EMPLOYMENT AGREEMENT
Exhibit 10.10
This Agreement is made and entered into as of the 30th day of June, 2011 by and between BioZone Pharmaceuticals, Inc., a Nevada corporation with principal offices at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx, XX 00000 (together with its successors and assigns, "BioZone"), and Xxxxxxxxx Xxxxxx (the "Executive").
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(a) The Annual Bonus, and any and all stock based compensation (such as options and equity awards) (collectively, the “Clawback Benefits”) shall be subject to “Company Clawback Rights” as follows: During the period that Executive is employed by the Company and upon the termination of Executive’s employment and for a period of three (3) years thereafter, if there is a Restatement (as defined below) of any financial results from which any Clawback Benefits to Executive shall have been determined, Executive agrees to repay any amounts which were determined by reference to any Company financial results which were later restated (as defined below), to the extent the Clawback Benefits amounts paid exceed the Clawback Benefits amounts that would have been paid, based on the Restatement of the Company’s financial information. All Clawback Benefits amounts resulting from such restated financial results shall be retroactively adjusted by the Compensation Committee to take into account the restated results, and any excess portion of the Clawback Benefits resulting from such restated results shall be immediately surrendered to the Company and if not so surrendered within ninety (90) days of the revised calculation being provided to Executive by the Compensation Committee following a publicly announced Restatement, the Company shall have the right to take any and all action to effectuate such adjustment. The calculation of the Revised Clawback Benefits amount shall be determined by the Compensation Committee and applicable law, rules and regulations. All determinations by the Compensation Committee with respect to the Clawback Rights shall be final and binding on the Company and Executive. The Clawback Rights shall be subject to applicable law, rules and regulations. For purposes of this Section 7, a restatement of financial results that requires a repayment of a portion of the Clawback Benefits amounts shall mean “a restatement resulting from material non-compliance of the Company with any financial reporting requirement under the federal securities laws and shall not include a restatement of financial results resulting from subsequent changes in accounting pronouncements or requirements which were not in effect on the date the financial statements were originally prepared (“Restatement”)”. The parties acknowledge it is their intention that the foregoing Clawback Rights as relates to Restatement conform in all respects to the provisions of the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act of 2010 (the “Xxxx Xxxxx Act”) and requires recovery of all “incentive-based” compensation, pursuant to the provisions of the Xxxx Xxxxx Act and any and all rules and regulations promulgated thereunder from time to time in effect. Accordingly, the terms and provisions of this Agreement shall be deemed automatically amended from time to time to assure compliance with the Xxxx Xxxxx Act and such rules and regulation as hereafter may be adopted and in effect.
(b) Notwithstanding the foregoing, the Clawback Benefits, including Share Awards, shall be subject to automatic forfeiture to the Company if at any time during the period that the Executive is employed by the Company and upon the termination of the Executive’s employment and for a period of three (3) years thereafter if there is (i) any breach of any Agreement by Executive relating to confidentiality, non-competition, non-raid of employees, or non-solicitation of vendors or customers; or (ii) any material breach of Company policy or procedures which causes harm to the Company, as determined by the Board (collectively, the “Fiduciary Clawbacks”). In the event of a Fiduciary Clawback, the Executive shall forfeit the Clawback Benefits, including Share Awards, to the Company within ninety (90) days of the occurrence of a breach pursuant to (i) or (ii) herein.
(a) If at any time during the Term, Executive shall invent, discover, or devise, either by himself or jointly with any other person, any invention, design, idea or any other form of intangible property (together "Invention") which relates to, or is connected or capable of being utilized, directly or indirectly, in connection with any trade or business being conducted at the time by BioZone or any Subsidiary or affiliate, the Invention shall, to the extent of Executive's entire interest, be the sole property of BioZone, and BioZone shall have the exclusive right to use, adapt or patent (or not to do so) the same, as determined by BioZone in its sole and absolute discretion. Executive shall immediately communicate to BioZone the full details of any such Invention and if BioZone applies for a patent in respect of such Invention, it shall make the patent application in the joint names of BioZone and Executive and Executive shall concur in applying for such Invention patent, and, at BioZone's sole expense, shall prepare all necessary specifications and drawings and give every assistance in Executive's power to procure the patent grant. Executive's interest in any such patent when granted shall be unconditionally and irrevocably assigned to BioZone.
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(b) Executive shall, both during and after the Term, at BioZone's request and sole expense, do all reasonable acts and things and shall execute all documents that BioZone may consider necessary or desirable to make such Invention available to BioZone and to perfect and defend BioZone's title to the Invention, including, but not limited to Executive irrevocably appointing BioZone as his attorney and agent and in his name and/or on his behalf for signing, executing or otherwise completing any deed or document and to do all acts and things that BioZone may reasonably consider necessary or expedient for purposes of this Section 6.
(i) Earned and unpaid Base Salary through the date of death or date of termination of Executive's employment by BioZone ("Termination Date") for disability, payable in a cash lump sum no later than 15 days following the Termination Date; and
(ii) all accrued and unpaid vacation time and all other additional benefits then due or earned in accordance with applicable plans and programs of BioZone.
