Employment Agreement--Jyrki Matilla, M.D., Ph.D.



 EXHIBIT 10.18 
  
 EMPLOYMENT AGREEMENT 
  
 (Jyrki Matilla, M.D., Ph.D.) 
  
 THIS EMPLOYMENT AGREEMENT (the “Agreement”) entered into as of April 19, 2004, by and between Auxilium Pharmaceuticals, Inc. (the
“Company”) and Jyrki Matilla, M.D., Ph.D. (“Executive”). 
  
 WHEREAS, the Company desires to continue to employ Executive, and Executive desires to continue to be employed by the Company upon the terms and conditions hereinafter set forth; 
  
 NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows: 
  
 1. Employment. The Company hereby
agrees to continue to employ Executive, and Executive hereby accepts such continued employment and agrees to perform Executive’s duties and responsibilities, in accordance with the terms, conditions and provisions hereinafter set forth. This
Agreement shall be effective as of April 19, 2004 (the “Effective Date”) and shall continue until terminated in accordance with Section 2 hereof. Nothing in this Agreement shall be construed as giving Executive any right to be retained in
the employ of the Company, and Executive specifically acknowledges that Executive shall be an employee-at-will of the Company, and thus subject to discharge at any time by the Company with or without cause and without compensation of any nature
except as provided in Section 2 below. 
  
 1.1. Duties and
Responsibilities. Commencing on the Effective Date, Executive shall serve as the Company’s Executive Vice President, Business Development and shall perform all duties and accept all responsibilities incident to such position as may be
reasonably assigned to Executive by the Company’s Board of Directors (the “Board”) or by the Chief Executive Officer of the Company. 
  
 1.2. Extent of Service. Executive agrees to use Executive’s best efforts to carry out Executive’s duties and responsibilities under
Section 1.1 hereof and, consistent with the other provisions of this Agreement, to devote substantially all of Executive’s business time, attention and energy thereto. The foregoing shall not be construed as preventing Executive from making
investments in other businesses or enterprises, provided that Executive agrees not to become engaged in any other business activity which, in the reasonable judgment of the Board, is likely to interfere with Executive’s ability to discharge
Executive’s duties and responsibilities to the Company. 
  
 1.3. Base Salary. For all the services rendered by Executive hereunder, the Company shall pay Executive a base salary (“Base Salary”) at the annual rate of $250,000, payable in installments at such times as the Company
customarily pays its other senior level executives. Executive’s Base Salary shall be reviewed annually for appropriate increases by the Board or compensation committee pursuant to the normal performance review policies for senior level
executives. 







 1.4. Incentive Compensation. Executive shall participate in short-term and long-term incentive
programs established by the Company for its senior level executives generally, at levels determined by the Board or the Chief Executive Officer. Executive’s incentive compensation shall be subject to the terms of the applicable plans and shall
be determined based on Executive’s individual performance and Company performance as determined by the Board or the Chief Executive Officer. 
  
 1.5. Retirement and Welfare Plans. Executive shall participate in employee retirement and welfare benefit plans made available to the
Company’s senior level executives as a group or to its employees generally, as such retirement and welfare plans may be in effect from time to time and subject to the eligibility requirements of the plans. Nothing in this Agreement shall
prevent the Company from amending or terminating any retirement, welfare or other employee benefit plans or programs from time to time as the Company deems appropriate. 
  
 1.6. Reimbursement of Expenses; Vacation. Executive shall be provided with reimbursement of reasonable expenses
related to Executive’s employment by the Company on a basis no less favorable than that which may be authorized from time to time for senior level executives as a group, and shall be entitled to vacation and sick leave in accordance with the
Company’s vacation, holiday and other pay for time not worked policies. 
  
