EMPLOYMENT AGREEMENT
EXHIBIT 10.1
THIS AGREEMENT, made as of the 31st day of March 2008, by and between BMP SUNSTONE
CORPORATION, a Delaware corporation (“BMP”), and Xxxx X. Xxxxxx (the “Executive”).
WHEREAS, BMP desires to offer the Executive’s employment as Chief Financial Officer and the
Executive desires to accept such employment with BMP, upon the terms and conditions set forth in
this Agreement; and
WHEREAS, this Agreement will formalize the terms and conditions governing the Executive’s
employment with BMP and the termination of that employment.
NOW, THEREFORE, the parties hereto agree as follows:
PART ONE — DEFINITIONS
For purposes of this Agreement, the following definitions shall be in effect:
1. “Agreement” means this Employment Agreement, as the same may, from time to time, be amended
in accordance with the provisions hereof.
2. “Board” means BMP’s Board of Directors.
3. “Change in Control” means a change in the ownership or control of BMP effected through any
of the following transactions:
(i) a merger, consolidation or other reorganization approved by BMP’s stockholders,
unless securities representing more than fifty percent (50%) of the total combined voting power
of the voting securities of the successor corporation are immediately hereafter beneficially owned,
directly or indirectly and in substantially the same proportion, by the persons who beneficially
owned BMP’s outstanding voting securities immediately prior to such transaction,
(ii) a stockholder-approved sale, transfer or other disposition of all or substantially all of
BMP’s assets,
(iii) the closing of any transaction or series of related transactions pursuant to which any
person or any group of persons comprising a “group” within the meaning of Rule 13d-5(b)(1) of the
1934 Act (other than BMP or a person that, prior to such transaction or series of related
transactions, directly or indirectly controls, is controlled by or is under common control with,
BMP) becomes directly or indirectly the beneficial owner (within the meaning of Rule 13d-3 of the
0000 Xxx) of securities possessing (or convertible into or exercisable for securities possessing)
more than fifty percent (50%) of the total combined voting power of BMP’s securities (as measured
in terms of the power to vote with respect to the election of Board members) outstanding
immediately after the consummation of such transaction or series of related transactions, whether
such transaction involves a direct issuance from BMP or the acquisition of outstanding securities
held by one or more of BMP’s existing stockholders, or
However, the term Change in Control shall not include either of the following events
undertaken at the election of BMP:
a. any transaction, the sole purpose of which is to change the state in which BMP is
incorporated; or
b. a transaction, the result of which is to sell all or substantially all of the assets of BMP
to another corporation (the “surviving corporation”) provided that the surviving corporation is
owned directly or indirectly by the stockholders of BMP immediately following such transaction in
substantially the same proportions as their ownership of BMP’s common stock immediately preceding
such transaction.
4. “Change in Control Severance Benefits” means the various payments and benefits to which the
Executive may become entitled to under Paragraph 14 of Part Four of this Agreement upon his
Involuntary Termination in connection with a Change in Control.
5. “Code” means the Internal Revenue Code of 1986, as amended and the regulations promulgated
thereunder.
6. “Competing Organization” means any person or legal entity engaged in, about to engage in,
or intending to engage in, the business of providing services to foreign and/or domestic
pharmaceutical companies, specifically: drug distribution; physician-oriented drug promotion;
product registration; clinical trial management; and pre-market entry analyses.
7. “Competing Service” means any service of any person or legal entity other than BMP, or a
parent, subsidiary or affiliate of BMP, in existence or under development, which during the term of
this Agreement, competes with or is an alternative to any present or planned future service of BMP,
whether or not actively marketed by BMP.
8. “Customer” means any individual, firm, partnership, corporation, company, joint venture or
governmental or military unit or any other entity or any parent, subsidiary or affiliate of any of
them which is negotiating or has a contract with BMP or a parent, subsidiary or affiliate of BMP
for the purchase, sale or lease of BMP’s or a parent’s, subsidiary’s or affiliate’s services or
which has been solicited by BMP or a parent, subsidiary or affiliate of BMP with respect to such
purchase or lease during the Executive’s employment with BMP.
