AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 99.2
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AGREEMENT dated as of the 13th day of March, 2006 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, parties
of the first part, and Xxxx 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 October 28, 1999, which was
amended and restated as of August 16, 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 the Employee wish to further amend and restate the Employment
Agreement to reflect the reincorporation of BLI-NY and related changes in the structure and
operations of its affiliated companies, and to make certain other changes;
NOW, THEREFORE, BPI, BLI-DE 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 16, 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
Page 1 of 24
extended, without further action by BPI or the Employee, on the date (the “Extension
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 BLI-DE, 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 BLI-DE, the Employee shall be responsible for managing and
supervising, and shall have responsibility for, the day-to-day management of the business
operations of BPI, BLI-DE and such other subsidiaries of BPI as BPI shall determine from time to
time, 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 he 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 BLI-DE, 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 him 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 BLI-DE (the “BLI-DE 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 he 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 management and policies of a “person”, whether through the ownership of voting
securities, by contract, or otherwise.
Page 2 of 24
(b) In connection with his employment by the Company, the Employee shall be based at the
principal executive offices of BPI and BLI-DE in the greater New York City metropolitan area, and
he agrees to travel, to the extent reasonably necessary to perform his 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 his business
time, attention, skill and efforts to the faithful performance of his 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 his duties and responsibilities hereunder.
4. Compensation. For all services rendered by the Employee in any capacity during the
term of this Agreement, and for his 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 and fifty thousand dollars ($450,000), 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 his annual bonus to the extent
that, and for such period of time 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 his annual bonus under section 162(m) of the Internal Revenue Code and to avoid any
inclusion of such
Page 3 of 24
portion of his annual bonus or any other amount in the Employee’s gross income pursuant to
section 409A(a)(1)(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; and
(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 BLI-DE 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 BLI-DE 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.
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 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 his Base Salary accrued
through the date of the Compensable Termination and any other amounts to which he is entitled by
law or pursuant to the terms of any compensation or benefit plan or arrangement in which he
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
Page 4 of 24
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) his 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; 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 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
Page 5 of 24
Employee’s serving as a member of a board of directors of a for-profit pharmaceutical company
or by his 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 his
obligations under this Agreement during the balance of the term and his 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 may be entitled hereunder (including without limitation his annual bonus pursuant to
paragraph 4(b) above for the fiscal year of BPI in which his employment terminates and any amounts
to which he 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 he participated before his 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 his employment, the Company shall also provide the Employee with COBRA coverage at its expense.
Page 6 of 24
(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 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 his obligations under Section 6 and 7 hereof 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 his duties
hereunder for any reason or to devote substantially all his 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 his
duties hereunder even with a reasonable accommodation by the Company, or fails to obtain the
consent of the BPI Board to his 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
Page 7 of 24
(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 his duties hereunder; or
(iv) the Employee materially breaches his 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 him intentionally and in bad faith (i.e., without reasonable belief that his 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 his 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 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 his consent, or his duties or responsibilities or power or
authority contemplated by section 3 above are limited in any respect materially detrimental to him,
and in either case the situation is not remedied within 30 days after BPI receives written notice
from the Employee of the situation; or
Page 8 of 24
(iii) he is removed from, or not elected or reelected to, the BPI Board, the BLI-DE Board, the
board of directors of any successor to BPI or BLI-DE, or the office, title or position of Senior
Vice President of BPI or President and Chief Operating Officer of BLI-DE, and BPI and its
Affiliates do not have Good Cause for doing so; or
(iv) BPI or an Affiliate relocates his office outside of either (A) the principal executive
offices of BPI or BLI-DE, or (B) the greater New York City metropolitan area, in either case (A) or
(B) without his 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
his 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 his 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 BLI-DE 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 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)
Page 9 of 24
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 his
consent to the act or omission in question, or a waiver of his right to terminate his 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 his duties hereunder (it being understood that a transitory illness, such
as a cold or flu, that prevents the Employee from substantially performing his 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 he both (I) has been
able to substantially perform his 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 his duties hereunder for 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.
Page 10 of 24
(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 (1/12th) 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 his 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 entitled by law or
pursuant to the terms of any compensation or benefit plan or arrangement in which he 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
Page 11 of 24
the prior written consent of an authorized officer of BPI or an Affiliate or as necessary or
appropriate for the performance of his duties hereunder, any confidential information obtained by
him 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 he will not take with him, without the prior written consent of an authorized
officer of the Company, and he 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 him or entrusted to him during the course of his employment
with the Company.
7. Restrictive Covenants
(a) Non-Solicitation. Employee covenants and agrees that, during his employment by
the Company and during the one year period immediately following the termination of his 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), he 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.
(b) Specific Enforcement. Employee recognizes and agrees that, by reason of his
knowledge, experience, skill and abilities, his 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
Page 12 of 24
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) he has reviewed and agreed to the restrictive covenants contained in this section
7 and their contemplated operation after receiving the advice of counsel of his choosing; (ii) he
believes, after receiving such advice, that the restrictive covenants and their contemplated
operation are fair and reasonable; (iii) he 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 his 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 his 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), he 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 his 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 his employment
with the Company. In addition, the Employee recognizes and agrees that, if the Employee violates
such provisions, the Company may recoup any payments it 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.
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 his service or status as an officer, director,
employee, agent or representative
Page 13 of 24
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 deductibility 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)(1)(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 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
Page 14 of 24
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 he 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,
(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;
Page 15 of 24
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.
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
Page 16 of 24
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 he
incurs to obtain payment or otherwise enforce his 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 his tax liability with respect to the Gross Up from the Gross Up, to pay all of his 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 he 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 he is the plaintiff
or, if he is not the plaintiff, demanding such judicial determination within the time to answer any
complaint in any arbitration action that may be commenced.
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
Page 17 of 24
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 BPI 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 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
Page 18 of 24
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 11(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.
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
Page 19 of 24
(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, his 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 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).
Page 20 of 24
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 his 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 BLI-DE, he were employed by the
Permitted Assignee as Senior Vice President of BPI and President and Chief Operating Officer of
BLI-DE, he were to continue to serve on the BPI Board and the BLI-DE Board, and his 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 which BPI may from time to time give the Employee written
notice in accordance with paragraph 13(f) below.
Page 21 of 24
(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 his 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 and BLI-DE 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)(1)(A) of the Code. BPI and BLI-DE
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)(1)(A) of the Code.
[This space left blank intentionally]
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/ [ILLEGIBLE] | |||||||
[SEAL] |
||||||||
Attest: |
||||||||
/s/ [ILLEGIBLE] |
||||||||
| XXXX LABORATORIES, INC. | ||||||||
| a Delaware corporation | ||||||||
| By: | /s/ [ILLEGIBLE] | |||||||
[SEAL] |
||||||||
Attest: |
||||||||
/s/ [ILLEGIBLE] |
||||||||
| /s/ [ILLEGIBLE] | ||||||||
| 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