 1.7. Equity Compensation. 
  
 (a) If, on or before August 1, 2004, the Company enters into a definitive license or co-promotion agreement for a product approved by the Food and Drug Administration, the Company shall recommend that, at the Board (or compensation
committee) meeting next following August 1, 2004, Executive be granted a non-qualified stock option to purchase 40,000 shares of common stock of the Company (“Common Stock”) at an exercise price equal to the fair market value of a share of
Common Stock as of the date such option is granted. Such option shall become exercisable in equal annual installments over the four-year period commencing on the date of grant. 
  
 (b) If, on or before August 1, 2004, the Company enters into a definitive in-license agreement to develop or co-develop a
development-stage product, the Company shall recommend that, at the Board (or compensation committee) meeting next following August 1, 2004, Executive be granted a non-qualified stock option to purchase 25,000 shares of Common Stock at an exercise
price equal to the fair market value of a share of Common Stock as of the date such option is granted. Such option shall become exercisable in equal annual installments over the four-year period commencing on the date of grant. 
  
 1.8. Certain Relocation and Educational Expenses. In addition to the
payments and benefits described in this Agreement, the Company shall reimburse Executive for the following expenses. 
  
 (a) If Executive purchases a home on or before August 1, 2007, the Company shall reimburse Executive for any settlement costs associated therewith up to a
maximum of $15,000, upon the Company’s receipt of appropriate documentation. 
  

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 (b) The Company shall reimburse Executive for educational expenses incurred by Executive for his two
children through August 1, 2005 up to a maximum of $10,000 per child per school year, upon the Company’s receipt of appropriate documentation. 
  

	2.	Termination. Executive’s employment shall terminate upon the occurrence of any of the following events: 

  

	2.1.	Termination Without Cause Before A Change of Control. 

  
 (a) The Company may remove Executive at any time without Cause (as defined in Section 2.9) from the position in which Executive is employed hereunder upon
not less than 30 days’ prior written notice to Executive. 
  
 (b) If Executive’s employment terminates as described in subsection (a) above and Executive executes and does not revoke a written release upon such removal, in a form provided by the Company, of any and all claims against the Company
and all related parties with respect to all matters arising out of Executive’s employment by the Company, or the termination thereof (the “Release”), Executive shall be entitled to receive the following severance compensation, as long
as Executive complies with the terms of Sections 4, 5, 6 and 7 below: 
  
 (i) Executive shall receive severance payments in an amount equal to 0.75 times Executive’s annual Base Salary at the rate in effect at the time of Executive’s termination. The severance amount shall be paid
in equal monthly installments over the 9-month period following Executive’s termination of employment (the “Severance Period”). Monthly payments shall commence within 30 days after the effective date of the termination (or the end of
the revocation period for the Release, if later). 
  
 (ii) During the Severance Period, Executive shall continue to receive (at no cost to Executive) the medical, dental and prescription drug coverage in effect at the date of Executive’s termination (or generally comparable coverage) for
Executive and, where applicable, Executive’s spouse and dependents, as the same may be changed from time to time for employees generally, as if Executive had continued in employment during such period. To the extent that continued participation
is neither permissible nor practicable, the Company shall take such actions as may be necessary to provide Executive with substantially comparable benefits (at no cost to the Executive) outside the scope of such plans, including, without limitation,
reimbursing Executive for his costs in obtaining such coverage, such as COBRA premiums paid by Executive and/or his eligible dependents. The COBRA health care continuation coverage period under Section 4980B of the Internal Revenue Code of 1986, as
amended (the “Code”) shall run concurrently with the Severance Period. 
  
 (iii) Executive shall receive any benefits accrued in accordance with the terms of any applicable benefit plans and programs of the
Company. 
  
 (iv) Executive agrees that if
Executive fails to comply with Section 4, 5, 6 or 7 below, all payments under this Section 2.1 shall immediately cease. 
  

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 2.2. Termination Without Cause; Resignation for Good Reason After A Change of Control. 

