EMPLOYMENT AGREEMENT
EXHIBIT 10.1
THIS AGREEMENT is made as of the 31st day of October, 2006, by and between Minrad International,
Inc., a Delaware corporation, with an office at 00 Xxxxxx Xxxxx, Xxxxxxx Xxxx, XX 00000 (the
“Corporation”) and Xxxxxxx X. Xxxxx, Xx. residing at 00 Xxxxxx Xxxx, Xxxxxxx Xxxx, XX 00000 (the
“Executive”).
Introductory Statement. The Executive has been employed as Chief Executive Officer of the
Corporation and Minrad Inc., its wholly owned subsidiary (“Subsidiary”), and also served as
Chairman of the Board of Directors of the Corporation and the Subsidiary for many years. During
the course of his employment, the Executive has become experienced in the business of the
Corporation and the Subsidiary, including its trade secrets, customers, market areas, sources of
supply and manner of doing business. Therefore, the Corporation desires to continue to employ the
Executive, and elect the Executive as a member of the Board of Directors of the Corporation (the
“Board”), and the Executive desires to accept continued employment, upon the terms and conditions
contained in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement
the parties agree as follows:
1.0 Term of Employment. Subject to the terms and conditions set forth in this Agreement:
1.1 The Corporation shall employ the Executive as an executive officer of the Corporation for the
period beginning on the date of this Agreement and continuing until December 31, 2008 or until
earlier terminated as provided in this Agreement. Initially the Executive will continue to be the
Chairman of the Board and Chief Executive Officer of the Corporation. The Executive acknowledges
and agrees that during the term hereof, the Board of Directors may name a different individual to
be the Chairman of the Board or the Chief Executive Officer and that any such action will not
constitute a breach of this Agreement by the Corporation.
1.2 During the term hereof, the Corporation will nominate the Executive to serve as a director of
the Corporation (which position is subject to election by the stockholders of the Corporation).
1.3 This Agreement cancels and replaces in its entirety that certain Employment Agreement made as
of the 1st day of March, 2004 by and between the Subsidiary and the Executive (the “2004
Employment Agreement”), which 2004 Employment Agreement is null and void by mutual agreement of the
Corporation and the Executive. For purpose of clarity, the Executive shall be considered employed
without interruption irrespective of the cancellation of the 2004 Employment Agreement, which
cancellation shall not result in either the Corporation and the Subsidiary having any obligation to
the Executive or the acceleration or vesting of any stock options granted by the Corporation or the
Subsidiary.
1.4 At the option of the Corporation, the Corporation may extend the term of this Agreement upon
the same terms and conditions set forth herein for a period not to exceed one year by giving
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Executive no less than forty-five (45) days’ written notice prior to the expiration of this
Agreement on December 31, 2008.
2.0 Duties. Subject to the terms and conditions set forth in this Agreement, the Executive
while serving as Chairman of the Board and the Chief Executive Officer of the Corporation, will be
in full charge of the operation of its business and affairs, subject to the provisions of the
by-laws of the Corporation in respect of the duties and responsibilities assigned by the Board to
the Chairman of the Board and the Chief Executive Officer, and subject also at all times to the
control of the Board. The Executive shall perform such duties and discharge such responsibilities
as are commensurate with his position, and as the Board shall from time to time reasonably direct
consistent with the executive nature and scope of the Executive’s employment.
The Executive shall perform his duties and discharge his responsibilities in a faithful manner and
to the best of his ability. Unless otherwise agreed upon by the Corporation and the Executive, the
Executive shall devote substantially all of his business time and attention to the performance of
the duties called for by this Agreement. The Executive shall not serve as a director or manager of
any other business corporation or entity without the prior written consent of the Board.
The Board reserves the right from time to time to assign to the Executive additional duties and
responsibilities and to delegate to other executives of the Corporation duties and responsibilities
normally discharged by the Executive.
3.0 Compensation. So long as the Executive is employed by the Corporation:
3.1 The Executive shall receive an annual base salary of $275,000 payable bi-weekly beginning on
September 1, 2006.
