EXHIBIT 10.20
EMPLOYMENT AGREEMENT
THIS AGREEMENT made by and between CAMBREX CORPORATION, a Delaware
corporation (the "Company"), and _________________, residing at
_________________________ (the "Employee"), as of the 6th day of February, 2006.
WHEREAS, the Employee presently is a key management employee of the
Company, namely its __________________________________; and
WHEREAS, the Board of Directors of the Company (the "Board"), on the
advice of its Compensation Committee, has determined that it is in the best
interests of the Company and its stockholders to assure that the Company will
have the continued dedication of the Employee, notwithstanding the possibility,
threat, or occurrence of a Change of Control (as defined below) of the Company.
The Board believes it is imperative to diminish the inevitable distraction of
the Employee by virtue of the personal uncertainties and risks created by a
pending or threatened Change of Control, to encourage the Employee's full
attention and dedication to the Company currently and in the event of any
threatened or pending Change of Control which provides the Employee with
individual financial security and which are competitive with those of other
corporations. In order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions.
(a) The "Effective Date" shall be the first date during the "Change of
Control Period" (as defined in Section 1(b)) on which a Change of Control
occurs. Anything in this Agreement to the contrary notwithstanding, if the
Employee's employment with the Company is terminated prior to the date on which
a Change of Control occurs, and it is reasonably demonstrated that such
termination (1) was at the request of a third party who has taken steps
reasonably calculated to effect a Change of Control or (2) otherwise arose in
connection with or anticipation of a Change of Control, then for all purposes of
this Agreement the "Effective Date" shall mean the date immediately prior to the
date of such termination.
(b) The "Change of Control Period" is the period commencing on the
date hereof and ending on the third anniversary of such date; provided, however,
that commencing on the date one year after the date hereof, and on each
successive anniversary thereof (each such anniversary being hereinafter referred
to as a "Renewal Date"), the Change of Control Period shall be automatically
extended so as to end on the third anniversary of such Renewal Date unless at
least sixty (60) days prior to such Renewal date the Company shall give notice
that the Change of Control Period shall not be so extended, in which event the
then current Change of Control Period shall not be extended and shall end on the
then applicable ending date.
2. Change of Control. For the purpose of this Agreement, a "Change of
Control" shall mean:
(a) the acquisition (other than from the Company) by any person,
entity or "group" (within the meaning of Section 13 (d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the "Exchange Act") but excluding for this
purpose the Company or its subsidiaries or any employee benefit plan of the
Company or its subsidiaries which acquires beneficial ownership of voting
securities of the Company) of "beneficial ownership" (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of fifteen percent (15%) or more of
either the then outstanding shares of common stock or the combined voting power
of the Company's then outstanding voting securities entitled to vote generally
in the election of directors; or
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(b) individuals who, as of the date hereof, constitute the Board (as
of the date hereof the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided that any person becoming a member of the
Board subsequent to the date hereof whose election or nomination for election by
the Company's stockholders (other than an election or nomination of an
individual whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be, for purposes of this
Agreement, considered a member of the Incumbent Board; or
(c) approval by the stockholders of the Company of either a
reorganization, or merger, or consolidation, with respect to which persons who
were the stockholders of the Company immediately prior to such reorganization,
merger or consolidation do not, immediately thereafter, own more than fifty
percent (50%) of the combined voting power entitled to vote generally in the
election of directors of the reorganized, merged or consolidated entity's then
outstanding voting securities, or a liquidation or dissolution of the Company,
or the sale of all or substantially all of the assets of the Company; or
(d) the sale or disposition by the Company of all or substantially all
of the assets of the Company; or
(e) any other event or series of events or which, notwithstanding any
of the foregoing provisions of this Section 2 to the contrary, is determined by
a majority of the Incumbent Board to constitute a Change of Control for the
purposes of this Agreement.