 
 (a) If a Change of Control occurs and the Company terminates
Executive’s employment without Cause at any time upon or after a Change of Control or Executive resigns for Good Reason (as defined in Section 2.9) upon or at any time during the two-year period following the Change of Control, this Section 2.2
shall apply. 
  
 (b) If Executive’s employment terminates as
described in subsection (a) above and Executive executes and does not revoke a Release, Executive shall be entitled to receive the following severance compensation, as long as Executive complies with the terms of Sections 4, 5, 6 and 7 below:

  
 (i) Executive shall receive a lump sum
severance payment in an amount equal to (A) 1.25 times Executive’s annual Base Salary at the rate in effect at the time of Executive’s termination, plus (B) 1.25 times Executive’s average annual bonus paid by the Company to Executive
for the two fiscal years preceding Executive’s termination of employment. The payment shall be made within 30 days after the effective date of the termination of employment (or the end of the revocation period for the Release, if later).

  
 (ii) During the 15-month period following
Executive’s termination of employment (the “Severance Period”), Executive shall continue to receive (at no cost to Executive) the medical, dental and prescription drug coverage in effect at the date of Executive’s termination (or
generally comparable coverage) for Executive and, where applicable, Executive’s spouse and dependents, as the same may be changed from time to time for employees generally, as if Executive had continued in employment during such period. To the
extent that continued participation is neither permissible nor practicable, the Company shall take such actions as may be necessary to provide Executive with substantially comparable benefits (at no cost to the Executive) outside the scope of such
plans, including, without limitation, reimbursing Executive for his costs in obtaining such coverage, such as COBRA premiums paid by Executive and/or his eligible dependents. The COBRA health care continuation coverage period under Section 4980B of
the Code shall run concurrently with the Severance Period. 
  
 (iii) All outstanding stock options held by Executive at the date of Executive’s termination of employment shall become fully exercisable on the date of termination and all stock awards held by Executive at the
date of Executive’s termination of employment shall become fully vested and exercisable as of the date of termination. 
  
 (c) Executive shall receive any benefits accrued in accordance with the terms of any applicable benefit plans and programs of the Company. 
  
 (d) Executive agrees that if Executive materially breaches Section 4, 5, 6 or
7 below, all payments under this Section 2.2 shall immediately cease. 
  

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 2.3. Increase in Payments Upon a Change of Control. 
  
 (a) Anything in this Agreement to the contrary notwithstanding, in the event
that it shall be determined that any payment or distribution by the Company to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”),
would constitute an “excess parachute payment” within the meaning of Section 280G of the Code, the Company shall pay to Executive an additional amount (the “Gross-Up Payment”) such that the net amount retained by Executive after
deduction of any excise tax imposed under Section 4999 of the Code, and any federal, state and local income tax, employment tax and excise tax imposed upon the Gross-Up Payment, shall be equal to the Payment. For purposes of determining the amount
of the Gross-Up Payment, unless Executive specifies that other rates apply, Executive shall be deemed to pay federal income tax and employment taxes at the highest marginal rate of federal income and employment taxation in the calendar year in which
the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive’s residence on Executive’s termination date, net of the maximum reduction in federal income
taxes that may be obtained from the deduction of such state and local taxes. 
  
 (b) All determinations to be made under this Section 2.3 shall be made by the Company’s independent public accountant immediately prior to the Change of Control or by another independent public accounting firm
mutually selected by the Company and Executive before the date of the Change of Control (the “Accounting Firm”), which firm shall provide its determinations and any supporting calculations both to the Company and Executive within 20 days
after Executive’s termination date. Any such determination by the Accounting Firm shall be binding upon the Company and Executive. Within 10 days after the Accounting Firm’s determination, the Company shall pay the Gross-Up Payment to
Executive. 
  
 (c) All of the fees and expenses of the Accounting
Firm in performing the determinations referred to in this Section 2.3 shall be borne solely by the Company. The Company agrees to indemnify and hold harmless the Accounting Firm from any and all claims, damages and expenses resulting from or
relating to its determinations pursuant to this Section 2.3, except for claims, damages or expenses resulting from the gross negligence or willful misconduct of the Accounting Firm. 
  
