Exhibit 10.18
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is
entered into by and between Cadence Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), and                      (“Executive”), and shall
be effective as of                     , 2007 (the “Effective Date”).
     WHEREAS, Executive and Company are parties to that certain Employment
Agreement dated as of                     , ___(the “Original Agreement”).
     WHEREAS, Executive and Company desire to amend and restate the Original
Agreement on the terms and conditions set forth herein.
     NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties agree as follows:
     1. Definitions. As used in this Agreement, the following terms shall have
the following meanings:
          (a) Board. “Board” means the Board of Directors of the Company.
          (b) Bonus. “Bonus” means an amount equal to (i) the bonus awarded to
Executive for the fiscal year prior to the date of termination (which bonus
shall be annualized to the extent Executive was not employed for entire fiscal
year prior to the date of termination), or (ii) if Executive has not received a
bonus because Executive was not employed by the Company for a sufficient period
of time, Executive’s target annual bonus for the fiscal year in which the date
of termination occurs. If any portion of the bonuses awarded to Executive
consisted of securities or other property, the fair market value thereof shall
be determined in good faith by the Board.
          (c) Cause. “Cause” means any of the following:
               (i) the commission of an act of fraud, embezzlement or dishonesty
by Executive that has a material adverse impact on the Company or any successor
or affiliate thereof;
               (ii) a conviction of, or plea of “guilty” or “no contest” to, a
felony by Executive;
               (iii) any unauthorized use or disclosure by Executive of
confidential information or trade secrets of the Company or any successor or
affiliate thereof that has a material adverse impact on any such entity;
               (iv) Executive’s gross negligence, insubordination or material
violation of any duty of loyalty to the Company or any other material misconduct
on the part of Executive;
               (v) Executive’s ongoing and repeated failure or refusal to
perform or neglect of Executive’s duties as required by this Agreement, which
failure, refusal or neglect continues for fifteen (15) days following
Executive’s receipt of written notice from the Board or

 

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the Company’s Chief Executive Officer (the “CEO”) [or the President] stating
with specificity the nature of such failure, refusal or neglect; or
               (vi) Executive’s breach of any material provision of this
Agreement; provided, however, that prior to the determination that “Cause” under
this Section 1(c) has occurred, the Company shall (w) provide to Executive in
writing, in reasonable detail, the reasons for the determination that such
“Cause” exists, (x) other than with respect to clause (v) above which specifies
the applicable period of time for Executive to remedy his or her breach, afford
Executive a reasonable opportunity to remedy any such breach, (y) provide the
Executive an opportunity to be heard prior to the final decision to terminate
the Executive’s employment hereunder for such “Cause” and (z) make any decision
that such “Cause” exists in good faith.
          The foregoing definition shall not in any way preclude or restrict the
right of the Company or any successor or affiliate thereof to discharge or
dismiss Executive for any other acts or omissions, but such other acts or
omissions shall not be deemed, for purposes of this Agreement, to constitute
grounds for termination for Cause.
          (d) Change of Control. “Change of Control” means (i) a merger or
consolidation of the Company with or into any other corporation or other entity
or person or (ii) a sale, lease, exchange or other transfer in one transaction
or a series of related transactions of all or substantially all of the Company’s
outstanding securities or all or substantially all of the Company’s assets;
provided, however, that the following events shall not constitute a “Change of
Control”: (A) a merger or consolidation of the Company in which the holders of
the voting securities of the Company immediately prior to the merger or
consolidation hold at least a majority of the voting securities in the successor
corporation immediately after the merger or consolidation; (B) a sale, lease,
exchange or other transaction in one transaction or a series of related
transactions of all or substantially all of the Company’s assets to a
wholly-owned subsidiary corporation; (C) a mere reincorporation of the Company;
or (D) a transaction undertaken for the sole purpose of creating a holding
company that will be owned in substantially the same proportion by the persons
who held the Company’s securities immediately before such transaction.
          (e) Code. “Code” means the Internal Revenue Code of 1986, as amended
from time to time, and the Treasury Regulations and other interpretive guidance
issued thereunder.
          (f) Good Reason. “Good Reason” means the occurrence of any of the
following events or conditions without Executive’s written consent:
               (i) a material diminution in Executive’s authority, duties or
responsibilities;
               (ii) a material diminution in Executive’s base compensation,
except in connection with a general reduction in the base compensation of the
Company’s or any successor’s or affiliate’s personnel with similar status and
responsibilities;
               (iii) a material change in the geographic location at which
Executive must perform his duties; or