3.2 For fiscal years 2006 and 2007, the Executive shall be entitled to a bonus for each full fiscal
year of the Corporation during which the Executive is employed and, subject to Articles 5.0, 6.0,
6.1-6.5 and 7.0 hereof, any part thereof, determined as follows:
(a) The Corporation shall calculate (i) its annual gross profit after distribution expenses for
fiscal years 2006 and 2007 (each a “Bonus Year”), retroactive to the beginning of fiscal year 2006
for purpose of calculating the bonus for fiscal year 2006, (the “Annual Net Profit Amount”) and
(ii) its quarterly gross profit after distribution expenses for each quarter in the Bonus Years
(the “Quarterly Net Profit Amount”); and
(b) Each quarter during the Bonus Years, the Executive shall be entitled to a bonus equal to (i)
one percent (1%) of the portion of each Quarterly Net Profit Amount in the applicable Bonus
Year up to, in aggregate for such Bonus Year, one percent (1%) of the Annual Net Profit Amount
for the prior fiscal year; plus (ii) two and one-half percent (2.5%) of each Quarterly Net
Profit Amount, in the aggregate for such Bonus Year, in excess of the Annual Net Profit Amount
for the prior fiscal year; provided, however, that the aggregate maximum amount of the bonuses
that can be earned by the Executive in any Bonus Year under this Section 3.2 is $724,999. The
bonus is to be payable on a quarterly basis, retroactive to the beginning of fiscal year 2006,
and calculated by the Corporation based on the Corporation’s financial statements filed with
the Securities and Exchange Commission on Form 10-QSB or annual report on Form 10-KSB (or
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their equivalent) (the “SEC Filing”). Such bonus shall be paid as soon as practicable after the
Corporation’s corresponding SEC Filing.
3.3 For fiscal year 2008, the Executive shall be entitled to a bonus if employed for the full
fiscal year and, subject to Articles 5.0, 6.0, 6.1-6.5 and 7.0 hereof, any part thereof, based on
corporate and individual performance targets and milestones, including revenue and EBITDA
benchmarks, rather than gross profits, to be mutually determined and maximum bonus amounts, which
may be more or less than the bonus payable under Section 3.2 hereof (the “2008 Bonus Program”).
The Compensation Committee of the Board and the Executive agree that any bonus under the 2008 Bonus
Program will be paid annually and to confer and work toward finalizing the 2008 Bonus Program by no
later than June 30, 2007.
3.4 The Corporation shall deduct or withhold from all payments made to the Executive pursuant to
this Agreement all amounts which may be required to be deducted or withheld under any applicable
law now in effect or which may become effective during the term of this Agreement (including but
not limited to Social Security contributions and income tax withholdings).
3.5 The Executive shall be entitled to participate in the qualified retirement plan or plans, if
any, adopted by the Board for the executive officers of the Corporation as such plan or plans may
be amended from time to time.
3.6 The Executive shall receive the various other fringe benefits, if any, provided for the
executive officers of the Corporation that may be authorized from time to time by the Board in its
sole discretion. Without limiting the foregoing, the Corporation shall pay or reimburse the
Executive for the dues of one country club in Western New York.
3.7 The Executive may be entitled to receive increases in compensation. The determination of the
amount of such bonus and increases in compensation, if any, and the time and method of payment of
such increases shall be vested in the sole discretion of the Board.
3.8 Vacations. The Executive shall be entitled to take four (4) weeks of vacation per year
on a non-cumulative basis; provided, that in the event of termination of this Agreement pursuant to
Articles 5.0, 6.0-6.2, 6.4, or 7.0, that such vacation period shall be deemed fully accrued for the
year in which such event occurs.
4.0 Reimbursement for Expenses. The Corporation shall reimburse the Executive for expenses
which the Executive may from time to time reasonably incur on behalf of and at the request of the
Corporation in the performance of his responsibilities and duties under this Agreement, provided
that the Executive shall be required to account to the Corporation for such expenses in the manner
prescribed by the Corporation.
