acts of personal dishonesty taken by the Executive and intended to result in the
direct or indirect personal enrichment of the Executive at the expense of the
Company (except that disputes regarding expense reimbursement shall not be
subject to this clause and shall instead be resolved in good faith by the Board
of Directors and the Executive), (ii) subject to the following sentences,
violation by the Executive of his material obligations or representations under
this Agreement which are demonstrably willful and deliberate and which are not
remedied within 30 days after written notice to the Executive, or (iii) the
conviction of the Executive of any criminal act which is a felony. Upon a
determination by the Company that cause exists under clause (ii) of the
preceding sentence, the Company shall cause a special meeting of the Board of
Directors to be called and held at a time mutually convenient to the Board of
Directors and the Executive, but in no event later than 10 business days after
the Executive's receipt of the notice contemplated in clause (ii). The Executive
shall have the right to appear at such special meeting with legal counsel of his
choosing to refute any determination of Cause specified in such notice, and any
termination of this Agreement by reason of such Cause determination shall not be
effective until the Executive is afforded such opportunity to appear before the
Board of Directors. Any notice of termination for Cause pursuant to clause (i)
or (iii) of the second sentence of this Section shall be made in writing to the
Executive, which notice shall set forth in detail all acts or omissions upon
which the Company is relying for such termination. Upon any termination pursuant
to this Section, the Executive shall be entitled to be paid his Base Salary to
the date of termination and the Company shall have no further liability under
this Agreement to the Executive (other than for reimbursement of business
expenses incurred prior to the termination date, in accordance with Section
(D) DEATH. This Agreement shall automatically terminate upon the death
of the Executive. If this Agreement is terminated pursuant to this Section, the
Company shall pay to the Executive's estate his Base Salary through the
(E) DISABILITY. The Company, by written notice to the Executive, shall
at all times have the right to terminate this Agreement if the Executive shall,
as the result of mental or physical incapacity, illness or disability, fail to
perform his duties and responsibilities provided for herein for a period of more
than 180 consecutive days. Upon any termination pursuant to this Section 4(e),
the Executive shall be entitled to be paid his Base Salary to the date of
termination and the Company shall have no further liability hereunder (other
than for reimbursement of business expenses incurred prior to the termination
date, in accordance with Section 3(a)).
5. RESTRICTIVE COVENANTS.
(A) NONDISCLOSURE. The Executive acknowledges that he has executed the
Company's standard form of Confidentiality Agreement and that such agreement is
in full force and effect.
(B) NONSOLICITATION OF EMPLOYEES. While employed by the Company and for
a period of two years thereafter, Executive shall not directly or indirectly,
for himself or for any other person, firm, corporation, partnership, association
or other entity, attempt to employ or enter into any contractual arrangement
with any employee or former employee of the Company, unless such employee or
former employee has not been employed by the Company for a period in excess of
(C) INJUNCTION. It is recognized and hereby acknowledged by the parties
hereto that a breach by the Executive of any of the covenants contained in
Section 5(a) or 5(b) will cause irreparable harm and damage to the Company, the
monetary amount of which may be virtually impossible to ascertain. As a result,
the Executive recognizes and hereby acknowledges that the Company shall be
entitled to an injunction from any court of competent jurisdiction enjoining and
restraining any violation of any or all of the covenants contained in such
Section by the Executive or any of his affiliates, associates, partners or
agents, either directly or indirectly, and that such right to injunction shall
be cumulative and in addition to whatever other remedies the Company may
6. CONFLICTS WITH EXISTING AGREEMENTS; COMPANY POLICIES.
(A) The Executive represents and warrants that he is not a party to or
bound by any contract which in the future may have a possibility of adversely
affecting the business of the Company or the performance by the Executive of his
duties under this Agreement, including but not limited to contracts related to
previous employment containing confidentiality or noncompete covenants.
(B) The Executive acknowledges that he will be subject to and required
to abide by the policies and procedures of the Company applicable to senior
executives as in effect from time to time, including without limitation the
Company's Code of Conduct, as in effect from time to time.
(A) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, without regard to the conflict
of law principles thereof.
(B) NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
by hand or when deposited in the United States mail, by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to the Company: IVAX Corporation
4400 Biscayne Boulevard
Miami, Florida 33137
Attention: General Counsel
If to the Executive: Dr. Phillip Frost
125 East San Marino Drive
Miami Beach, Florida 33139
or to such other addresses as either party hereto may from time to time give
notice of to the other in the aforesaid manner.
(i) This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution.
(ii) This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal representatives.
(iii) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns. 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 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. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor to
its business and/or assets which assumes and agrees to perform this Agreement by
operation of law or otherwise.
(D) SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part thereof, all of which are inserted conditionally on their being valid in
law, and, in the event that any one or more of the words, phrases, sentences,
clauses or sections contained in this Agreement shall be declared invalid, this
Agreement shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted. If such invalidity is caused by length of time or size of
area, or both, the otherwise invalid provision will be considered to be reduced
to a period or area which would cure such invalidity.
(E) WAIVERS. The waiver by either party hereto of a breach or violation
of any term or provision of this Agreement shall not operate nor be construed as
a waiver of any subsequent breach or violation.
(F) DAMAGES. Nothing contained herein shall be construed to prevent the
Company or the Executive from seeking and recovering from the other damages
sustained by either or both of them as a result of its or his breach of any term
or provision of this Agreement, except that the payment required to be made by
the Company to the Executive pursuant to Section 4 shall be the Executive's
exclusive remedy for any termination of this Agreement pursuant to such section.
(G) NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
(other than the parties hereto and, in the case of Executive, his heirs,
personal representative(s) and/or legal representative) any rights or remedies
under or by reason of this Agreement.
(H) MISCELLANEOUS. The Company's obligation to make the 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 the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement. To the extent
that the Executive is successful in any legal proceeding against the Company
involving this Agreement, the Company agrees to pay, to the full extent
permitted by law, all legal fees and expenses which the Executive may reasonably
incur in connection with such proceeding.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
/S/ DAVID R. BETHUNE
David R. Bethune
President and Chief Operating Officer
/S/ PHILLIP FROST, M.D.
Phillip Frost, M.D.