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               (iv) any other action or inaction that constitutes a material
breach by the Company or any successor or affiliate of its obligations to
Executive under this Agreement.
          Executive must provide written notice to the Company of the occurrence
of any of the foregoing events or conditions without Executive’s written consent
within ninety (90) days of the occurrence of such event. The Company or any
successor or affiliate shall have a period of thirty (30) days to cure such
event or condition after receipt of written notice of such event from Executive.
Any voluntary termination of Executive’s employment for “Good Reason” following
such thirty (30) day cure period must occur no later than the date that is six
(6) months following the initial occurrence of one of the foregoing events or
conditions without Executive’s written consent and such voluntary termination of
Executive’s employment shall be treated as an involuntary termination of
employment.
          (g) Permanent Disability. Executive’s “Permanent Disability” shall be
deemed to have occurred if Executive shall become physically or mentally
incapacitated or disabled or otherwise unable fully to discharge his or her
duties hereunder for a period of ninety (90) consecutive calendar days or for
one hundred twenty (120) calendar days in any one hundred eighty
(180) calendar-day period. The existence of Executive’s Permanent Disability
shall be determined by the Company on the advice of a physician chosen by the
Company and the Company reserves the right to have the Executive examined by a
physician chosen by the Company at the Company’s expense.
          (h) Stock Awards. “Stock Awards” means all stock options, restricted
stock and such other awards granted pursuant to the Company’s stock option and
equity incentive award plans or agreements and any shares of stock issued upon
exercise thereof.
     2. Services to Be Rendered.
          (a) Duties and Responsibilities. Executive shall serve as
                     of the Company[, but shall not perform policy-making
functions for the Company or be designated an “officer” of the Company, as such
term is defined under Rule 16a-1(f) of the Securities Exchange Act of 1934, as
amended]. In the performance of such duties, Executive shall report directly to
the [Board][CEO][President][Chief Medical Officer (“CMO”)] and shall be subject
to the direction of the [Board][CEO][President][CMO] and to such limits upon
Executive’s authority as the Board or the CEO or [President][CMO] may from time
to time impose. [In the event of the [President][CMO]’s incapacity or
unavailability, Executive shall report directly to the CEO [or President], or
such other officer of the Company as the CEO [or President] may designate, or be
subject to the direction of the Board or its designee.] Executive hereby
consents to serve as an officer and/or director of the Company or any subsidiary
or affiliate thereof without any additional salary or compensation, if so
requested by the [Board][CEO or President]. Executive shall be employed by the
Company on a full time basis. Executive’s primary place of work shall be the
Company’s facility in San Diego, California, or such other location within San
Diego County as may be designated by the [Board][CEO or President] from time to
time. Executive shall also render services at such other places within or
outside the United States as the [Board][CEO][or President][or CMO] may direct
from time to time. Executive shall be subject to and comply with the policies
and procedures generally applicable to senior executives of the Company to the
extent the same are not inconsistent with any term of this Agreement.

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          (b) Exclusive Services. Executive shall at all times faithfully,
industriously and to the best of his or her ability, experience and talent
perform to the satisfaction of the Board, the CEO and the President all of the
duties that may be assigned to Executive hereunder and shall devote
substantially all of his or her productive time and efforts to the performance
of such duties. Subject to the terms of the Employee Proprietary Information and
Inventions Agreement referred to in Section 5(b), this shall not preclude
Executive from devoting time to personal and family investments or serving on
community and civic boards, or participating in industry associations, provided
such activities do not interfere with his or her duties to the Company, as
determined in good faith by the [Board][the CEO or the President]. Executive
agrees that he or she will not join any boards, other than community and civic
boards (which do not interfere with his or her duties to the Company), without
the prior approval of the [Board][the CEO or the President].
     3. Compensation and Benefits. The Company shall pay or provide, as the case
may be, to Executive the compensation and other benefits and rights set forth in
this Section 3.
          (a) Base Salary. The Company shall pay to Executive a base salary of
                     per year, payable in accordance with the Company’s usual
pay practices (and in any event no less frequently than monthly). Executive’s
base salary shall be subject to review annually by and at the sole discretion of
the Compensation Committee of the Board or its designee.
          (b) Bonus. Executive shall participate in any bonus plan that the
Board or its designee may approve for the senior executives of the Company.
          (c) Benefits. Executive shall be entitled to participate in benefits
under the Company’s benefit plans and arrangements, including, without
limitation, any employee benefit plan or arrangement made available in the
future by the Company to its senior executives, subject to and on a basis
consistent with the terms, conditions and overall administration of such plans
and arrangements. The Company shall have the right to amend or delete any such
benefit plan or arrangement made available by the Company to its senior
executives and not otherwise specifically provided for herein.
          (d) Expenses. The Company shall reimburse Executive for reasonable
out-of-pocket business expenses incurred in connection with the performance of
his or her duties hereunder, subject to (i) such policies as the Company may
from time to time establish, [and] (ii) Executive furnishing the Company with
evidence in the form of receipts satisfactory to the Company substantiating the
claimed expenditures[, (iii) Executive receiving advance approval from the CEO
or the President in the case of expenses for travel outside of North America,
and (iv) Executive receiving advance approval from the CEO or the President in
the case of expenses (or a series of related expenses) in excess of $10,000].
          (e) Paid Time Off. Executive shall be entitled to such periods of paid
time off (“PTO”) each year as provided from time to time under the Company’s PTO
guidelines; provided that Executive shall be entitled to at least four (4) weeks
of PTO per year.

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          (f) Equity Plans. Executive shall be entitled to participate in any
equity or other employee benefit plan that is generally available to senior
executive officers, as distinguished from general management, of the Company.
Except as otherwise provided in this Agreement, Executive’s participation in and
benefits under any such plan shall be on the terms and subject to the conditions
specified in the governing document of the particular plan.
          (g) Stock Award Acceleration.
               (i) If Executive’s employment is terminated by the Company
without Cause, by Executive for Good Reason, or as a result of Executive’s death
or Permanent Disability, the vesting and/or exercisability of each of
Executive’s outstanding Stock Awards shall be automatically accelerated on the
date of termination as to the number of Stock Awards that would vest over the
twelve (12) month period following the date of termination had Executive
remained continuously employed by the Company during such period.
               (ii) The vesting and exercisability of fifty percent (50%) of
Executive’s outstanding Stock Awards shall be automatically accelerated on the
date of a Change of Control.
               (iii) If Executive’s employment is terminated by the Company
without Cause or by Executive for Good Reason within three (3) months prior to
or twelve (12) months following a Change of Control, the vesting and/or
exercisability of any outstanding unvested portions of Executive’s Stock Awards
shall be automatically accelerated on the later of (A) the date of termination
or (B) the date of the Change of Control. In addition, Executive’s Stock Awards
may be exercised by Executive (or Executive’s guardian or legal representative)
until the latest of (A) three (3) months after the date of termination, (B) with
respect to any portion of the Stock Awards that become exercisable on the date
of a Change of Control pursuant to this Section 3(g)(iii), three (3) months
after the date of the Change of Control, or (C) such longer period as may be
specified in the applicable Stock Award agreement; provided, however, that in no
event shall any Stock Award remain exercisable beyond the original outside
expiration date of such Stock Award.
               (iv) The vesting pursuant to clauses (i), (ii) and (iii) of this
Section 3(g) shall be cumulative. The foregoing provisions are hereby deemed to
be a part of each Stock Award and to supersede any less favorable provision in
any agreement or plan regarding such Stock Award.
     4. Termination and Severance. Executive shall be entitled to receive
benefits upon termination of employment only as set forth in this Section 4:
          (a) At-Will Employment; Termination. The Company and Executive
acknowledge that Executive’s employment is and shall continue to be at-will, as
defined under applicable law, and that Executive’s employment with the Company
may be terminated by either party at any time for any or no reason, with or
without notice. If Executive’s employment terminates for any reason, Executive
shall not be entitled to any payments, benefits, damages, awards or compensation
other than as provided in this Agreement. Executive’s employment under this
Agreement shall be terminated immediately on the death of Executive.

