EMPLOYMENT AGREEMENT
Exhibit 10.12
This employment agreement is made and entered into as of this 10th day of November, 2009, by and
between Unilife Medical Solutions, Inc. (“Unilife”) and Xxxx Xxxxxxxxx (“Xxxxxxxxx”) The term
“Unilife” shall include its subsidiaries, affiliates, assigns and successors in interest under
Sections 7, 8, and 14.
WHEREAS, Unilife wishes to continue to employ Xxxxxxxxx as Vice President, Quality Systems and
Regulatory Affairs, and Xxxxxxxxx wishes to enter into this agreement to formalize his previous
employment arrangements; and
WHEREAS, Unilife is engaged in the business of designing, developing, manufacturing and supplying
innovative healthcare safety products for medical device and pharmaceutical industries; and
WHEREAS, Xxxxxxxxx will develop valuable relationships by virtue of his employment with Unilife,
and Xxxxxxxxx will have access to valuable confidential and proprietary information and trade
secrets belonging to Unilife; and
WHEREAS, Unilife and Xxxxxxxxx desire to set forth the terms of their employment relationship in
this agreement.
NOW, THEREFORE, in consideration of the promises and covenants set forth herein, and intending to
be legally bound hereby, the parties agree as follows:
1. Term. This agreement shall be effective upon the mutual execution of this agreement
and is for an initial multi-year term commencing on the effective date and expiring on December 31,
2012. This agreement will automatically renew for one-year periods annually thereafter, unless
either party gives the other party thirty (30) days written notice in advance of the relevant
expiration date of its intention not to renew the agreement. Upon expiration or earlier
termination of this employment relationship, the parties will be relieved of their duties and
obligations under this agreement, except that the rights and obligations set forth in Sections 7
and 8 below shall remain in full force and effect and shall survive the expiration or termination
of this agreement, regardless of the reason(s) for termination.
2. Position and Duties. Unilife has employed Xxxxxxxxx as Vice President, Quality Systems
and Regulatory Affairs, and Xxxxxxxxx agrees to serve in such capacity for Unilife on the terms and
conditions hereafter set forth, until such time as Unilife may change Xxxxxxxxx’x responsibilities,
as the needs of the organization change from time to time. Xxxxxxxxx shall report to the Chief
Executive Officer, with respect to the performance of these duties. In the performance of these
duties, Xxxxxxxxx shall devote his knowledge, skill, attention, energies and all of his business
time, and shall comply with all of Unilife’s policies, rules, and procedures, as they may be
amended from time to time. Xxxxxxxxx shall not engage in any endeavor that would conflict with the
rendition of his services to Unilife, either directly or indirectly, without the prior written
consent of Unilife.
3. Compensation. Xxxxxxxxx shall be paid an annual base salary of One Hundred Eighty-Five
Thousand Dollars ($185,000), subject to the customary payroll deductions and withholdings, and
payable in accordance with Unilife’s standard payroll practices. In addition, Xxxxxxxxx shall be
eligible to participate in Unilife’s Incentive Bonus Plan in amounts and percentages as determined
by Unilife’s Board of Directors. For the calendar year ending December 31, 2009, the potential
cash bonus amount will be twenty-five percent (25%) of base salary. This bonus is discretionary and
subject to achievement of such goals and objectives as the Chief Executive Officer, in his sole
discretion, determines in a set of Key Performance Indicators. Any bonus payable for a calendar
year shall be paid in a lump-sum payment in the following calendar year on or before March 15.
Xxxxxxxxx’x salary and any bonuses will be subject to the customary withholding and employment
taxes as required by law with respect to compensation paid by an employer to an employee. Salary
increases and annual bonus levels will be determined by the Chief Executive Officer and Unilife’s
Board of Directors based upon Xxxxxxxxx’x and Unilife’s performance.