9. “Disability” means a physical or mental disability which renders it impracticable for the
Executive to continue to perform his duties under this Agreement, whether with or without
reasonable accommodation. The Executive shall be deemed to have incurred such disability if (i) a
physician selected by BMP and reasonably satisfactory to the Executive advises BMP that the
Executive’s physical or mental condition will render him unable to perform his duties under this
Agreement for a period of six (6) consecutive months, or (ii) due to a physical or mental condition
the Executive has not substantially performed the material duties required of him hereunder for
eighty percent (80%) or more of the normal working days during a period of six (6) consecutive
months.
10. “Employment Period” means the duration of the Executive’s employment with BMP pursuant to
the terms of this Agreement.
11. “Involuntary Termination” means (i) BMP’s termination of the Executive’s employment for
any reason other than a Termination for Cause, (ii) the termination of the Executive’s employment
by reason of his death, (iii) the termination of the Executive’s employment by the Company by
reason of the Executive’s Disability, or (iv) the Executive’s voluntary resignation following (A) a
material reduction in the scope of his duties and responsibilities, (B) a material diminution by
the Company of the Executive’s authority, duties or responsibilities that results in a change in
his level of reporting so that he no longer directly reports to the Board, (C) a national reduction
in the annual rate of his base salary by more than fifteen percent (15%), (D) a material change in
the geographic location of the Executive’s principal place of employment that results in a
relocation of his principal place of employment by more than fifty (50) miles, or (E) a material
breach by BMP of any of its obligations under this Agreement.
A greater than fifteen percent (15%) aggregate reduction in the Executive’s base salary shall
not constitute grounds for an Involuntary Termination under clause (C) above if substantially all
of the other executive officers of BMP are subject to the same aggregate reduction to their base
salary.
Notwithstanding the foregoing, no event or condition described in clauses (A) through (E)
shall constitute an Involuntary Termination for purposes of this Agreement unless (a) the Executive
gives BMP written notice of his intention to resign from employment with BMP for one of the reasons
set forth in (A) through (E) and specifies the grounds for such resignation, (b) the notice
described in (a) is provided within sixty (60) days after the event giving rise to the Executive’s
right to resign first occurs, and (c) such grounds for resignation (if susceptible to correction)
are not corrected by BMP within thirty (30) days after its receipt of such notice. If BMP does not
correct the ground(s) for resignation during the thirty (30) day period following the Executive’s
notice of intent to resign, the Executive’s resignation must become effective within 90 days after
the expiration of the cure period in order for such resignation to be treated as an Involuntary
Termination under this Agreement.
12. “1934 Act” means the Securities Exchange Act of 1934, as amended.
13. “Option” means any option granted to the Executive under the Plan or otherwise to purchase
shares of common stock which is outstanding at the time of (i) a Change in Control or (ii) his
Involuntary Termination, whether or not in connection with a Change in Control.
14. “Plan” means (i) BMP’s 2007 Omnibus Equity Compensation Plan, as subsequently amended or
restated from time to time, and (ii) any other equity incentive plan established or implemented by
BMP.
15. “Termination for Cause” means the termination of the Executive’s employment for any of the
following reasons: (i) the Executive’s conviction of a felony or his commission of any act of
personal dishonesty involving the property or assets of BMP, (ii) a material breach by the
Executive of one or more of his obligations under his Agreement or his Proprietary Information and
Inventions Agreement with BMP, (iii) any intentional misconduct by the Executive which has a
material adverse effect upon BMP’s business or reputation, (iv) the Executive’s material
dereliction of the major duties, functions and responsibilities of his executive position, (v) a
material breach by the Executive of any of his fiduciary obligations as an officer of BMP, or
(vi) the Executive’s willful and knowing participation in the preparation or release of false or
materially misleading financial statements relating to the false or erroneous certification
required of him under the Xxxxxxxx-Xxxxx Act of 2002 or any securities exchange on which shares of
BMP’s common stock are at the time listed for trading.
PART TWO — TERMS AND CONDITIONS OF EMPLOYMENT
1. Duties and Responsibilities.
A. The Executive shall serve as the Chief Financial Officer of BMP and shall in such capacity
report to the President and Chief Executive Officer.