5.0 Termination of Employment by Reason of Death. If the Executive dies during the term of
this Agreement, this Agreement shall terminate automatically as of the date of his death, and the
Corporation shall pay to the Executive’s legal representatives the following:
(a) The Executive’s base salary through the end of the month in which death occurs together with
any unpaid bonus for a prior fiscal year. These payments will be made as soon as
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practicable following the Executive’s termination of employment, but in any event no later than the
date that is 21/2 months following the close of the calendar year in which the termination
occurs.
(b) A prorated portion of any unpaid bonus payable under Section 3.2 or Section 3.3, or otherwise
approved by the Board, for the fiscal year in which termination occurs (determined by multiplying
the bonus for the fiscal year in which termination occurs by a fraction, the numerator of which is
the number of whole or partial months in such fiscal year during which this Agreement was in effect
and the denominator of which is twelve (12).
(c) The Executive’s accrued vacation for the year of termination, as provided under Section 3.8,
and any fringe benefits accrued through the date of termination, together with any reimbursable
expenses accrued and owing to the Executive with respect to his employment prior to termination
(the amount provided for in clauses (b) and (c) being the “Accrued Obligations”).
All vested stock options shall be transferred to the Executive’s legal representatives.
6.0 Termination of Employment by Reason of Disability. If the Executive shall become
temporarily disabled during the term of this Agreement, all of the Executive’s rights under this
Agreement shall continue until such time as the Executive either returns to work or is deemed
“permanently disabled” (defined below).
6.1 If the Executive shall be deemed permanently disabled, the Executive’s employment shall
automatically terminate at the end of the month in which it is determined that the Executive has a
permanent disability. Upon such termination, the Corporation shall pay the Executive (or his
legal representatives) as if the Executive were terminated pursuant to Article 5.0. During the
period of permanent disability the Executive shall be entitled to receive any benefits payable
under the Corporation’s disability insurance program.
6.2 The Executive shall be deemed “permanently disabled” for purposes of this Agreement if:
(a) in the opinion of the Board, the Executive is unable to render full-time service to the
Corporation pursuant to the terms of this Agreement for six consecutive months; or
(b) in the opinion of the Board, the Executive is unable to render full-time service to the
Corporation pursuant to the terms of this Agreement for nine months out of any twelve consecutive
month period; or
(c) in the opinion of the Corporation’s Medical Director or, if there is no Medical Director at
such time, a physician mutually selected by the Corporation and the Executive or selected in
accordance with the provisions of this Section 6.2, the Executive is permanently unable to render
full-time service to the Corporation under this Agreement.
If the Corporation and the Executive are unable to mutually agree upon the selection of a physician
under “(c)” above within 30 days of either party requesting the other to so agree, each party shall
select a physician and the two physicians so selected shall promptly select a third physician who
shall make such determination.
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6.3 Termination of Employment for Cause. The Corporation may immediately terminate the
Executive’s employment in the event that the Executive shall do or cause to be done any act which
constitutes “cause” (as hereinafter defined) for termination. For purposes of this Agreement,
cause shall be deemed to mean a material breach by the Executive of this Agreement, gross
negligence or willful misconduct in the performance of his duties, dishonesty to the Corporation
(conviction of a crime in any court which could have the effect of causing the termination or
suspension of any license which the Corporation holds), conviction of a felony or excessive
absenteeism not related to disability. If the Executive’s employment is terminated by the
Corporation for cause, the Corporation’s only obligation shall be to pay the Executive (a) his base
salary and fringe benefits through the effective date of termination together with any unpaid bonus
for a prior fiscal year, plus (b) any reimbursable expenses that have not been paid as of the date
of such termination. All amounts payable under this Section will be paid as soon as practicable
following the Executive’s termination of employment, but in any event no later than the date that
is 21/2 months following the close of the calendar year in which the termination occurs. Nothing
contained in this Article 6.0 shall in any way waive, restrict or prejudice the Corporation’s
rights and remedies in equity and at law against the Executive with respect to the matter for which
the Executive’s employment under this Agreement is terminated for cause. All vested but
unexercised and unvested stock options shall be voided and returned to the Corporation.
