AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AGREEMENT
dated as of the 19th day of August, 2005 between Xxxx Pharmaceuticals,
Inc. (“BPI”) and Xxxx Laboratories, Inc.
(“BLI-DE”), Delaware corporations having their principal
executive offices at 000 Xxxxxxxx Xxxxx Xxxx, Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000, and Duramed
Research Inc., a Delaware corporation having its principal executive offices at 0 Xxxxxxx Xxxxxx,
Xxxx Xxxxx, XX 00000 (“DRI”), parties of the first
part, and Xxxxxx Xxx-Xxxxxx (the “Employee”).
WITNESSETH:
WHEREAS,
Xxxx Laboratories, Inc., a publicly-traded New York corporation
(“BLI-NY”) and the
Employee entered into an employment agreement dated as of January 10, 2001, which was amended and
restated as of August 19, 2002 and October 24, 2002 (as so
amended and restated, the “Employment
Agreement”); and
WHEREAS, BLI-NY was reincorporated as a Delaware corporation on December 31, 2003 by merging
into BPI, which was the corporation that survived the merger and which has succeeded to the rights
and obligations of BLI-NY under the Employment Agreement; and
WHEREAS, in connection with the reincorporation BLI-NY contributed its principal operating
assets, including its rights under the Employment Agreement, to BLI-DE, which was a subsidiary of
BLI-NY and which became a subsidiary of BPI as a result of the merger; and
WHEREAS, BPI, BLI-DE and DRI and the Employee wish to further amend and restate the Employment
Agreement;
NOW, THEREFORE, BPI, BLI-DE and DRI and the Employee hereby agree that, effective as of
December 31, 2003, the Employment Agreement is amended and restated in its entirety to read
as follows:
1. Employment. The Company agrees to employ the Employee, and the
Employee agrees to remain in the employ of the Company, during the term of this
Agreement and on the other terms and conditions hereafter set forth. Subject to
paragraph 13(d) below, where used in this Agreement, the
“Company” means BPI or,
commencing on the effective date of any assignment of BPI’s rights or obligations in
accordance with paragraph 13(d) below, the Permitted Assignee (as such term is defined
in that paragraph) to which such rights or obligations are so assigned.
2. Term. The term of this Agreement shall commence on August 19, 2002
(the “Commencement Date”) and shall terminate at 5 P.M. on the third anniversary of the
Commencement Date unless sooner terminated in accordance with the terms of this
Agreement or extended as hereinafter provided. The term of this Agreement shall be
extended, without further action by BPI or the Employee, on the date
(the “Extension
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Effective
Date”) which is six months before the third anniversary of the Commencement Date
and on the date (also an “Extension Effective Date”) which is six months before each
subsequent anniversary of the Commencement Date, for successive periods of twelve months each,
unless either BPI or an Affiliate (as defined in paragraph 3(a) below) shall have given written
notice to the Employee, or the Employee shall have given written notice to BPI, in the manner set
forth in paragraph 13 (e) or (f) below, prior to the Extension Effective Date in question, that the
term of this Agreement that is in effect at the time such written notice is given is not to be
extended or further extended, as the case may be. Examples that illustrate the intended operation
of the preceding sentence appear in the Appendix to this Agreement.
3. Positions
and Responsibilities; Place of Performance.
(a) Throughout the term of this Agreement, the Employee agrees to remain in the employ
of the Company, and the Company agrees to employ the Employee, as a Senior Vice President of BPI
and as the President and Chief Operating Officer of DRI, reporting to the Chairman of the Board and
Chief Executive Officer of BPI (the “CEO”). As a Senior Vice President of BPI and the President and
Chief Operating Officer of DRI, the Employee shall be responsible for directing, managing and
overseeing all new proprietary drug discovery and development studies and activities, including
clinical trials and medical affairs and regulatory affairs related to such activities, conducted by
BPI or any Affiliate (as defined below), including without limitation any such studies and
activities conducted by DRI on behalf of BPI or any Affiliate, subject only to the authority of the
CEO and the Board of Directors of BPI (the “BPI Board”), and shall have all of the powers,
authority, duties and responsibilities she has had prior to the Commencement Date and all of the
powers, authority, duties and responsibilities usually incident to the position and role of Senior
Vice President in public companies that are comparable in size, character and performance to BPI
(including its interests in BLI-DE and the other Affiliates) and the position and role of President
and Chief Operating Officer of companies that are comparable in size, character and performance to
DRI, and such other reasonable duties, consistent with the position of such a Senior Vice President
and President and Chief Operating Officer, as may be lawfully assigned to her by the CEO or the BPI
Board. BPI agrees to use reasonable efforts to secure the Employee’s election as a member of the
BPI Board and as a member of the Board of Directors of DRI (the
“DRI Board”) during the term of
this Agreement, and the Employee agrees to serve as such and as an officer and member of the board
of directors of any other Affiliate to which she may be elected or appointed during the term of
this Agreement, without additional compensation beyond that provided in this Agreement. As used in
this paragraph 3(a) and elsewhere in this Agreement, the term
“Affiliate” means any “person” (as
such term is used in sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended) that directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, BPI. For the purposes of the preceding sentence,
the word “control” (by itself and as used in the terms “controlling”, “controlled by” and “under
common control with”) means the possession, direct or indirect, of the power to direct or cause the
direction of the
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management and policies of a “person”, whether through the ownership of voting
securities, by contract, or otherwise.
(b) In connection with her employment by Company, the Employee shall be based in the
metropolitan Philadelphia, Pennsylvania area but agrees to travel, to the extent reasonably
necessary to perform her duties and obligations under this Agreement, to Company facilities and
other destinations elsewhere at the Company’s
expense.
(c) During the term of this Agreement, the Employee shall serve the Company on an
exclusive basis (it being understood that the Employee’s engaging in activities on behalf of BPI or
an Affiliate shall be deemed serving the Company for this purpose) and shall devote all her
business time, attention, skill and efforts to the faithful performance of her duties hereunder;
provided that the Employee may engage in community service and charitable activities and, with the
approval of the BPI Board, may serve as a member of the board of directors of other companies (and
retain remuneration for such service) if such activities and service do not materially interfere
with the performance of her duties and responsibilities hereunder and, provided further, that the
Employee may continue to serve as the Chairperson of the Generic Pharmaceutical Association during
the first 18 months of the term of this Agreement.
