CHANGE IN CONTROL AGREEMENT

 

THIS CHANGE IN CONTROL AGREEMENT (this “Agreement”) is made and entered into
this 31st day of October, 2011, by and between Keryx Biopharmaceuticals, Inc., a
Delaware corporation (the “Company”), and James F. Oliviero (the “Executive”),
to be effective as of the Effective Date, as defined in Section 2.

 

BACKGROUND

 

The Board of Directors of the Company (the “Board”) 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 Executive, notwithstanding the
possibility, threat or occurrence of a Change in Control (as defined below) of
the Company. The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change in Control and to encourage the
Executive’s full attention and dedication to the Company currently and in the
event of any threatened or pending Change in Control, and to provide the
Executive with compensation upon a Change in Control which ensure that the
compensation expectations of the Executive will be satisfied and which are
competitive with those of other corporations. Therefore, 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. Defined Terms. For purposes of this Agreement, the following terms shall have
the meanings indicated below:

 

1.1 “Annual Base Salary” means the Executive’s annual base salary at the rate in
effect immediately prior to a Qualifying Termination or, if higher, at the rate
in effect immediately prior to a Change in Control.

 

1.2 “Board” means the Board of Directors of the Company.

 

1.3 “Cause” means (a) a material breach of the terms of the Executive’s
Proprietary Information and Inventions Agreement or any provisions relating to
non-competition or non-solicitation in any other agreement; (b) a material
breach by the Executive of any other provision of his employment arrangement,
which is not cured by the Executive within fifteen (15) days after receiving
written notice thereof from the Company containing a description of the breach
or breaches alleged to have occurred; (c) the habitual neglect or gross failure
by the Executive to adequately perform the duties of his position; (d) any act
of the Executive involving moral turpitude; (e) the Executive’s commission or
conviction of, or pleading guilty or no lo contendere to, a felony or criminal
action involving dishonesty or other moral turpitude or that is connected to the
Executive’s employment with the Company or his place of employment; (f) the
Executive’s use of illegal drugs, abuse of other controlled substances, working
under the influence of alcohol or other controlled substances, or knowing
neglect of reasonably assigned duties; or (g) the Executive’s repetitive refusal
to comply with or the Executive’s violation of lawful instructions of the Chief
Executive Officer or the Board of Directors, unless cured within fifteen (15)
days after receiving written notice thereof from the Company.

 

1.4 “COBRA Payment” shall have the meaning provided in Section 3 hereof.

 

1.5 “Code” means the Internal Revenue Code of 1986, as amended from time to
time.

 

1.6 “Change in Control” means and includes the occurrence of any one of the
following events:

 

 

 

 

(i) the acquisition by an individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial
ownership of any capital stock of the Company if, after such acquisition, such
Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) 30% or more of either (x) the then-outstanding shares of common
stock of the Company (the “Outstanding Company Common Stock”) or (y) the
combined voting power of the then-outstanding securities of the Company entitled
to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this subsection (i), the
following acquisitions shall not constitute a Change in Control: (A) any
acquisition directly from the Company (excluding an acquisition pursuant to the
exercise, conversion or exchange of any security exercisable for, convertible
into or exchangeable for common stock or voting securities of the Company,
unless the Person exercising, converting or exchanging such security acquired
such security directly from the Company or an underwriter or agent of the
Company), (B) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company, or (C) any acquisition by any corporation pursuant to a Business
Combination (as defined in subsection (iii) below) which complies with clauses
(x) and (y) of subsection (iii) of this definition; or

 

(ii) such time as the Continuing Directors (as defined below) do not constitute
a majority of the Board (or, if applicable, the Board of Directors of a
successor corporation to the Company), where the term “Continuing Director”
means at any date a member of the Board (x) who was a member of the Board on the
date of this Agreement or (y) who was nominated or elected subsequent to such
date by at least a majority of the directors who were Continuing Directors at
the time of such nomination or election or whose election to the Board was
recommended or endorsed by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election; provided,
however, that there shall be excluded from this clause (y) any individual whose
initial assumption of office occurred as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents, by or on behalf of a
person other than the Board; or

 