The term "the sale or disposition by the Company of all or substantially all of
the assets of the Company" shall mean a sale or other disposition transaction or
series of related transactions involving assets of the Company or of any direct
or indirect subsidiary of the Company (including the stock of any direct or
indirect subsidiary of the Company) in which the value of the assets or stock
being sold or otherwise disposed of (as measured by the purchase price being
paid therefor or by such other method as the Board determines is appropriate in
a case where there is no readily ascertainable purchase price) constitutes 35%
or more of the enterprise value of the Company (as hereinafter defined). The
"enterprise value of the Company" shall be the aggregate market value of the
then Outstanding Company Common Stock (on a fully diluted basis) plus aggregate
debt minus cash. The aggregate market value of the shares of Outstanding Company
Common Stock shall be determined by multiplying the number of shares of
Outstanding Company Common Stock (on a fully diluted basis) outstanding on the
date of the execution and delivery of a definitive agreement with respect to the
transaction or series of related transactions (the "Transaction Date") by the
average closing price of the shares of Outstanding Company Common Stock for the
ten trading days immediately preceding the Transaction Date. Debt and cash shall
be measured by the actual debt and cash on hand as of the end of the month
preceding the Transaction Date.
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3. Employment Period. The Company hereby agrees to employ the Employee, and
the Employee hereby agrees to remain in the employ of the Company, for the
period (the "Employment Period") commencing on the Effective Date and ending on
the third anniversary of such date; provided, however, that if a Change of
Control actually occurs but the Employee's employment is terminated by the
Company other than for Cause (as defined in Section 5(b) hereof) prior to the
occurrence of such Change of Control but within twelve (12) months after
(a) the commencement of a tender offer for at least 15% of the
Company's common stock by any person (other than the Company, one
of its subsidiaries or any employee benefit plan sponsored or
maintained by the Company or one of its subsidiaries) that has
not been withdrawn on or before the date of such termination;
(b) the commencement of a proxy contest intended to remove control of
the Company's business from the Incumbent Board that has not been
abandoned on or before the date of such termination; or
(c) the execution of a definitive agreement to merge or otherwise
consolidate the Company with or into another corporation or to
sell a substantial portion of the Company's assets (in each case,
other than a transaction involving only the Company and one or
more corporations or other entities directly or indirectly owned
and controlled by the Company) that is still binding on the
parties thereto at the date of such termination;
the Effective Date of this Agreement shall be deemed to be the day immediately
prior to the date of such termination and the date of such termination shall be
deemed to be the Employee's Date of Termination (as defined in Section 5(e)
hereof) for the purposes of this Agreement.
4. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, (A) the Employee's position
shall be at least commensurate in all substantial respects with the Employee's
position with the Company and its subsidiaries during the ninety-day period
immediately preceding the Effective Date and (B) the Employee's services shall
be performed at the location where the Employee was employed immediately
preceding the Effective Date or any office or location less than thirty-five
(35) miles from such location.
(ii) During the Employment Period, the Employee agrees to devote
reasonable attention and time during normal business hours to the business and
affairs of the Company and, to the extent necessary to discharge the
responsibilities assigned to the Employee hereunder, to use the Employee's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. It is expressly understood and agreed that to the extent that
any outside activities have been conducted by the Employee prior to the
Effective Date, the continued conduct of such activities subsequent to the
Effective Date shall not thereafter be deemed to interfere with the performance
of the Employee's responsibilities to the Company.
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(b) Compensation.
(i) Base Salary. During the Employment Period, the Employee shall
receive a base salary ("Base Salary") at a monthly rate at least equal to the
highest monthly base salary paid or payable to the Employee by the Company and
its subsidiaries during the twelve-month period immediately preceding the month
in which the Effective Date occurs. During the Employment Period, the Base
Salary shall be reviewed at least annually and shall be increased at any time
and from time to time as shall be substantially consistent with increases in
base salary awarded in the ordinary course of business to other key employees of
the Company and its subsidiaries. Any increase in Base Salary shall not serve to
limit or reduce any other obligation to the Employee under this Agreement.