 2.4. Voluntary Termination. Executive may voluntarily terminate Executive’s employment for any reason upon 30
days’ prior written notice. In such event, after the effective date of such termination, except as provided in Section 2.2 with respect to a resignation for Good Reason, no further payments shall be due under this Agreement, except that
Executive shall be entitled to any benefits accrued in accordance with the terms of any applicable benefit plans and programs of the Company. 
  
 2.5. Disability. The Company may terminate Executive’s employment if Executive has been unable to perform the material duties of
Executive’s employment for a period of 90 days in any 12-month period because of physical or mental injury or illness (“Disability”); provided, however, that the Company shall continue to pay Executive’s Base Salary until the
Company acts to terminate Executive’s employment. Executive agrees, in the event of a dispute under this Section 2.5 relating to Executive’s Disability, to submit to a physical examination by a licensed physician jointly selected by the
Board and Executive. If the Company terminates Executive’s employment for Disability then Executive shall be entitled to any benefits accrued in 
  

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 accordance with the terms of any applicable benefit plans and programs of the Company, and in addition, if Executive
executes and does not revoke a Release, then Executive shall be entitled to receive the severance compensation set forth in Section 2.1(b) above, as long as Executive complies with the terms of Sections 4, 5, 6 and 7 below. 
  
 2.6. Death. If Executive dies while employed by the Company, the
Company shall pay to Executive’s executor, legal representative, administrator or designated beneficiary, as applicable, any benefits accrued under the Company’s benefit plans and programs. Otherwise, the Company shall have no further
liability or obligation under this Agreement to Executive’s executors, legal representatives, administrators, heirs or assigns or any other person claiming under or through Executive. 
  
 2.7. Cause. The Company may terminate Executive’s employment at
any time for Cause (as defined in Section 2.9) upon written notice to Executive, in which event all payments under this Agreement shall cease. Executive shall be entitled to any benefits accrued before Executive’s termination in accordance with
the terms of any applicable benefit plans and programs of the Company. 
  
 2.8. Notice of Termination. Any termination of Executive’s employment shall be communicated by a written notice of termination to the other party hereto given in accordance with Section 11. The notice of termination shall (i)
indicate the specific termination provision in this Agreement relied upon, (ii) briefly summarize the facts and circumstances deemed to provide a basis for a termination of employment and the applicable provision hereof, and (iii) specify the
termination date in accordance with the requirements of this Agreement. 
  
 2.9. Definitions. 
  
 (a)
“Cause” shall mean any of the following grounds for termination of Executive’s employment: 
  
 (i) Executive shall have been convicted of, or entered a plea of guilty to, a felony, 
  
 (ii) Executive intentionally and continually fails to
perform Executive’s reasonably assigned material duties to the Company (other than a failure resulting from Executive’s incapacity due to physical or mental illness), which failure has continued for a period of at least 30 days after a
written notice of demand for substantial performance, signed by a duly authorized officer of the Company, has been delivered to Executive specifying the manner in which Executive has failed substantially to perform, 
  
 (iii) Executive engages in willful misconduct in the
performance of Executive’s duties, or 
  
 (iv) Executive materially breaches Section 4, 5, 6 or 7 below. 
  

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 (b) “Change of Control” as used herein, a “Change of Control” shall be deemed
to have occurred if: 
  
 (i) Any
“person” (as such term is used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing more than 50% of the voting power of the then outstanding securities of the Company; provided that a Change of Control shall not be deemed to occur as a result of a transaction in
which the Company becomes a subsidiary of another corporation and in which the stockholders of the Company, immediately prior to the transaction, will beneficially own, immediately after the transaction, shares entitling such stockholders to more
than 50% of all votes to which all stockholders of the parent corporation would be entitled in the election of directors; or 
  
 (ii) The consummation of (A) a merger or consolidation of the Company with another corporation where the stockholders of the Company,
immediately prior to the merger or consolidation, will not beneficially own, immediately after the merger or consolidation, shares entitling such stockholders to more than 50% of all votes to which all stockholders of the surviving corporation would
be entitled in the election of directors, (B) a sale or other disposition of all or substantially all of the assets of the Company, or (C) a liquidation or dissolution of the Company. 
  