(iii) the consummation of a merger, consolidation, reorganization,
recapitalization or share exchange involving the Company or a sale or other
disposition of all or substantially all of the assets of the Company (a
“Business Combination”), unless, immediately following such Business
Combination, each of the following two conditions is satisfied: (x) all or
substantially all of the individuals and entities who were the beneficial owners
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the then-outstanding shares of common
stock and the combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall include,
without limitation, a corporation which as a result of such transaction owns the
Company or substantially all of the Company’s assets either directly or through
one or more subsidiaries) (such resulting or acquiring corporation is referred
to herein as the “Acquiring Corporation”) in substantially the same proportions
as their ownership of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, respectively, immediately prior to such Business
Combination and (y) no Person (excluding the Acquiring Corporation or any
employee benefit plan (or related trust) maintained or sponsored by the Company
or by the Acquiring Corporation) beneficially owns, directly or indirectly, 30%
or more of the then-outstanding shares of common stock of the Acquiring
Corporation, or of the combined voting power of the then-outstanding securities
of such corporation entitled to vote generally in the election of directors
(except to the extent that such ownership existed prior to the Business
Combination).

 

 

 

 

1.7 “Date of Termination” shall have the meaning provided in Section 6 hereof.

 

1.8 “Disability” means the Executive’s inability to perform the essential
functions of his job for more than twelve (12) workweeks in any one (1) year
period, with or without reasonable accommodation).

 

1.9 “Effective Date” shall have the meaning provided in Section 2 hereof.

 

1.10 “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time.

 

1.11 “Good Reason” means any of the following, without the Executive’s written
consent: (i) a material diminution in the Executive’s Annual Base Salary in
effect as of the date of the Change in Control; or (ii) a material diminution in
the Executive’s authority, duties, or responsibilities as of the date of the
Change in Control; provided, however, that a termination by the Executive shall
not constitute termination for Good Reason unless the Executive shall first have
delivered to the Company written notice setting forth with specificity the
occurrence deemed to give rise to a right to terminate for Good Reason (which
notice must be given no later than sixty (60) days after the initial occurrence
of such event). Good Reason shall not include the Executive’s death or
Disability. The Executive’s employment must be terminated by the Executive for
Good Reason within ninety (90) days after the occurrence of an event of Good
Reason. A resignation by the Executive for Good Reason effectively constitutes
an involuntary separation from service within the meaning of Section 409A of the
Code and Treas. Reg. Section 1.409A-1(n)(2).

 

1.12 “Qualifying Termination” means the Executive’s termination of employment
with the Company or the Successor Entity either by the Company or the Successor
Entity without Cause or by the Executive for Good Reason, in each case, on, or
within twelve (12) months after, the effective date of a Change in Control. For
the avoidance of doubt, in no event shall the Executive be deemed to have
experienced a Qualifying Termination as a result of the Executive’s death or
Disability.

 

1.13 “Severance Payment” shall have the meaning provided in Section 3 hereof.

 

1.14 “Successor Entity” means any entity that acquires or otherwise succeeds to
all or substantially all of the business or assets of the Company following a
Change in Control.

 

2. Effective Date of the Agreement. This Agreement shall become effective upon
the consummation of a Change in Control (the “Effective Date”) and shall be of
no force or effect prior to a Change in Control. In the event that a Change in
Control does not occur on or prior to the second anniversary of the date of this
Agreement, this Agreement shall thereupon automatically terminate and have no
force or effect.

 

3. Severance Benefits. In the event of the Executive’s Qualifying Termination:
(i) the Executive shall receive a cash payment equal to the sum of (A) the
Executive’s Annual Base Salary, and (B) the annual bonus earned by the Executive
for the fiscal year immediately prior to the year in which the Date of
Termination occurs, if any, payable in a lump sum within sixty (60) days
following the Date of Termination (the “Severance Payment”); and (ii) the
Executive shall receive a cash payment equal to the total monthly premium
payment (both the Company’s portion and the Executive’s portion of such premium)
under the Company’s group healthcare plan multiplied by twelve (12), payable in
a lump sum within sixty (60) days following the Date of Termination (the “COBRA
Payment”). Notwithstanding anything herein to the contrary, the Executive shall
not be eligible to receive the Severance Payment or the COBRA Payment unless he
first executes a general release of claims and covenant not to sue in a form
satisfactory to the Company and does not revoke such release of claims and
covenant not to sue.

 

 

 

 

4. Non-Qualifying Termination. If the Executive’s status as an employee is
terminated for any reason other than due to a Qualifying Termination, the
Executive shall not be entitled to receive the Severance Payment or the COBRA
Payment, and the neither the Company nor any Successor Entity shall have any
obligation to the Executive under this Agreement.