(ii) Annual Bonus. In addition to Base Salary, the Employee shall
be eligible (but not entitled) to receive, for each fiscal year during the
Employment Period, an annual bonus (an "Annual Bonus") (either pursuant to any
incentive bonus plan maintained by the Company or otherwise) in cash on the same
basis as with respect to the fiscal year immediately preceding the fiscal year
in which the Effective Date occurs.
5. Termination.
(a) Death or Disability. This Agreement shall terminate automatically
upon the Employee's death. If the Company determines in good faith that the
Disability of the Employee has occurred (pursuant to the definition of
"Disability" set forth below), it may give to the Employee written notice of its
intention to terminate the Employee's employment. In such event, the Employee's
employment with the Company shall terminate effective on the thirtieth (30th)
day after receipt of such notice by the Employee (the "Disability Effective
Date"), provided that, within the thirty (30) days after such receipt, the
Employee shall not have returned to full-time performance of the Employee's
duties. For purposes of this Agreement, "Disability" means disability which, at
least twenty-six (26) weeks after its commencement, is determined to be total
and permanent by a physician selected by the Company or its insurers and
acceptable to the Employee or the Employee's legal representative (such
agreement as to acceptability not to be withheld unreasonably).
(b) Cause. The Company may terminate the Employee's employment for
"Cause". For purposes of this Agreement, "Cause" shall constitute either (i)
personal dishonesty or breach of fiduciary duty involving personal profit; (ii)
the commission of a criminal act related to the performance of duties, or the
furnishing of proprietary confidential information about the Company to a
competitor, or potential competitor or third party whose interests are adverse
to those of the Company; (iii) habitual intoxication by alcohol or drugs during
work hours; or (iv) conviction of a felony.
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(c) Good Reason. The Employee's employment may be terminated by the
Employee for Good Reason. For purposes of this Agreement, "Good Reason" means:
(i) relocation of the principal place at which the Employee's
duties are to be performed to a location more than thirty-five (35) miles from
the principal place where the Employee's duties were performed during the
ninety-day period immediately preceding the Effective Date;
(ii) a substantial reduction in the Base Salary, or in the
benefits or perquisites provided the Employee from those which pertained during
the 90-day period immediately preceding the Effective Date;
(iii) a substantial reduction in the Employee's,
responsibilities, authorities or functions from those which pertained during the
90-day period immediately preceding the Effective Date;
(iv) a substantial adverse change in the Employee's work
conditions from those which pertained during the 90-day period immediately
preceding the Effective Date; and
(v) any failure by the Company to comply with and satisfy Section
II(c) of this Agreement.
For purposes of this Section 5(c), any good faith determination of
"Good Reason" made by the Employee shall be conclusive. Notwithstanding anything
in this Agreement to the contrary, a termination by the Employee for any reason
during the 30-day period immediately following the first anniversary of the
Effective Date shall be deemed to be a termination for Good Reason for all
purposes of this Agreement.
(d) Notice of Termination. Any termination by the Company for Cause or
by the Employee for Good Reason shall be communicated by Notice of Termination
to the other party hereto given in accordance with Section 12(b) of this
Agreement. For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee's
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than fifteen (15) days after
the giving of such notice). The failure by the Employee to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Good Reason shall not waive any right of the Employee hereunder or preclude the
Employee from asserting such fact or circumstance in enforcing his rights
hereunder.
(e) Date of Termination. "Date of Termination" means the date of
receipt of the Notice of Termination or any later date specified therein, as the
case may be; provided, however, that (i) if the Employee's employment is
terminated by the Company other than Cause or Disability, the Date of
Termination shall be the date on which the Company notifies the Employee of such
termination and (ii) if the Employee's employment is terminated by reason of
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death or Disability, the Date of Termination shall be the date of death of the
Employee or the Disability Effective Date, as the case may be.