4. Compensation. For all services rendered by the Employee in any capacity
during the term of this Agreement, and for her undertakings with respect to confidential
information, non-solicitation and disparaging remarks set forth in sections 6 and 7 below, the
Employee shall be entitled to the following:
(a) a salary, payable in installments not less frequent than monthly, at
the annual rate on October 24, 2002 of four hundred thousand dollars ($400,000), with
such increases in such rate, if any, as the Compensation Committee of the BPI Board may
approve from time to time during the term of this Agreement in accordance with BPI’s
regular administrative practices applicable to senior officers from time to time during the
term of this Agreement (the annual salary rate as increased from time to time during the
term of this Agreement being hereafter referred to as the
“Base Salary”);
(b) participation in BPI’s annual executive incentive or
bonus plan as in effect from time to time, with the opportunity to receive an award in accordance
with the terms and conditions of such plan, for each fiscal year of BPI that commences or
terminates during the term of this Agreement, of up to 50% of the Base Salary earned during such
year (or such higher percentage as the BPI Board or a committee of the BPI Board may allow from
time to time during the term of this Agreement), it being understood that any award for the fiscal
year of BPI in which the term of this Agreement terminates pursuant to the terms hereof shall be
prorated based on the portion of such fiscal year that coincides with the term of this Agreement
and shall be made at the same time as awards (if any) are made to other participants with respect
to such fiscal year. The Employee recognizes and agrees that the BPI Board may defer the payment of
any portion of her annual bonus to the extent that, and for such period of time
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and on such terms and subject to such conditions as, may be reasonably necessary to avoid a loss by
BPI or an Affiliate of a tax deduction with respect to such portion of her annual bonus under
section 162(m) of the Internal Revenue Code and to avoid any inclusion of such portion of her
annual bonus or any other amount in the Employee’s gross income pursuant to section 409A(a)(l)(A)
of the Internal Revenue Code. Any such deferred amount shall be non-forfeitable, shall constitute
an unfunded, unsecured obligation of the Company, and until paid shall be deemed invested in such
hypothetical investments as the Employee may select from among the hypothetical investment options
that are available from time to time during the deferral period under
BPI’s excess 401(k) plan or,
if no such investment options are available at the time in question under that plan, then from
among the same hypothetical investment options that were available under BLI-NY’s excess 401(k)
plan on October 24, 2002 or a reasonable facsimile thereof;
(c) participation
in BPI’s stock incentive plan as from time to time in effect, subject
to the terms and conditions of such plan;
(d) the business and personal use of an automobile at Company
expense including, without limitation, payment or reimbursement of automobile
insurance and maintenance expenses in accordance with BLI-NY’s automobile policy
applicable to senior officers on the Commencement Date;
(e) participation in all health, welfare, savings and other employee
benefit and fringe benefit plans (including vacation pay plans or policies and life and
disability insurance plans) in which other senior officers of BPI or DRI participate during
the term of this Agreement, subject in all events to the terms and conditions of such plans
as in effect from time to time. Nothing in this paragraph (e) shall preclude BPI or any
Affiliate from amending or terminating any such plan at any time. The plans covered by
this paragraph (e) shall not include the annual incentive or stock incentive plans, which
are covered by paragraphs (b) and (c) above; and
(f) the Company shall pay, or reimburse the Employee for, the
premiums she incurs to maintain her current medical malpractice insurance coverage (or
equivalent coverage) during the term, such premiums payable or reimburseable by the
Company in no event to exceed $15,000 per year of the term.
5. Termination of Employment.
(a) Termination by BPI or an Affiliate without Good Cause or by the Employee for
Good Reason.
(i) If the Employee’s employment with the Company is
terminated by BPI or an Affiliate without Good Cause (except as an incident of assigning the rights
to Employee’s services to a Permitted Assignee in accordance with paragraph 13 (d) below) or is
terminated by the Employee for Good Reason, in either case during the term of this Agreement and
other than at the expiration of the term of this Agreement as
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the same may have been extended in accordance with the provisions of section 2 above (any such
employment termination being hereafter referred to as a “Compensable Termination”), the
Company shall pay the Employee the portion of her Base Salary accrued through the date of the
Compensable Termination and any other amounts to which she is entitled by law or pursuant to the
terms of any compensation or benefit plan or arrangement in which she participated prior to the
Compensable Termination and, in addition, subject to compliance by the Employee with the provisions
of sections 6 and 7 below, relating to confidential information, non-solicitation and disparaging
remarks, the Company shall, as liquidated damages or severance pay or both (whichever
characterization(s) will serve to validate the payments), and as additional consideration for the
Employee’s undertakings under sections 6 and 7 below, pay the Employee the following:
(A) her annual bonus for the fiscal year of BPI
preceding the fiscal year of BPI in which the Compensable Termination occurs, if unpaid at the time
of the Compensable Termination, the amount of such bonus to be determined by the Compensation
Committee of the BPI Board on a basis consistent with the prior bonus determinations with respect
to the Employee or, in the event a Change in Control or Potential Change in Control (as defined in
section 11 below) occurred before the Compensable Termination, consistent with the bonus
determinations with respect to the Employee prior to the Change in Control or Potential Change in
Control;
(B) a prorated annual bonus for the fiscal year of BPI in
which the Compensable Termination occurs, such prorated annual bonus to be
determined by multiplying the “Applicable Average Bonus” as defined below in this
subparagraph 5(a)(i)(B) by a fraction the numerator of which shall be the number of days
elapsed in such fiscal year through (and including) the date on which the Compensable
Termination occurs and the denominator of which shall be the number 365. For purposes
of this Agreement, the “Applicable Average Bonus” means the higher of (I) the average
annual bonus (including any deferred bonus) awarded to the Employee during the three
year period immediately preceding the Compensable Termination, or (II) the average
annual bonus (including any deferred bonus) awarded to the Employee during the three
fiscal years of BPI or, if applicable, BLI-NY that precede the fiscal year in which the
Compensable Termination occurs(annualizing any bonus awarded for less than a full year
of employment); provided that, if the Compensable Termination occurs after a Change in
Control or Potential Change in Control, the Applicable Average Bonus shall not be less
than the average annual bonus (including any deferred bonus) awarded to the Employee
during the three years preceding the date on which the Change in Control or Potential
Change in Control occurred; and
(C) an
amount of money (the “Severance Payment”)
equal to two and one-half (21/2) times the Employee’s “Annual Cash Compensation” as
hereafter defined, unless the Severance Payment is payable solely on account of the Employee’s
resignation for Good Reason pursuant to subparagraph 5(d)(v) below (relating to BPI or an Affiliate
giving the Employee notice of non-extension), in which case the Severance Payment shall be equal to
one and one-quarter
(11/4) times the
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Employee’s “Annual Cash Compensation” as hereafter defined. Except as otherwise provided
hereafter in this subparagraph 5(a)(i)(C), sixty percent (60%) of the Severance Payment shall be
paid in a lump sum within ten days after the date of the Compensable Termination. The forty percent
(40%) balance of the Severance Payment shall be paid in twelve (12) equal monthly installments one
of which shall be paid at the end of each of the first twelve (12) months after the date of the
Compensable Termination, provided, in the case of each of such 12 installments, that the Employee
has not accepted full-time or regular part-time employment with or regularly served as a consultant
to a for-profit pharmaceutical company prior to the date for payment of such installment, it being
understood and agreed that the foregoing condition shall not be violated by the Employee’s serving
as a member of a board of directors of a for-profit pharmaceutical company or by her performing
consulting services on an ad hoc basis for such a company. If a Change in Control or
Potential Change in Control as defined in section 11 below occurs (either before or after the
Compensable Termination), the Severance Payment (or, in the case of a Change in Control or
Potential Change in Control that occurs after the Compensable Termination, any portion thereof that
remains unpaid at the time such Change in Control or Potential Change in Control occurs) shall be
paid in a lump sum within ten days after the Compensable Termination (or, in the case of a Change
in Control or Potential Change in Control that occurs after the Compensable Termination, within ten
days after the Change in Control or Potential Change in Control occurs), and the two preceding
sentences of this subparagraph shall not apply. In addition, if the Severance Payment is payable
solely on account of the Employee’s resignation for Good Reason pursuant to subparagraph 5(d)(v)
below (relating to BPI or an Affiliate giving the Employee notice of non-extension), the Severance
Payment shall be paid in a lump sum within ten days after the Employee resigns for such Good
Reason, and the second and third preceding sentences of this subparagraph shall not apply. During
the 18 month period following a Compensable Termination, the Company shall also provide the
Employee with COBRA coverage at its expense. For purposes of this section 5, the Employee’s
“Annual Cash Compensation” shall mean the sum of (I) the Employee’s highest Base Salary
(i.e., one year’s salary at its highest rate), plus (II) the “Applicable Average Bonus” as defined
in subparagraph 5(a)(i)(B) above.