 

5. Section 409A.

 

5.1 General. It is intended that the payments and benefits provided under this
Agreement shall either be exempt from the application of, or comply with, the
requirements of Section 409A of the Code. This Agreement shall be construed in a
manner that effects such intent. Nevertheless, the tax treatment of the benefits
provided under this Agreement is not warranted or guaranteed. Neither the
Company nor its directors, officers, employees or advisers shall be held liable
for any taxes, interest, penalties or other monetary amounts owed by the
Executive as a result of the application of Section 409A of the Code.

 

5.2 Definitional Restrictions. Notwithstanding anything in this Agreement to the
contrary, to the extent that any amount or benefit that would constitute
non-exempt “deferred compensation” for purposes of Section 409A of the Code
(“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable
under this Agreement by reason of the occurrence of the Executive’s separation
from service, such Non-Exempt Deferred Compensation will not be payable or
distributable to the Executive by reason of such circumstance unless the
circumstances giving rise to such separation from service meet any description
or definition of “separation from service” in Section 409A of the Code and
applicable regulations (without giving effect to any elective provisions that
may be available under such definition). This provision does not prohibit the
vesting of any amount upon a separation from service, however defined. If this
provision prevents the payment or distribution of any Non-Exempt Deferred
Compensation, such payment or distribution shall be made on the date, if any, on
which an event occurs that constitutes a Section 409A-compliant “separation from
service,” or such later date as may be required by subsection 5.3 below.

 

5.3 Six-Month Delay in Certain Circumstances. Notwithstanding anything in this
Agreement to the contrary, if any amount or benefit that would constitute
Non-Exempt Deferred Compensation would otherwise be payable or distributable
under this Agreement by reason of the Executive’s separation from service during
a period in which the Executive is a Specified Employee (as defined below),
then, subject to any permissible acceleration of payment by the Compensation
Committee of the Board under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic
relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of
employment taxes): (i) the amount of such Non-Exempt Deferred Compensation that
would otherwise be payable during the six-month period immediately following the
Executive’s separation from service will be accumulated through and paid or
provided on the first day of the seventh month following the Executive’s
separation from service (or, if the Executive dies during such period, within
thirty (30) days after the Executive’s death) (in either case, the “Required
Delay Period”); and (ii) the normal payment or distribution schedule for any
remaining payments or distributions will resume at the end of the Required Delay
Period. For purposes of this Agreement, the term “Specified Employee” has the
meaning given such term in Code Section 409A and the final regulations
thereunder.

 

5.4 Timing of Release. Whenever in this Agreement a payment or benefit is
conditioned on the Executive’s execution of a release of claims and covenant not
to sue, the Company shall provide such release to the Executive promptly
following the Date of Termination, and such release and covenant not to sue must
be executed and all revocation periods shall have expired in accordance with
terms set forth in the release, but in no case later than sixty (60) days after
the Date of Termination; failing which such payment or benefit shall be
forfeited. If such payment or benefit constitutes Non-Exempt Deferred
Compensation, then, subject to subsection 5.3 above, such payment or benefit
(including any installment payments) that would have otherwise been payable
during such 60-day period shall be accumulated and paid on the 60th day after
the Date of Termination provided such release shall have been executed and such
revocation periods shall have expired. If such payment or benefit is exempt from
Section 409A of the Code, the Company may elect to make or commence payment at
any time during such 60-day period.

 

 

 

 

6. Termination Procedures. Any purported termination of the Executive’s
employment shall be communicated by written Notice of Termination from the
terminating party to the other party in accordance with Section 9 hereof. For
purposes of this Section 6, a “Notice of Termination” shall mean (a) in the case
of termination by the Company with Cause or by the Executive with Good Reason, a
notice indicating (i) in reasonable detail the facts and circumstances giving
rise to the determination that Cause or Good Reason exists, as applicable, and
(ii) the effective date of the termination of employment (absent cure, as
provided below and, in the case of termination by the Executive with Good
Reason, in compliance with the time period set forth in Section 1.11 herein),
and (b) in the case of all other terminations of employment, a notice indicating
the effective date of the termination of employment, in each case, subject to
any other contractual obligations that may exist between the Company and the
Executive (the date specified in any such Notice of Termination, the “Date of
Termination”). Notwithstanding the foregoing, in the case of a termination by
the Executive with Good Reason, the Company shall have an opportunity to cure
the circumstances giving rise to Good Reason within thirty (30) days after
receipt of such Notice of Termination. If the Company fails to cure such
circumstances, the Date of Termination shall be as specified in the Notice of
Termination, notwithstanding such thirty (30) day cure period.