6. Obligation of the Company upon Termination.
(a) Death. If the Employee's employment is terminated by reason of the
Employee's death, this Agreement shall terminate without further obligations to
the Employee's legal representatives under this Agreement, other than those
obligations accrued or earned and vested (if applicable) by the Employee as of
the Date of Termination, including, for this purpose (i) the Employee's full
Base Salary through the Date of Termination at the rate in effect on the Date of
Termination or, if higher, at the highest rate in effect at any time from the
ninety-day period preceding the Effective Date through the Date of Termination
(the "Highest Base Salary"), (ii) the product of the Annual Bonus paid to the
Employee for the last full fiscal year and a fraction, the numerator of which is
the number of days in the current fiscal year through the Date of Termination,
and the denominator of which is three hundred sixty-five (365) and (iii) any
compensation previously deferred by the Employee (together with accrued interest
thereon, if any) and not yet paid by the Company and any accrued vacation pay
not yet paid by the Company (such amounts specified in clauses (i), (ii) and
(iii) are hereinafter referred to as "Accrued Obligations"). All such Accrued
Obligations shall be paid to the Employee's estate or beneficiary, as
applicable, in a lump sum in cash within thirty (30) days of the Date of
Termination. Anything in this Agreement to the contrary notwithstanding, the
Employee's family shall be entitled to receive benefits at least equal to the
most favorable benefits provided by the Company and any of its subsidiaries
under such plans, programs, practices and policies relating to family death
benefits, if any, in accordance with the most favorable plans, programs,
practices and policies of the company and its subsidiaries in effect at any time
during the ninety-day period immediately preceding the Effective Date or, if
more favorable to the Employee and/or the Employee's family, as in effect on the
date of the Employee's death with respect to other key employees of the Company
and its subsidiaries and their families.
(b) Disability. If the Employee's employment is terminated by reason
of the Employee's Disability, this Agreement shall terminate without further
obligations to the Employee; other than those obligations accrued or earned and
vested (if applicable) by the Employee as of the Date of Termination, including
for this purpose, all Accrued Obligations. All such Accrued Obligations shall be
paid to the Employee in a lump sum in cash within thirty (30) days of the Date
of Termination. Anything in this Agreement to the contrary notwithstanding, the
Employee shall be entitled after the Disability Effective Date to receive
disability and other benefits at least equal to the most favorable of those
provided by the Company and its subsidiaries to disabled employees and/or their
families in accordance with such plans, programs, practices and policies of the
Company and its subsidiaries in effect at any time during the ninety-day period
immediately preceding the Effective Date or, if more favorable to the Employee
and/or the Employee's family, as in effect at any time thereafter with respect
to other key employees of the Company and its subsidiaries and their families.
(c) Cause; Other than for Good Reason. If the Employee's employment
shall be terminated for Cause, this Agreement shall terminate without further
obligations to the Employee other than the obligation to pay to the Employee the
Highest Base Salary through the Date of Termination plus the amount of any
compensation previously deferred by the Employee (together with accrued interest
thereon, if any).
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If the Employee terminates employment other than for Good Reason, this Agreement
shall terminate without further obligations to the Employee, other than those
obligations accrued or earned and vested (if applicable) by the Employee through
the Date of Termination, including for this purpose, all Accrued Obligations.
All such Accrued Obligations shall be paid to the Employee in a lump sum in cash
within thirty (30) days of the Date of Termination.
