Exhibit 10.2

 

TRANSITION AGREEMENT

 

This Transition Agreement (“Transition Agreement”) is made between DR. THOMAS E.
D’AMBRA (“Executive”) and ALBANY MOLECULAR RESEARCH, INC. (the “Company,”
together with Executive, the “Parties”).

 

WHEREAS, Executive is serving as the Company’s President and Chief Executive
Officer and has tendered his resignation to the Board of Directors, such
resignation to be effective on December 31, 2013 as such may be changed by
agreement of the parties (the “Resignation Date”);

 

WHEREAS, the Board of Directors has elected the Executive as Chairman of the
Board of Directors, such appointment to be effective on the Resignation Date;

 

WHEREAS, the Parties entered into an Amended and Restated Employment Agreement
dated April 5, 2012 (the “Employment Agreement”) which shall remain in full
force and effect until the Resignation Date;

 

WHEREAS, the Parties also entered into an Employee Nondisclosure, Proprietary
Information, Inventions and Non-Solicitation Agreement dated September 5, 2013
(“Employee Agreement”), the terms of which expressly survive the termination of
Executive’s employment;

 

WHEREAS, Executive holds options to purchase shares of the Company’s common
stock which are both vested and unvested and are governed by the Company’s
Amended 2008 Stock Option and Incentive Plan (the “Stock Plan”) and associated
stock option agreements and shares of restricted stock which are unvested and
are governed by the Stock Plan and associated restricted stock agreements
(collectively “Equity Documents”);

 

WHEREAS, the Company has agreed to provide Executive with certain benefits (the
“Transition Benefits”) in connection with his transition as set forth herein;

 

WHEREAS, the Non-Contingent Payments set forth in Section 1 and the Transition
Benefits set forth in Section 2 are the exclusive source of payments, benefits
and equity rights to Executive in connection with the Executive’s transition
from an employee of the Company. By entering into this Transition Agreement,
Executive acknowledges and agrees that he is not entitled to any other severance
pay, benefits or equity rights including without limitation pursuant to any
severance plan, or program or arrangement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties hereby agree as follows:

 

 

 

 

 

1. Non-Contingent Payments. Executive and the Company acknowledge and agree that
(a) Executive shall continue to remain an active, full-time employee of the
Company, receiving base salary and benefits (in each case at the same amount and
level as in effect immediately prior to the date hereof; provided, however, that
any benefits available to the Executive may be modified to the extent such
benefits are modified for the other members of the executive staff of the
Company), through the later of December 31, 2013 or the date immediately prior
to the date on which the new newly elected President and Chief Executive Officer
of the Company becomes an employee of the Company (the “Resignation Date”),
which is expected to be January 1, 2014, and (b) the Employment Agreement, the
Employee Agreement and the Equity Documents shall remain in full force and
effect in accordance with their terms prior to the Resignation Date. On the
Resignation Date, the Executive will resign all of his positions with the
Company, including any positions as director or officer of any of the Company’s
subsidiaries, but excluding his position on the Company’s Board of Directors and
will sign any documents reflecting such resignations reasonably requested by the
Company. The Company shall also pay all accrued but unused vacation through the
Resignation Date, such payment to be made on the first payroll date following
the Resignation Date. The Company shall promptly reimburse Executive for any
outstanding, reasonable business expenses that Executive has incurred on the
Company’s behalf through the Resignation Date, provided the Company receives
appropriate documentation pursuant to the Company’s business expense
reimbursement policy.

 

2. Transition Benefits. In exchange for, among other things, the Executive
signing, not revoking and complying with the terms of this Transition Agreement,
the Company agrees to provide Executive with the following Transition Benefits,
which shall be effective after the Resignation Date:

 

(a) Continuing TIP: The Company shall continue to pay Executive, or in the event
of his death, his heirs, the technology incentive payments with respect to the
worldwide sales of the Allegra/fexofenadine products for which the Company is
receiving royalty payments, as, at such times and how such payments have been
made prior to the Resignation Date, which technology incentive payments shall
continue through the time that the Company is receiving any royalty income with
respect to the worldwide sales of the Allegra/fexofenadine set of products from
Sanofi or any other third party source;

 

(b) Continued vesting of equity: The following shares of restricted stock and
grants of stock options previously issued to the Executive shall continue to
vest in accordance with their terms following the Resignation Date so long as
Executive continues to provide service to the Company as a director, and
Executive shall not be deemed to incur a “termination of employment” for
purposes of these equity grants until he ceases to provide service to the
Company as a director. Except as otherwise provided herein, the equity awards
listed below shall continue to be governed by the terms of the Equity Documents:

 

(i)80,000 stock options and 26,666 shares of Restricted Stock granted June 2,
2011

 

(ii)80,000 stock options and 26,666 shares of Restricted Stock granted February
17, 2012

 

(iii)80,000 stock options and 26,666 shares of Restricted Stock granted January
31, 2013

 

Any changes to comparable equity awards granted to other executive officers,
including modification to the performance targets made by the Compensation
Committee and acceleration in vesting in a change in control transaction, shall
apply equally to the equity awards listed above.