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          (b) Termination by Death. If Executive’s employment is terminated by
death, Executive’s estate shall be entitled to receive (i) Executive’s fully
earned but unpaid base salary, through the date of death at the rate then in
effect, plus all other amounts to which Executive is entitled under any
compensation plan or practice of the Company at the time of Executive’s death,
(ii) a lump sum cash payment equal to Executive’s annual base salary as in
effect immediately prior to the date of death, payable within thirty (30) days
following the date of Executive’s death, (iii) a lump sum cash payment equal to
Executive’s Bonus for the year in which Executive’s death occurs prorated for
the period during such year Executive was employed prior to his or her death,
payable within thirty (30) days following the date of Executive’s death, and
(iv) for the period beginning on the date of death and ending on the date which
is twelve (12) full months following the date of death (or, if earlier, the date
on which the applicable continuation period under COBRA expires), the Company
shall reimburse Executive’s eligible dependents for the costs associated with
continuation coverage for such eligible dependents pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) (provided that
Executive’s dependents shall be solely responsible for all matters relating to
such continuation of coverage pursuant to COBRA, including, without limitation,
election of such coverage and his or her timely payment of premiums).
          (c) Termination for Permanent Disability. If Executive’s employment is
terminated by the Company as a result of Executive’s Permanent Disability,
Executive shall be entitled to receive (i) Executive’s fully earned but unpaid
base salary, through the date of termination at the rate then in effect, plus
all other amounts to which Executive is entitled under any compensation plan or
practice of the Company at the time such payments are due, (ii) subject to
Executive’s continued compliance with Section 5, a lump sum cash payment equal
to Executive’s annual base salary as in effect immediately prior to the date of
termination, payable within thirty (30) days following the effective date of
Executive’s Release (as defined below), but in no event later than two and
one-half (2 1/2) months following the last day of the calendar year in which
Executive’s termination of employment occurs, (iii) subject to Executive’s
continued compliance with Section 5, a lump sum cash payment equal to
Executive’s Bonus for the year in which the date of termination occurs prorated
for the period during such year Executive was employed prior to the date of
termination, within thirty (30) days following the effective date of Executive’s
Release (as defined below), but in no event later than two and one-half (2 1/2)
months following the last day of the calendar year in which Executive’s
termination of employment occurs, (iv) subject to Executive’s continued
compliance with Section 5, for the period beginning on the date of termination
and ending on the date which is twelve (12) full months following the date of
termination (or, if earlier, the date on which the applicable continuation
period under COBRA expires), the Company shall (A) reimburse Executive for the
costs associated with continuation coverage pursuant to COBRA for Executive and
his or her eligible dependents who were covered under the Company’s health plans
as of the date of Executive’s termination (provided that Executive shall be
solely responsible for all matters relating to his or her continuation of
coverage pursuant to COBRA, including, without limitation, his or her election
of such coverage and his or her timely payment of premiums), and (v) the Company
shall pay for and provide Executive and such eligible dependents with a lump sum
payment sufficient to pay the premiums for life insurance benefits coverage for
the twelve (12) month period commencing on the date of termination to the extent
such Executive and/or such dependents were receiving such benefits prior to the
date of Executive’s termination, which payment shall be paid within thirty
(30) days following the effective date of Executive’s Release, but in no event
later than two and

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one-half (2 1/2) months following the last day of the calendar year in which the
date of Executive’s termination of employment occurs.
          (d) Termination Without Cause or For Good Reason.
               (i) Termination Without Cause or For Good Reason. If Executive’s
employment is terminated by the Company without Cause or by Executive for Good
Reason more than three (3) months prior to a Change of Control or more than
twelve (12) months following a Change of Control, Executive shall be entitled to
receive, in lieu of any severance benefits to which Executive may otherwise be
entitled under any severance plan or program of the Company (other than as
provided in Section 3(g) of this Agreement), the benefits provided below:
               (A) the Company shall pay to Executive his or her fully earned
but unpaid base salary, when due, through the date of termination at the rate
then in effect, plus all other amounts to which Executive is entitled under any
compensation plan or practice of the Company at the time of termination;
               (B) subject to Executive’s continued compliance with Section 5,
Executive shall be entitled to receive a lump sum cash payment equal to
Executive’s annual base salary as in effect immediately prior to the date of
termination, payable within thirty (30) days following the effective date of
Executive’s Release (as defined below), but in no event later than two and
one-half (2 1/2) months following the last day of the calendar year in which the
date of Executive’s termination of employment occurs; plus
               (C) subject to Executive’s continued compliance with Section 5,
(1) for the period beginning on the date of termination and ending on the date
which is twelve (12) full months following the date of termination (or, if
earlier, the date on which the applicable continuation period under COBRA
expires), the Company shall reimburse Executive for the costs associated with
continuation coverage pursuant to COBRA for Executive and his or her eligible
dependents who were covered under the Company’s health plans as of the date of
Executive’s termination (provided that Executive shall be solely responsible for
all matters relating to his or her continuation of coverage pursuant to COBRA,
including, without limitation, his or her election of such coverage and his or
her timely payment of premiums), and (2) the Company shall pay for and provide
Executive and such eligible dependents with a lump sum payment sufficient to pay
the premiums for life insurance benefits coverage for the twelve (12) month
period commencing on the date of termination to the extent such Executive and/or
such dependents were receiving such benefits prior to the date of Executive’s
termination, which payment shall be paid within thirty (30) days following the
effective date of Executive’s Release, but in no event later than two and
one-half (2 1/2) months following the last day of the calendar year in which the
date of Executive’s termination of employment occurs; and
               (D) subject to Executive’s continued compliance with Section 5,
for the period beginning on the date of termination and ending on the date which
is twelve (12) full months following the date of termination, Executive shall be
entitled to executive-level outplacement services at the Company’s expense, not
to exceed $15,000. Such