(d) Good Reason; Other than for Cause or Disability. If, during the
Employment Period, the Company shall terminate the Employee's employment other
than for Cause, Disability, or death or if the Employee shall terminate his
employment for Good Reason:
(i) the Company shall pay to the Employee in a lump sum in cash
within thirty (30) days after the Date of Termination the aggregate of the
following amounts:
A. to the extent not theretofore paid, the Employee's
Highest Base Salary through the Date of Termination; and
B. the product of (x) the highest Annual Bonus paid to the
Employee during the three fiscal years immediately preceding the Date of
Termination and (y) a fraction, the numerator of which is the number of days in
the current fiscal year through the Date of Termination and the denominator of
which is three hundred sixty-five (365); and
C. the product of (x) a fraction, the numerator of which is
thirty-six (36) minus the number of whole months the Employee has been employed
by the Company following the first anniversary of the Effective Date and the
denominator of which is twelve (12) and (y) the annualized Highest Base Salary;
and
D. the product of (x) fraction, the numerator of which is
thirty-six (36) minus the number of whole months the Employee has been employed
by the Company following the first anniversary of the Effective Date and the
denominator of which is twelve (12) and (y) the highest Annual Bonus paid to the
Employee during three fiscal years immediately preceding the Date of
Termination, provided that Employee's Annual Bonus under this Section shall be
his Target Bonus until an Annual Bonus has actually been paid; and
E. in the case of compensation previously deferred by the
Employee, all amounts previously deferred (together with accrued interest
thereon, if any) and not yet paid by the Company, and any accrued vacation pay
not yet paid by the Company; and
F. a lump-sum payment equal to the excess of (a) the
actuarial equivalent of the benefit under the retirement plan of the Company or
a subsidiary of the Company in which the Employee is a participant at the date
hereof or any successor retirement plan (the "Retirement Plan") (and the
supplemental and/or excess retirement plan, if any) the Employee would receive
if he remained employed by the Company at the compensation level provided for in
Section 6(d)(i) of this Agreement through the end of the Employment Period,
assuming Employee was fully vested under such plan(s), over (b) the actuarial
equivalent of the actual benefit, if any, the Employee is to receive under the
Retirement Plan (and the supplemental and/or excess retirement plan), utilizing,
in each case, the payment option available under the Retirement Plan (and the
supplemental and/or excess retirement plan) which will produce the greatest
lump-sum benefit to the Employee; and
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(ii) for the remainder of the Employment Period, or such longer
period as any plan, program, practice or policy may provide, the Company shall
continue benefits to the Employee and/or the Employee's family at least equal to
those which would have been provided to them as if the Employee's employment had
not been terminated, in accordance with the most favorable employee welfare
benefit plans (as such term is defined in Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended) of the Company and its
subsidiaries (including health insurance and life insurance) during the
ninety-day period immediately preceding the Effective Date or, if more favorable
to the Employee, as in effect at any time thereafter with respect to other key
employees and their families, and for purposes of eligibility for retiree
benefits pursuant to such employee welfare benefit plans, the Employee shall be
considered to have remained employed until the end of the Employment Period and
to have retired on the last day of such period; and
(iii) all outstanding equity awards shall immediately vest and,
as applicable, become exercisable; and
(iv) the Date of Termination shall be considered the Vesting Date
under the Company's 1987 Long Term Incentive Plan.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Employee's continuing or future participation in any benefit, bonus,
incentive or other plans, programs, policies or practices, provided by the
Company or any of its subsidiaries and for which the Employee may qualify, nor
shall anything herein limit or otherwise affect such rights as the Employee may
have under any stock option or other agreements with the Company or any of its
subsidiaries. Amounts which are vested benefits or which the Employee is
otherwise entitled to receive under any plan, policy, practice or program of the
Company or any of its subsidiaries at or subsequent to the Date of Termination
shall be payable in accordance with such plan, policy, practice or program
provided, however, that in the event the terms of any such plan, policy,
practice or program concerning the payment of benefits thereunder shall conflict
with any provision of this Agreement, the terms of this Agreement shall take
precedence but only if and to the extent the payment would not adversely affect
the tax exempt status (if applicable) of any such plan, policy, practice or
program and only if the Employee agrees in writing that such payment shall be in
lieu of any corresponding payment from such plan, policy, practice or program.
8. Full Settlement. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against the Employee or
others. In no event shall the Employee be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Employee under any of the provisions of this Agreement. The Company agrees to
pay, to the full extent permitted by law, all legal fees and expenses which the
Employee may reasonably incur as a result of any contest (regardless of the
outcome thereof) by the Company or others of the validity or enforceability of,
or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by the Employee about
the amount of any payment pursuant to Section 9 of this Agreement), plus in each
case interest at the applicable Federal rate provided for in Section 7872(f)(2)
of the Internal Revenue Code of 1986, as amended (the "Code").