 

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(c) the Company shall provide the Executive with health and dental insurance
continuation at a level consistent with the level and type the Executive had in
place at the Resignation Date for a period of 24 months from the Resignation
Date;

 

(d) the Company will pay Executive a bonus in a final amount to be determined
following the close of the 2013 fiscal year (the “2013 Bonus”) which will be
calculated based on the Company’s actual achievement of the 2013 bonus targets
that were established by the Board of Directors and will be finally determined
by the Compensation Committee of the Board of Directors following completion of
the audit of the fiscal year results, provided, however, that any costs
associated with leadership transition shall not be applied towards the 2013
bonus target for margin. For purposes of this Section 2(d), Executive’s bonus
allocation, if any, shall be determined in the same manner as the other
Executives at the Company. The 2013 Bonus will be paid no later than the date
that the bonuses, if any, for such time period are paid to the other executive
officers of the Company or March 15, 2014, whichever is earlier;

 

(e) any other equity awards pursuant to the Equity Documents not listed in
Section 2(b) above shall cease to vest on the Resignation Date and exercise of
such equity awards shall be subject to the terms of the Equity Documents.

 

3. Appointment as Non-Executive Chairman of the Board of Directors. Upon
assuming the role of non-executive Chairman of the Board of Directors on the
Resignation Date, Executive shall be eligible for the annual cash, equity and
other consideration payable to non-employee members of the Company’s Board of
Directors as such shall be established from time to time, including annual
retainers, meeting fees and expense reimbursement. The annual retainers shall be
as of the Resignation Date no less than the sum of (i) $30,000 per year for
service on the Board of Directors, and (ii) $55,000 per year for services as the
Chairman of the Board of Directors; both of which amounts shall be payable once
per year around the time of the Company’s annual general meeting of
shareholders.

 

4. Equity Grant. Upon assuming the role of non-executive Chairman of the Board
of Directors, Executive shall receive a grant of shares of restricted stock with
a Fair Market Value on the date of grant equal to $1 million. Such restricted
stock grant will vest on the fifth anniversary of the date of grant, subject to
continued service on the Board, with full acceleration of vesting in the event
of a change in control transaction. For purposes of this Agreement, the Fair
Market Value of the shares of restricted stock will be calculated with reference
to the closing price on the date of grant (or the immediately preceding business
day if the date of grant is not a business day).

 

5. General Release. Executive irrevocably and unconditionally releases and
forever discharges the Company, all of its affiliated and related entities, its
and their respective predecessors, successors and assigns, its and their
respective executive benefit plans and the fiduciaries of such plans, and the
current and former officers, directors, stockholders, executives, attorneys,
accountants, and agents of each of the foregoing in their official and personal
capacities (collectively referred to as the “Releasees”) generally from all
claims, demands, debts, damages and liabilities of every name and nature, known
or unknown (“Claims”) that, as of the date when Executive signs this Transition
Agreement, he has, ever had, now claims to have or ever claimed to have had
against any or all of the Releasees. This release includes, without implication
of limitation, the complete waiver and release of all Claims of or arising in
connection with or for: the Employment Agreement including Claims for breach of
express or implied contract; wrongful termination of employment whether in
contract or tort; intentional, reckless, or negligent infliction of emotional
distress; breach of any express or implied covenant of employment, including the
covenant of good faith and fair dealing; interference with contractual or
advantageous relations, whether prospective or existing; deceit or
misrepresentation; discrimination or retaliation under state, federal, or
municipal law, including, without implication of limitation, Title VII of the
Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., as amended, the Americans
with Disabilities Act, 42 U.S.C. § 12101 et seq., the Age Discrimination in
Employment Act, 29 U.S.C. § 621 et seq.; the New York Executive Law; the New
York Constitution; the New York Labor Law; the New York Civil Rights Law;
defamation or damage to reputation; reinstatement; punitive or emotional
distress damages; wages, severance pay, vacation pay, back or front pay or other
forms of compensation; and attorney’s fees and costs. Executive understands that
this general release of Claims extends to any and all Claims related to
Executive’s employment by the Company and his resignation from employment and
all claims in his capacity as a Company stockholder. Executive understands that
this general release does not release any rights arising under or preserved by
this Transition Agreement, or to claims that may arise out of acts or events
that occur after the Resignation Date. Executive represents that he has not
assigned to any third party and has not filed with any agency or court any Claim
released by this Transition Agreement. The Company represents that it is unaware
of any claims, demands, debts, damages and liabilities of any kind that the
Company may have against the Executive as of the date of this Transition
Agreement and that Executive’s willingness to enter into this Transition
Agreement and provide the release set forth in this Section is in consideration,
in part, on that representation.