4. Benefits. Xxxxxxxxx shall be eligible to participate in Unilife’s benefits programs
(including any equity incentive plan of Unilife or its affiliates), as they may change from time to
time. The benefits provided to Xxxxxxxxx will be the same as the benefits provided to other
similarly situated Unilife employees, and may be changed upon expiration or other termination of
the current benefits contracts. For further information, Xxxxxxxxx should review any applicable
benefit plan documents, which will govern the terms of the benefits. Xxxxxxxxx shall also receive
four (4) weeks of paid vacation per year with no carry-over for unused vacation days or payment in
lieu thereof, except as allowed by Unilife standard employment policies.
5. Indemnification. Unilife agrees to provide Xxxxxxxxx with indemnification equivalent
to that provided to other senior management and pursuant to Unilife’s Directors and Officers
insurance policies, as amended from time to time.
6. Termination. In the event that Unilife terminates this agreement and Xxxxxxxxx’x
employment without Cause as defined herein, including employment termination due to Unilife’s
election not to renew this agreement where Xxxxxxxxx was willing and able to continue performing
services under the terms of this agreement, Unilife will pay Xxxxxxxxx his base salary, at the rate
in effect immediately before the date that Xxxxxxxxx’x employment terminates, for six (6) months,
commencing within 45 days after the date that Xxxxxxxxx’x employment terminates, in accordance with
Unilife’s standard payroll practices then in effect and will pay the cost of Xxxxxxxxx’x COBRA
health care continuation coverage for six (6) months. In the event that Xxxxxxxxx terminates this
agreement for any reason, including Xxxxxxxxx’x election not to renew the agreement, Xxxxxxxxx
shall not receive any compensation or benefits from the time that he ceases to devote full time and
attention to Unilife’s business, and, if Xxxxxxxxx terminates this agreement prior to the
expiration of the initial term Xxxxxxxxx shall repay Unilife an
amount equal to the cost of recruitment and relocation to Pennsylvania. This provision may be
waived by the Chief Executive Officer in his sole discretion. In addition, Xxxxxxxxx agrees to
provide Unilife with thirty (30) days advance written notice of his intent to terminate his
employment, whether during the initial term or any renewal thereof. Upon termination of this
agreement, the parties will be relieved of their duties and obligations, except that the rights and
obligations set forth in Sections 7 and 8 shall remain in full force and effect and shall survive
the expiration and termination of this agreement, regardless of the reasons for termination or
expiration. Upon termination of this agreement, Xxxxxxxxx shall not have any further contact with
any customers of Unilife.
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7. Confidential Information.
(a) Xxxxxxxxx acknowledges that Unilife has a valuable property interest in all aspects of its
business relationships with its customers, clients, vendors and suppliers. In the course of
Xxxxxxxxx’x work with Unilife, Xxxxxxxxx has become aware of and familiar with secret and
confidential information of Unilife relating to its customers, clients, vendors and suppliers, and
its internal business operations. Secret and confidential information includes, but is not limited
to, Unilife’s business plans, customer lists, customer data, marketing plans, supplier and vendor
lists and cost information, software and computer programs, data processing systems and information
contained therein, financial statements, financial data, acquisition and divestiture plans, and any
other trade secrets or confidential or proprietary information, documents, reports, plans, or data,
of or about Unilife that is not already available to the public.
(b) Xxxxxxxxx agrees that he will not, without the written consent of Unilife, during the term
of this agreement or thereafter, disclose or make any use of secret and confidential information,
except as may be required in the performance of his duties under Section 2 of this agreement.
Xxxxxxxxx agrees that, following the termination of his employment with Unilife for any reason, he
will not ever disclose any secret and confidential information to any other business or individual,
and he will never use secret and confidential information to compete with Unilife in any manner.
(c) Upon termination of this agreement, Xxxxxxxxx shall surrender to Unilife all records and
all paper and/or electronic copies made of those records that pertain to any aspect of the business
of Unilife, including all secret and confidential information.
8. Agreement Not To Compete.
(a) In consideration for continued employment by Unilife and the benefits of this agreement,
Xxxxxxxxx agrees to be bound by the covenant not to compete as set forth in Section 8 of this
agreement below.