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9. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by the Company 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 (a
"payment"), would be subject to the excise tax imposed by Section 4999 of the
Code or any interest or penalties 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 the amount such that after
payment by the Employee of all taxes (including any interest or penalties
imposed with respect to such taxes), including any 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.
(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether a Gross-Up Payment
is required and the amount of such Gross-Up Payment, shall be made by the
Company's regular outside independent public accounting firm (the "Accounting
Firm") which shall provide detailed supporting calculations both to the Company
and the Employee within fifteen (15) business days of the Date of Termination,
if applicable, or such earlier time as is requested by the Company. The initial
Gross-Up Payment, if any, as determined pursuant to this Section 9(b), shall be
paid to the Employee within five (5) days of the receipt of the Accounting
Firm's determination. If the Accounting Firm determines that no Excise Tax is
payable by the Employee, it shall furnish the Employee with an opinion that he
has substantial authority under Section 6661 of the Code not to report any
Excise Tax on his federal income tax return. 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 ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 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 shall be promptly paid by the
Company to or for the benefit of the Employee.
(c) The Employee shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten (10) business days after the later of either
(i) the date the Employee has actual knowledge of such claim, or (ii) ten (10)
days after the Internal Revenue Service issues to the Employee either a written
report proposing imposition of the Excise Tax or a statutory Notice of
Deficiency with respect thereto, and shall apprise the Company 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 thirty-day
period following the date on which it gives such notice to the Company
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(or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the Employee in writing
prior to the expiration of such period that it desires to contest such claim,
the Employee shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim,
(iv) permit the Company to participate in any proceedings
relating to such claim; provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold the
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 of the
foregoing provisions of this Section 9(c), the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Employee to request or accede to a request for an
extension of the statute of limitations with respect only to the tax claimed, or
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 the Company shall determine; provided, however,
that if the Company directs the Employee to pay such claim and xxx for a refund,
the Company shall advance the amount of such payment to the Employee, on an
interest-free basis 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 hereto, imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided
that any extension of the statue of limitations requested or acceded to by the
Employee at the Company's request and 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, the
Company's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the 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 by the
Company pursuant to Section 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 Section 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 outstanding shares of
common stock or the combined voting power of the Company's then outstanding
voting securities entitled to vote generally in the election of directors; or
Employee of an amount
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advanced by the Company pursuant to Section 9(c), a determination is made that
the Employee shall not be entitled to any refund with respect to such claim and
the Company does not notify the Employee in writing of its intent to contest
such denial of refund prior to the expiration of thirty (30) days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.
(e) In the event that any state or municipality or subdivision thereof
shall subject any Payment to any special tax which shall be in addition to the
generally applicable income tax imposed by such state, municipality, or
subdivision with respect to receipt of such Payment, the foregoing provisions of
this Section 9 shall apply, mutatis mutandis, with respect to such special tax.
10. Non-competition. As a condition to receiving any benefits pursuant to
this Agreement, the Employee agrees that during his period of employment and
through the first anniversary of his Date of Termination, the Employee shall not
engage in or become associated with any Competitive Activity. For purposes of
this Section 10, a "Competitive Activity" shall mean any business or other
endeavor that engages in any country in which the Company or its Affiliates have
business operations in a business that directly or indirectly competes with all
or any substantial part of any of the business in which the Company or its
Affiliates is engaged at the time of the Employee's Date of Termination. The
Employee shall be considered to have become "engaged" or "associated" with a
Competitive Activity if he becomes involved as an owner, employee, officer,
director, independent contractor, agent, partner, advisor, lender, or in any
other capacity calling for the rendition of the Employee's personal services,
either alone or with any individual, partnership, corporation or other
organization that is engaged in a Competitive Activity and his involvement
relates in any respect to the Competitive Activity of such entity; provided,
however, that the Employee shall not be prohibited from owning less than two
percent of any publicly traded corporation, whether or not such corporation is
in competition with the Company. If, at any time, the provisions of this Section
10 shall be determined to be invalid or unenforceable, by reason of being vague
or unreasonable as to area, duration or scope of activity, this Section _ shall
be considered divisible and shall become and be immediately amended to only such
area, duration and scope of activity as shall be determined to be reasonable and
enforceable by the court or other body having jurisdiction over the matter; and
the Employee agrees that this Section 10 as so amended shall be valid and
binding as though any invalid or unenforceable provision had not been included
herein.