B. During the employment period specified in Paragraph 2, the Executive agrees that he will:
(i) serve BMP faithfully, diligently and to the best of his ability under the direction of the
Board, (ii) devote his best efforts and his entire working time, attention and energy to the
performance of his duties hereunder and to promoting and furthering the interests of BMP, and
(iii) not, without the prior written approval of the Board, become associated with or engaged in,
any business other than that of BMP, and he will do nothing inconsistent with his duties to BMP.
2. Employment Period. The Executive’s employment with BMP shall be governed by the
provisions of this Agreement for the period commencing March 31, 2008 , and continuing
through March 30, 2009. However, the term of the Executive’s employment pursuant to the terms of
this Agreement shall automatically be extended for successive one-year periods hereafter,
unless either BMP or the Executive elects, by written notice delivered to the other not later than
sixty (90) days prior to the start of any such one-year period, not to renew the term of this
Agreement. This Agreement may also be terminated at any time in accordance with the termination of
employment provisions set forth in Paragraph 10.
3. Cash Compensation.
A. For all services to be rendered by the Executive under this Agreement and such duties as
the President and Chief Executive Officer may assign him, BMP agrees to pay the Executive a base
salary of $325,000 per year, payable at such times as is customary for salaried employees of BMP
and in accordance with the normal payroll practices of BMP.
B. For each fiscal year of BMP during the Employment Period, beginning with the fiscal year
commencing January 1, 2008, the Executive shall be entitled to receive a cash bonus up to
40% of his base salary to be determined by the Chief Executive Officer and approved by the
Compensation Committee of the Board of Directors.
C. BMP shall deduct and withhold from the compensation payable to the Executive hereunder any
and all applicable taxes and any other amounts required to be deducted or withheld by Sunstone
under applicable statutes, regulations, ordinances or orders governing or requiring the withholding
or deduction of amounts otherwise payable as compensation or wages to employees.
4. Equity Compensation.
A. The Executive shall be eligible to receive one or more additional Option grants during the
Employment Period, as the President and Chief Executive Officer and Compensation Committee of the
Board may deem appropriate in order to provide him with sufficient equity incentive for his
position.
B. The shares of common stock subject to the Options currently held and additional Options
which the Executive may subsequently receive over the remainder of the Employment Period, shall be
subject to the applicable vesting acceleration provisions of either Paragraph 12 or Paragraph 14
should an Involuntary Termination of his employment occur during the Employment Period.
5. Expense Reimbursement. BMP shall reimburse the Executive for reasonable
out-of-pocket expenses incurred in connection with BMP’s and/or BMP China’s business, including
travel expenses, food and lodging while away from home, subject to such polices as BMP may from
time to time reasonably establish for its employees and subject to substantiation of expenses as
required under applicable tax laws and regulations.
6. Fringe Benefits.
A. The Executive shall, throughout the Employment Period, be eligible to participate in all
benefit plans which are made available to BMP’s China executives and for which the Executive
qualifies.
B. The Executive shall be entitled to receive four weeks of paid vacation each year, which
shall be taken at such time or times as will not unreasonably hinder or interfere with BMP’s
business or operations. Vacation time may be accrued from year to year in accordance with BMP’s
general vacation policy.
C. BMP will obtain and maintain at all times directors’ and officers’ liability insurance for
Executive, so long as such insurance can be obtained on terms acceptable to the Board.
7. Indemnification. BMP agrees to defend the Executive and shall indemnify and hold
harmless the Executive to the fullest extent permitted by law from any and all liability, costs and
expenses which may be assessed against the Executive by reason of the performance of his
responsibilities and duties under the terms of this Agreement, provided such liability does not
result from the willful misconduct or gross negligence of the Executive.
8. Proprietary Information.
A. The Executive hereby acknowledges that BMP and/or BMP China may, from time to time during
the Employment Period, disclose to the Executive confidential information pertaining to BMP’s
and/or BMP China’s business, strategic plans, technology or financial affairs. All information,
data and know-how, whether or not in writing, of a private or confidential nature concerning BMP’s
and/or BMP China’s trade secrets, inventions, processes, systems, designs, drawings, product
innovations and developments, engineering, marketing strategies and future marketing plans,
customer lists, prospective customers, finances and financial reports, employee information and
other organizational information (collectively,
“Proprietary Information”) is and shall remain the sole and exclusive property of BMP and/or
BMP China and shall not be used or disclosed by the Executive except to the extent necessary to
perform his duties and responsibilities under this Agreement. All tangible manifestations of such
Proprietary Information (whether written, printed or otherwise reproduced) shall be returned by the
Executive upon the termination of the Employment Period, and the Executive shall not retain any
copies or excerpts of the returned items. The foregoing restrictions on the use, disclosure and
disposition of BMP’s and/or BMP China’s Proprietary Information shall also apply to the Executive’s
use, disclosure and disposition of any confidential information relating to the business,
technology or financial affairs of BMP’s and/or BMP China’s customers.