(b) Xxxxxxxxx agrees that during the term of this agreement and for a period of two (2) years
following the termination of this agreement for any reason, he will not, directly or indirectly:
(i) render services to, become employed by, be engaged as a consultant by, own, or
have a financial or other interest in (either as an individual, partner, joint venture,
owner, manager, employee, partner, officer, director, independent contractor, or other
similar role) any business that is engaged in any business activity that is in competition
with the activities of Unilife.
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(ii) induce, offer, assist, encourage, or suggest that another business or enterprise
offer employment to or enter into a consulting arrangement with any individual who is
employed by Unilife, or induce, offer, assist, encourage, or suggest that any Unilife
employee terminate her or her employment with Unilife, or accept employment with any other
business or enterprise.
(c) In the event that Xxxxxxxxx commits any breach of Section 8(b) above, Xxxxxxxxx
acknowledges that Unilife would suffer substantial and irreparable harm and damages. Accordingly,
Xxxxxxxxx hereby agrees that in such event, Unilife shall be entitled to temporary and/or permanent
injunctive relief, without the necessity of proving damage, to enforce the provisions of this
Section, all without prejudice to any and all other remedies that Unilife may have at law or in
equity and that Unilife may elect or invoke. Xxxxxxxxx agrees that if any of the provisions of
this Section are or become unenforceable, the remainder hereof shall nevertheless remain binding
upon him to the fullest extent possible, taking into consideration the purposes and spirit of this
agreement. Any invalid or unenforceable provision is to be reformed to the maximum time,
geographic and/or business limitations permitted by applicable laws, so as to be valid and
enforceable.
(d) Xxxxxxxxx expressly acknowledges and agrees that the restrictive covenants set forth in
Sections 7 and 8 above are absolutely necessary to protect the legitimate business interests of
Unilife, because he is employed in a position of trust and confidence and is provided with
extensive access to Unilife’s most confidential and proprietary trade secrets, and has significant
involvement in important business relationships, which constitute the goodwill of Unilife.
Xxxxxxxxx further agrees and acknowledges that these restrictive covenants are reasonable, will not
restrict him from earning a livelihood following the termination of employment, and are intended by
the parties to be enforceable following termination of employment for any reason.
(e) In the event that Unilife must bring legal action to enforce or seek a remedy for any
breach of the provisions of Sections 7 or 8 of this agreement and Xxxxxxxxx is found by a court to
have breached any of these provisions, Xxxxxxxxx agrees to reimburse Unilife for any and all
expenses, including attorneys’ fees and court costs, incurred by it in enforcing the terms of these
Sections of the agreement.
9. Relocation Benefits. In recognition that Xxxxxxxxx has relocated himself and his
dependents to Pennsylvania from Massachusetts, Unilife shall reimburse Xxxxxxxxx by March 15, 2010
for: all reasonable relocation expenses incurred by Xxxxxxxxx and his dependents, including moving
and other out of pocket expenses (other than home
decorating expenses, differences in mortgage rates, differences in costs of comparable housing,
etc.), closing costs and fees, including up to 1.5 mortgage points.
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10. Extraordinary Terminations.
(a) In the event Unilife terminates this agreement and Xxxxxxxxx’x employment prior to the
expiration of the initial term or any written extension thereof, other than for Cause as defined
herein, Xxxxxxxxx will receive severance compensation as provided in Section 6 above. In the event
that Xxxxxxxxx’x employment is terminated by Unilife and, as applicable, its successor coincident
with or following a Change in Control as defined herein of Unilife, then, in lieu of and not in
duplication of the severance compensation provided for in Section 6 above, Xxxxxxxxx shall receive
(a) severance in the form of continued payment of his base salary, at the rate in effect
immediately before the date that Xxxxxxxxx’x employment terminates, for eighteen (18) months,
commencing within 45 days after the date that Xxxxxxxxx’x employment terminates, in accordance with
Unilife’s or its successor’s standard payroll practices then in effect, (b) payment of the cost of
Xxxxxxxxx’x COBRA health care continuation coverage for eighteen (18) months, (c) payment of an
amount equal to the amount of the bonus, if any, earned by and paid to Xxxxxxxxx for the last
completed fiscal year prior to the year in which his employment terminates, and (d) all of his
outstanding options and other stock-based awards shall vest immediately upon such termination of
employment. Except for severance paid pursuant to a Change in Control, if Xxxxxxxxx is re-employed
by another employer at any time during the severance period, all further severance payments shall
immediately cease.