 

7. No Mitigation. The Executive shall not be required to seek other employment
or to attempt in any way to reduce or mitigate any benefits payable under this
Agreement and the amount of any such benefits shall not be reduced by any other
compensation paid or provided to the Executive following the Executive’s
termination of service.

 

8. Successors.

 

8.1 Company Successors. This Agreement shall inure to the benefit of and shall
be binding upon the Company, the Successor Entity, and their successors and
assigns. Any successor (whether direct or indirect and whether by purchase,
lease, merger, consolidation, liquidation or otherwise) to all or substantially
all of the Company’s business and/or assets shall assume and agree to perform
the obligations of the Company under this Agreement.

 

8.2 Executive Successors. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, legatees or other
beneficiaries. If the Executive shall die while any amount remains payable to
the Executive hereunder, all such amounts shall be paid in accordance with the
terms of this Agreement to the executors, personal representatives or
administrators of the Executive’s estate.

 

9. Notices. All communications relating to matters arising under this Agreement
shall be in writing and shall be deemed to have been duly given when hand
delivered, faxed, emailed or mailed by reputable overnight carrier or United
States certified mail, return receipt requested, addressed, if to the Executive,
to the address on file with the Company and, if to the Company, to the address
set forth below, or to such other address as either party may have furnished to
the other in writing in accordance herewith, except that notice of change of
address shall be effective only upon actual receipt:

 

Keryx Biopharmaceuticals, Inc.

750 Lexington Avenue, 20th Floor

New York, New York 10022

Attention: Board of Directors

 

 

 

 

10. Code Section 280G.

 

10.1 Notwithstanding anything in this Agreement to the contrary, in the event it
shall be determined that any benefit, payment or distribution by the Company to
or for the benefit of the Executive (whether payable or distributable pursuant
to the terms of this Agreement or otherwise) (such benefits, payments or
distributions are hereinafter referred to as “Payments”) would, if paid, be
subject to the excise tax (the “Excise Tax”) imposed by Section 4999 of the
Code, then the aggregate present value of the Payments shall be reduced (but not
below zero) to an amount expressed in present value that maximizes the aggregate
present value of the Payments without causing the Payments or any part thereof
to be subject to the Excise Tax and therefore nondeductible by the Company
because of Section 280G of the Code (the “Reduced Amount”). The reduction of the
Payments due hereunder, if applicable, shall be made by first reducing cash
Payments and then, to the extent necessary, reducing those Payments having the
next highest ratio of Parachute Value to actual present value of such Payments
as of the date of the change of control, as determined by the Determination Firm
(as defined in subsection (b) below). For purposes of this Section 10, present
value shall be determined in accordance with Section 280G(d)(4) of the Code. For
purposes of this Section 10, the “Parachute Value” of a Payment means the
present value as of the date of the change of control of the portion of such
Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the
Code, as determined by the Determination Firm for purposes of determining
whether and to what extent the Excise Tax will apply to such Payment.

 

10.2 All determinations required to be made under this Section 10, including
whether an Excise Tax would otherwise be imposed, whether the Payments shall be
reduced, the amount of the Reduced Amount, and the assumptions to be utilized in
arriving at such determinations, shall be made by an independent, nationally
recognized accounting firm or compensation consulting firm mutually acceptable
to the Company and the Executive (the “Determination Firm”) which shall provide
detailed supporting calculations both to the Company and the Executive within
fifteen (15) business days of the receipt of notice from the Executive that a
Payment is due to be made, or such earlier time as is requested by the Company.
All fees and expenses of the Determination Firm shall be borne solely by the
Company. Any determination by the Determination Firm shall be binding upon the
Company and the Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Determination Firm hereunder, it is possible that Payments hereunder will have
been unnecessarily limited by this Section 10 (“Underpayment”), consistent with
the calculations required to be made hereunder. The Determination 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
Executive together with interest at the applicable Federal rate provided for in
Section 7872(f)(2) of the Code, but no later than March 15 of the year after the
year in which the Underpayment is determined to exist, which is when the legally
binding right to such Underpayment arises.