(ii) If the term of this Agreement as the same may have been extended in accordance with
the provisions of section 2 above is not extended or further extended because BPI or an Affiliate
gives written notice of non-extension to the Employee as provided in section 2 above, and there is
not Good Cause for termination of the Employee’s employment at the time of giving such notice, and
the Employee does not thereafter resign for Good Reason during the term of this Agreement as
permitted by paragraph 5(d)(v) below, then the Company, subject to fulfillment by the Employee of
her obligations under this Agreement during the balance of the term and her compliance with the
provisions of sections 6 and 7 below, relating to confidential information, non-solicitation and
disparaging remarks, shall, as non-renewal compensation, and as additional consideration for the
Employee’s undertakings under this Agreement including sections 6 and 7 below, pay the Employee an
amount of money (the “Non-Renewal Payment”) equal to the Employee’s Annual Cash
Compensation as defined in subparagraph 5(a)(i)(C) above, in addition to any other amounts to which
the Employee
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may be entitled hereunder (including without limitation her annual bonus pursuant to paragraph
4(b) above for the fiscal year of BPI in which her employment terminates and any amounts to which
she may be entitled under section 8, 9 or 10 below) or by law or pursuant to the terms of any
compensation or benefit plan or arrangement in which she participated before her employment
terminated. The Non-Renewal Payment shall be paid in a lump sum within ten days after the date on
which the Employee’s employment terminates. During the 18 month period following the termination of
her employment, the Company shall also provide the Employee with COBRA coverage at its expense.
(iii) The foregoing provisions of (including any payments
under) this paragraph 5(a) shall be in lieu of any severance pay that may be payable under any plan
or practice of BPI or any Affiliate, but shall be in addition to (and not in lieu of) any payments
to which the Employee may be entitled under sections 8, 9 and 10 below. Subparagraphs 5(a)(i)(C)
and 5(a)(ii) above are intended to be mutually exclusive, and in no event shall such subparagraphs,
either individually or collectively, be construed to require the Company to pay an amount of money
in excess of two and one-half (21/2) times the Employee’s Annual Cash Compensation under
such subparagraphs, either individually or collectively, in addition to the 18 months of COBRA
coverage provided for therein. The Employee shall not be required to mitigate the amount of any
payment or benefit provided for in this Agreement (including but not limited to any payment
provided for above in this paragraph 5 (a)) by seeking other employment or otherwise, nor shall any
compensation earned by the Employee in other employment or otherwise reduce the amount of any
payment or benefit provided for in this Agreement.
(b) Termination by BPI or an Affiliate for Good Cause or by the Employee without
Good Reason. If, during the term of this Agreement, the Employee’s employment by the Company
and its subsidiaries is terminated by BPI or an Affiliate for Good Cause or by the Employee without
Good Reason, the Employee shall not be entitled to receive any compensation under section 4 above
accruing after the date of such termination or any payment under paragraph 5(a) above. However, any
obligations of BPI or the Company under sections 8, 9 and 10 shall not be affected by such
termination of employment. The provisions of this paragraph 5(b) shall be in addition to, and not
in lieu of, any other rights and remedies the Company may have at law or in equity or under any
other provision of this Agreement in respect of such termination of employment. However, if during
the term of this Agreement the Employee’s employment is terminated by the Employee without Good
Reason and the Employee gives BPI at least 120 days’ advance notice of such termination, then the
Employee shall not have any obligation or liability to BPI or any Affiliate under this Agreement on
account of such termination of employment, but her obligations under Section 6 and 7 hereof and the
next sentence shall not be affected by such termination of employment.
(c) Good Cause Defined. For purposes of this Agreement,
BPI and its Affiliates shall have “Good Cause” to terminate the Employee’s employment by the
Company during the term of this Agreement only if:
(i) (A) the Employee fails to substantially perform her duties
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hereunder for any reason or to devote substantially all her business time exclusively to the
affairs of the Company (including Company activities on behalf of BPI or an Affiliate), other than
by reason of a medical condition that prevents the Employee from substantially performing her
duties hereunder even with a reasonable accommodation by the Company, or fails to obtain the
consent of the BPI Board to her service on the board of directors of another company, and (B) such
failure is not discontinued within a reasonable period of time, in no event to exceed 30 days,
after the Employee receives written notice from BPI or an Affiliate of such failure; or
(ii) the Employee commits an act of dishonesty resulting or
intended to result directly or indirectly in gain or personal enrichment at the expense of BPI
or an Affiliate, or engages in conduct that constitutes a felony in the jurisdiction in which
the Employee engages in such conduct; or
(iii) the Employee is grossly negligent or engages in willful misconduct or
insubordination in the performance of her duties hereunder; or
(iv) the Employee materially breaches her obligations under section 6 or paragraph 7(a)
below, relating to confidential information and non-solicitation.
Any foregoing provision of this paragraph 5(c) to the contrary notwithstanding, BPI and its
Affiliates shall not have “Good Cause” to terminate the Employee’s employment within three years
after a Change in Control or Potential Change in Control (as such terms are defined in section 11
below) unless (A) the Employee’s act or omission is willful and has a material adverse effect upon
BPI, (B) the BPI Board gives the Employee (I) written notice warning of its intention to terminate
the Employee for Good Cause if the specified act or omission alleged to constitute Good Cause is
not discontinued and, if curable, cured, and (II) a reasonable opportunity after receipt of such
written notice, but in no event less than two weeks, to discontinue and, if curable, cure the
conduct alleged to constitute Good Cause, and (C) the Employee fails to discontinue and, if
curable, cure the act or omission in question; provided that clauses (B) and (C) of this sentence
shall not apply with respect to conduct on the part of the Employee that constitutes a felony in
the jurisdiction in which the Employee engages in such conduct, and, provided further, that this
sentence shall not apply to conduct involving moral turpitude. For all purposes of this Agreement,
no act, or failure to act, on the Employee’s part shall be deemed “willful” unless done, or omitted
to be done, by her intentionally and in bad faith (i.e., without reasonable belief that her action
or omission was in furtherance of the interests of BPI or an Affiliate).