 (iii) After the Effective Date, directors are elected such that a majority of the members of the Board shall
have been members of the Board for less than two years, unless the election or nomination for election of each new director who was not a director at the beginning of such two-year period was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such period. 
  
 (c) “Good Reason” shall mean the occurrence of any of the following events or conditions, unless Executive has expressly consented in writing thereto, or except as a result of Executive’s
physical or mental incapacity or as described in the last sentence of this subsection (c): 
  
 (i) a reduction in Executive’s Base Salary; 
  

(ii) a substantial reduction of Executive’s duties and responsibilities hereunder; or 
  
 (iii) the Company requires that Executive’s principal
office location be moved to a location more than 50 miles from Executive’s principal office location immediately before the change. 
  
 Notwithstanding the foregoing, Executive shall not have Good Reason for termination unless Executive gives written notice of termination for Good Reason
within 30 days after the event giving rise to Good Reason occurs and the Company does not correct the action or failure to act that constitutes the grounds for Good Reason, as set forth in Executive’s notice of termination, within 30 days after
the date on which Executive gives written notice of termination. 
  
 3. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in or rights under any benefit, bonus, incentive or 
  

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 other plan or program provided by the Company and for which Executive may qualify; provided, however, that if Executive
becomes entitled to and receives the payments provided for in Section 2 of this Agreement, Executive hereby waives Executive’s right to receive payments under any severance plan or similar program applicable to all employees of the Company.

  
 4. Confidentiality. Executive agrees that
Executive’s services to the Company and its subsidiaries and any successors or assigns (collectively, the “Employer”) were and are of a special, unique and extraordinary character, and that Executive’s position places Executive
in a position of confidence and trust with the Employer’s customers and employees. Executive also recognizes that Executive’s position with the Employer will give Executive substantial access to Confidential Information (as defined below),
the disclosure of which to competitors of the Employer would cause the Employer to suffer substantial and irreparable damage. Executive recognizes, therefore, that it is in the Employer’s legitimate business interest to restrict
Executive’s use of Confidential Information for any purposes other than the discharge of Executive’s employment duties at the Employer, and to limit any potential appropriation of Confidential Information by Executive for the benefit of
the Employer’s competitors and to the detriment of the Employer. Accordingly, Executive agrees as follows: 
  
 (a) Executive will not at any time, whether during or after the termination of Executive’s employment, reveal to any person or entity any of the
trade secrets or confidential information of the Employer or of any third party which the Employer is under an obligation to keep confidential (including but not limited to trade secrets or confidential information respecting inventions, products,
designs, methods, know-how, techniques, systems, processes, software programs, works of authorship, customer lists, projects, plans and proposals) (“Confidential Information”), except as may be required in the ordinary course of performing
Executive’s duties as an employee of the Employer, and Executive shall keep secret all matters entrusted to Executive and shall not use or attempt to use any such information in any manner which may injure or cause loss or may be calculated to
injure or cause loss whether directly or indirectly to the Employer. 
  
 (b) The above restrictions shall not apply to: (i) information that at the time of disclosure is in the public domain through no fault of Executive; (ii) information received from a third party outside of the Employer that was disclosed
without a breach of any confidentiality obligation; (iii) information approved for release by written authorization of the Employer; or (iv) information that may be required by law or an order of any court, agency or proceeding to be disclosed;
provided Executive shall provide the Employer notice of any such required disclosure once Executive has knowledge of it and will help the Employer to the extent reasonable to obtain an appropriate protective order. 
  