 

10.3 In the event that the provisions of Code Section 280G and 4999 or any
successor provisions are repealed without succession, this Section 10 shall be
of no further force or effect.

 

11. Miscellaneous.

 

11.1 Termination and Amendment of the Agreement. Except as provided below,
during the twelve (12) month period following a Change in Control, neither the
Company nor any Successor Entity may terminate this Agreement, nor may the
Company or any Successor Entity amend this Agreement if any such amendment would
have an adverse impact on the interests of the Executive under this Agreement,
in either case, without the express written consent of the Executive. At any
time prior to a Change in Control, the Board may, in its sole discretion,
terminate or amend this Agreement by resolution. Following the Executive’s
Qualifying Termination, no termination or amendment of this Agreement shall
adversely affect the rights of the Executive under the Agreement without
Executive’s written consent.

 

 

 

 

11.2 Withholding. The Company shall have the authority and the right to deduct
and withhold an amount sufficient to satisfy federal, state, local and foreign
taxes required by law to be withheld with respect to any benefits payable under
this Agreement.

 

11.3 Benefits not Assignable. Except as otherwise provided herein or by law, no
right or interest of the Executive under this Agreement shall be assignable or
transferable, in whole or in part, either directly or by operation of law or
otherwise, including without limitation by execution, levy, garnishment,
attachment, pledge or in any manner; no attempted assignment or transfer thereof
shall be effective; and no right or interest of the Executive under this
Agreement shall be liable for, or subject to, any obligation or liability of the
Executive. When a payment is due under this Agreement to the Executive at a time
when he is unable to care for his affairs, payment may be made directly to his
legal guardian or personal representative.

 

11.4 Applicable Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of New York without reference to the
conflict of laws provisions thereof, to the extent not preempted by federal law,
which shall otherwise control.

 

11.5 Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

 

11.6 Captions. The captions contained in this Agreement are for convenience only
and shall have no bearing on the meaning, construction or interpretation of this
Agreement’s provisions.

 

11.7 Status Before and After Effective Date. The Executive and the Company
acknowledge that the employment of the Executive by the Company is “at will” and
the Executive’s employment and/or this Agreement may be terminated by either the
Executive or the Company at any time prior to a Change in Control, in which case
the Executive shall have no further rights under this Agreement. From and after
the effective date of a Change in Control, this Agreement shall supersede any
other agreement between the parties with respect to the subject matter hereof.

 

IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf.

 

  /s/ Ron Bentsur           Keryx Biopharmaceuticals, Inc.     By: Ron Bentsur  
  Its: Chief Executive Officer           /s/ James F. Oliviero     Executive  

 

 

 

 

FIRST AMENDMENT TO
CHANGE IN CONTROL AGREEMENT

 

THE CHANGE IN CONTROL AGREEMENT dated as of October 31, 2011, by and between
Keryx Biopharmaceuticals, Inc., a Delaware corporation (the “Company”), and
James F. Oliviero (the “Executive”), is amended with effect this 3rd day of
November, 2011, by amending Section 1.11 to read as follows:

 

1.11 “Good Reason” means any of the following, without the Executive’s written
consent: (i) a material diminution in the Executive’s Annual Base Salary in
effect as of the date of the Change in Control; (ii) a material diminution in
the Executive’s authority, duties, or responsibilities as of the date of the
Change in Control; or (iii) the relocation of Executive’s principal office to a
facility or location that is more than fifty (50) miles away from the location
of the Executive’s primary place of business as of the Effective Date; provided,
however, that a termination by the Executive shall not constitute termination
for Good Reason unless the Executive shall first have delivered to the Company
written notice setting forth with specificity the occurrence deemed to give rise
to a right to terminate for Good Reason (which notice must be given no later
than sixty (60) days after the initial occurrence of such event). Good Reason
shall not include the Executive’s death or Disability. The Executive’s
employment must be terminated by the Executive for Good Reason within ninety
(90) days after the occurrence of an event of Good Reason. A resignation by the
Executive for Good Reason effectively constitutes an involuntary separation from
service within the meaning of Section 409A of the Code and Treas. Reg. Section
1.409A-1(n)(2).

 

IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf.

 

  /s/ Ron Bentsur           Keryx Biopharmaceuticals, Inc.     By: Ron Bentsur  
  Its: Chief Executive Officer           /s/ James F. Oliviero     Executive