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services shall be provided by a firm selected by Executive from a list compiled
by the Company.
               (E) The payments and benefits provided for in this
Section 4(d)(i) shall only be payable in the event Executive’s employment is
terminated by the Company without Cause or by Executive for Good Reason more
than three (3) months prior to a Change of Control or more than twelve
(12) months following a Change of Control. If Executive’s employment is
terminated by the Company without Cause or by Executive for Good Reason within
three (3) months prior to or twelve (12) months following a Change of Control,
then Executive shall receive the payments and benefits described in
Section 4(d)(ii) in lieu of the payments and benefits described in this
Section 4(d)(i).
               (ii) Termination Without Cause or By Executive For Good Reason In
Connection With a Change of Control. If Executive’s employment is terminated by
the Company without Cause or by Executive for Good Reason within three
(3) months prior to or twelve (12) months following a Change of Control,
Executive shall be entitled to receive, in lieu of any severance benefits to
which Executive may otherwise be entitled under any severance plan or program of
the Company (other than as provided in Section 3(g) of this Agreement), the
benefits provided below:
               (A) the Company shall pay to Executive his or her fully earned
but unpaid base salary, when due, through the date of termination at the rate
then in effect, plus all other amounts to which Executive is entitled under any
compensation plan or practice of the Company at the time of termination;
               (B) subject to Executive’s continued compliance with Section 5,
Executive shall be entitled to receive a lump sum cash payment, payable within
thirty (30) days following the effective date of Executive’s Release, but in no
event later than two and one-half (2 1/2) months following the last day of the
calendar year in which the date of Executive’s termination of employment occurs
(or, in the event the date of termination precedes the consummation of a Change
of Control, because the payment of Executive’s prorated Bonus pursuant to clause
(2) below shall not be administratively practicable by the foregoing date
because it will not yet be known whether a Change of Control will occur within
three (3) months following the date of termination, such prorated Bonus shall be
paid within thirty (30) days following the date of the Change in Control), equal
to the sum of:
               (1) Executive’s annual base salary as in effect immediately prior
to the date of termination, plus
               (2) an amount equal to Executive’s Bonus for the year in which
the date of termination occurs prorated for the period during such year
Executive was employed prior to the date of termination;
               (C) subject to Executive’s continued compliance with Section 5,
(1) for the period beginning on the date of termination and ending on the date
which is

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twelve (12) full months following the date of termination (or, if earlier, the
date on which the applicable continuation period under COBRA expires), the
Company shall reimburse Executive for the costs associated with continuation
coverage pursuant to COBRA for Executive and his or her eligible dependents who
were covered under the Company’s health plans as of the date of Executive’s
termination (provided that Executive shall be solely responsible for all matters
relating to his or her continuation of coverage pursuant to COBRA, including,
without limitation, his or her election of such coverage and his or her timely
payment of premiums), and (2) the Company shall pay for and provide Executive
and such eligible dependents with a lump sum payment sufficient to pay the
premiums for life insurance benefits coverage for the twelve (12) month period
commencing on the date of termination to the extent such Executive and/or such
dependents were receiving such benefits prior to the date of Executive’s
termination, which payment shall be paid within thirty (30) days following the
effective date of Executive’s Release, but in no event later than two and
one-half (2 1/2) months following the last day of the calendar year in which the
date of Executive’s termination of employment occurs; and
               (D) subject to Executive’s continued compliance with Section 5,
for the period beginning on the date of termination and ending on the date which
is twelve (12) full months following the date of termination, Executive shall be
entitled to executive-level outplacement services at the Company’s expense, not
to exceed $15,000. Such services shall be provided by a firm selected by
Executive from a list compiled by the Company.
               (E) The payments and benefits provided for in this
Section 4(d)(ii) shall only be payable in the event Executive’s employment is
terminated by the Company without Cause or by Executive for Good Reason within
three (3) months prior to or twelve (12) months following a Change of Control.
If Executive’s employment is terminated by the Company without Cause or by
Executive for Good Reason more than twelve (12) months following a Change of
Control or prior to a Change of Control and such Change of Control is not
consummated within three (3) months following such termination, then Executive
shall receive the payments and benefits described in Section 4(d)(i) and shall
not be eligible to receive any of the payments and benefits described in this
Section 4(d)(ii).
          (e) Termination for Cause, Voluntary Resignation Without Good Reason.
If Executive’s employment is terminated by the Company for Cause or by Executive
without Good Reason (other than as a result of Executive’s death or Permanent
Disability), the Company shall not have any other or further obligations to
Executive under this Agreement (including any financial obligations) except that
Executive shall be entitled to receive (i) Executive’s fully earned but unpaid
base salary, through the date of termination at the rate then in effect, and
(ii) all other amounts or benefits to which Executive is entitled under any
compensation, retirement or benefit plan or practice of the Company at the time
of termination in accordance with the terms of such plans or practices,
including, without limitation, any continuation of benefits required by COBRA or
applicable law. In addition, if Executive’s employment is terminated by the
Company for Cause or by Executive without Good Reason (other than as a result of
Executive’s death or Permanent Disability), all vesting of Executive’s unvested
Stock Awards previously granted to him or her by the Company shall cease and
none of such unvested Stock Awards shall be exercisable following