 (c) Further, Executive agrees that during Executive’s employment
Executive shall not take, use or permit to be used any notes, memoranda, reports, lists, records, drawings, sketches, specifications, software programs, data, documentation or other materials of any nature relating to any matter within the scope of
the business of the Employer or concerning any of its dealings or affairs otherwise than for the benefit of the Employer. Executive further agrees that Executive shall not, after the termination of Executive’s employment, use or permit to be
used any such notes, memoranda, reports, lists, records, drawings, sketches, specifications, software programs, data, documentation or other materials, it being agreed that all of the foregoing shall 
  

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 be and remain the sole and exclusive property of the Employer and that immediately upon the termination of
Executive’s employment Executive shall deliver all of the foregoing, and all copies thereof, to the Employer, at its main office. 
  
 (d) Executive agrees that upon the termination of Executive’s employment with the Employer, Executive will not take or retain without written
authorization any documents, files or other property of the Employer, and Executive will return promptly to the Employer any such documents, files or property in Executive’s possession or custody, including any copies thereof maintained in any
medium or format. Executive recognizes that all documents, files and property which Executive has received and will receive from the Employer, including but not limited to scientific research, customer lists, handbooks, memoranda, product
specifications, and other materials (with the exception of documents relating to benefits to which Executive might be entitled following the termination of Executive’s employment with the Employer), are for the exclusive use of the Employer and
employees who are discharging their responsibilities on behalf of the Employer, and that Executive has no claim or right to the continued use, possession or custody of such documents, files or property following the termination of Executive’s
employment with the Employer. 
  
 5. Intellectual Property.

  
 (a) If at any time or times during Executive’s
employment Executive shall (either alone or with others) make, conceive, discover or reduce to practice any invention, modification, discovery, design, development, improvement, process, software program, work of authorship, documentation, formula,
data, technique, know-how, secret or intellectual property right whatsoever or any interest therein (whether or not patentable or registrable under copyright or similar statutes or subject to analogous protection) (herein called
“Developments”) that (i) relates to the business of the Employer or any customer of or supplier to the Employer or any of the products or services being developed, manufactured or sold by the Employer or which may be used in relation
therewith, (ii) results from tasks assigned to Executive by the Employer or (iii) results from the use of premises or personal property (whether tangible or intangible) owned, leased or contracted for by the Employer, such Developments and the
benefits thereof shall immediately become the sole and absolute property of the Employer and its assigns, and Executive shall promptly disclose to the Employer (or any persons designated by it) each such Development, and Executive hereby assigns any
rights Executive may have or acquire in the Developments and benefits and/or rights resulting therefrom to the Employer and its assigns without further compensation and shall communicate, without cost or delay, and without publishing the same, all
available information relating thereto (with all necessary plans and models) to the Employer. 
  
 (b) Upon disclosure of each Development to the Employer, Executive will, during Executive’s employment and at any time thereafter, at the request and cost of the Employer, sign, execute, make and do all such
deeds, documents, acts and things as the Employer and its duly authorized agents may reasonably require: 
  
 (i) to apply for, obtain and vest in the name of the Employer alone (unless the Employer otherwise directs) letters patent, copyrights or
other analogous protection in any country throughout the world and when so obtained or vested to renew and restore the same; and 
  

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 (ii) to defend any opposition proceedings in respect of such applications and any
opposition proceedings or petitions or applications for revocation of such letters patent, copyright or other analogous protection. 
  
 (c) In the event the Employer is unable, after reasonable effort, to secure Executive’s signature on any letters patent, copyright or other analogous
protection relating to a Development, whether because of Executive’s physical or mental incapacity or for any other reason whatsoever, Executive hereby irrevocably designates and appoints the Employer and its duly authorized officers and agents
as Executive’s agent and attorney-in-fact, to act for and on Executive’s behalf and stead to execute and file any such application or applications and to do all other lawfully permitted acts to further the prosecution and issuance of
letter patents, copyright and other analogous protection thereon with the same legal force and effect as if executed by Executive. 
  