(d) Good Reason Defined. For purposes of this Agreement, the Employee shall have
“Good Reason” to terminate her employment during the term of this Agreement only if:
(i) the Company fails to pay or provide any amount or benefit that the Company is
obligated to pay or provide under section 4 above or section 8, 9 or
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10 below and the failure is not remedied within 30 days after BPI receives written notice from the
Employee of such failure; or
(ii) the Employee is assigned duties, responsibilities or
reporting relationships not contemplated by section 3 above without her consent, or her duties or
responsibilities or power or authority contemplated by section 3 above are limited in any respect
materially detrimental to her, and in either case the situation is not remedied within 30 days
after BPI receives written notice from the Employee of the situation; or
(iii) she is removed from, or not elected or reelected to, the BPI Board, the DRI Board,
the board of directors of any successor to BPI or DRI, or the office, title or position of Senior
Vice President of BPI or President and Chief Operating Officer of DRI, and BPI and the Affiliates
do not have Good Cause for doing so; or
(iv) BPI or an Affiliate relocates her office outside of a forty (40) mile radius from
her residence on the date of this Agreement without her written consent (given in a personal rather
than representative capacity), and the situation is not remedied within 30 days after BPI receives
written notice from the Employee of the situation; or
(v) BPI or an Affiliate gives the Employee written notice, in the manner set forth in
paragraph 13(e) or (f) below, prior to any Extension Effective Date, that the term of this
Agreement that is in effect at the time such written notice is given is not to be extended or
further extended, as the case may be; provided that the giving of such written notice to the
Employee shall constitute Good Reason only if and when the Employee shall have performed such of
her duties and responsibilities for such period of time, in no event to exceed ninety (90) days
after the giving of such notice, as the CEO or the BPI Board may reasonably request in writing to
transition her duties and responsibilities; or
(vi) a Change in Control occurs and as a result thereof either
(A) equity securities of BPI cease to be publicly-traded, or (B) the Employee is not
elected or designated to serve as the Senior Vice President of BPI or its survivor and as
the sole President and Chief Operating Officer of DRI or its survivor in the Change in
Control; or
(vii) a Change in Control or Potential Change in Control occurs and (A) the dollar value
of the stock optioned to the Employee annually thereafter is less than the average annual dollar
value of the stock that was optioned to the Employee during the four years prior to the Change in
Control or Potential Change in Control, or
(B) the material terms of such options (including without limitation vesting schedules)
are less favorable to the Employee than the material terms of the options that were
granted to the Employee during the four years prior to the Change in Control or Potential
Change in Control, and in either case (A) or (B) the situation is not remedied within 30
days after BPI receives written notice from the Employee of the situation. For purposes
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of (A) and (B) of this subparagraph 5(d)(vii), if free-standing stock appreciation rights are
granted to the Employee, the stock subject to such rights shall be considered stock that is
optioned to the Employee, and if alternative stock appreciation rights (aka tandem stock
appreciation rights) are granted to the Employee, the stock appreciation rights shall be considered
terms of the options to which they are alternative/tandem; or
(viii) BPI or a Permitted Assignee attempts to assign any of its
rights or obligations under this Agreement other than in accordance with paragraph 13(d) below
and does not remedy the situation within 30 days after BPI receives written notice from the
Employee of the situation.
In no event shall the Employee’s continued employment after any of the foregoing constitute
her consent to the act or omission in question, or a waiver of her right to terminate her
employment for Good Reason hereunder on account of such act or omission.
(e) Disability
(i) Notwithstanding any provision of this Agreement to the contrary, (A) if during the
term of this Agreement as the same may be extended from time to time pursuant to section 2 above, a
medical condition prevents the Employee, even with a reasonable accommodation by the Company, from
substantially performing her duties hereunder (it being understood that a transitory illness, such
as a cold or flu, that prevents the Employee from substantially performing her duties hereunder
during a brief period is not such a medical condition), then until the date, if any, on which the
Employee recovers from such medical condition (the “Evaluation Period”), BPI or an Affiliate may
terminate the Employee’s employment only pursuant to subparagraph 5(e)(ii) below (a “Disability
Termination”) or for willful misconduct constituting Good Cause under paragraph 5(c) above, and (B)
if any notice of non-extension of the term of this Agreement was given before the Evaluation
Period, or is given during the Evaluation Period, whether by BPI, an Affiliate or the Employee,
pursuant to section 2 above, and, but for this clause (B), the term of this Agreement would expire
during the Evaluation Period as a result of such notice of non-extension having been given, then
the term of this Agreement will automatically be extended without action by any party until the
Employee recovers from such medical condition. For purposes of this paragraph 5(e), the Employee
will be deemed to recover from a medical condition only if and when she both (I) has been able to
substantially perform her duties hereunder (either with or without a reasonable accommodation by
the Company) for more than six months, consecutive or non-consecutive, within any period of 12 or
fewer consecutive months commencing on or after the commencement of the Evaluation Period, and (II)
is not entitled to receive long-term disability (“LTD”) benefits under a LTD plan of BPI or a
Subsidiary.
(ii) Except as otherwise provided in subparagraph 5(e)(i)
above, during the Evaluation Period, BPI or an Affiliate may terminate the Employee’s employment
only in the event of a “Disability”, which for this purpose means that a medical condition either
(A) has prevented the Employee, even with a reasonable accommodation by the Company, from
substantially performing her duties hereunder for
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six months, consecutive or non-consecutive, in any period of 12 or fewer consecutive months, or (B)
entitles the Employee to receive LTD benefits under a LTD plan of BPI or any Subsidiary. The
Company will give the Employee at least ten (10) days advance written notice of a Disability
Termination. Notwithstanding any provision of this Agreement to the contrary, a Disability
Termination will not be treated as a termination to which the provisions of paragraph 5(a) or 5(b)
apply.
(iii) In the event of a Disability Termination, the Company will pay or provide the
Employee with the following:
(A) With respect to the period ending on the date of the
Disability Termination, the Employee will receive all of the compensation and benefits provided by
Section 4 above. The amount of any compensation payable to the Employee with respect to the period
ending on the date of the Disability Termination may be reduced by (I) any payments which the
Employee receives with respect to the same period because of short- or long-term disability under
any disability plan of BPI or any Subsidiary, and (II) any income (whether from Social Security,
workers compensation or any other source) that is deducted in computing the amount of such payments
under any disability plan of BPI or any Subsidiary;
(B) During the period from the date of the Disability
Termination until the first to occur of (I) the date, if any, on which the Employee recovers from
the disabling medical condition, (II) the Employee’s attainment of age 65, and (III) the death of
the Employee (such period being referred to in subparagraph 5(e)(iii)(C) below as the “LTD
Period”), the Company will pay the Employee a monthly amount of money equal to the excess, if any,
of (aa) over (bb) where (aa) is 60% of one-twelfth (l/12th) of the Employee’s Base
Salary (as defined in subparagraph 4(a) above) immediately before the Disability Termination (i.e.,
60% of the Employee’s monthly salary at its highest rate), and (bb) is the sum of (1) the monthly
LTD benefit (if any) which the Employee receives with respect to the same month under a LTD plan of
BPI or any Subsidiary, plus (2) any income (whether from Social Security, workers compensation or
any other source) that is deducted in computing the amount of such monthly LTD benefit; and
(C) Promptly following the LTD Period as defined in
subparagraph 5(e)(iii)(B) above (and whether or not the Employee received payments pursuant to that
subparagraph during the LTD Period), the Company will pay the Employee or her estate or designated
beneficiary a lump sum amount of money equal to the excess, if any, of (I) over (II) where (I) is
the Severance Payment as defined in subparagraph 5(a)(i)(C) above, and (II) is the cumulative
monthly payments made by the Company to the Employee pursuant to subparagraph 5(e)(iii)(B) above
(if any). In calculating the amount payable pursuant to this subparagraph 5(e)(iii)(C) (including
the payments made pursuant to subparagraph 5(e)(iii)(B) above), no adjustments will be made for
interest or otherwise for the time value of money.