(b) “Cause” will mean any one or more of the following: (i) neglect of assigned duties,
willful misconduct in connection with the performance of duties, or refusal to perform assigned
duties (other than by reason of disability) which continues uncured for thirty (30) days following
receipt of written notice of such deficiency from the Chief Executive Officer, specifying the scope
and nature of the deficiency; (ii) an act of dishonesty; (iii) engaging in illegal conduct; (iv)
committing a crime relating to an act of dishonesty or fraud; (v) engaging in any act of moral
turpitude that causes material harm to Unilife or its reputation; (vi) breaching, in any material
respect, the terms of any agreement with Unilife; or (vii) commencement of employment with any
other employer while an employee of Unilife without the prior written consent of the Chief
Executive Officer. Any determination of “Cause” as used herein will be made in good faith by the
Chief Executive Officer.
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(c) “Change in Control” means: a (i) Change in Ownership of Unilife Corporation, the ultimate
parent company of Unilife, (ii) Change in Effective Control of Unilife Corporation, or (iii) Change
in the Ownership of Assets of Unilife Corporation, all as described herein and construed in
accordance with section 409A of the Internal Revenue Code of 1986, as amended (the “Code”);
provided, however, that a Change in Control shall not include the re-domiciliation of Unilife
Medical Solutions Limited and its subsidiaries into the United States pursuant to certain schemes
of arrangement as set
forth in the Merger Implementation Agreement dated as of September 1, 2009 between Unilife Medical
Solutions Limited and Unilife Corporation (the “Redomiciliation”).
(i) A Change in Ownership of Unilife Corporation shall occur on the date that
any one Person acquires, or Persons Acting as a Group (or Group) acquire, ownership
of the capital stock of Unilife Corporation that, together with the stock held by
such Person or Group, constitutes more than 50% of the total fair market value or
total voting power of the capital stock of Unilife Corporation. However, if any one
Person is, or Persons Acting as a Group are, considered to own more than 50% of the
total fair market value or total voting power of the capital stock of Unilife
Corporation, the acquisition of additional stock by the same Person or Persons
Acting as a Group is not considered to cause a Change in Ownership of Unilife
Corporation or to cause a Change in Effective Control of Unilife Corporation. An
increase in the percentage of capital stock owned by any one Person, or Persons
Acting as a Group, as a result of a transaction in which Unilife Corporation
acquires its stock in exchange for property will be treated as an acquisition of
stock.
(ii) A Change in Effective Control of Unilife Corporation shall occur on the
date a majority of members of the Board of Directors of Unilife Corporation is
replaced during any 12-month period by directors whose appointment or election is
not endorsed by a majority of the members of the Board of Directors of Unilife
Corporation before the date of the appointment or election.
(iii) A Change in the Ownership of Assets of Unilife Corporation shall occur on
the date that any one Person acquires, or Persons Acting as a Group acquire (or has
or have acquired during the 12-month period ending on the date of the most recent
acquisition by such Person or Persons), assets from Unilife Corporation the total
gross fair market value of which is more than 50% of the total gross fair market
value of all of the assets of Unilife Corporation immediately before such
acquisition or acquisitions. For this purpose, gross fair market value means the
value of the assets of Unilife Corporation, or the value of the assets being
disposed of, determined without regard to any liabilities associated with such
assets.
The following rules of construction apply in interpreting the definition of Change
in Control:
(A) A Person means any individual, entity or group within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended,
other than employee benefit plans sponsored or maintained by Unilife Corporation and
by entities controlled by Unilife Corporation or an underwriter of the capital stock
of Unilife Corporation in
a registered public offering.
