AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit
10.4
AMENDED
AND RESTATED
This
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made this
5th
day of
August, 2008, by and between Albany Molecular Research, Inc., a Delaware
corporation (the “Company”), and Xxxxxxxx X. Xxxxx (the
“Executive”).
WHEREAS,
the Executive is an officer and key employee of the Company;
WHEREAS,
the parties hereto desire to assure that the Executive’s knowledge and
familiarity with the business of the Company will continue to be available
to
the Company after the date hereof; and
WHEREAS,
the Executive and the Company entered into an amended and restated Employment
Agreement on June 30, 2006, and wish to amend and restate in full such agreement
to address issues raised by Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”).
NOW,
THEREFORE, in consideration of the mutual promises and covenants herein
contained, the parties agree as follows:
1. Employment.
Subject
to the provisions of Section 6, the Company hereby employs the Executive and
the
Executive accepts such employment upon the terms and conditions hereinafter
set
forth.
2. Term
of Employment.
The
term of the Executive’s employment pursuant to this Agreement shall commence on
and as of the date hereof (the “Effective Date”) and shall remain in effect for
a period of two (2) years from the Effective Date (the “Term”). The Term shall
be renewed automatically for periods of two (2) years (each a “Renewal Term”)
commencing at the third anniversary of the Effective Date and on each subsequent
anniversary thereafter, unless notice that this Agreement will not be extended
is given by either the Executive or the Company not less than one-hundred (180)
days prior to the expiration of the Term (as extended by any Renewal Term).
The
period during which the Executive serves as an employee of the Company in
accordance with and subject to the provisions of this Agreement is referred
to
in this Agreement as the “Term of Employment.”
3. Capacity.
(a) Duties.
During
the Term of Employment, the Executive shall report directly to the Chairman,
President and Chief Executive Officer and (i) shall serve as
an
executive officer of the
Company with the title Vice
President, Pharmaceutical Development and Manufacturing, subject to election
by
the Board of Directors of the Company, (ii) shall perform such duties and
responsibilities as may be reasonably determined by the Board of Directors
of
the Company consistent with the Executive’s title and position, duties and
responsibilities as an executive officer of the Company as of the Effective
Date; provided
that
such duties and responsibilities shall be within the general area of the
Executive’s experience and skills, (iii) upon the request of the Board of
Directors of the Company, shall serve as an officer and/or director of the
Company and any of its subsidiaries or affiliates (provided
that the
Company shall indemnify the Executive for liabilities incurred as such in
accordance with its current practices to the fullest extent permitted by
applicable law); and (iv) shall render all services incident to the
foregoing.
(b) Extent
of Service.
The
Executive agrees to diligently serve the interests of the Company and shall
devote substantially all of his working time, attention, skill and energies
to
the advancement of the interests of the Company and its subsidiaries and
affiliates and the performance of his duties and responsibilities hereunder;
provided
that
nothing in this Agreement shall be construed as preventing the Executive from
(i) investing the Executive’s assets in any entity in a manner not prohibited by
Section 7 and in such form or manner as shall not require any material
activities on the Executive’s part in connection with the operations or affairs
of the entities in which such investments are made, or (ii) engaging in
religious, charitable or other community or non-profit activities that do not
impair the Executive’s ability to fulfill the Executive’s duties and
responsibilities under this Agreement.
4. Compensation.
(a)
Salary.
During
the Term of Employment, the Company shall pay the Executive a salary (the “Base
Salary”) at an annual rate as shall be determined from time to time by the Board
of Directors of the Company or the Compensation Committee of the Board of
Directors consistent with the general policies and practices of the Company
and
subject to periodic review in accordance with the policies and practices of
the
Company; provided,
however,
that in
no event shall such rate per annum be less than $260,000.00. Such salary shall
be subject to withholding under applicable law and shall be payable in periodic
installments in accordance with the Company’s usual practice for its senior
executives, as in effect from time to time.
(b)
Bonus.
Annually, the Company shall review the performance of the Company and of the
Executive during the prior year, and the Company may provide the Executive
with
additional compensation as a bonus in accordance with any bonus plan then in
effect from time to time for senior executives of the Company. Any such bonus
plan shall have such terms as may be established in the sole discretion of
the
Board of Directors of the Company or the Compensation Committee of the Board
of
Directors.
5. Benefits.
(a)
Regular
Benefits.