B. The Executive shall, concurrently with the execution of this Agreement, execute and deliver
to BMP a copy of the BMP standard form Proprietary Information and Inventions Agreement and shall
remain subject to the terms and provisions of that agreement throughout the Employment Period and
for such period hereafter as provided pursuant to the terms of that agreement.
9. Death or Disability. Upon the Executive’s death or Disability during the Employment
Period, the employment relationship created pursuant to this Agreement shall immediately terminate,
and BMP shall pay the Executive or his estate: (i) any unpaid base salary earned under Paragraph
3.A. for services rendered through the date of death or Disability, (ii) the dollar value of all
accrued and unused vacation benefits based upon the Executive’s most recent level of base salary,
and (iii) any bonus actually earned pursuant to Paragraph 3.B. for one or more fiscal years but not
previously paid to the Executive at the time of his death or Disability.
10. Termination of Employment.
A. BMP may terminate the Executive’s employment under this Agreement at any time for any
reason, with or without Cause, by giving at least ninety (90) days prior written notice of such
termination to the Executive. If such termination notice is given to the Executive, BMP may, if it
so desires, immediately relieve the Executive of some or all of his duties. However, during any
such notice period, the Executive shall continue to be entitled to his regular compensation and
benefits hereunder.
B. The Executive may terminate his employment under this Agreement at any time by giving BMP
at least sixty (60) days prior written notice of such termination.
C. BMP may, at any time, upon written notice discharge the Executive from employment under
this Agreement pursuant to a Termination for Cause. Such termination will be effective immediately
upon such notice.
D. Upon the termination of the Executive’s employment for any reason (other than Termination
for Cause), during the Employment Period, the Executive shall be paid (i) any unpaid base salary
earned under Paragraph 3.A. for services rendered through the date of such termination, (ii) the
dollar value of all accrued and unused vacation benefits based upon the Executive’s most recent
level of base salary, and (iii) any bonus amount actually earned pursuant to Paragraph 3.B. for one
or more fiscal years but not previously paid to the Executive at the time of such termination of
employment. In addition, the Executive shall be entitled to the payments
and benefits provided under Part Three or Part Four of this Agreement, to the extent
applicable.
E. If the Executive’s employment is terminated by reason of a Termination for Cause or should
the Executive voluntarily resign (other than for a reason which qualifies as grounds for an
Involuntary Termination), then the following provisions shall apply:
(i) BMP shall only be required to pay the Executive (a) any unpaid base salary earned under
Paragraph 3.A. for services rendered through the date of such termination, (b) the dollar value of
all accrued and unused vacation benefits based upon the Executive’s most recent level of base
salary, and (c) any bonus amount actually earned pursuant to Paragraph 3.B. for one or more fiscal
years but not previously paid to the Executive at the time of such termination of employment.
(ii) All vesting in the Executive’s outstanding Options shall cease at the time of such
termination or resignation, and the Executive shall be permitted to exercise the vested portion of
the Executive’s outstanding Options for the period specified in the applicable stock option
agreement, if any, subject to and in accordance with the terms of the applicable stock option
agreement and the Plan.
(iii) The Executive shall not be entitled to any payments or benefits under Part Three or
Part Four of this Agreement.
PART THREE — NORMAL SEVERANCE BENEFITS
11. Entitlement.
A. Should the Executive’s employment with BMP terminate during the Employment Period by reason
of an Involuntary Termination in the absence of a Change in Control or more than twelve (12) months
after a Change in Control event, the Executive shall be entitled to receive the severance benefits
provided under this Part Three. Those benefits shall be subject to the Executive’s compliance with
the restrictive covenants of Part Six of this Agreement, and shall in all cases be in lieu of any
other severance benefits to which the Executive might otherwise be entitled by reason of his
termination of employment under such circumstances.