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(B) Persons will be considered to be Persons Acting as a Group if they are
owners of a corporation that enters into a merger, consolidation, purchase or
acquisition of stock, or similar business transaction with the corporation. If a
Person owns stock in both corporations that enter into a merger, consolidation,
purchase or acquisition of stock, or similar transaction, such shareholder is
considered to be acting as a Group with other shareholders only with respect to the
ownership in that corporation before the transaction giving rise to the change and
not with respect to the ownership interest in the other corporation. Persons will
not be considered to be acting as a Group solely because they purchase assets of the
same corporation at the same time or purchase or own stock of the same corporation
at the same time, or as a result of the same public offering.
(C) For purposes of this Section 10, fair market value shall be determined by
the Board of Directors.
(D) A Change in Control shall not include a transfer to a related person as
described in Code section 409A or a public offering of capital stock of Unilife
Corporation.
(E) For purposes of this Section 10, Code section 318(a) applies to determine
stock ownership. Stock underlying a vested option is considered owned by the
individual who holds the vested option (and the stock underlying an unvested option
is not considered owned by the individual who holds the unvested option). For
purposes of the preceding sentence, however, if a vested option is exercisable for
stock that is not substantially vested (as defined by Treasury Regulation §1.83-3(b)
and (j)), the stock underlying the option is not treated as owned by the individual
who holds the option.
11. General Release. As a condition of receiving the severance compensation and benefits
described in Section 6 or Section 10, Xxxxxxxxx will be required to execute a general release of
claims against Unilife and its officers, directors, agents and shareholders. Such general release
would not include rights to previously vested options or claims for any compensation earned
(including, without limitation, accrued vacation), or reimbursement of expenses incurred, through
the date of termination. Severance compensation will be paid in accordance with normal payroll
procedures, so long as the general release becomes irrevocable before the payments are due or
scheduled to begin.
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12. Dispute Resolution. Any controversy, claim or dispute involving the parties (or their
affiliated persons) directly or indirectly concerning this agreement shall be finally settled by
binding arbitration held in Harrisburg, Pennsylvania by one arbitrator in accordance with the rules
of employment arbitration then followed by the American Arbitration
Association or any successor to the functions thereof. The arbitrator shall apply Pennsylvania law
in the resolution of all controversies, claims and disputes and shall have the right and authority
to determine how his or her decision or determination as to each issue or matter in dispute may be
implemented or enforced. Any decision or award of the arbitrator shall be final and conclusive for
both Xxxxxxxxx and Unilife (and its affiliates), and there shall be no appeal there from other than
causes of appeal allowed by the Federal Arbitration Act. Unilife shall bear all costs of the
arbitrator in any action brought under this agreement. The arbitrator shall have the power to
award attorney’s fees and arbitration costs to the prevailing party, if the award of attorney’s
fees and litigation costs would be permitted by a court. The parties hereto agree that any action
to compel arbitration may be brought in the appropriate Pennsylvania state or federal court, and in
connection with such action to compel, the laws of the Commonwealth of Pennsylvania and the Federal
Arbitration Act shall control. Application may also be made to such court for confirmation of any
decision or award of the arbitrator, for an order of the enforcement and for any other remedies,
which may be necessary to effectuate such decision or award. The parties hereto hereby consent to
the jurisdiction of the arbitrator and of such court and waive any objection to the jurisdiction of
such arbitrator and court.
13. Non-waiver. A waiver of any provision of this agreement by either party shall not
prevent either party from enforcing that provision or any other provision hereof.
14. Assignment. This agreement is personal and may not be assigned by Xxxxxxxxx. Any
assignment of this agreement between Unilife (or its successor) and its affiliates (and their
successors) shall not constitute a termination of Xxxxxxxxx’x employment hereunder. This agreement
(including the Restrictive Covenants set forth in Sections 7 and 8) shall inure to the benefit of
and be binding upon any successor to Unilife. The parties specifically understand and agree that
the non-compete provisions of Section 8 will inure to the benefit of a successor and that Xxxxxxxxx
will remain bound by these provisions in the event of a sale or corporate reorganization of
Unilife.