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the date of such termination. The foregoing shall be in addition to, and not in
lieu of, any and all other rights and remedies which may be available to the
Company under the circumstances, whether at law or in equity.
          (f) Delay of Payments. If at the time of Executive’s termination of
employment with the Company Executive is a “specified employee” as defined in
Section 409A of the Code, as determined by the Company in accordance with
Section 409A of the Code, and the deferral of the commencement of any payments
or benefits otherwise payable hereunder as a result of such termination of
employment is necessary in order to prevent any accelerated or additional tax
under Section 409A of the Code, then the Company will defer the commencement of
the payment of any such payments or benefits hereunder (without any reduction in
such payments or benefits ultimately paid or provided to Executive) until the
date that is at least six (6) months following Executive’s termination of
employment with the Company (or the earliest date as is permitted under
Section 409A of the Code).
          (g) Release. As a condition to Executive’s receipt of any
post-termination benefits described in this Agreement, Executive shall execute
and not revoke a general release of all claims in favor of the Company (the
“Release”) substantially in the form attached hereto.
          (h) Exclusive Remedy. Except as otherwise expressly required by law
(e.g., COBRA) or as specifically provided herein, all of Executive’s rights to
salary, severance, benefits, bonuses and other amounts hereunder (if any)
accruing after the termination of Executive’s employment shall cease upon such
termination. In the event of a termination of Executive’s employment with the
Company, Executive’s sole remedy shall be to receive the payments and benefits
described in this Section 4. In addition, Executive acknowledges and agrees that
he or she is not entitled to any reimbursement by the Company for any taxes
payable by Executive as a result of the payments and benefits received by
Executive pursuant to this Section 4, including, without limitation, any excise
tax imposed by Section 4999 of the Code.
          (i) No Mitigation. The amount of any payment or benefit provided for
in this Section 4 shall not be reduced by any compensation earned by Executive
as the result of employment by another employer or self-employment or by
retirement benefits and, as provided in Sections 4(b), (c) or (d), Executive’s
(or his or her dependents’) right to continued healthcare and life insurance
benefits following his or her termination of employment will terminate on the
date on which the applicable continuation period under COBRA expires. In
addition, loans, advances or other amounts owed by Executive to the Company may
be offset by the Company against amounts payable to Executive under this
Section 4.
          (j) Return of the Company’s Property. If Executive’s employment is
terminated for any reason, the Company shall have the right, at its option, to
require Executive to vacate his or her offices prior to or on the effective date
of termination and to cease all activities on the Company’s behalf. Upon the
termination of his or her employment in any manner, as a condition to the
Executive’s receipt of any post-termination benefits described in this
Agreement, Executive shall immediately surrender to the Company all lists, books
and records of, or in connection with, the Company’s business, and all other
property belonging to the Company, it being distinctly understood that all such
lists, books and records, and other documents, are the property of the Company.
Executive shall deliver to the Company a signed

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statement certifying compliance with this Section 4(j) prior to the receipt of
any post-termination benefits described in this Agreement.
          (k) Waiver of the Company’s Liability. Executive recognizes that his
or her employment is subject to termination with or without Cause for any reason
and therefore Executive agrees that Executive shall hold the Company harmless
from and against any and all liabilities, losses, damages, costs and expenses,
including but not limited to, court costs and reasonable attorneys’ fees, which
Executive may incur as a result of the termination of Executive’s employment.
Executive further agrees that Executive shall bring no claim or cause of action
against the Company for damages or injunctive relief based on a wrongful
termination of employment. Executive agrees that the sole liability of the
Company to Executive upon termination of this Agreement shall be that determined
by this Section 4. In the event this covenant is more restrictive than permitted
by laws of the jurisdiction in which the Company seeks enforcement thereof, this
covenant shall be limited to the extent permitted by law.
     5. Certain Covenants.
          (a) Noncompetition. Except as may otherwise be approved by the Board,
during the term of Executive’s employment, Executive shall not have any
ownership interest (of record or beneficial) in, or have any interest as an
employee, salesman, consultant, officer or director in, or otherwise aid or
assist in any manner, any firm, corporation, partnership, proprietorship or
other business that engages in any county, city or part thereof in the United
States and/or any foreign country in a business which competes directly or
indirectly (as determined by the Board) with the Company’s business in such
county, city or part thereof, so long as the Company, or any successor in
interest of the Company to the business and goodwill of the Company, remains
engaged in such business in such county, city or part thereof or continues to
solicit customers or potential customers therein; provided, however, that
Executive may own, directly or indirectly, solely as an investment, securities
of any entity which are traded on any national securities exchange if Executive
(x) is not a controlling person of, or a member of a group which controls, such
entity; or (y) does not, directly or indirectly, own one percent (1%) or more of
any class of securities of any such entity.
          (b) Confidential Information. Executive and the Company have entered
into the Company’s standard employee proprietary information and inventions
agreement (the “Employee Proprietary Information and Inventions Agreement”).
Executive agrees to perform each and every obligation of Executive therein
contained.
          (c) Solicitation of Employees. Executive shall not during the term of
Executive’s employment and for the applicable severance period for which
Executive receives severance benefits following any termination hereof pursuant
to Section 4(c) or (d) above (regardless of whether Executive receives such
severance benefits in a lump sum payment or over the length of the severance
period) (the “Restricted Period”), directly or indirectly, solicit or encourage
to leave the employment of the Company or any of its affiliates, any employee of
the Company or any of its affiliates.
          (d) Solicitation of Consultants. Executive shall not during the term
of Executive’s employment and for the Restricted Period, directly or indirectly,
hire, solicit or