6.4 Termination Without Cause. The Corporation may terminate the Executive without cause.
If the Executive’s employment is terminated by the Corporation without cause, the Corporation shall
pay the Executive the sum of (a) his salary for the remainder of the term of this Agreement or one
year, whichever is shorter, payable in accordance with the Corporation’s regular payroll practices,
plus (b) any Accrued Obligations. The non-milestone stock options shall be automatically vested.
6.5 Accrued Obligations. All Accrued Obligations to be paid under Article 5.0 or this
Article 6.0 shall be payable within 30 days after they are determinable, but in any event no later
than the date that is 21/2 months following the close of the calendar year in which the
termination of employment occurs..
7.0 Change of Control. If the Executive’s employment is terminated other than for cause
pursuant to Section 6.3 above, or the Executive terminates employment because the scope of the
Executive’s duties under the Agreement are significantly reduced or materially diminished
(provided, however that the Board failing to elect the Executive as Chairman of the Board or Chief
Executive Officer of the Corporation would not constitute such a reduction or diminution), or the
Corporation’s principal executive office is re-located more than 30 miles from Buffalo, New York,
in any case, following or within three (3) months prior to a Change in Control (as defined below),
(each such event, a “Triggering Event”) the Corporation shall pay the Executive the sum of (a) his
salary for one year plus (b) any Accrued Obligations. All payments due hereunder shall be made in
one lump sum payment no later than thirty (30) days after the date of the Triggering Event.
7.1 “Affiliate” means a person that directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under current control with, the person specified.
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7.2 “Change of Control” means:
(a) Any acquisition or series of acquisitions by any person other than the Corporation, any of
the subsidiaries of the Corporation, any employee benefit plan of the Corporation, or any of
their subsidiaries, or any person holding common shares of the Corporation for or pursuant to
the terms of such employee benefit plan, that results in that person becoming the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
of the Corporation representing 51% or more of either the then outstanding shares of the
common stock of the Corporation (“Outstanding Corporation Common Stock”) or the combined
voting power of the Corporation’s then outstanding securities entitled to then vote generally
in the election of directors of the Corporation (“Outstanding Corporation Voting Securities”),
except that any such acquisition of Outstanding Corporation Common Stock or Outstanding
Corporation Voting Securities will not constitute a Change of Control while such Person does
not exercise the voting power of its Outstanding Corporation Common Stock or otherwise
exercise control with respect to any matter concerning or affecting the Corporation, or
Outstanding Corporation Voting Securities, and promptly sells, transfers, assigns or otherwise
disposes of that number of shares of Outstanding Corporation Common Stock necessary to reduce
its beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of the Outstanding
Corporation Common Stock to below 51%.
(b) During any period not longer than 12 consecutive months, individuals who at the beginning of
such period constitute the Board cease to constitute at least a majority of the Board, unless the
election, or the nomination for election by the Corporation’s stockholders, of each new Board
member was approved by a vote of at least 3/4ths of the Board members then still in office who were
Board members at the beginning of such period (including for these purposes, new members whose
election or nomination was so approved).
(c) Approval by the stockholders of the Corporation of: (i) a dissolution or liquidation of the
Corporation; (ii) a sale of 50% or more of the assets of the Corporation, taken as a whole
(with the stock or other ownership interests of the Corporation in any of its majority owned
subsidiaries constituting assets of the Corporation for this purpose) to a person that is not
an Affiliate of the Corporation (for purposes of this paragraph “sale” means any change of
ownership); or (iii) an agreement to merge or consolidate or otherwise reorganize, with or
into one or more persons that are not Affiliates of the Corporation, as a result of which less
than 50% of the outstanding voting securities of the surviving or resulting entity immediately
after any such merger, consolidation or reorganization are, or will be, owned, directly or
indirectly, by stockholders of the Corporation immediately before such merger, consolidation
or reorganization (assuming for purposes of such determination that there is no change in the
record ownership of the Corporation’s securities from the record date for such approval until
such merger, consolidation or reorganization and that such record owners hold no securities of
the other parties to such merger, consolidation or reorganization), but including in such
determination any securities of the other parties to such merger, consolidation or
reorganization held by Affiliates of the Corporation.