B. In addition, the Executive’s entitlement to any severance benefits under this Part Three
shall be subject to the Executive’s execution and delivery to BMP of a general release which
becomes effective in accordance with applicable law and pursuant to which the Executive releases
BMP and its officers, directors, employees and agents from any and all claims the Executive may
otherwise have with respect to the terms and conditions of his employment with BMP and the
termination of that employment. In no event, however, shall such release cover any claims, causes
of action, suits, demands or other obligations or liabilities relating to any payments or benefits
to which the Executive is or becomes entitled pursuant to the provisions of this Agreement. The
general release described in Paragraph 11.B shall be referred to in this Agreement as the
“Release.”
12. Severance Benefits. The severance benefits payable to the Executive under this
Part Three shall consist of the following:
(a) Salary Continuation Payment. The Executive shall receive his base salary, at the monthly
rate in effect for him under Paragraph 3.A. at the time of his Involuntary Termination, for a
period of 12 months in equal installments in accordance with BMP’s normal payroll practices,
Subject to the deferral restrictions of Paragraph 19, the first such payment shall be made within
thirty (30) days following the Executive’s Involuntary Termination, subject to the Executive’s
execution and non-revocation of the Release. Each such salary continuation payment shall be subject
to all applicable withholding requirements as set forth in Paragraph 3.C.
(b) Option Acceleration. Each Option outstanding at the time of such Involuntary Termination,
to the extent not otherwise vested and exercisable for all the shares at the time subject to that
Option, will immediately vest and become exercisable for all those option shares, and the Executive
shall be permitted to exercise the vested Options for the period specified in the applicable stock
option agreement, if any, subject to and in accordance with the terms of the applicable stock
option agreement and the Plan.
PART FOUR — CHANGE IN CONTROL SEVERANCE BENEFITS
13. Entitlement.
A. Should an Involuntary Termination occur within twelve (12) months after a Change in Control
event, the Executive shall be entitled to receive the severance benefits provided under this Part
Four. Those benefits shall be subject to the Executive’s compliance with the restrictive covenants
of Part Six of this Agreement and shall in all cases be in lieu of any other severance benefits to
which the Executive might otherwise be entitled by reason of his termination of employment under
such circumstances.
B. In addition, the Executive’s entitlement to any severance benefits under his Part Four
shall be subject to the Executive’s execution and delivery to BMP of the Release.
14. Change in Control Severance Benefits. The Change in Control Severance Benefits to
which the Executive shall receive under this Part Four shall consist of the following payments and
benefits:
(a) Salary Continuation Payments. The Executive shall receive his base salary, at the monthly
rate in effect for him under Paragraph 3.A. at the time of his Involuntary Termination, for a
period of eighteen (18) months in accordance with BMP’s normal payroll practices, Subject to the
deferral restrictions of Paragraph 19, the first such payment shall be made within thirty (30) days
following the Executive’s Involuntary Termination, subject to the Executive’s execution and
non-revocation of the Release. Each such salary continuation payment shall be subject to all
applicable withholding requirements as set forth in Paragraph 3.C. However, these payments,
together with the benefits provided pursuant to Paragraph 14(b), shall be subject to the benefit
limitation provisions of Part Five of this Agreement.
(b) Option Acceleration. Each Option outstanding at the time of such Involuntary Termination,
to the extent not otherwise vested and exercisable for all the shares at the time subject to that
Option, will immediately vest and become exercisable for all those option shares and the Executive
shall be permitted to exercise the vested Options for the period specified in the applicable stock
option agreement, if any, subject to and in accordance with the terms of the
applicable stock option agreement and the Plan.
In no event shall the Executive be entitled to payments and benefits under both Part Three and
Part Four of this Agreement.
PART FIVE — LIMITATION ON BENEFITS
15. Benefit Limit. The benefit limitations of this Part Five shall be applicable in
the event the Executive receives any benefits under this Agreement which are deemed to constitute
parachute payments under Code Section 280G.