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encourage to cease work with the Company or any of its affiliates any consultant
then under contract with the Company or any of its affiliates within one year of
the termination of such consultant’s engagement by the Company or any of its
affiliates.
          (e) Rights and Remedies Upon Breach. If Executive breaches or
threatens to commit a breach of any of the provisions of this Section 5 (the
“Restrictive Covenants”), the Company shall have the following rights and
remedies, each of which rights and remedies shall be independent of the other
and severally enforceable, and all of which rights and remedies shall be in
addition to, and not in lieu of, any other rights and remedies available to the
Company under law or in equity:
               (i) Specific Performance. The right and remedy to have the
Restrictive Covenants specifically enforced by any court having equity
jurisdiction, all without the need to post a bond or any other security or to
prove any amount of actual damage or that money damages would not provide an
adequate remedy, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and that money
damages will not provide adequate remedy to the Company; and
               (ii) Accounting and Indemnification. The right and remedy to
require Executive (i) to account for and pay over to the Company all
compensation, profits, monies, accruals, increments or other benefits derived or
received by Executive or any associated party deriving such benefits as a result
of any such breach of the Restrictive Covenants; and (ii) to indemnify the
Company against any other losses, damages (including special and consequential
damages), costs and expenses, including actual attorneys’ fees and court costs,
which may be incurred by them and which result from or arise out of any such
breach or threatened breach of the Restrictive Covenants.
          (f) Severability of Covenants/Blue Pencilling. If any court determines
that any of the Restrictive Covenants, or any part thereof, is invalid or
unenforceable, the remainder of the Restrictive Covenants shall not thereby be
affected and shall be given full effect, without regard to the invalid portions.
If any court determines that any of the Restrictive Covenants, or any part
thereof, are unenforceable because of the duration of such provision or the area
covered thereby, such court shall have the power to reduce the duration or area
of such provision and, in its reduced form, such provision shall then be
enforceable and shall be enforced. Executive hereby waives any and all right to
attack the validity of the Restrictive Covenants on the grounds of the breadth
of their geographic scope or the length of their term.
          (g) Enforceability in Jurisdictions. The Company and Executive intend
to and do hereby confer jurisdiction to enforce the Restrictive Covenants upon
the courts of any jurisdiction within the geographical scope of such covenants.
If the courts of any one or more of such jurisdictions hold the Restrictive
Covenants wholly unenforceable by reason of the breadth of such scope or
otherwise, it is the intention of the Company and Executive that such
determination not bar or in any way affect the right of the Company to the
relief provided above in the courts of any other jurisdiction within the
geographical scope of such covenants, as to breaches of such covenants in such
other respective jurisdictions, such covenants as they relate to each
jurisdiction being, for this purpose, severable into diverse and independent
covenants.

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          (h) Definitions. For purposes of this Section 5, the term “Company”
means not only Cadence Pharmaceuticals, Inc., but also any company, partnership
or entity which, directly or indirectly, controls, is controlled by or is under
common control with Cadence Pharmaceuticals, Inc.
     6. Insurance. The Company shall have the right to take out life, health,
accident, “key-man” or other insurance covering Executive, in the name of the
Company and at the Company’s expense in any amount deemed appropriate by the
Company. Executive shall assist the Company in obtaining such insurance,
including, without limitation, submitting to any required examinations and
providing information and data required by insurance companies.
     7. Arbitration. Any dispute, claim or controversy based on, arising out of
or relating to Executive’s employment or this Agreement shall be settled by
final and binding arbitration in San Diego, California, before a single neutral
arbitrator in accordance with the National Rules for the Resolution of
Employment Disputes (the “Rules”) of the American Arbitration Association, and
judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction. Arbitration may be compelled pursuant to the California
Arbitration Act (Code of Civil Procedure §§ 1280 et seq.). If the parties are
unable to agree upon an arbitrator, one shall be appointed by the AAA in
accordance with its Rules. Each party shall pay the fees of its own attorneys,
the expenses of its witnesses and all other expenses connected with presenting
its case; however, Executive and the Company agree that, to the extent permitted
by law, the arbitrator may, in his or her discretion, award reasonable
attorneys’ fees to the prevailing party. Other costs of the arbitration,
including the cost of any record or transcripts of the arbitration, AAA’s
administrative fees, the fee of the arbitrator, and all other fees and costs,
shall be borne by the Company. This Section 7 is intended to be the exclusive
method for resolving any and all claims by the parties against each other for
payment of damages under this Agreement or relating to Executive’s employment;
provided, however, that neither this Agreement nor the submission to arbitration
shall limit the parties’ right to seek provisional relief, including without
limitation injunctive relief, in any court of competent jurisdiction pursuant to
California Code of Civil Procedure § 1281.8 or any similar statute of an
applicable jurisdiction. Seeking any such relief shall not be deemed to be a
waiver of such party’s right to compel arbitration. Both Executive and the
Company expressly waive their right to a jury trial.
     8. General Relationship. Executive shall be considered an employee of the
Company within the meaning of all federal, state and local laws and regulations
including, but not limited to, laws and regulations governing unemployment
insurance, workers’ compensation, industrial accident, labor and taxes.
     9. Miscellaneous.
          (a) Modification; Prior Claims. This Agreement and the Employee
Proprietary Information and Inventions Agreement set forth the entire
understanding of the parties with respect to the subject matter hereof,
supersede all existing agreements between them concerning such subject matter,
including the Original Agreement, between the Company and Executive, and may be
modified only by a written instrument duly executed by each party.