7.3 Upon a Change of Control, regardless of whether there occurs a Triggering Event, the Executive
shall be fully vested in any and all stock options (including, without limitation, all
performance-based stock options) now or hereafter granted to the Executive. The Executive
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shall have the right to exercise all unexercised options, including those options vested in
connection with such termination, for a period of not less than twelve (12) months commencing on
the date of a Change of Control.
8.0 Confidentiality. During the course of his employment as an executive officer of the
Corporation, the Executive has had and will have access to and will gain knowledge with respect to
all of the lines of business of the Corporation, including product information, information
concerning customers, brokers, suppliers and other valuable information relating to the
development, manufacture, storage, shipment, marketing and sale of products of the Corporation
(“Confidential Information”). The parties also agree that covenants by the Executive not to make
unauthorized disclosures of the Confidential Information and not to use the Confidential
Information after the termination of the Executive’s employment with the Corporation in a business
in competition with that of the Corporation are essential to the growth and stability of the
business of the Corporation. Accordingly, Executive agrees that, except as required by his duties
under this Agreement, he or she shall not use or disclose to anyone at anytime during or after the
term of this Agreement any Confidential Information obtained by him or her in the course of his
employment with the Corporation.
9.0 Non-Competition.
9.1 During the term of this Agreement and for a period of 12 months after the date of the
termination of this Agreement, the Executive agrees that he shall not directly or indirectly, for
his own account or as agent, officer, director, trustee, consultant or shareholder of any
corporation or a member of any firm or otherwise, anywhere in the United States engage or attempt
to engage in any business activity which is the same as, substantially similar to or directly
competitive with (a) the type of business of the Corporation in designing, developing and producing
products intended to minimize radiation exposure and enhance surgical accuracy in fluoroscopically
assisted medical procedures, (b) the Corporation’s generic inhalation pharmaceutical business
involving enflurane, isoflurane or sevoflurane or related products and/or (c) the Corporation’s
conscious sedation business.
9.2 During the term of this Agreement and for a period of 12 months from the date of termination of
this Agreement, the Executive agrees that he or she shall not, directly or indirectly, for his own
account or as agent, employee, officer, director, trustee, consultant or shareholder of any
corporation, or member of any firm or otherwise, employ or solicit the employment of any employee
of the Corporation.
9.3 It is acknowledged and agreed by the Corporation that the Executive’s ownership of shares of a
company which competes with the business of the Corporation shall not violate this Article 9.0
unless (a) the Executive also participates in the management of such company as an officer,
director or consultant or (b) the Executive owns a controlling interest in such company.
9.4 The Executive acknowledges and agrees that the foregoing territorial and time limitations and
restrictive covenants are reasonable and properly required for the adequate protection of the
business and affairs of the Corporation, and in the event any such territorial or time limitation
is found to be unreasonable by a court of competent jurisdiction, the Executive agrees and submits
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to the reduction of either said territorial or time limitation or both, to such an area or period
as the court may determine to be reasonable.