The payments and benefits provided by the foregoing provisions of this subparagraph 5(e)(iii) are
in addition to and not in lieu of any other amounts to which the Employee is
Page 11 of 24
entitled by law or pursuant to the terms of any compensation or benefit plan or arrangement
in which she participated prior to the Disability Termination, and any amounts payable
pursuant to section 8, 9 or 10 below.
6. Confidential Information. The Employee agrees not to disclose, either
while in the Company’s employ or at any time thereafter, to any person not employed by
BPI or an Affiliate, or not engaged to render services to BPI or an Affiliate, except with
the prior written consent of an authorized officer of BPI or an Affiliate or as necessary or
appropriate for the performance of her duties hereunder, any confidential information
obtained by her while in the employ of the Company, including, without limitation,
information relating to any of the inventions, processes, formulae, plans, devices,
compilations of information, research, methods of distribution, suppliers, customers,
client relationships, marketing strategies or trade secrets of BPI or any Affiliate;
provided, however, that this provision shall not preclude the Employee from use or
disclosure of information known generally to the public or of information not considered
confidential by persons engaged in the businesses conducted by BPI or any Affiliate, or
from disclosure required by law or court order. The Employee also agrees that upon
leaving the Company’s employ she will not take with her, without the prior written
consent of an authorized officer of the Company, and she will surrender to the Company,
any record, list, drawing, blueprint, specification or other document or property of BPI or
an Affiliate, together with any copy or reproduction thereof, mechanical or otherwise,
which is of a confidential nature relating to BPI or an Affiliate, or without limitation,
relating to its or their methods of distribution, suppliers, customers, client relationships,
marketing strategies or any description of any formulae or secret processes, or which was
obtained by her or entrusted to her during the course of her employment with the
Company.
7. Restrictive Covenants
(a) Non-Solicitation. Employee covenants and agrees that, during her employment
by the Company and during the one year period immediately following the termination of her
employment with the Company for any reason (including, without limitation, a termination of
employment by BPI or an Affiliate without cause and a voluntary termination of employment by the
Employee, in either case whether during the term of this Agreement, at the expiration of the term
of this Agreement or at any time thereafter), she will not solicit or attempt to persuade any
employee of BPI or any Affiliate (except the Employee’s personal secretary or administrative
assistant), or any other person who performs services for BPI or an Affiliate at the time the
Employee’s employment terminates or at any time within one year thereafter, to terminate or reduce
or refrain from engaging in his or her employment or other service relationship with BPI or an
Affiliate; provided, however, that responding to inquiries from any such employees or other persons
that are not initiated by the Employee, and subsequently hiring such employees or other persons
following the termination of their employment with BPI and any Affiliates shall be permitted.
Page 12 of 24
(b) Specific Enforcement. Employee recognizes and agrees that, by
reason of her knowledge, experience, skill and abilities, her services are extraordinary
and unique, that the breach or attempted breach of any of the restrictions set forth above
in this section 7 will result in immediate and irreparable injury for which the Company
will not have an adequate remedy at law, and that the Company shall be entitled to a
decree of specific performance of those restrictions and to a temporary and permanent
injunction enjoining the breach thereof, and to seek any and all other remedies to which
the Company may be entitled, including, without limitation, monetary damages, without
posting bond or furnishing security of any kind.
(c) Restrictions Reasonable. Employee specifically and expressly
represents and warrants that (i) she has reviewed and agreed to the restrictive covenants
contained in this section 7 and their contemplated operation after receiving the advice of
counsel of her choosing; (ii) she believes, after receiving such advice, that the restrictive
covenants and their contemplated operation are fair and reasonable; (iii) she will not seek
or attempt to seek to have the restrictive covenants declared invalid, and, after receiving
the advice of counsel, expressly waives any right to do so; and (iv) if the full breadth of
any restrictive covenant and/or its contemplated operation shall be held in any fashion to
be too broad, such covenant or its contemplated operation, as the case may be, shall be
interpreted in a manner as broadly in favor of the beneficiary of such covenant as is
legally permissible. Employee recognizes and agrees that the restrictions on her activities
contained in this section 7 are required for the reasonable protection of BPI and its
investments; and that the restriction on his activities set forth in paragraph 7(a) will not
deprive the Employee of the ability to earn a livelihood.
(d) Non-Disparagement. Employee covenants and agrees that, during
the one year period immediately following the termination of her employment with the
Company for any reason (including, without limitation, a termination of employment by
BPI or an Affiliate without cause and a voluntary termination of employment by the
Employee, in either case whether during the term of this Agreement, at the expiration of
the term of this Agreement or at any time thereafter), she will not make disparaging
remarks about BPI or any Affiliate or any of their officers, directors or employees, unless
required by law or reasonably necessary to assert or defend her position in a bona fide
dispute arising out of or relating to this Agreement or the breach thereof.
(e) Effect on Termination Payments. The Employee recognizes and
agrees that the Company shall not be obligated to make any payments provided for in
paragraph 5(a) or 5(e) above if the Employee violates the provisions of section 6 or
paragraph 7(a) or 7(d) above during the one year period immediately following the
termination for any reason of her employment with the Company. In addition, the
Employee recognizes and agrees that, if the Employee violates such provisions, the
Company may recoup any payments the Company may have theretofore made pursuant
to paragraph 5(a) or 5(e) above and any payments it may thereafter make under paragraph
5(a) or 5(e). The foregoing provisions of this paragraph 7(e) shall be in addition to and
not by way of limitation of any other rights and remedies the Company may have in
respect of the violation in question.
Page 13 of 24
8. Indemnification
To the fullest extent permitted by applicable law, the Company shall indemnify, defend and
hold harmless the Employee from and against any and all claims, demands, actions, causes of action,
liabilities, losses, judgments, fines, costs and expenses (including reasonable attorneys’ fees and
settlement expenses) arising from or relating to her service or status as an officer, director,
employee, agent or representative of BPI or any Affiliate, or in any other capacity in which the
Employee serves or has served at the request of, or for the benefit of, BPI or an Affiliate. The
Company’s obligations under this section 8 shall be in addition to, and not in derogation of, any
other rights the Employee may have against BPI or any Affiliate to indemnification or advancement
of expenses, whether by statute, contract or otherwise.