 6. Non-Competition. While Executive is employed at the Employer and for a period of nine months after termination of Executive’s employment
(for any reason whatsoever, whether voluntary or involuntarily), Executive will not, without the prior written approval of the Board, whether alone or as a partner, officer, director, consultant, agent, employee or stockholder of any company or
other commercial enterprise, directly or indirectly engage in any business or other activity in the United States or Canada which competes directly with the Employer in the sale of the pharmaceutical or other products being manufactured, marketed,
distributed or developed by the Employer while Executive is employed by Employer and at the time of termination of such employment. The foregoing prohibition shall not prevent Executive’s employment or engagement after termination of
Executive’s employment by any company or business organization, as long as the activities of any such employment or engagement, in any capacity, do not involve work on matters related to the products being directly developed, manufactured, or
marketed by the Employer at the time of termination of Executive’s employment. Executive shall be permitted to own securities of a public company not in excess of five percent of any class of such securities and to own stock, partnership
interests or other securities of any entity not in excess of five percent of any class of such securities and such ownership shall not be considered to be in competition with the Employer. 
  
 7. Non-Solicitation. 
  
 (a) While Executive is employed at the Employer and for a period of one (1)
year after termination of such employment (for any reason, whether voluntary or involuntarily), Executive agrees that Executive will not: 
  
 (i) directly or indirectly solicit, entice or induce any customer of the Employer to become a customer of any other person, firm or
corporation with respect to products of such person, firm or corporation that are directly competitive with products then sold or under development by the Employer, or to cease doing business with the Employer, and Executive shall not approach any
such person, firm or corporation for such competitive purpose or authorize or knowingly approve the taking of such actions by any other person; or 
  

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 (ii) directly or indirectly solicit or recruit any employee of the Employer to work for a
third party other than the Employer (excluding newspaper or similar print or electronic solicitations of general circulation). 
  
 (b) This Section 7 does not apply to any general solicitation not focused to any group of customers itemized on a customer list of the Employer.

  
 8. General Provisions. 
  
 (a) Executive acknowledges and agrees that the type and periods of
restrictions imposed in Sections 4, 5, 6 and 7 of this Agreement are fair and reasonable, and that such restrictions are intended solely to protect the legitimate interests of the Employer, rather than to prevent Executive from earning a livelihood.
Executive recognizes that the Employer competes worldwide, and that Executive’s access to Confidential Information makes it necessary for the Employer to restrict Executive’s post-employment activities in any market in which the Employer
competes, and in which Executive’s access to Confidential Information and other proprietary information could be used to the detriment of the Employer. In the event that any restriction set forth in this Agreement is determined to be overbroad
with respect to scope, time or geographical coverage, Executive agrees that such a restriction or restrictions should be modified and narrowed, either by a court or by the Employer, so as to preserve and protect the legitimate interests of the
Employer as described in this Agreement, and without negating or impairing any other restrictions or agreements set forth herein. 
  
 (b) Executive acknowledges and agrees that if Executive should breach any of the covenants, restrictions and agreements contained herein, irreparable loss
and injury would result to the Employer, and that damages arising out of such a breach may be difficult to ascertain. Executive therefore agrees that, in addition to all other remedies provided at law or at equity, the Employer shall be entitled to
have the covenants, restrictions and agreements contained in Sections 4, 5, 6, and 7 specifically enforced (including, without limitation, by temporary, preliminary, and permanent injunctions and restraining orders) by any state or federal court in
the Commonwealth of Pennsylvania having equity jurisdiction and Executive agrees to subject Executive to the jurisdiction of such court. 
  