During
the Term of Employment, the Executive shall be entitled to participate in any
and all medical, dental, pension and life insurance plans, disability income
plans and other employee benefit plans as in effect from time to time for senior
executives of the Company. Such participation shall be subject to (i) the terms
of the applicable plan documents, (ii) generally applicable policies of the
Company and (iii) the discretion of the Board of Directors of the Company or
the
administrative or other committee provided for in, or contemplated by, such
plan. Compliance with this Section 5(a) shall in no way create or be deemed
to
create any obligation, express or implied, on the part of the Company or any
subsidiary or affiliate of the Company with respect to the continuation of
any
benefit or other plan or arrangement maintained as of or prior to the Effective
Date or the creation and maintenance of any particular benefit or other plan
or
arrangement at any time after the Effective Date.
(b) Reimbursement
of Expenses.
The
Company shall promptly reimburse the Executive for all reasonable business
expenses incurred by the Executive during the Term of Employment in accordance
with the Company’s practices for senior executives of the Company, as in effect
from time to time.
(c)
Vacation.
During
the Term of Employment, the Executive shall receive at least four (4) weeks
paid
vacation annually or such greater amount as is in accordance with the Company’s
practices for senior executives of the Company, as in effect from time to
time.
6. Termination
of Employment.
Notwithstanding the provisions of Section 2, the Executive’s employment under
this Agreement shall terminate under the following circumstances set forth
in
this Section 6.
For
purposes of this Agreement, “Date
of Termination”
means
(i) if the Executive’s employment is terminated by his death as provided in
Section 6(c), the date of his death; (ii) if the Executive’s employment is
terminated due to his permanent disability as provided in Section 6(c), the
date
on which notice of termination is given; (iii) if the Executive’s employment is
terminated under Section 6(e), sixty (60) days after the date on which notice
of
termination is given; and (iv) if the Executive’s employment is terminated under
Section 6(f), the date on which the applicable cure period expires.
(a) Mutual
Consent.
The
Executive’s employment under this Agreement may be terminated at any time by the
mutual consent of the Executive and the Company on such terms as both parties
shall mutually agree.
(b) Termination
by the Company for Cause.
The
Executive’s employment under this Agreement may be terminated by the Company for
Cause at any time upon written notice to the Executive without further liability
on the part of the Company. For purposes of this Agreement, a termination shall
be for Cause if:
(i) the
Executive shall commit an act of fraud, embezzlement, misappropriation or breach
of fiduciary duty against the Company or any of its subsidiaries or affiliates
or shall be convicted by a court of competent jurisdiction or shall plead guilty
or nolo contendere to any felony or any crime involving moral
turpitude;
(ii) the
Executive shall commit a material breach of any of the covenants, terms or
provisions of Section 7 or 8 hereof which breach has not been cured within
fifteen (15) days after delivery to the Executive by the Company of written
notice thereof;
(iii) the
Executive shall commit a material breach of any of the covenants, terms or
provisions hereof (other than pursuant to Section 7 or 8 hereof) which breach
has not been remedied within thirty (30) days after delivery to the Executive
by
the Company of written notice thereof; or
(iv) the
Executive shall have disobeyed reasonable written instructions from the
Company’s Board of Directors Compensation Committee or other appropriate
governing committee which are consistent with the terms and conditions of this
Agreement or shall have deliberately, willfully, substantially and continuously
failed to perform the Executive’s duties hereunder, after written notice and
under circumstances effectively constituting a voluntary resignation of the
Executive’s position with the Company.
Upon
termination for Cause as provided in this Section 6(b), all obligations of
the
Company under this Agreement shall thereupon immediately terminate other than
any obligations with respect to (A) earned but unpaid Base Salary and (B) the
continued rights of the Executive to receive payments due under the Technology
Development Incentive Plan. The Company shall have any and all rights and
remedies under this Agreement and applicable law.
(c) Death;
Disability.
The
Executive’s employment under this Agreement may be terminated by the Company
upon the earlier of death or permanent disability (as defined below) of the
Executive continuing for a period of one hundred eighty (180) days. Upon any
such termination of the Executive’s employment, all obligations of the Company
under this Agreement shall thereupon immediately terminate other than any
obligations with respect to (i) earned but unpaid salary through the Date of
Termination, (ii) bonus payments with respect to the calendar year within which
such termination occurred on the basis of and to the extent contemplated in
any
bonus plan then in effect with respect to senior executive officers of the
Company, pro-rated on the basis of the number of days of the Executive’s actual
employment hereunder during such calendar year through the Date of Termination,
and (iii) in the case of permanent disability, continuation at the Company’s
expense of health insurance benefits (medical and dental) until the first
anniversary of the Date of Termination to the extent permitted under the
Company’s group health insurance policy. As used herein, the term “permanent
disability” or “permanently disabled” means the inability of the Executive, by
reason of injury, illness or other similar cause, after reasonable accommodation
by the Company, to perform a major part of his duties and responsibilities
in
connection with the conduct of the business and affairs of the Company. The
Company shall provide written notice to the Executive of the termination of
his
employment hereunder due to permanent disability. The provisions of the
Technology Development Incentive Plan shall apply to matters related to any
technical incentive compensation being received at the time of disability or
death of the Executive.