For purposes of this Section 10(a), the term "Disability" means any illness or incapacity which prohibits Executive from rendering services of the character as contemplated hereunder (i) for a period of 120 consecutive days or 150 days out of 12 consecutive months, or (ii) which is expected to result in Executive's death or be of indefinite duration.
(i) "Cause" shall mean:
A. Executive's refusal or failure to carry out specific lawful Board directive(s) which are of a material nature and consistent with his status as Chairman and CEO;
B. Executive's willful refusal or failure to perform a material part of his duties hereunder;
C. Commission by Executive of a material breach of this Agreement;
D. Executive's conviction of any felony (or plea of guilty or nolo contendere thereto) that involves moral turpitude;
E. Willful misconduct by Executive with regard to BioZone or its subsidiaries or their affiliates, assets, businesses or employees; or
F. Executive commits a fraudulent or dishonest act in his relations with BioZone or its subsidiaries or affiliates ("Dishonest" for this purpose means Executive's knowing or reckless material statement or omission for his own benefit).
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(ii) A termination for Cause shall not take effect unless the provisions of this paragraph (ii) are complied with. Executive shall be given written notice by BioZone of its intention to terminate him for Cause, such notice to state in detail the particular alleged act or acts or failure or failures to act that constitute the grounds on which the proposed termination for Cause is based. Executive shall have 10 business days after the date that such written notice has been received by him in which to cure such conduct, to the extent such cure is possible. If he fails to cure such conduct, Executive shall then be entitled to appear at a special hearing before the Board that is held for the purpose of determining whether Cause exists. Such hearing shall be held within 15 days of such notice to Executive, provided he requests such hearing within 10 days of the written notice from BioZone stating its intention to terminate him for Cause. If, within five(5) days following such hearing, Executive is furnished written notice by the Board that it has (excluding Executive if he is a member of the Board) determined that, in its good faith judgment, grounds for Cause on the basis of the original notice exist, he shall thereupon be terminated for Cause.
(iii) In the event BioZone terminates Executive's employment for Cause, he shall be entitled to and his sole remedies under this Agreement shall be earned and unpaid Base Salary through the Termination Date, payable in a cash lump sum no later than 15 days following the Termination Date; and all accrued and unpaid vacation time and all other additional benefits then due or earned in accordance with BioZone's applicable plans or programs.
(i) earned and unpaid Base Salary through the Termination Date, payable in a cash lump sum no later than 15 days following such date;
(ii) the sum of Executive's Base Salary, at the annualized rate in effect on the Termination Date (or, in the event a reduction in Base Salary is a basis for a Termination by Executive for Good Reason, then the Base Salary in effect immediately prior to such reduction) divided by 12 ("Monthly Continuation Payments") and which Monthly Continuation Payments are to be paid to Executive for a period of 6 months but not to extend beyond the last day of the Term (the "Severance Period");
(iii) any outstanding stock options or shares of Restricted Stock which are unvested shall vest and Executive shall have the right to exercise any vested stock options during the Severance Period or for the remainder of the exercise period;
(iv) continued participation in all medical, health and life insurance plans at the same benefit level at which he was participating on the date of the termination of his employment until the earlier of the end of the Severance Period or the date, or dates, he receives equivalent coverage and benefits under the plans and programs of a subsequent employer (such coverage and benefits to be determined on a coverage-by-coverage, or benefit-by-benefit, basis); and
(v) all accrued and unpaid vacation and all other additional benefits then due or earned in accordance with BioZone’s applicable plans or programs.
"Termination Without Cause" shall mean BioZone terminates Executive's employment for any reason other than Cause (as defined in Section 10(b)) or due to Executive's death or Disability.
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The provisions of this Agreement are intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and any final regulations and guidance promulgated thereunder (“Section 409A”) and shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A. The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.
To the extent that Executive will be reimbursed for costs and expenses or in-kind benefits, except as otherwise permitted by Section 409A, (a) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit, (b) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; provided that the foregoing clause (b) shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect and (c) such payments shall be made on or before the last day of the taxable year following the taxable year in which you incurred the expense.
A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination constitutes a “Separation from Service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement references to a “termination,” “termination of employment” or like terms shall mean Separation from Service.
Each installment payable hereunder shall constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b), including Treasury Regulation Section 1.409A-2(b)(2)(iii). Each payment that is made within the terms of the “short-term deferral” rule set forth in Treasury Regulation Section 1.409A-1(b)(4) is intended to meet the “short-term deferral” rule. Each other payment is intended to be a payment upon an involuntary termination from service and payable pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii), et. seq., to the maximum extent permitted by that regulation, with any amount that is not exempt from Code Section 409A being subject to Code Section 409A.
Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” within the meaning of Section 409A at the time of Executive’s termination, then only that portion of the severance and benefits payable to Executive pursuant to this Agreement, if any, and any other severance payments or separation benefits which may be considered deferred compensation under Section 409A (together, the “Deferred Compensation Separation Benefits”), which (when considered together) do not exceed the Section 409A Limit (as defined herein) may be made within the first six (6) months following Executive’s termination of employment in accordance with the payment schedule applicable to each payment or benefit. Any portion of the Deferred Compensation Separation Benefits in excess of the Section 409A Limit otherwise due to Executive on or within the six (6) month period following Executive’s termination will accrue during such six (6) month period and will become payable in one lump sum cash payment on the date six (6) months and one (1) day following the date of Executive’s termination of employment. All subsequent Deferred Compensation Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if Executive dies following termination but prior to the six (6) month anniversary of Executive’s termination date, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Executive’s death and all other Deferred Compensation Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit.
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For purposes of this Agreement, “Section 409A Limit” will mean a sum equal (x) to the amounts payable prior to March 15 following the year in which Executive terminations plus (y) the lesser of two (2) times: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during the Company’s taxable year preceding the Company’s taxable year of Executive’s termination of employment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any IRS guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive’s employment is terminated.
(a) During the Term and thereafter, Executive shall not, without BioZone's prior written consent, disclose to anyone (except in good faith in the ordinary course of business to a person who will be advised by Executive to keep such information confidential) or make use of any Confidential Information except in the performance of his duties hereunder or when required to do so by legal process, by any governmental agency having supervisory authority over the business of BioZone or by any administrative or legislative body (including a committee thereof) that requires him to divulge, disclose or make accessible such information. In the event that Executive is so ordered, he shall give prompt written notice to BioZone to allow BioZone the opportunity to object to or otherwise resist such order.
(b) During the Term and thereafter, Executive shall not disclose the existence or contents of this Agreement beyond what is disclosed in any proxy statement or documents filed with the government unless and to the extent such disclosure is required by law, by a governmental agency, or in a document required by law to be filed with a governmental agency or in connection with enforcement of his rights under this Agreement. In the event that disclosure is so required, Executive shall give prompt written notice to BioZone to allow BioZone the opportunity to object to or otherwise resist such requirement. This restriction shall not apply to such disclosure by him to members of his immediate family, his tax, legal or financial advisors, any lender, or tax authorities, or to potential future employers to the extent necessary, each of whom shall be advised not to disclose such information.
(c) "Confidential Information" shall mean all information concerning the business of BioZone or any Subsidiary relating to any of their products, product development, trade secrets, customers, suppliers, finances, and business plans and strategies. Excluded from the definition of Confidential Information is information (i) that is or becomes part of the public domain, other than through the breach of this Agreement by Executive or (ii) regarding BioZone's business or industry properly acquired by Executive in the course of his career as an executive in BioZone's industry and independent of Executive's employment by BioZone. For this purpose, information known or available generally within the trade or industry of BioZone or any Subsidiary shall be deemed to be known or available to the public.
(d) "Subsidiary" shall mean any corporation controlled directly or indirectly by BioZone.
(e) Executive agrees to cooperate with BioZone, during the Term and thereafter, by making himself reasonably available to testify on behalf of BioZone or any Subsidiary in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, and to assist BioZone, or any Subsidiary, in any such action, suit, or proceeding, by providing information and meeting and consulting with the Board or its representatives or counsel, or representatives or counsel to BioZone, or any Subsidiary as reasonably requested; provided however, that the same does not materially interfere with his then current professional activities. BioZone agrees to reimburse Executive, on an after-tax basis, for all expenses actually incurred in connection with his provision of testimony or assistance.
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(f) Executive agrees that, during the Term and thereafter he will not make statements or representations, or otherwise communicate, directly or indirectly, in writing, orally, or otherwise, or take any action which may, directly or indirectly, disparage BioZone or any Subsidiary or their respective officers, directors, employees, advisors, businesses or reputations. BioZone agrees that, during the Term and thereafter BioZone will not make statements or representations, or otherwise communicate, directly or indirectly, in writing, orally, or otherwise, or take any action which may directly or indirectly, disparage Executive or his business or reputation. Notwithstanding the foregoing, nothing in this Agreement shall preclude either Executive or BioZone from making truthful statements or disclosures that are required by applicable law, regulation or legal process.
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24. GOVERNING LAW/JURISDICTION. This Agreement shall be governed by and construed and interpreted in accordance with the laws of New York without reference to principles of conflict of laws. Subject to Section 16, BioZone and Executive hereby consent to the jurisdiction of any or all of the following courts for purposes of resolving any dispute under this Agreement: (i) the United States District Court for New York, or (ii) any of the courts of the State of New York. BioZone and Executive further agree that any service of process or notice requirements in any such proceeding shall be satisfied if the rules of such court relating thereto have been substantially satisfied. BioZone and Executive hereby waive, to the fullest extent permitted by applicable law, any objection which it or he may now or hereafter have to such jurisdiction and any defense of inconvenient forum.
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If to BioZone:
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx, XX 00000
Attention: Chief Financial Officer
with copies to (such copies not constituting notice):
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx, XX 00000
Attention: Chairman of the Governance and Nominating Committee of the Board
If to EXECUTIVE:
Xxxxxxxxx Xxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.
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__________________________________________
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By: Xxxxxxx Xxxxx Novo
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Title: President
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EXECUTIVE
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___________________________________________
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| Xxxxxxxxx Xxxxxx |
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