15. Severability. Each provision of this agreement is severable and distinct from, and
independent of, every other provision hereof. If one provision hereof is declared void, the
remaining provisions shall remain in effect. Any provision of this agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the
extent of such prohibition or unenforceability without invalidating or affecting the remaining
provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
16. Entire Agreement. This agreement contains the entire agreement of the parties
concerning the employment relationship and supersedes any prior agreements or understandings
between the parties concerning the terms and conditions of Xxxxxxxxx’x employment, whether oral or
written; provided however, that any stock options or other stock-based awards provided to Xxxxxxxxx
shall be governed by Unilife’s stock incentive plans as they are amended from time to time, except
as provided herein. The parties
acknowledge, in entering into this agreement that they have not relied upon any promise or
inducement not specifically set forth herein. Any changes to this agreement must be in writing and
signed by both parties.
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17. Section 409A.
(a) This agreement is intended to comply with, or otherwise be exempt from, Code section 409A
and any regulations and Treasury guidance promulgated thereunder.
(b) Unilife shall undertake to administer, interpret, and construe this agreement in a manner
that does not result in the imposition on Xxxxxxxxx of any additional tax, penalty, or interest
under Code section 409A.
(c) Unilife and Xxxxxxxxx agree that they will execute any and all amendments to this
agreement permitted under applicable law as they mutually agree in good faith may be necessary to
ensure compliance with the distribution provisions of Code section 409A or as otherwise needed to
ensure that this agreement complies with that section.
(d) The preceding provisions, however, shall not be construed as a guarantee by Unilife of any
particular tax effect to Xxxxxxxxx under this agreement. Unilife shall not be liable to Xxxxxxxxx
for any payment made under this agreement that is determined to result in an additional tax,
penalty, or interest under Code section 409A, nor for reporting in good faith any payment made
under this agreement as an amount includible in gross income under that section.
(e) For purposes of Code section 409A, the right to a series of installment payments under
this agreement shall be treated as a right to a series of separate payments.
(f) With respect to any reimbursement of future expenses of, or any provision of in-kind
benefits to, Xxxxxxxxx, as specified under this agreement, such reimbursement of expenses or
provision of in-kind benefits shall be subject to the following conditions: (i) the expenses
eligible for reimbursement or the amount of in-kind benefits provided in one taxable year shall not
affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any
other taxable year, except for any medical reimbursement arrangement providing for the
reimbursement of expenses referred to in Code section 105(b); (ii) the reimbursement of an eligible
expense shall be made no later than the end of the year after the year in which such expense was
incurred; and (iii) the right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit. Any tax gross-up payment shall be made by no later
than the end of the calendar year following the year in which Xxxxxxxxx remits the taxes.
(g) “Termination of employment,” “resignation,” or words of similar import, as used in this
agreement means, for purposes of any payments under this agreement that
are payments of deferred compensation subject to Code section 409A, Xxxxxxxxx’x “separation
from service” as defined in that section.
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(h) If a payment obligation under this agreement arises on account of Xxxxxxxxx’x separation
from service while Xxxxxxxxx is a “specified employee” (as defined under Code section 409A and
determined in good faith by the Unilife), any payment of “deferred compensation” (as defined under
Treasury regulation section 1.409A-1(b)(1), after giving effect to the exemptions in Treasury
regulation sections 1.409A-1(b)(3) through (b)(12)) that is scheduled to be paid within six (6)
months after such separation from service shall accrue without interest and shall be paid within 15
days after the end of the six-month period beginning on the date of such separation from service
or, if earlier, within 15 days after the appointment of the personal representative or executor of
Xxxxxxxxx’x estate following his death.