(d) Voluntary
Termination by the Executive.
At any
time during the Term of Employment, the Executive may terminate his employment
under this Agreement upon sixty (60) days’ prior written notice to the Company.
Upon termination by the Executive as provided in this Section 6(d), all
obligations of the Company under this Agreement shall thereupon immediately
terminate other than any obligations with respect to earned but unpaid Base
Salary and any payments of technology incentive compensation under the
Technology Development Incentive Plan.
(e) Termination
by the Company Without Cause.
The
Executive’s employment under this Agreement may be terminated by the Company at
any time without Cause by the Company upon sixty (60) days’ prior written notice
to the Executive. Any termination by the Company of the Executive’s employment
under this Agreement which does not constitute a termination for Cause under
Section 6(b) and is not a termination on account of death or disability under
Section 6(c) shall be deemed a termination without Cause. Upon any such
termination of the Executive’s employment, all obligations of the Company under
this Agreement shall thereupon immediately terminate other than any obligations
with respect to earned but unpaid Base Salary and bonus under Section 4. In
addition, subject to the Executive signing a general release of claims in a
form
and manner satisfactory to the Company and the lapse of any statutory revocation
period, the Company shall continue to pay the Executive his Base Salary at
the
rate then in effect pursuant to Section 4(a) for a period of one (1) year from
the Date of Termination and shall pay to the Executive in monthly installments
over each year of the one (1) year period, an amount equal to the Executive’s
cash bonus, if any, received in respect of the year immediately preceding the
year of termination pursuant to Section 4(b) beginning with the first payroll
date that begins thirty (30) days after the Date of Termination. The Company
shall also pay 100% of the costs to provide up to twelve (12) months of
outplacement support services at a level appropriate for the Executive’s title
and responsibility and provide the Executive with health and dental insurance
continuation at a level consistent with the level and type the Executive had
in
place at the time of termination for a period of twelve (12) months from the
Date of Termination to the extent permitted under the Company’s group health
insurance policy. Termination of the Executive without Cause shall not impact
the eligibility of the Executive to receive technology incentive compensation
payments due under the provisions of the Technology Development Incentive
Plan.
(f) Termination
by the Executive upon Company Breach.
The
Executive shall have the right to terminate his employment hereunder upon
written notice to the Company in the event of (i) a material diminution in
the
nature or scope of the powers, duties or responsibilities of the Executive
or
(ii) a breach by the Company of any of its material obligations hereunder,
in
each case after the Executive has given written notice to the Company specifying
such default by the Company within sixty (60) days of the occurrence of the
default and giving the Company a reasonable time, not less than thirty (30)
days, to conform its performance to its obligations hereunder. Upon any such
termination of the Executive’s employment, all obligations of the Company under
this Agreement shall thereupon immediately terminate other than any obligations
with respect to earned but unpaid Base Salary and bonus under Section 4. In
addition, subject to the Executive signing a general release of claims in a
form
and manner satisfactory to the Company and the lapse of any statutory revocation
period, the Company shall continue to pay the Executive his Base Salary at
the
rate then in effect pursuant to Section 4(a) for a period of one (1) year from
the Date of Termination and shall pay to the Executive in monthly installments
over the one (1) year period, an amount equal to the Executive’s cash bonus, if
any, received in respect of the year immediately preceding the year of
termination pursuant to Section 4(b) beginning with the first payroll date
that
begins thirty (30) days after the Date of Termination. The Company shall also
pay 100% of the costs to provide up to twelve (12) months of outplacement
support services at a level appropriate for the Executive’s title and
responsibility and provide the Executive with health and dental insurance
continuation at a level consistent with the level and type the Executive had
in
place at the time of termination for a period of twelve (12) months from the
Date of Termination to the extent permitted under the Company’s group health
insurance policy. Termination of the Executive upon Company breach shall not
impact the eligibility of the Executive to receive technology incentive
compensation payments due under the provisions of the Technology Development
Incentive Plan.
(g) Termination
Pursuant to a Change of Control.