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          (b) Assignment; Assumption by Successor. The rights of the Company
under this Agreement may, without the consent of Executive, be assigned by the
Company, in its sole and unfettered discretion, to any person, firm, corporation
or other business entity which at any time, whether by purchase, merger or
otherwise, directly or indirectly, acquires all or substantially all of the
assets or business of the Company. The Company will require any successor
(whether direct or indirect, by purchase, merger or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
and to 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; provided, however, that no such assumption shall relieve the Company of
its obligations hereunder. As used in this Agreement, the “Company” shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law or otherwise.
          (c) Survival. The covenants, agreements, representations and
warranties contained in or made in Sections 4, 5, 7 and 9 of this Agreement
shall survive any termination of Executive’s employment.
          (d) Third-Party Beneficiaries. This Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Agreement.
          (e) Waiver. The failure of either party hereto at any time to enforce
performance by the other party of any provision of this Agreement shall in no
way affect such party’s rights thereafter to enforce the same, nor shall the
waiver by either party of any breach of any provision hereof be deemed to be a
waiver by such party of any other breach of the same or any other provision
hereof.
          (f) Section Headings. The headings of the several sections in this
Agreement are inserted solely for the convenience of the parties and are not a
part of and are not intended to govern, limit or aid in the construction of any
term or provision hereof.
          (g) Notices. All notices, requests and other communications hereunder
shall be in writing and shall be delivered by courier or other means of personal
service (including by means of a nationally recognized courier service or
professional messenger service), or sent by telex or telecopy or mailed first
class, postage prepaid, by certified mail, return receipt requested, in all
cases, addressed to:
     If to the Company or the Board:
Cadence Pharmaceuticals, Inc.
ATTN: Secretary
12481 High Bluff Drive, Suite 200
San Diego, CA 92130
     If to Executive:
At the address listed on the records of the Company

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All notices, requests and other communications shall be deemed given on the date
of actual receipt or delivery as evidenced by written receipt, acknowledgement
or other evidence of actual receipt or delivery to the address. In case of
service by telecopy, a copy of such notice shall be personally delivered or sent
by registered or certified mail, in the manner set forth above, within three
business days thereafter. Any party hereto may from time to time by notice in
writing served as set forth above designate a different address or a different
or additional person to which all such notices or communications thereafter are
to be given.
          (h) Severability. All Sections, clauses and covenants contained in
this Agreement are severable, and in the event any of them shall be held to be
invalid by any court, this Agreement shall be interpreted as if such invalid
Sections, clauses or covenants were not contained herein.
          (i) Governing Law and Venue. This Agreement is to be governed by and
construed in accordance with the laws of the State of California applicable to
contracts made and to be performed wholly within such State, and without regard
to the conflicts of laws principles thereof. Except as provided in Sections 5
and 7, any suit brought hereon shall be brought in the state or federal courts
sitting in San Diego, California, the parties hereto hereby waiving any claim or
defense that such forum is not convenient or proper. Each party hereby agrees
that any such court shall have in personam jurisdiction over it and consents to
service of process in any manner authorized by California law.
          (j) Non-transferability of Interest. None of the rights of Executive
to receive any form of compensation payable pursuant to this Agreement shall be
assignable or transferable except through a testamentary disposition or by the
laws of descent and distribution upon the death of Executive. Any attempted
assignment, transfer, conveyance, or other disposition (other than as aforesaid)
of any interest in the rights of Executive to receive any form of compensation
to be made by the Company pursuant to this Agreement shall be void.
          (k) Gender. Where the context so requires, the use of the masculine
gender shall include the feminine and/or neuter genders and the singular shall
include the plural, and vice versa, and the word “person” shall include any
corporation, firm, partnership or other form of association.
          (l) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
          (m) Construction. The language in all parts of this Agreement shall in
all cases be construed simply, according to its fair meaning, and not strictly
for or against any of the parties hereto. Without limitation, there shall be no
presumption against any party on the ground that such party was responsible for
drafting this Agreement or any part thereof.
          (n) Withholding and other Deductions. All compensation payable to
Executive hereunder shall be subject to such deductions as the Company is from
time to time required to make pursuant to law, governmental regulation or order.

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          (o) Code Section 409A Exempt. The compensation and benefits payable
under this Agreement, including without limitation the severance benefits
described in Section 4, are not intended to constitute “nonqualified deferred
compensation” within the meaning of Section 409A of the Code. To the extent
applicable, this Agreement shall be interpreted in accordance with Code
Section 409A and Department of Treasury regulations and other interpretive
guidance issued thereunder. If the Company and Executive determine that any
compensation or benefits payable under this may be or become subject to Code
Section 409A and related Department of Treasury guidance, the Company and
Executive agree to amend this Agreement or adopt other policies or procedures
(including amendments, policies and procedures with retroactive effect), or take
such other actions as the Company and Executive deem necessary or appropriate to
(1) exempt the compensation and benefits payable under this Agreement from Code
Section 409A and/or preserve the intended tax treatment of the compensation and
benefits provided with respect to this Agreement, or (2) comply with the
requirements of Code Section 409A and related Department of Treasury guidance.
(Signature Page Follows)

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.

              CADENCE PHARMACEUTICALS, INC.
 