18. Excise Tax on Parachute Payments. Xxxxxxxxx shall bear all expense of, and be solely
responsible for, all federal, state, local or foreign taxes due with respect to any payment
received hereunder, including, without limitation, any excise tax imposed by Code section 4999;
provided, however, that any payment or benefit received or to be received by Xxxxxxxxx in
connection with a Change in Control or the termination of Xxxxxxxxx’x employment (whether payable
pursuant to the terms of this Agreement (“Contract Payments”) or any other plan, arrangements or
agreement with Unilife or any affiliate (collectively with the Contract Payments, the “Total
Payments”) shall be reduced to the extent necessary so that no portion thereof shall be subject to
the excise tax imposed by Code section 4999 but only if, by reason of such reduction, the net
after-tax benefit received by Xxxxxxxxx shall exceed the net after-tax benefit that would be
received by Xxxxxxxxx if no such reduction was made.
For purposes of this Section 18, “net after-tax benefit” shall mean (i) the total of all
payments and the value of all benefits which Xxxxxxxxx receives or is then entitled to receive from
Unilife that would constitute “excess parachute payments” within the meaning of Code section 280G,
less (ii) the amount of all federal, state, local and foreign income taxes payable with respect to
the foregoing calculated at the maximum marginal income tax rate for each year in which the
foregoing shall be paid to Xxxxxxxxx (based on the rate in effect for such year as set forth in the
Code or other applicable tax law as in effect at the time of the first payment of the foregoing),
less (iii) the amount of excise taxes imposed with respect to the payments and benefits described
in (i) above by Code section 4999.
The foregoing determination shall be made by a nationally recognized accounting firm (the
“Accounting Firm”) selected by Unilife and reasonably acceptable to Xxxxxxxxx (which may be, but
will not be required to be, Unilife’s independent auditors). The Accounting Firm shall submit its
determination and detailed supporting calculations to both Xxxxxxxxx and Unilife within fifteen
(15) days after receipt of a notice from either Unilife or Xxxxxxxxx that Xxxxxxxxx may receive
payments which may be “parachute payments.” If the Accounting Firm determines that a reduction is
required by this Section 18, the Contract Payments consisting of cash severance shall be reduced to
the
extent necessary so that no portion of the Total Payments shall be subject to the excise tax
imposed by Code section 4999, and Unilife shall pay such reduced amount to Xxxxxxxxx in accordance
with the terms of this agreement. If the Accounting Firm determines that none of the Total
Payments, after taking into account any reduction required by this Section 18, constitutes a
“parachute payment” within the meaning of Code section 280G, it will, at the same time as it makes
such determination, furnish Xxxxxxxxx and Unilife an opinion that Xxxxxxxxx has substantial
authority not to report any excise tax under Code section 4999 on his federal income tax return.
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Xxxxxxxxx and Unilife shall each provide the Accounting Firm access to and copies of any
books, records, and documents in the possession of Xxxxxxxxx or Unilife, as the case may be,
reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in
connection with the preparation and issuance of the determinations and calculations contemplated by
this Section 18. The fees and expenses of the Accounting Firm for its services in connection with
the determinations and calculations contemplated by this Section 18 shall be borne by Unilife.
19. Counterparts. This agreement may be executed on separate counterparts, each of which
is deemed to be an original and all of which taken together constitute one and the same agreement.
20. Interpretation. The captions and headings of this agreement are not part of the
provisions hereof and shall have no force or effect.
21. Notices. Any notices, requests, demands and other communications provided for by this
agreement shall be sufficient if in writing and if hand delivered, sent by overnight courier, or
sent by registered or certified mail to Xxxxxxxxx at the last address he has filed in writing with
Unilife or, in the case of Unilife, to Unilife’s secretary at Unilife’s principal executive
offices.
22. Governing Law. The terms of this agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania without giving effect to provisions
thereof regarding conflict of laws.
IN WITNESS WHEREOF, and wishing to be legally bound, the parties have executed this agreement
as of the date first above written.
| UNILIFE MEDICAL SOLUTIONS, INC.: | Xxxx Xxxxxxxxx: | |||||||||
| By: | /s/ Xxxx Xxxxxxxx | /s/ Xxxx Xxxxxxxxx | ||||||||
| Name: | Xxxx Xxxxxxxx | |||||||||
| Title: | Chief Executive Officer | |||||||||
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