If
there is a Change of Control, as defined below, during the Term of Employment,
the provisions of this Section 6(g) shall apply and shall continue to apply
throughout the remainder of the Term (as extended by any Renewal Term). Upon
a
Change in Control, the Executive will become fully vested in any outstanding
stock options, Restricted Stock or other stock grants awarded and become fully
vested in all Company contributions made to the Executive’s 401(k), Profit
Sharing or other retirement account(s). If, within two (2) years following
a
Change of Control, the Executive’s employment is terminated by the Company
without Cause (in accordance with Section 5(e) above) or by the Executive for
“Good Reason” (as defined in Section 5(g)(ii) below), in lieu of any severance
and other benefits payable under Section 5(e) or Section 5(f), subject to the
Executive signing a general release of claims in a form and manner satisfactory
to the Company and the lapse of any statutory revocation period, the Company
shall pay to the Executive (or the Executive’s estate, if applicable) a lump sum
amount equal to one (1) times the sum of (x) the Executive’s Base Salary at the
rate then in effect pursuant to Section 4(a), plus
(y) an
amount equal to the Executive’s cash bonus, if any, received in respect of the
year immediately preceding the year of termination pursuant to Section 4(b)
within thirty (30) days of the Date of Termination. The Company shall also
pay
100% of the costs to provide up to twelve (12) months of outplacement support
services at a level appropriate for the Executive’s title and responsibility and
provide the Executive with health and dental insurance continuation at a level
consistent with the level and type the Executive had in place at the time of
termination for a period of twelve (12) months from the Date of Termination
to
the extent permitted under the Company’s group health insurance policy.
Termination upon a Change of Control shall not impact the eligibility of the
Executive to receive technology incentive compensation payments due under the
provisions of the Technology Development Incentive Plan.
(i) “Change
of Control”
shall
mean the occurrence of any one of the following events:
(A) any
“person” as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Act”) (other than the Company, any of its
subsidiaries, or any trustee, fiduciary or other person or entity holding
securities under any employee benefit plan or trust of the Company or any of
its
subsidiaries and other than Xxxxxx X. X’Xxxxx, Ph.D.), together with all
“affiliates” and “associates” (as such terms are defined in Rule 12b-2 under the
Act) of such person, shall become the “beneficial owner” (as such term is
defined in Rule 13d-3 under the Act), directly or indirectly, of securities
of
the Company representing twenty-five percent (25%) or more of the combined
voting power of the Company’s then outstanding securities having the right to
vote in an election of the Company’s Board of Directors (“Voting Securities”)
(in such case other than as a result of an acquisition of securities directly
from the Company);
(B) persons
who, as of the Effective Date, constitute the Company’s Board of Directors (the
“Incumbent Directors”) cease for any reason, including, without limitation, as a
result of a tender offer, proxy contest, merger or similar transaction, to
constitute at least a majority of the Board; provided
that any
person becoming a director of the Company subsequent to the Effective Date
shall
be considered an Incumbent Director if such person’s election was approved by or
such person was nominated for election by either (1) a vote of at least a
majority of the Incumbent Directors or (2) a vote of at least a majority of
the
Incumbent Directors who are members of a nominating committee comprised, in
the
majority, of Incumbent Directors; but provided further
that any
such person whose initial assumption of office is in connection with an actual
or threatened election contest relating to the election of members of the Board
of Directors or other actual or threatened solicitation of proxies or consents
by or on behalf of a person other than the Board, including by reason of
agreement intended to avoid or settle any such actual or threatened contest
or
solicitation, shall not be considered an Incumbent Director; or
(C) consummation
of (1) any consolidation or merger of the Company where the stockholders of
the
Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such term
is
defined in Rule 13d-3 under the Act), directly or indirectly, shares
representing in the aggregate more than fifty percent (50%) of the voting shares
of the corporation issuing cash or securities in the consolidation or merger
(or
of its ultimate parent corporation, if any), or (2) any sale, lease, exchange
or
other transfer (in one transaction or a series of transactions contemplated
or
arranged by any party as a single plan) of all or substantially all of the
assets of the Company; or
(D) the
stockholders of the Company shall approve any plan or proposal for the
liquidation or dissolution of the Company.