In the event that any payments to which the Executive becomes entitled in accordance with the
provisions of this Agreement would otherwise constitute a parachute payment under Code
Section 280G, then such payments will be subject to reduction to the extent necessary to assure
that the Executive receives only the greater of (i) the amount of those payments which would not
constitute such a parachute payment or (ii) the amount which yields the Executive the greatest
after-tax amount of benefits after taking into account any excise tax imposed under Code
Section 4999 on the payments provided to the Executive under this Agreement (or any other benefits
to which the Executive may become entitled in connection with any change in control or ownership of
BMP or the subsequent termination of his employment with BMP). Should a reduction in benefits be
required to satisfy the benefit limit of this Paragraph 15, then the salary continuation payments
shall accordingly be reduced to the extent necessary to comply with such benefit limit. Should such
benefit limit still be exceeded following such reduction, then the number of shares which would
otherwise be purchasable under the vesting-accelerated portion (if any) of each Option (based on
the amount of the parachute payment attributable to such Option under Code Section 280G) shall be
reduced to the extent necessary to eliminate such excess.
PART SIX — RESTRICTIVE COVENANTS
16. Non-Compete. The Executive agrees that, during the Employment Period and for a
period of two (2) years following the date of his termination of employment with BMP, he
will not, without the prior written approval of BMP, directly or indirectly, under any
circumstances whatsoever, own, manage, operate, engage in, control or participate in the ownership,
management, operation or control of, or be connected in any manner, whether as an individual,
partner, stockholder, director, officer, principal, agent, employee or consultant, or in any other
relation or capacity whatsoever, with any Competing Organization, wherever located, who was a
Customer at any time during the period one year prior to the termination of the Executive’s
employment with BMP, for the purpose of inducing such Customer to purchase or lease a Competing
Service. Notwithstanding the foregoing, nothing contained in this Paragraph 16 shall restrict the
Executive from making any investment in any company, so long as such investment consists of no more
than five percent (5%) of any class of equity securities of a company whose securities are traded
on a national securities exchange or in the over-the-counter market.
17. Non-Interference. The Executive agrees that he will not, for a period of two
(2) years following the date of his termination of employment with BMP, directly or indirectly,
employ, hire, solicit or, in any manner, encourage any employee of BMP to leave the employ of BMP.
PART SEVEN — MISCELLANEOUS PROVISIONS
18. Cessation of Benefits. In the event of a material breach by the Executive of any
of his obligations under Paragraph 16 or Paragraph 17 of this Agreement or any of his obligations
under his Proprietary Information and Inventions Agreement with BMP, he shall cease to be entitled
to any further benefits under Part Three or Part Four of this Agreement, including (without
limitation) any subsequent right to exercise any outstanding Options or to receive any further
salary payments.
19. Application of Section 409A of the Internal Revenue Code.
(a) This Agreement is intended to comply with the applicable provisions of code section 409A
and shall be interpreted to avoid any penalty sanctions under code section 409A. If any payment or
benefit cannot be provided or made at the time specified herein without incurring sanctions under
code section 409A, then such benefit or payment shall be provided in full at the earliest time
thereafter when such sanctions will not be imposed. For purposes of code section 409A, all
payments to be made upon the termination of employment under this Agreement may only be made upon a
“separation from service” within the meaning of such term under code section 409A, each payment
made under this Agreement shall be treated as a separate payment and the right to a series of
installment payments under this Agreement is to be treated as a right to a series of separate
payments. In no event shall the Executive, directly or indirectly, designate the calendar year of
payment.
(b) Notwithstanding any provision of this Agreement (or any provision of the documents
incorporated herein by reference) to the contrary, if, at the time of the Executive’s termination
of employment with BMP, BMP has stock which is publicly traded on an established securities market
and the Executive is a “specified employee” (as defined in code section 409A) and it is necessary
to postpone the commencement of any payments or benefits otherwise payable pursuant to Agreement as
a result of such termination of employment to prevent any accelerated or additional tax under code
section 409A, then BMP will postpone the commencement of the payment of any such payments or
benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided
to the Executive) that are not otherwise paid within the short-term deferral exception under code
section 409A and are in excess of the lesser of two (2) times (i) the Executive’s then-annual
compensation or (ii) the limit on compensation then set forth in section 401(a)(17) of the Code,
until the first payroll date that occurs after the date that is six months following the
Executive’s “separation of service” with BMP (within the meaning of such term under code section
409A). If any payments or benefits are postponed due to such requirements, such amounts will be
paid in a lump sum to the Executive on the first payroll date that occurs after the date that is
six months following the Executive’s “separation of service” with BMP; provided, however, that, if
any payment due to the Executive is delayed as a result of code section 409A, the Executive shall
be entitled to be paid interest at a per annum rate equal to the highest rate of interest
applicable to six (6)-month money market accounts offered by the following institutions: Citibank
N.A., Xxxxx Fargo Bank, N.A. or Bank of America, as of the Executive’s date of termination. If the
Executive dies during the postponement period prior to the payment of postponed amount, the amounts
withheld on account of code section 409A shall be paid to the personal representative of the
Executive’ s estate within sixty (60) days after the date of the Executive’s death.