9. Certain Additional Payments by the Company
(a) Anything in this Agreement (other than the second sentence of this
paragraph 9(a)) to the contrary notwithstanding, in the event it shall be determined that
any payment or distribution by BPI or an Affiliate to or for the benefit of the Employee
(whether paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this section 9) (a “Payment”), would be subject to the excise tax imposed
by Section 4999 of the United States Internal Revenue Code (the “Code”) or any interest
or penalties are incurred by the Employee with respect to such excise tax (such excise
tax, together with any such interest and penalties, are hereinafter collectively referred to
as the “Excise Tax”), then the Employee shall be entitled to receive an additional
payment (a “Gross-Up Payment”) in an amount such that after payment by the Employee
of all taxes and any benefits that result from the deducibility by the Employee of such
taxes (including, in each case, any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the
Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed
upon the Payments. However, if it shall be determined that none of the Payments would
be subject to the Excise Tax if the total Payments were reduced in the aggregate by
$25,000 or less, then in that event the total Payments shall be reduced by the smallest
amount (in no event to exceed $25,000 in the aggregate) necessary to ensure that none of
the Payments will be subject to the Excise Tax. The decision as to which Payments shall
be so reduced shall be made by the Employee, unless allowing the decision to be made by
the Employee will result in any income inclusion pursuant to Code section
409A(a)(l)(A), in which case the Payments shall be reduced in the chronological order in
which they are payable to or on behalf of the Employee.
(b) Subject to the provisions of paragraph 9(a) above and 9(c) below,
all determinations required to be made under this section 9, including whether and when
a Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, and whether Payments are to
be reduced pursuant to the second sentence of paragraph 9(a) above, shall be made by
Page 14 of 24
Deloitte & Touche or such other certified public accounting firm as may be designated by the
Employee (the “Accounting Firm”) which shall provide detailed supporting calculations both to BPI
and the Employee within 15 business days of the receipt of notice from the Employee that there has
been a Payment, or such earlier time as is requested by BPI. In the event that the Accounting Firm
is serving as accountant or auditor for the individual, entity or group effecting the “change in
ownership or effective control” or “change in the ownership of a substantial portion of assets”
(within the meaning of Code section 280G(b)(2)(A)) that gives rise to the Excise Tax, or in the
event that the Accounting Firm for any reason is unable or unwilling to make the determinations
required hereunder, the Employee shall appoint another nationally recognized accounting firm to
make the determinations required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by
the Company. Any Gross-Up Payment, as determined pursuant to this section 9, shall be paid by the
Company to the Employee within five days of the receipt of the Accounting Firm’s determination. Any
determination by the Accounting Firm shall be binding upon the Company and the Employee. As a
result of the uncertainty in the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will
not have been made by the Company should have been made (an “Underpayment”), consistent with the
calculations required to be made hereunder. In the event that BPI exhausts its remedies pursuant to
paragraph 9(c) and the Employee thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred and any such
Underpayment, along with any penalty and interest imposed with respect to such Underpayment, shall
be promptly paid by the Company to or for the benefit of the Employee.
(c) The Employee shall notify BPI in writing of any claim by the Internal Revenue
Service that, if successful, would require either the payment by the Company of the Gross-Up
Payment or the reduction of Payments pursuant to the second sentence of paragraph 9(a) above. Such
notification shall be given as soon as practicable but no later than ten business days after the
Employee is informed in writing of such claim and shall apprise BPI of the nature of such claim and
the date on which such claim is requested to be paid. The Employee shall not pay such claim prior
to the expiration of the 30-day period following the date on which she gives such notice to BPI (or
such shorter period ending on the date that any payment of taxes with respect to such claim is
due). If BPI notifies the Employee in writing prior to the expiration of such period that it
desires to contest such claim, the Employee shall:
(i) give BPI any information reasonably requested by BPI relating to such claim,
(ii) take such action in connection with contesting such claim as BPI shall reasonably
request in writing from time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by BPI,
Page 15 of 24
(iii) cooperate with BPI in good faith in order effectively to contest such claim, and
(iv) permit BPI to participate in any proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and shall indemnify and
hold the Employee harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such representation and payment
of costs and expenses. Without limitation on the foregoing provisions of this paragraph 9(c), BPI
shall control all proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either direct the Employee
to pay the tax claimed and xxx for a refund or contest the claim in any permissible manner, and the
Employee agrees to prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as BPI shall determine,
provided, however, that if BPI directs the Employee to pay such claim and xxx for a refund, the
Company shall, if permissible under Section 402 of the Xxxxxxxx-Xxxxx Act of 2002, advance the
amount of such payment to the Employee, on an interest-free basis or, if such an advance is not
permissible thereunder, pay the amount of such payment to the Employee as additional compensation,
and shall indemnify and hold the Employee harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with respect to such
advance or additional compensation; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Employee with respect to which
such contested amount is claimed to be due is limited solely to such contested amount. Furthermore,
BPI’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Employee shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Employee of an amount advanced or paid by the Company
pursuant to paragraph 9(a) or 9(c), the Employee becomes entitled to receive any refund with
respect to such claim, the Employee shall (subject to the Company’s complying with the requirements
of paragraph 9(c)) promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the
Employee of an amount advanced by the Company pursuant to paragraph 9(c), a determination is made
that the Employee shall not be entitled to any refund with respect to such claim and BPI does not
notify the Employee in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance shall be forgiven and shall not
be required to be repaid and the amount of such advance shall offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid.
Page 16 of 24
10. Certain Enforcement Matters
(a) If, after a Change in Control or Potential Change in Control, a
dispute arises (i) with respect to this Agreement or the breach thereof, or (ii) with respect
to the Employee’s or the Company’s or BPI’s rights or obligations under this Agreement,
including but not limited to any such dispute between the Employee and BPI, the
Company shall pay or reimburse the Employee for all reasonable costs and expenses
(including court costs, arbitrators’ fees and reasonable attorneys’ fees and disbursements)
the Employee incurs in connection with such dispute, including without limitation costs
and expenses she incurs to obtain payment or otherwise enforce her rights under this
Agreement, or to obtain payment of costs and expenses due under this paragraph 10(a).
In addition, the Company shall pay the Employee such additional amount (a “Gross Up”)
as will be sufficient, after the Employee pays her tax liability with respect to the Gross
Up from the Gross Up, to pay all of her federal, state and local tax liability with respect to
any costs and expenses that are paid by the Company pursuant to this paragraph 10(a).
The Company shall promptly pay or reimburse the Employee for all such costs and
expenses as she incurs them, upon presentation of reasonable documentation of such
costs and expenses, and shall promptly pay the related Gross Up as and when it pays or
reimburses costs and expenses. The Employee shall not be obligated to repay any such
costs, expenses or Gross Up unless it is finally determined by the trier of fact in a non-
appealable judicial or arbitral decision or ruling (as applicable) that the Employee’s
principal positions with respect to the principal matter(s) in dispute were unreasonable
and pursued in bad faith.
(b) Any payments to which the Employee may be entitled under this
Agreement, including, without limitation, under section 5, 8, 9 or 10 hereof, shall be
made forthwith on the applicable date(s) for payment specified in this Agreement. If for
any reason the amount of any payment due to the Employee cannot be finally determined
on that date, such amount shall be estimated on a good faith basis by the Company and
the estimated amount shall be paid no later than within 10 days after such date. As soon
as practicable thereafter, the final determination of the amount due shall be made and any
adjustment requiring a payment to or from the Employee shall be made as promptly as
practicable.