Notwithstanding
the foregoing, a “Change of Control” shall not be deemed to have occurred for
purposes of the foregoing clause (A) solely as the result of an acquisition
of
securities by the Company which, by reducing the number of shares of Voting
Securities outstanding, increases the proportionate number of shares of Voting
Securities beneficially owned by any person to twenty-five percent (25%) or
more
of the combined voting power of all then outstanding Voting Securities;
provided,
however,
that if
any person referred to in this sentence shall thereafter become the beneficial
owner of any additional shares of Voting Securities (other than pursuant to
a
stock split, stock dividend, or similar transaction or as a result of an
acquisition of securities directly from the Company), then a “Change of Control”
shall be deemed to have occurred for purposes of the foregoing clause
(A).
(ii) “Good
Reason”
shall
mean the occurrence of any of the following:
(A)
a
material diminution in the nature or scope of the powers, duties or
responsibilities of the Executive;
(B) a
breach
by the Company of any of its material obligations hereunder; or
(C) the
relocation of the offices at which the Executive is principally employed as
of
the Change of Control to a location more than fifty (50) miles from such
offices, which relocation is not approved by the Executive.
(iii) The
Executive shall provide the Company with reasonable notice and an opportunity
to
cure any of the events listed in Section 6(g)(ii) within sixty (60) days of
the
occurrence of the event and shall not be entitled to compensation pursuant
to
this Section 6(g) unless the Company fails to cure within a reasonable period
of
not less than thirty (30) days.
(h) Gross
Up Payment.
(i) In
the
event it shall be determined that any compensation, payment or distribution
by
the Company to or for the benefit of the Executive, whether paid or payable
or
distributed or distributable pursuant to the terms of this Agreement or
otherwise (the “Severance Payments”), would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”),
or any interest or penalties are incurred by the Executive 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 Executive
shall be entitled to receive an additional payment (a “Gross-Up Payment”) such
that the net amount retained by the Executive, after deduction of any Excise
Tax
on the Severance Payments, any Federal, state, and local income tax, employment
tax and Excise Tax upon the payment provided by this subsection, and any
interest and/or penalties assessed with respect to such Excise Tax, shall be
equal to the Severance Payments.
(ii) Subject
to the provisions of subsection (iii) below, all determinations required to
be
made under this subsection (ii), including whether a Gross-Up Payment is
required and the amount of such Gross-Up Payment, shall be made by a nationally
recognized accounting firm selected by the Company (the “Accounting Firm”),
which shall provide detailed supporting calculations both to the Company and
the
Executive within fifteen (15) business days of the Date of Termination, if
applicable, or at such earlier time as is reasonably requested by the Company
or
the Executive. For purposes of determining the amount of the Gross-Up Payment,
the Executive shall be deemed to pay Federal income taxes at the highest
marginal rate of Federal income taxation applicable to individuals for the
calendar year in which the Gross-Up Payment is to be made, and state and local
income taxes at the highest marginal rates of individual taxation in the state
and locality of Executive’s residence on the date of the Terminating Event, net
of the maximum reduction in Federal income taxes which could be obtained from
deduction of such state and local taxes. The initial Gross-Up Payment, if any,
as determined pursuant to this subsection (ii), shall be paid to the relevant
tax authorities as withholding taxes on behalf of the Executive at such time
or
times when each Excise Tax Payment is due. Any determination by the Accounting
Firm shall be binding upon the Company and the Executive. 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”). In the event that the Company exhausts its remedies
pursuant to subsection (iii) below and the Executive thereafter is required
to
make a payment of any Excise Tax, the Accounting Firm shall determine the amount
of the Underpayment that has occurred, consistent with the calculations required
to be made hereunder, and any such Underpayment, and any interest and penalties
imposed on the Underpayment and required to be paid by the Executive in
connection with the proceedings described in subsection (iii) below, shall
be
promptly paid by the Company to the relevant tax authorities as withholding
taxes on behalf of the Executive.
(iii) The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company
of
the Gross-up Payment. Such notification shall be given as soon as practicable
but no later than ten (10) business days after the Executive knows of such
claim
and shall apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid. The Executive shall not pay such claim
prior
to the expiration of the thirty (30)-day period following the date on which
he
gives such notice to the Company (or such shorter period ending on the date
that
any payment of taxes with respect to such claim is due). If the Company notifies
the Executive in writing prior to the expiration of such period that it desires
to contest such claim, provided that the Company has set aside adequate reserves
to cover the Underpayment and any interest and penalties thereon that may
accrue, the Executive shall: (A) give the Company any information reasonably
requested by the Company relating to such claim, (B) take such action in
connection with contesting such claim as the Company shall reasonably request
in
writing from time to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney selected by the
Company, (C) cooperate with the Company in good faith in order to effectively
contest such claim, and (D) permit the Company 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
Executive 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 subsection (iii), the Company shall control all
proceedings taken in connection with such contest and, at its sole option,
may
pursue or forego 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 Executive to pay the tax claimed and xxx for
a
refund or contest the claim in any permissible manner, and the Executive 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
the
Company shall determine; provided, however, that if the Company directs the
Executive to pay such claim and xxx for a refund, the Company shall advance
the
amount of such payment to the Executive on an interest-free basis (to the extent
not prohibited by applicable law) and shall indemnify and hold the Executive
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 with respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment
of
taxes for the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company’s control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as the case may be, any other
issues raised by the Internal Revenue Service or any other taxing
authority.