(c) All reimbursable expenses, any other reimbursements, and in kind benefits, including any
third-party payments, provided under this Agreement shall be made or provided in accordance with
the requirements of code section 409A, including, where applicable, the requirement that (a) any
reimbursement or in kind benefit is for expenses incurred during the Executive’s lifetime (or
during a shorter period of time specified in this Agreement), (b) the amount of expenses eligible
for reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses
eligible for reimbursement, or in kind benefits to be provided, in any other calendar year, (c) the
reimbursement or payment of an eligible expense will be made on or before the last day of the
calendar year following the year in which the expense is incurred, and (d) the right to
reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit.
20. Representations and Warranties of the Executive. The Executive represents and
warrants that his employment by BMP does not and will not violate any agreement or instrument to
which he is a party or by which he is bound, and the Executive agrees that he will indemnify and
hold harmless BMP, its directors, officers and employees against any claims, damages, liabilities
and expenses (including reasonable attorneys’ fees) which may be incurred, including amounts paid
in settlement, by any of them in connection with any claim based upon or related to a breach of the
Executive’s representations and warranties set forth in this Paragraph 20. In the event of any
claim based upon or related to a breach of the Executive’s representations and warranties set forth
herein, BMP will give prompt written notice hereof to the Executive and the Executive shall have
the right to defend such claim with counsel reasonably satisfactory to BMP.
21. Successors and Assigns. The provisions of this Agreement shall inure to the
benefit of, and shall be binding upon, (i) BMP and its successors and assigns, including any
successor entity by merger, consolidation or transfer of all or substantially all of BMP’s assets
(whether or not such transaction constitutes a Change in Control), and (ii) the Executive, the
personal representative of his estate and his heirs and legatees.
22. Notices. Any notice required or permitted to be given under this Agreement shall
be in writing and shall be deemed given when personally delivered or sent by overnight courier or
certified mail, postage prepaid, return receipt requested, to the respective addresses of the
parties hereto as set forth above or to such other address as either party may designate by notice
to the other party given as herein provided.
23. Waivers. Any waiver of the performance of the terms or provisions of this
Agreement shall be effective only if in writing and signed by the party against whom such waiver is
to be enforced. The failure of either party to exercise any of his or its rights under this
Agreement or to require the performance of any term or provision of this Agreement, or the waiver
by either party of any breach of this Agreement, shall not prevent a subsequent exercise or
enforcement of such rights or be deemed a waiver of any subsequent breach of the same or any other
term or provision of this Agreement.
24. Survival of Terms. The terms of this Agreement and the respective obligations of
the parties hereto shall survive the termination of the Executive’s employment with BMP for as long
as any obligation or duty remains outstanding.
25. General Creditor Status. The benefits to which the Executive may become entitled
under Part Three or Part Four of this Agreement shall be paid, when due, from BMP’s general assets,
and no trust fund, escrow arrangement or other segregated account shall be established as a funding
vehicle for such payments. Accordingly, the Executive’s right (or the right of the executors or
administrators of the Executive’s estate) to receive such benefits shall at all times be that of a
general creditor of BMP and shall have no priority over the claims of other general creditors.