10.0 Rights to Discoveries.
10.1 Subject to Section 10.2 hereof, the Executive agrees that all ideas, inventions, trademarks
and other developments or improvements conceived, developed or acquired by the Executive, whether
or not during working hours, at the premises of the Corporation or elsewhere, alone or with others,
that are within the scope of the Corporation’s business operations or that relate to any work or
projects of the Corporation (“Inventions”) shall be the sole and exclusive property of the
Corporation. The Executive agrees to disclose promptly and fully to the Corporation all such
Inventions, trademarks or other developments and, at the request of the Corporation, the Executive
shall submit to the Corporation a full written report thereof regardless of whether the request for
a written report is made after the termination of this Agreement. The Executive agrees that during
the term of this Agreement and for 6 months thereafter, upon the request of the Corporation and at
its expense, he shall execute and deliver any and all applications, assignments and other
instruments which the Corporation shall deem necessary or advisable to transfer to and vest in the
Corporation the Executive’s entire right, title and interest in and to all such Inventions,
trademarks or other developments and to apply for and to obtain patents or copyrights for any such
patentable or copyrightable ideas, inventions, trademarks and other developments.
10.2 The Corporation and the Executive agree that notwithstanding the provisions of Section 10.1,
the Executive shall have the rights under the Corporation’s Patent and Invention Policy, including
but not limited to the rights to any royalty payable thereunder, with respect to Inventions
conceived, developed or acquired prior to March 1, 2004 but not with respect to any Inventions that
were conceived, developed or acquired by the Executive both (a) after March 1, 2004 and (b) while
Executive was Chief Executive Officer of the Corporation.
11.0 Insurance. The Executive agrees that the Corporation, in its sole discretion, may
apply for insurance coverage to be owned by it and for its benefit covering the Executive in any
amounts deemed advisable by the Corporation, and the Executive waives any right, title or interest
therein. The Executive agrees to submit to all required examinations and to execute, assign and
deliver all applications and other documents necessary to effectuate such insurance coverage.
The Executive shall have the right to purchase from the Corporation, within 30 days after
termination of this Agreement, all such policies of insurance covering him or her, at a price equal
to the cash value of such policies, plus the unearned portion of any premiums, on the date of such
termination. For purposes of this Article 11.0, “cash value” shall mean the net cash amount, after
adjustment for credits and debits, at which such policies could be surrendered by the Corporation
on the date of such termination. Upon receipt of the purchase price, the Corporation shall deliver
such policies to the Executive and shall execute all necessary instruments of transfer. The
Executive shall have no further rights in any such policies not so purchased within such 30-day
period.
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12.0 Notices. All notices and other communications given pursuant to this Agreement shall
be deemed to have been properly given or delivered if mailed, by certified mail, postage prepaid,
addressed to the appropriate party, at the address for such party set forth at the beginning of
this Agreement. Any party may from time to time designate by written notice given pursuant to this
Article 12.0 any other address or party to which any such notice or communication or copies thereof
shall be sent.
13.0 Equitable Relief. The Executive acknowledges that the Corporation will suffer damages
incapable of ascertainment in the event that any of the provisions of Article 8.0, 9.0 or 10.0
hereof are breached and that the Corporation will be irreparably damaged in the event that the
provisions of Articles 8.0, 9.0 and 10.0 are not enforced. Therefore, should any dispute arise
with respect to the breach or threatened breach of Articles 8.0, 9.0 or 10.0 of this Agreement, the
Executive agrees and consents, that in addition to any and all other remedies available to the
Corporation, an injunction or restraining order or other equitable relief may be issued or ordered
by a court of competent jurisdiction restraining any breach or threatened breach of Articles 8.0,
9.0 or 10.0 of this Agreement. The Executive agrees not to urge in any such action that an
adequate remedy exists at law. All expenses, including, without limitation, attorney’s fees and
expenses incurred in connection with any legal proceeding arising as a result of a breach or
threatened breach of Articles 8.0, 9.0 or 10.0 of this Agreement shall be borne by the losing party
to the fullest extent permitted by law and the losing party hereby agrees to indemnify and hold the
other party harmless from and against all such expenses.