(c) Any controversy or claim arising, after a Change in Control or
Potential Change in Control, out of or related to this Agreement or the breach thereof,
shall be settled by binding arbitration in the City of New York, in accordance with the
employment dispute arbitration rules of the American Arbitration Association then in
effect, and the arbitrator’s decision shall be binding and final and judgment upon the
award rendered may be entered in any court having jurisdiction thereof, except that the
Employee may elect to have any such controversy or claim settled by judicial
determination in lieu of arbitration by bringing a court action, if she is the plaintiff or,
if she is not the plaintiff, demanding such judicial determination within the time to answer
any complaint in any arbitration action that may be commenced.
Page 17 of 24
11. Change in Control
(a) The term “Change in Control” as used in this Agreement means a change of
control of BPI of a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), whether or not BPI is then subject to such reporting requirement; provided
that, whether or not any of the following events would constitute a change of control of such a
nature, a Change in Control shall be deemed to occur for purposes of this Agreement if and when any
of the following events occur:
(i) any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act) (a “Person”), other than—
(A) BPI,
(B) a Subsidiary,
(C) a trustee or other fiduciary holding securities under
an employee benefit plan of BPI or a Subsidiary, or
(D) an underwriter engaged in a distribution of BPI
stock to the public with BPI’s written consent,
becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of Voting Securities that represent more than thirty percent (30%) of the combined
voting power of the then outstanding Voting Securities. However, if the Person in question is an
institutional investor whose investment in Voting Securities is purely passive when such Person
becomes such a more than thirty percent beneficial owner of Voting Securities, then such event
(i.e., such Person’s becoming a more than thirty percent beneficial owner of Voting Securities)
shall not be deemed to constitute a Change in Control under this subparagraph 11(a)(i) for so long
as (and only for so long as) such Person’s investment in Voting Securities remains purely passive;
or
(ii) the stockholders of BPI approve a merger, consolidation, recapitalization or
reorganization of BPI or a Subsidiary, reverse split of any class of Voting Securities, or an
acquisition of securities or assets by the Company or a Subsidiary, or consummation of any such
transaction if stockholder approval is not obtained, other than (A) any such transaction in which
the holders of outstanding Voting Securities immediately prior to the transaction receive, with
respect to such Voting Securities (or, in the case of a transaction in which BPI is the surviving
corporation or a transaction involving a Subsidiary, retain), voting securities of the surviving or
transferee entity representing more than fifty percent (50%) of the total voting power outstanding
immediately after such transaction, with the voting power of each such continuing holder relative
to other such continuing holders not substantially altered in the transaction, or (B) any such
transaction which would result in BPI or a Related Party beneficially owning
Page 18 of 24
more than 50 percent of the voting securities of the surviving entity outstanding
immediately after such transaction; or
(iii) the stockholders of BPI approve a plan of complete liquidation of BPI or an
agreement for the sale or disposition by BPI of all or substantially all of BPI’s assets other than
any such transaction which would result in a Related Party owning or acquiring more than 50 percent
of the assets owned by BPI immediately prior to the transaction; or
(iv) the persons who were members of the BPI Board
immediately before a tender or exchange offer for shares of Common Stock of BPI by any person other
than BPI or a Related Party, or before a merger or consolidation of BPI or a Subsidiary, or
contested election of the BPI Board, or before any combination of such transactions, cease to
constitute a majority of the BPI Board as a result of such transaction or transactions.
(b) For purposes of this Agreement, including paragraph 1l(a) above:
(i) the term “Related Party” shall mean (A) a Subsidiary, (B) an employee or
group of employees of BPI or any Subsidiary, (C) a trustee or other fiduciary holding securities
under an employee benefit plan of BPI or any Subsidiary, or (D) a corporation or other form of
business entity owned directly or indirectly by the stockholders of BPI in substantially the same
proportion as their ownership of Voting Securities;
(ii) the term “Subsidiary” means a corporation or other form of business
association of which shares (or other ownership interests) having more than 50% of the voting power
are, or in the future become, owned or controlled, directly or indirectly, by BPI; and
(iii) the term “Voting Securities” shall mean any securities of BPI which carry
the right to vote generally in the election of directors.
(c) For purposes of this Agreement, a “Potential Change in Control”
means that (i) BPI or a Subsidiary enters into an agreement, the consummation of which
would result in the occurrence of a Change of Control; or (ii) the BPI Board adopts a
resolution to the effect that, for purposes of this Agreement, a potential change in control
has occurred.
(d) A “Change in Control” as such term is used in this Agreement
shall also be deemed to occur if either BLI-DE, or a Permitted Assignee to which BPI
assigns any of its rights or obligations under this Agreement in accordance with
paragraph 13(d) below, ceases to be an Affiliate.
Page 19 of 24
12. Severability; Survival
(a) In the event that any provision of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining provisions of this
Agreement not so invalid or unenforceable shall be unaffected thereby and shall remain
in full force and effect to the fullest extent permitted by law; and
(b) Any provision of this Agreement which may for any reason be
invalid or unenforceable in any jurisdiction shall remain in effect and be enforceable in
any jurisdiction in which such provision shall be valid and enforceable.
(c) The provisions of sections 6, 7, 8, 9 and 10 and paragraph 5(e) of
this Agreement, and any other provision of this Agreement which is intended to apply,
operate or have effect after the expiration or termination of the term of this Agreement, or
at a time when the term of this Agreement may have expired or terminated, shall survive
the expiration or termination of the term of this Agreement for any reason.
13. General Provisions
(a) No right or interest to or in any payments to be made under this
Agreement shall be subject to anticipation, alienation, sale, assignment, encumbrance,
pledge, charge or hypothecation or to execution, attachment, levy or similar process, or
assignment by operation of law. All payments to be made by the Company hereunder
shall be subject to the withholding of such amounts as the Company may determine it is
required to withhold under the laws or regulations of any governmental authority,
whether foreign, federal, state or local.
(b) To the extent that the Employee acquires a right to receive
payments from the Company under this Agreement, such right shall be no greater than
the right of an unsecured general creditor of the Company. All payments to be made
hereunder shall be paid from the general funds of the Company and no special or separate
fund shall be established and no segregation of assets shall be made to assure payment of
any amount hereunder.
(c) This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of New York, without giving effect to the
principles of conflicts of laws of that State.