 (c) Executive agrees that if the Employer fails to take action to remedy any breach by Executive of this Agreement or any portion of the Agreement, such
inaction by the Employer shall not operate or be construed as a waiver of any subsequent breach by Executive of the same or any other provision, agreement or covenant. 
  
 (d) Executive acknowledges and agrees that the payments and benefits to be provided to Executive under this Agreement are
provided as consideration for the covenants in Sections 4, 5, 6, and 7 hereof. 
  
 9. Survivorship. The respective rights and obligations of the parties under this Agreement shall survive any termination of Executive’s employment to the extent necessary to the intended preservation of
such rights and obligations. 
  

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 10. Mitigation. Executive shall not be required to mitigate the amount of any payment or benefit
provided for in this Agreement by seeking other employment or otherwise and there shall be no offset against amounts due Executive under this Agreement on account of any remuneration attributable to any subsequent employment that Executive may
obtain. 
  
 11. Notices. All notices and other
communications required or permitted under this Agreement or necessary or convenient in connection herewith shall be in writing and shall be deemed to have been given when hand delivered or mailed by registered or certified mail, as follows
(provided that notice of change of address shall be deemed given only when received): 
  
 If to the Company, to: 
  
 Auxilium Pharmaceuticals, Inc. 
 Norriton Office Center 
 160 West Germantown Pike 
 Suite D-5 
 Norristown, PA 19401 
  
 If to Executive, to: 
  
 Jyrki Matilla, M.D., Ph.D. 
 522 Oakley Road 
 Haverford, PA 19041 
  
 or to such other names or addresses as the
Company or Executive, as the case may be, shall designate by notice to each other person entitled to receive notices in the manner specified in this Section. 
  
 12. Contents of Agreement; Amendment and Assignment. 
  
 (a) This Agreement sets forth the entire understanding between the parties hereto with respect to the subject matter hereof and supersedes any and all
prior agreements and understandings concerning Executive’s employment by the Company, including the offer letter between the Company and Executive dated August 1, 2003, and cannot be changed, modified, extended or terminated except upon written
amendment approved by the Board and executed on its behalf by a duly authorized officer and by Executive. 
  
 (b) All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Executive under this Agreement are of a personal nature and shall not be assignable or delegatable in
whole or in part by Executive. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company, within 15 days
of such succession, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform if no such succession had taken place. 
  

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 13. Severability. If any provision of this Agreement or application thereof to anyone or under any
circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable
provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. If any provision is held void, invalid or unenforceable with respect to particular circumstances, it shall
nevertheless remain in full force and effect in all other circumstances. 
  
 14. Remedies Cumulative; No Waiver. No remedy conferred upon a party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in
addition to any other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission by a party in exercising any right, remedy or power under this Agreement or existing at law or in equity shall be
construed as a waiver thereof, and any such right, remedy or power may be exercised by such party from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. 
  
 15. Withholding. All payments under this Agreement shall be made
subject to applicable tax withholding, and the Company shall withhold from any payments under this Agreement all federal, state and local taxes as the Company is required to withhold pursuant to any law or governmental rule or regulation. Except as
otherwise provided by Section 2.3, Executive shall bear all expense of, and be solely responsible for, all federal, state and local taxes due with respect to any payment received under this Agreement. 
  
 16. Miscellaneous. This Agreement may be executed in counterparts,
each of which is an original. It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. 
  
 17. Governing Law. This Agreement shall be governed by and interpreted under the laws of the Commonwealth of
Pennsylvania without giving effect to any conflict of laws provisions or canons of construction that construe agreements against the draftsperson. 
  
 IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Agreement as of the date first above written. 
  

	
	 AUXILIUM PHARMACEUTICALS, INC.

	
	 By: /s/    GERRI A. HENWOOD


	 Name:  Gerri A. Henwood

	 Title:    President and GEO

	
	 EXECUTIVE

	
	 /s/    JYRKI MATILLA, M.D., PH.D.


	 Jyrki Matilla, M.D., Ph.D.



  

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