(iv) If,
after
a Gross-Up Payment by the Company on behalf of the Executive pursuant to this
Section 6(h), the Executive becomes entitled to receive any refund with respect
to such claim, the Executive shall (subject to the Company’s complying with the
requirements of subsection (iii) above) promptly pay to the Company the amount
of such refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after a Gross-Up Payment by the Company pursuant to
this Section 5(h), a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Company does not
notify the Executive in writing of its intent to contest such denial of refund
prior to the expiration of thirty (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.
(i) No
Mitigation.
Without
regard to the reason for the termination of the Executive’s employment
hereunder, the Executive shall be under no obligation to mitigate damages with
respect to such termination under any circumstances and in the event the
Executive is employed or receives income from any other source, there shall
be
no offset against the amounts due from the Company hereunder.
(j) Section
409A.
(i) Anything
in this Agreement to the contrary notwithstanding, if at the time of the
Executive’s separation from service within the meaning of Section 409A of the
Code, the Company determines that the Executive is a “specified employee” within
the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any
payment or benefit that the Executive becomes entitled to under this Agreement
would be considered deferred compensation subject to the 20 percent additional
tax imposed pursuant to Section 409A(a) of the Code as a result of the
application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not
be
payable and such benefit shall not be provided until the date that is the
earlier of (A) six months and one day after the Executive’s separation from
service, or (B) the Executive’s death. If any such delayed cash payment is
otherwise payable on an installment basis, the first payment shall include
a
catch-up payment covering amounts that would otherwise have been paid during
the
six-month period but for the application of this provision, and the balance
of
the installments shall be payable in accordance with their original schedule.
Any such delayed cash payment shall earn interest at an annual rate equal to
the
prime rate reported by The
Wall Street Journal
as of
the date of separation from service, from such date of separation from service
until the payment.
(ii) The
parties intend that this Agreement will be administered in accordance with
Section 409A of the Code. To the extent that any provision of this Agreement
is
ambiguous as to its compliance with Section 409A of the Code, the provision
shall be read in such a manner so that all payments hereunder comply with
Section 409A of the Code. The parties agree that this Agreement may be amended,
as reasonably requested by either party, and as may be necessary to fully comply
with Section 409A of the Code and all related rules and regulations in order
to
preserve the payments and benefits provided hereunder without additional cost to
either party.
(iii) The
determination of whether and when a separation from service has occurred shall
be made in accordance with the presumptions set forth in Treasury Regulation
Section 1.409A-1(h).
(iv) The
Company makes no representation or warranty and shall have no liability to
the
Executive or any other person if any provisions of this Agreement are determined
to constitute deferred compensation subject to Section 409A of the Code but
do
not satisfy an exemption from, or the conditions of, such Section.
7. Non-Competition
and No Solicitation.
(a) Because
the Executive’s services to the Company are special and because the Executive
has access to the Company’s confidential information, during the Term of
Employment and for a period of twenty-four (24) months following the
termination, the Executive shall not, without the express written consent of
the
Company, directly or indirectly, engage, participate, invest in, be employed
by
or assist, whether as owner, part-owner, shareholder, partner, director,
officer, trustee, employee, agent or consultant, or in any other capacity,
any
Person (as hereinafter defined) other than the Company and its affiliates in
the
Designated Industry (as hereinafter defined); provided, however, that nothing
herein shall be construed as preventing the Executive from making passive
investments in a Person in the Designated Industry if the securities of such
Person are publicly traded and such investment constitutes less than one percent
(1%) of the outstanding shares of capital stock or comparable equity interests
of such Person.
(b) For
purposes of this Agreement, the following terms have the following
meanings:
“Person”
means
an individual, a corporation, an association, a partnership, a limited liability
company, an estate, a trust and any other entity or organization; and
“Designated
Industry”
means
the business of providing chemistry research and development services to
pharmaceutical and biotechnology companies involved in drug development and
discovery and any and all activities related thereto, including, without
limitation, medicinal chemistry, chemical development, biocatalysis, analytical
chemistry services and small-scale manufacturing and any other business
conducted by the Company during the Executive’s employment with the
Company.