14.0 Miscellaneous. This Agreement shall be governed by the internal domestic laws of the
State of New York without reference to conflict of laws principles. This Agreement shall be
binding upon and inure to the benefit of the legal representatives, successors and assigns of the
parties hereto (provided, however, that the Executive shall not have the right to assign this
Agreement in view of its personal nature). All headings and subheadings are for convenience only
and are not of substantive effect. This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all prior negotiations,
understandings and writings (or any part thereof) whether oral or written between the parties
hereto relating to the subject matter hereof. There are no oral agreements in connection with this
Agreement. Neither this Agreement nor any provision of this Agreement may be waived, modified or
amended orally or by any course of conduct but only by an agreement in writing duly executed by
both of the parties hereto. If any article, section, portion, subsection or subportion of this
Agreement shall be determined to be unenforceable or invalid, then such article, section, portion,
subsection or subportion shall be modified in the letter and spirit of this Agreement to the extent
permitted by applicable law so as to be rendered valid and any such determination shall not affect
the remainder of this Agreement, which shall be and remain binding and effective as against all
parties hereto.
15.0 Code §409A Compliance.
15.1 Savings Clause. Notwithstanding any other provision in this Agreement, to the extent
that any amounts payable under this Agreement (a) are subject to §409A of the Internal Revenue Code
of 1986, as amended (the “Code”) and (b) the time or form of payment of those amounts would not be
in compliance with Code §409A, then payment of those amounts will be made at such time and in such
a manner that the payment will be in compliance with Code §409A. If the
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time or form of payment cannot be modified in such a way as to be in compliance with Code §409A,
then the payment will be made as otherwise provided in this Agreement, disregarding this Section.
15.2 Six Month Delay. Notwithstanding any other provision in this Agreement, if the
Executive is a “specified employee,” within the meaning of Code §409A, and if any benefit payable
under this Agreement is subject to Code §409A and is payable to the Executive solely because the
Executive has “separated from service,” within the meaning of Code §409A, no such benefit will be
paid prior to the date that is six months after the date of the Executive’s separation from service
(or, if earlier, the date of the Executive’s death). Payments to which the Executive would
otherwise be entitled during the first six months following the date of the Executive’s separation
from service will be accumulated and paid on the day that is six months after the date of the
Executive’s separation from service.
15.3 409A Liability Limitation. Amounts payable under this Agreement are intended to
comply with the rules of Code §409A and will be construed accordingly. However, the Corporation
will not be liable to the Executive or any beneficiary of the Executive with respect to any adverse
tax consequences arising under Code §409A or other provision of the Code as a result of payments
made under this Agreement.
16.0 Arbitration. The Executive and the Corporation agree that, except as contemplated by
Article 13.0 for any action or proceeding to enforce Articles 8.0, 9.0 and 10.0 hereof, any dispute
or controversy arising out of, relating to, or in connection with this Agreement or the termination
thereof, or the interpretation, validity, construction, performance, breach, or termination
thereof, shall be settled by expedited, binding arbitration to be held in Buffalo, New York in
accordance with the National Rules for the Resolution of Employment Disputes then in effect of the
American Arbitration Association (the “Rules”). The arbitrator may grant injunctions or other
relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive
and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s
decision in any court having jurisdiction.
The arbitrator(s) shall apply New York law to the merits of any dispute or claim, without reference
to rules of conflicts of law. The arbitration proceedings shall be governed by federal arbitration
law and by the Rules, without reference to state arbitration law.
THE EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EXECUTIVE
UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE IS AGREEING TO SUBMIT ANY CLAIMS ARISING OUT
OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY,
CONSTRUCTION, PERFORMANCE, BREACH OF TERMINATION THEREOF, TO BINDING ARBITRATION, AND THAT THIS
ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND RELATES TO THE
RESOLUTION OF ALL DISPUTES RELATING OT ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING
BUT NOT LIMITED TO, STATUTORY DISCRIMINATION CLAIMS.
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[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above
written.
| Xxxxxxx X. Xxxxx, Xx. (Executive) | ||||
| MINRAD INTERNATIONAL, INC. | ||||
| By | ||||
| Xxxxx XxXxxxxxxx, Director and | ||||
| Chairman of Compensation Committee | ||||
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