26. Governing Documents. This Agreement, together with (i) the stock option agreements
evidencing the Executive’s currently outstanding Options and any future Option grants, and (ii) the
Proprietary Information and Inventions Agreement, shall constitute the entire agreement and
understanding of BMP and the Executive with respect to the terms and conditions of the Executive’s
employment with BMP and the payment of severance benefits and shall supersede all prior and
contemporaneous written or verbal agreements and understandings between the Executive and BMP
relating to such subject matter. This Agreement may only be amended by written instrument signed by
the Executive and an authorized officer of BMP. Any and all prior agreements, understandings or
representations relating to the Executive’s employment with BMP, other than the stock option
agreements evidencing the Executive’s currently outstanding Options, are hereby terminated and
cancelled in their entirety and are of no further force or effect.
27. Governing Law. The provisions of this Agreement shall be construed and interpreted
under the laws of the State of Delaware, without giving effect to the conflict of laws rules of
such state.
28. Severability. The provisions of this Agreement shall be severable and if any part
of any provision shall be held invalid or unenforceable, or any separate covenant contained in any
provision is held to be unduly restrictive and void by a final decision of any court or other
tribunal of competent jurisdiction, such part, covenant or provision shall be construed or limited
in scope to give it maximum lawful validity, and the remaining provisions of this Agreement shall
nonetheless remain in full force and effect.
29. Injunctive Relief. The Executive expressly agrees that the covenants set forth in
Paragraph 16 and Paragraph 17 of this Agreement are reasonable and necessary to protect BMP and its
legitimate business interests, and to prevent the unauthorized dissemination of Proprietary
Information to competitors of BMP. The Executive also agrees that BMP will be irreparably harmed
and that damages alone cannot adequately compensate BMP if here is a violation of Paragraph 16 or
Paragraph 17 of this Agreement by the Executive, and that, in addition to any rights or remedies
BMP may have under Paragraph 18, injunctive relief against the Executive is essential for the
protection of BMP. Therefore, in the event of any such breach, it is agreed that, in addition to
any other rights or remedies available to BMP, BMP shall be entitled as a matter of right to pursue
injunctive relief in any court of competent jurisdiction.
30. Arbitration.
A. Each party agrees that any and all disputes which arise out of or relate to the Executive’s
employment, the termination of the Executive’s employment or the terms of this
Agreement shall be resolved through final and binding arbitration. Such arbitration shall be
in lieu of any trial before a judge and/or jury, and the Executive and BMP expressly waive all
rights to have such disputes resolved through trial before a judge and/or jury. Such disputes shall
include, without limitation, claims for breach of contract or of the covenant of good faith and
fair dealing, claims of discrimination, claims under any federal, state or local law or regulation
now in existence or hereinafter enacted and as amended from time to time concerning in any way the
subject of the Executive’s employment with BMP or its termination. The only claims not covered by
this Agreement to arbitrate disputes are: (i) claims for benefits under the unemployment insurance
benefits, (ii) claims for workers’ compensation benefits under any of BMP’s workers’ compensation
insurance policy or fund, (iii) claims arising from or relating to the restrictive covenants
imposed upon the Executive pursuant to the provisions of Paragraph 16 and Paragraph 17 of this
Agreement, and (iv) claims concerning the validity, infringement, ownership, or enforceability of
any trade secret, patent right, copyright, trademark or any other intellectual property right, and
any claim pursuant to or under any existing confidential/proprietary/trade secrets information and
inventions agreement(s) such as, but not limited to, the Proprietary Information and Inventions
Agreement. With respect to such disputes, they shall not be subject to arbitration; rather, they
will be resolved pursuant to applicable law.
B. Arbitration shall be held in Xxxxxxxxxx County, Pennsylvania and conducted in accordance
with the National Rules for the Resolution of Employment Disputes of the American Arbitration
Association (“AAA Rules”), provided, however, that the arbitrator shall allow the discovery
authorized by applicable law in arbitration proceedings, including, but not limited to, discovery
available under the applicable state and/or federal arbitration statutes. Also, to the extent that
any of the AAA Rules or anything in this arbitration section conflicts with any arbitration
procedures required by applicable law, the arbitration procedures required by applicable law shall
govern.
31. Counterparts. This Agreement may be executed in more than one counterpart, each of
which shall be deemed an original, but all of which together shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year written
above.
| BMP SUNSTONE CORPORATION | ||||||
| By: | ||||||
| Title: | President and Chief Executive Officer | |||||
| EXECUTIVE | ||||||
| Xxxx X Xxxxxx | ||||||