(c) For
a
period of twenty-four (24) months following the termination of this Agreement
for any reason, the Executive shall not, directly or indirectly, alone or as
a
member of any partnership or limited liability company or entity, or as an
officer, director, shareholder, or employee of any corporation or entity (a)
solicit or otherwise encourage any employee or independent contractor of the
Company to terminate his/her relationship with the Company, or (b) recruit,
hire
or solicit for employment or for engagement as an independent contractor, any
person who is or was employed by the Company at any time during the Executive’s
employment with the Company. This paragraph shall not apply to persons whose
employment and/or retention with the Company has been terminated for a period
of
twenty-four (24) months or longer.
8. Confidentiality.
In the
course of performing services hereunder and otherwise, the Executive has had,
and it is anticipated that the Executive will from time to time have, access
to
confidential records, data, customer lists, trade secrets, technology and
similar confidential information owned or used in the course of business by
the
Company and its subsidiaries and affiliates (the “Confidential Information”).
The Executive agrees (i) to hold the Confidential Information in strict
confidence, (ii) not to disclose the Confidential Information to any Person
(other than in the regular business of the Company), and (iii) not to use,
directly or indirectly, any of the Confidential Information for any competitive
or commercial purpose; provided, however, that the limitations set forth above
shall not apply to any Confidential Information which (A) is then generally
known to the public, (B) became or becomes generally known to the public through
no fault of the Executive, or (C) is disclosed in accordance with an order
of a
court of competent jurisdiction or applicable law. Upon termination of the
Executive’s employment with the Company, all data, memoranda, customer lists,
notes, programs and other papers and items, and reproductions thereof relating
to the foregoing matters in the Executive’s possession or control, shall be
returned to the Company and remain in its possession. This Section 8 shall
survive the termination of this Agreement for any reason.
9. Conflicting
Agreements.
The
Executive hereby represents and warrants that the execution of this Agreement
and the performance of his obligations hereunder will not breach or be in
conflict with any other agreement to which he is a party or is bound, and that
he is not now subject to any covenants which would affect the performance of
his
obligations hereunder. As of the Effective Date, the Executive is not performing
any other duties for, and is not a party to any similar agreement with, any
Person competing with the Company or any of its affiliates.
10. Severability.
In case
any of the provisions contained in this Agreement shall for any reason be held
to be invalid, illegal or unenforceable in any respect, any such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement, but this Agreement shall be construed as if such invalid, illegal
or
unenforceable provision had been limited or modified (consistent with its
general intent) to the extent necessary to make it valid, legal and enforceable,
or if it shall not be possible to so limit or modify such invalid, illegal
or
unenforceable provision or part of a provision, this Agreement shall be
construed as if such invalid, illegal or unenforceable provision or part of
a
provision had never been contained in this Agreement.
11. Litigation
and Regulatory Cooperation.
During
and after the Executive’s employment, the Executive shall cooperate fully with
the Company in the defense or prosecution of any claims or actions now in
existence or which may be brought in the future against or on behalf of the
Company which relate to events or occurrences that transpired while the
Executive was employed by the Company. The Executive’s full cooperation in
connection with such claims or actions shall include, but not be limited to,
being available to meet with counsel to prepare for discovery or trial and
to
act as a witness on behalf of the Company at mutually convenient times. During
and after the Executive’s employment, the Executive also shall cooperate fully
with the Company in connection with any investigation or review of any federal,
state or local regulatory authority as any such investigation or review relates
to events or occurrences that transpired while the Executive was employed by
the
Company. The Company shall reimburse the Executive for any reasonable
out-of-pocket expenses incurred in connection with the Executive’s performance
of obligations pursuant to this Section 11. This Section 11 shall survive the
termination of this Agreement for any reason.
12. Arbitration
of Disputes.
Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Albany, New York, in accordance with
the rules of the American Arbitration Association then in effect. Judgment
may
be entered in any court having jurisdiction. In the event that the Company
terminates the Executive’s employment for cause under Section 6(b) and the
Executive contends that cause did not exist, then the Company’s only obligation
shall be to submit such claim to arbitration and the only issue before the
arbitrator will be whether the Executive was in fact terminated for cause.