11. Confidential Information. The Employee shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its subsidiaries, and their
respective businesses, which shall have been obtained by the Employee during the
Employee's employment by the Company or any of its subsidiaries and which shall
not be or become public knowledge (other than by acts by the Employee or his
representatives in violation of this Agreement). After termination of the
Employee's employment with the Company, the Employee shall not, without the
prior written consent of the Company, communicate or divulge any such
information,
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knowledge or data to anyone other than the Company and those designated by it.
In no event shall an asserted violation of the provisions of this Section 10
constitute a basis for deferring or withholding any amounts otherwise payable to
the Employee under this Agreement.
12. Successors.
(a) This Agreement is personal to the Employee and without the prior
written consent of the Company shall not be assignable by the Employee otherwise
than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by the Employee's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
13. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the provisions
hereof an shall have no force or effect.
(b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Employee:
If to the Company:
Cambrex Corporation
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, X.X. 00000
Attention: General Counsel
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or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
(e) The Employee's failure to insist upon strict compliance with any
provision hereof shall not be deemed to be a waiver of such provision or any
other provision thereof.
(f) This Agreement contains the entire understanding of the Company
and the Employee with respect to the subject matter hereof. This agreement may
not be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(g) The Employee and the Company acknowledge that the employment of
the Employee by the Company or any of its subsidiaries prior to the Effective
Date is "at will", and, prior to the Effective Date, may be terminated by either
the Employee or the employer at any time. Upon a termination of the Employee's
employment or upon the Employee's ceasing to be an officer of the Company, in
each case, prior to the Effective Date, there shall be no further rights under
this Agreement.
14. Section 409A. Notwithstanding anything in this Agreement to the
contrary, to the extent the Employee would otherwise be entitled to a payment
during the six months beginning on the Date of Termination that would be subject
to the additional tax imposed under Section 409A of the Code, (i) the payment
will not be made to the Employee and instead will be made, at the election of
the Company, either to a trust in compliance with Rev. Proc. 92-64 or an escrow
account established to fund such payments (provided that such funds shall be at
all times subject to the creditors of the Company and its affiliates) and (ii)
the payment, together with interest thereon at the rate of "prime" plus 1%, will
be paid to the Employee on the earlier of the six-month anniversary of Date of
Termination or the Employee's death or disability (within the meaning of Section
409A of the Code). Similarly, to the extent the Employee would otherwise be
entitled to any benefit (other than a cash payment) during the six months
beginning on the Date of Termination that would be subject to the additional tax
under Section 409A of the Code, the benefit will be delayed and will begin being
provided (together, if applicable, with an adjustment to compensate the Employee
for the delay, with such adjustment to be determined in the Company's reasonable
good faith discretion) on the earlier of the six-month anniversary of the Date
of Termination or the Employee's death or disability (within the meaning of
Section 409A of the Code). The Company will establish the trust or escrow
account, as applicable, no later than ten days following the Employee's Date of
Termination. It is the intention of the parties that the payments and benefits
to which the Employee could become entitled in connection with termination of
employment under this Agreement comply with Section 409A of the Code.
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In the event that the parties determine that any such benefit or right does not
so comply, they will negotiate reasonably and in good faith to amend the terms
of this Agreement such that it complies (in a manner that attempts to minimize
the economic impact of such amendment on the Employee and the Company).
IN WITNESS WHEREOF, pursuant to the authorization from its Board of
Directors, the Company has caused these presents to be executed in its name on
its behalf, and the Employee has hereunto set his hand, all as of the day and
year first above written.
CAMBREX CORPORATION
By:
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Xxxxx X. Xxxx, Chairman,
President & Chief Executive Officer