(d) This Agreement shall be binding upon and inure to the benefit of
BPI, its successors and permitted assigns, and the Employee, her heirs, devisees,
distributees and legal representatives. BPI may assign any or all of its rights and
obligations under this Agreement to any Subsidiary or Affiliate (collectively,
“Permitted
Assignees”), and, if any rights or obligations are assigned pursuant to this sentence,
the assignee may thereafter assign any or all of such rights and obligations to any other
Permitted Assignee; provided that (i) the Employee’s title, authority, duties and
responsibilities, reporting relationships and office location immediately before any such
Page 20 of 24
assignment are not changed in any respect materially detrimental to the Employee in connection
with such assignment without the written consent of the Employee (given in a personal capacity
rather than a representative capacity), (ii) no such assignment shall relieve BPI of any past,
present or future payment or benefit obligation hereunder without the express written consent of
the Employee (also given in a personal capacity), and (iii) no assignment may be made after a
Change in Control or Potential Change in Control without the express written consent of the
Employee (also given in a personal capacity). In the event of an assignment in accordance with this
paragraph, (A) the term “Company” as used in this Agreement shall be deemed to refer, with respect
to the period commencing on the effective date of such assignment, to the Permitted Assignee to
which such rights or obligations are assigned and, with respect to any obligations that are
assigned hereunder, to BPI and such Permitted Assignee jointly and severally, and (B) the term
“BPI” as used in this Agreement shall continue to refer exclusively to BPI as defined on page 1 of
this Agreement and its successors. The foregoing provisions of this paragraph are intended to
enable BPI to assign its right to employ the Employee under this Agreement to an Affiliate but only
if (I) such assignment does not change to the material detriment of the Employee her title,
authority, duties, responsibilities, reporting relationships, office location or compensation, (II)
such assignment does not result in any Affiliate replacing BPI as an obligor under this Agreement,
and (III) the Employee expressly consents in writing to any assignment that is to occur after a
Change in Control or Potential Change in Control. For the avoidance of doubt, as an example, the
Employee would not have Good Reason under subparagraph 5(d)(ii), (iii) or (iv) above if as a result
of an assignment in accordance with this paragraph the Employee were to cease to be employed by BPI
as Senior Vice President of BPI and President and Chief Operating Officer of DRI, she were employed
by the Permitted Assignee as Senior Vice President of BPI and President and Chief Operating Officer
of DRI, she were to continue to serve on the BPI Board and the DRI Board, and her authority,
duties, responsibilities, reporting relationships and office location were to continue to be those
described in subparagraphs 3(a) and 3(b) above as in effect immediately before the assignment. The
term “BPI” as used in this Agreement shall include any successor to BPI by merger or operation of
law, and the term “Company” shall include any successor to the relevant Permitted Assignee. The
rights and obligations of the Employee hereunder are personal to the Employee and may not be
assigned by the Employee; provided that nothing herein shall prevent the Employee from assigning
the right to any amount that may be payable under this Agreement after the death of the Employee by
will or the laws of descent and distribution or to a beneficiary designated by the Employee with
the written consent of BPI.
(e) Any notice or other communication to BPI pursuant to any provision of this Agreement
shall be given in writing and will be deemed to have been delivered:
(i) when delivered in person to the General Counsel of BPI; or
(ii) one week after it is deposited in the United States certified or registered mail,
postage prepaid, addressed to the General Counsel of BPI at 000 Xxxxxxxx Xxxxx Xxxx, Xxxxxxxxx
Xxxx, Xxx Xxxxxx 00000 or at such other address of
Page 21 of 24
which BPI may from time to time give the Employee written notice in accordance with paragraph 13(f)
below.
(f) Any notice or other communication to the Employee pursuant to
any provision of the Agreement shall be given in writing and will be deemed to have
been delivered:
(i) when delivered to the Employee in person, or
(ii) one week after it is deposited in the United States certified or registered mail,
postage prepaid, addressed to the Employee at her address as it appears on the records of the
Company or at such other address of which the Employee may from time to time give BPI written
notice in accordance with paragraph 13(e) above.
(g) No provision of this Agreement may be amended, modified or
waived unless such amendment, modification or waiver shall be agreed to in a writing
signed by the Employee and an authorized officer of BPI.
(h) This instrument contains the entire agreement of the parties relating to the subject
matter of this Agreement and supersedes and replaces all prior agreements and understandings with
respect to such subject matter, and the parties have made no agreements, representations or
warranties relating to the subject matter of this Agreement which are not set forth herein.
(i) BPI, BLI-DE and DRI agree to amend this Agreement on or before December 31, 2005
(or such later date, if any, to which the December 31, 2005 date referred to in Q&A-19 of IRS
Notice 2005-1 is extended) in the respects that BPI reasonably determines to be necessary or
advisable to enable the Employee to receive all amounts and benefits payable under this Agreement
at the times herein provided (or as close thereto as is practicable and permissible) without
inclusion of any amounts or benefits in the Employee’s income pursuant to Section 409A(a)(l)(A) of
the Code. BPI, BLI-DE and DRI also agree to use commercially reasonable efforts to administer this
Agreement, and operate any deferred compensation plans in which the Employee participates from time
to time that are aggregated with this Agreement for purposes of Section 409A of the Code (e.g.,
account balance plans, nonaccount balance plans, and plans that are neither account balance nor
nonaccount balance plans), in good faith compliance with Section 409A of the Code to the extent
necessary to avoid inclusion of any amounts or benefits payable hereunder in the Employee’s income
pursuant to Section 409A(a)(l)(A) of the Code.
Page 22 of 24
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
above written.
| XXXX PHARMACEUTICALS, INC. | ||||
| By: | /s/ Xxxx Xxxxxx | |||
[SEAL] |
||
Attest: |
||
/s/
Xxxxxxxxxx Xxxxxxxx
|
||
Secretary |
| XXXX LABORATORIES, INC., a Delaware corporation |
||||
| By: | /s/ Xxxxxxxxx X. Xxxxxxx | |||
[SEAL] Attest: |
||
/s/
Xxxxxxxxxx Xxxxxxxx
|
| DURAMED RESEARCH INC. | ||||
| By: | ||||
[SEAL] Attest: |
||
/s/
Xxxxxxxxxx Xxxxxxxx
|
||
Secretary |
| /s/ Xxxxxx Xxx-Xxxxxx | ||
| Employee |
Page 23 of 24
Appendix
Examples
Illustrating Intended Operation of Extension Provisions of Paragraph 2
Example 1:
Facts: BPI and its Affiliates do not give the Employee, and the Employee does not
give BPI, written notice of non-extension before the date that is six months before
the third anniversary of the Commencement Date.
Result: Effective as of the date that is six months before the third anniversary of
the Commencement Date, the term of the Agreement is extended 12 months, so that it
will expire on the fourth anniversary of the Commencement Date unless further
extended in accordance with the provisions of Paragraph 2 of the Agreement.
Example 2:
Facts: BPI or an Affiliate gives the Employee, or the Employee gives BPI,
written notice of non-extension before the date that is six months before the
third anniversary of the Commencement Date.
Result: The term of the Agreement is not extended, and expires on the third
anniversary of the Commencement Date.
Example 3:
Facts: BPI and its Affiliates do not give the Employee, and the Employee does not
give BPI, written notice of non-extension before the date that is six months before
the fourth anniversary of the Commencement Date.
Result: Effective as of the date that is six months before the fourth anniversary of
the Commencement Date, the term of the Agreement as extended in accordance with
Example 1 above is further extended 12 months, so that it will expire on the fifth
anniversary of the Commencement Date unless further extended in accordance with the
provisions of Paragraph 2 of the Agreement.
Example 4:
Facts: BPI or an Affiliate gives the Employee, or the Employee gives BPI, written
notice of non-extension on or after the date that is six months before the fourth
anniversary of the Commencement Date and before the date that is six months before
the fifth anniversary of the Commencement Date.
Result: The term of the Agreement as extended is not further extended, and
expires on the fifth anniversary of the Commencement Date.
Page 24 of 24