If
the arbitrator determines that the Executive was not terminated for cause by
the
Company, then the only remedies that the arbitrator may award are (i) payment
of
amounts which would have been payable if the Executive’s employment had been
terminated under Section 6(e), (ii) the costs of arbitration, (iii) the
Executive’s attorneys’ fees, and (iv) all rights and benefits granted or in
effect with respect to the Executive under the Company’s stock option plans and
agreements with the Executive pursuant thereto, with the vesting and exercise
of
any stock options and the forfeit ability of any stock-based grants held by
the
Executive to be governed by the terms of such plans and the related agreements
between the Executive and the Company. If the arbitrator finds that the
Executive’s employment was terminated for cause, the arbitrator will be without
authority to award the Executive anything, and the parties will each be
responsible for their own attorneys’ fees, and they will divide the costs of
arbitration equally. Furthermore, should a dispute occur concerning the
Executive’s mental or physical capacity as described in Section 6(c), a doctor
selected by the Executive and a doctor selected by the Company shall be entitled
to examine the Executive. If the opinion of the Company’s doctor and the
Executive’s doctor conflict, the Company’s doctor and the Executive’s doctor
shall together agree upon a third doctor, whose opinion shall be binding. This
Section 12 shall survive the termination of this Agreement for any
reason.
13. Specific
Performance.
Notwithstanding Section 12 hereof, it is specifically understood and agreed
that
any breach of the provisions of this Agreement, including, without limitation,
Sections 7 and 8 hereof, by the Executive is likely to result in irreparable
injury to the Company and its subsidiaries and affiliates, that the remedy
at
law alone will be inadequate remedy for such breach and that, in addition to
any
other remedy it may have, the Company shall be entitled to enforce the specific
performance of this Agreement by the Executive and to seek both temporary and
permanent injunctive relief (to the extent permitted by law), without the
necessity of proving actual damages. To the extent that any court action is
permitted consistent with or to enforce Section 7 or 8 of this Agreement, the
parties hereby agree to the sole and exclusive jurisdiction of the Supreme
Court
of the State of New York (Albany County) and the United States District Court
for the Northern District of New York (City of Albany). Accordingly, with
respect to any such court action, the Executive (i) submits to the personal
jurisdiction of such courts, (ii) consents to service of process, and (iii)
waives any other requirement (whether imposed by statute, rule of court or
otherwise) with respect to personal jurisdiction or service of
process.
14. Notices.
All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given (i) when delivered by hand,
(ii) when transmitted by facsimile and receipt is acknowledged, or (iii) if
mailed by certified or registered mail with postage prepaid, on the third
business day after the date on which it is so mailed:
To
the
Company:
Albany
Molecular Research, Inc.
00
Xxxxxxxxx Xxxxxx
Xxxxxx,
Xxx Xxxx 00000-0000
Facsimile:
(000) 000-0000
Attention:
Board of Directors
To
the
Executive, at the address on file with the Company
or
to
such other address of which any party may notify the other parties as provided
above. Notices shall be effective as of the date of such delivery or
mailing.
15. Amendment;
Waiver.
This
Agreement shall not be amended, modified or discharged in whole or in part
except by an Agreement in writing signed by both of the parties hereto. The
failure of either of the parties to require the performance of a term or
obligation or to exercise any right under this Agreement or the waiver of any
breach hereunder shall not prevent subsequent enforcement of such term or
obligation or exercise of such right or the enforcement at any time of any
other
right hereunder or be deemed a waiver of any subsequent breach of the provision
so breached, or of any other breach hereunder.
16. Successors
and Assigns.
This
Agreement shall inure to the benefit of successors of the Company by way of
merger, consolidation or transfer of all or substantially all of the assets
of
the Company, and may not be assigned by the Executive. The
Company shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Company expressly to assume and agree to perform this Agreement
to the same extent that the Company would be required to perform it if no
succession had taken place. Failure of the Company to obtain an assumption
of
this Agreement at or prior to the effectiveness of any succession shall be
a
material breach of this Agreement.
17. Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties concerning the
subjects hereof and supersedes all prior understandings and agreements between
the parties relating to the subject matter hereof.
18. Governing
Law.
This
Agreement shall be construed and regulated in all respects under the laws of
the
State of New York.
19. Counterparts.
This
Agreement may be executed in counterparts, each of which when so executed and
delivered shall be taken to be an original, but such counterparts shall together
constitute one and the same document.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year
first above written.
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ALBANY
MOLECULAR RESEARCH, INC.
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|
By:
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/s/
Xxxxxx X’Xxxxx
|
|
|
EXECUTIVE:
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|
/s/
Xxxxxxxx Xxxxx
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|
Xxxxxxxx
X. Xxxxx
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