       
 
  By:    
 
  Name:   Theodore R. Schroeder
 
  Title:   President and CEO
 
            [Name of Executive]

 1

 

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RELEASE
     Certain capitalized terms used in this Release are defined in the Amended
and Restated Employment Agreement by and between Cadence Pharmaceuticals, Inc.,
a Delaware corporation (the “Company”), and                      (“Executive”)
dated as of the ___day of                     , 2007 (the “Agreement”) which
Executive has previously executed and of which this Release is a part.
     Pursuant to the Agreement, and in consideration of and as a condition
precedent to the payments and benefits provided under the Agreement, Executive
hereby furnishes the Company with this Release.
     Executive hereby confirms his/her obligations under the Company’s
proprietary information and inventions agreement.
     On Executive’s own behalf and on behalf of Executive’s heirs, estate and
beneficiaries, Executive hereby waives, releases, acquits and forever discharges
the Company, and each of its subsidiaries and affiliates, and each of their
respective past or present officers, directors, agents, servants, employees,
shareholders, predecessors, successors and assigns, and all persons acting by,
through, under, or in concert with them, or any of them, of and from any and all
suits, debts, liens, contracts, agreements, promises, claims, liabilities,
demands, causes of action, costs, expenses, attorneys’ fees, damages,
indemnities and obligations of every kind and nature, in law, equity, or
otherwise, known and unknown, fixed or contingent, suspected and unsuspected,
disclosed and undisclosed (“Claims”), from the beginning of time to the date
hereof, including without limitation, Claims that arose as a consequence of
Executive’s employment with the Company, or arising out of the termination of
such employment relationship, or arising out of any act committed or omitted
during or after the existence of such employment relationship, all up through
and including the date on which this Release is executed, including, but not
limited to, Claims which were, could have been, or could be the subject of an
administrative or judicial proceeding filed by Executive or on Executive’s
behalf under federal, state or local law, whether by statute, regulation, in
contract or tort. This Release includes, but is not limited to: (1) Claims for
intentional and negligent infliction of emotional distress; (2) tort Claims for
personal injury; (3) Claims or demands related to salary, bonuses, commissions,
stock, stock options, or any other ownership interest in the Company, vacation
pay, fringe benefits, expense reimbursements, severance pay, front pay, back pay
or any other form of compensation; (4) Claims for breach of contract; (5) Claims
for any form of retaliation, harassment, or discrimination; (6) Claims pursuant
to any federal, state or local law or cause of action including, but not limited
to, the federal Civil Rights Act of 1964, as amended, the federal Age
Discrimination in Employment Act of 1967, as amended (“ADEA”), the federal
Employee Retirement Income Security Act of 1974, as amended, the federal
Americans with Disabilities Act of 1990, the California Fair Employment and
Housing Act, as amended, and the California Labor Code; and (7) all other Claims
based on tort law, contract law, statutory law, common law, wrongful discharge,
constructive discharge, fraud, defamation, emotional distress, pain and
suffering, breach of the implied covenant of good faith and fair dealing,
compensatory or punitive damages, interest, attorneys’ fees, and reinstatement
or re-employment. If any court rules that Executive’s waiver of the right to
file any administrative or judicial charges or complaints is ineffective,
Executive

 

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agrees not to seek or accept any money damages or any other relief upon the
filing of any such administrative or judicial charges or complaints.
     Executive acknowledge that he/she has read and understand Section 1542 of
the California Civil Code which reads as follows: “A general release does not
extend to claims which the creditor does not know or suspect to exist in his or
her favor at the time of executing the release, which if known by him or her
must have materially affected his or her settlement with the debtor.” Executive
hereby expressly waives and relinquishes all rights and benefits under that
section and any law of any jurisdiction of similar effect with respect to
his/her release of any unknown Claims Executive may have against the Company.
     Notwithstanding the foregoing, nothing in this Release shall constitute a
release by Executive of any claims or damages based on any right Executive may
have to enforce the Company’s executory obligations under the Agreement, any
right Executive may have to vested or earned compensation and benefits, or
Executive’s eligibility for indemnification under applicable law, Company
governance documents, Executive’s indemnification agreement with the Company, if
any, or under any applicable insurance policy with respect to Executive’s
liability as an employee or officer of the Company.
     If Executive is 40 years of age or older at the time of the termination,
Executive acknowledges that he/she is knowingly and voluntarily waiving and
releasing any rights he/she may have under ADEA. Executive also acknowledges
that the consideration given under the Agreement for the Release is in addition
to anything of value to which he/she was already entitled. Executive further
acknowledges that he/she has been advised by this writing, as required by the
ADEA, that: (A) his/her waiver and release do not apply to any rights or claims
that may arise on or after the date he/she executes this Release; (B) Executive
has the right to consult with an attorney prior to executing this Release;
(C) Executive has 21 days to consider this Release (although he/she may choose
to voluntarily execute this Release earlier); (D) Executive has 7 days following
the execution of this Release to revoke the Release; and (E) this Release shall
not be effective until the date upon which the revocation period has expired,
which shall be the 8th day after this Release is executed by Executive, without
Executive’s having given notice of revocation.
     Executive further acknowledges that Executive has carefully read this
Release, and knows and understands its contents and its binding legal effect.
Executive acknowledges that by signing this Release, Executive does so of
Executive’s own free will, and that it is Executive’s intention that Executive
be legally bound by its terms.
Print Name:
Date:

 

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Schedule to Exhibit 10.18: The Form of Amended and Restated Employment Agreement
was entered into with the following officers with their respective titles listed
below:

          Name   Title
Theodore R. Schroeder
  President and Chief Executive Officer
James B. Breitmeyer, M.D., Ph.D.
  Executive Vice President, Development and Chief Medical Officer
Hazel M. Aker, J.D.
  Senior Vice President, General Counsel
William S. Craig, Ph.D.
  Senior Vice President, Pharmaceutical Development and Manufacturing
Catherine J. Hardalo, M.D.
  Vice President, Clinical Development
William R. LaRue
  Senior Vice President and Chief Financial Officer
Malvina M. Laudicina
  Vice President, Regulatory Affairs and Quality Assurance
David A. Socks
  Vice President, Business Development