 

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6. Indemnification. To the full extent permitted by law and subject to the
Company’s Articles of Incorporation and Bylaws, the Company shall indemnify
Executive with respect to actions commenced against Executive in his capacity as
a director or officer of the Company. The Company agrees to use its best efforts
to secure and maintain directors’ and officers’ liability insurance with respect
to Executive.

 

7. Restrictive Covenants; Injunctive Relief. Executive’s obligations set forth
in the Employment Agreement, including but not limited to Sections 7 and 8
thereof, and those set forth in the Employee Agreement shall be referred to as
the “Restrictive Covenants.” Executive agrees that it would be difficult to
measure any harm caused to the Company that might result from any breach by
Executive of any of the Restrictive Covenants, and that in any event money
damages would be an inadequate remedy for any such breach. Accordingly,
Executive agrees that if he breaches, or proposes to breach, any portion of the
Restrictive Covenants the Company shall be entitled, in addition to all other
remedies it may have, to an injunction or other appropriate equitable relief to
restrain any such breach, without showing or proving any actual damage to the
Company and without the necessity of posting a bond. In the event that the
Company prevails in any action to enforce any part of the Restrictive Covenants,
then Executive also shall be liable to the Company for attorney’s fees and costs
incurred by the Company in enforcing such provision(s).

 

8. Advice of Counsel. This Transition Agreement is a legally binding document
and Executive’s signature will commit Executive to its terms. Executive
acknowledges that he has been advised to discuss all aspects of this Transition
Agreement with his attorney, that he has carefully read and fully understands
all of the provisions of this Transition Agreement and that Executive is
voluntarily entering into this Transition Agreement.

 

9. Termination of Transition Benefits. Executive acknowledges that his right to
the Transition Benefits is conditional on his compliance with the Restrictive
Covenants. In the event that Executive fails to comply with any of the
Restrictive Covenants after written notice of noncompliance from the Company and
a 30-day period to cure, in addition to any other legal or equitable remedies it
may have for such breach, the Company shall have the right to terminate the
Transition Benefits set forth in Sections 2 and 3 of this Transition Agreement.
Such termination of those payments and benefits in the event of such breach by
the Executive shall not affect Executive’s ongoing obligations and shall be in
addition to and not in lieu of the Company’s rights to injunctive relief and
other legal and equitable remedies that the Company may have.

 

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10. Time for Consideration; Effective Date. Executive acknowledges that he has
been provided with the opportunity to consider this Transition Agreement for
twenty-one (21) days before signing it. If Executive signs this Transition
Agreement within less than twenty-one (21) days of the date of its delivery to
him, Executive acknowledges by signing this Transition Agreement that such
decision was entirely voluntary and that he had the opportunity to consider this
Transition Agreement for the entire twenty-one (21) day period. Executive and
the Company agree that any changes or modifications to this Transition Agreement
shall not restart the twenty-one (21) day period. For a period of seven (7) days
from the day of the execution of this Transition Agreement, Executive shall
retain the right to revoke this Transition Agreement by written notice that must
be received by Brian Russell before the end of such revocation period. This
Transition Agreement shall become effective on the business day immediately
following the expiration of the revocation period (the “Effective Date”),
provided that Executive does not revoke this Transition Agreement during the
revocation period.

 

11. Enforceability. Executive acknowledges that, if any portion or provision of
this Transition Agreement or the Restrictive Covenants shall to any extent be
declared illegal or unenforceable by a court of competent jurisdiction, then the
remainder other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision
shall be valid and enforceable to the fullest extent permitted by law.

 

12. Entire Agreement. This Transition Agreement, the Employee Agreement, the
Equity Documents, and the Employment Agreement (except as specifically revised
by, amended by, or as otherwise set forth in, this Transition Agreement)
constitute the entire agreement between Executive and the Company concerning
Executive’s relationship with the Company, and supersedes and replaces any and
all prior agreements and understandings between the Parties concerning
Executive’s relationship with the Company.

 

13. Waiver. No waiver of any provision of this Transition Agreement shall be
effective unless made in writing and signed by the waiving party. The failure of
either Party to require the performance of any term or obligation of this
Transition Agreement, or the waiver by either Party of any breach of this
Transition Agreement, shall not prevent any subsequent enforcement of such term
or obligation or be deemed a waiver of any subsequent breach.

 

14. Taxes. The Company shall undertake to make deductions, withholdings and tax
reports with respect to payments and benefits under this Transition Agreement
and in connection with other compensation matters to the extent that it
reasonably and in good faith determines that it is required to make such
deductions, withholdings and tax reports. Payments under this Transition
Agreement shall be in amounts net of any such deductions or withholdings.
Nothing in this Transition Agreement shall be construed to require the Company
to make any payments to compensate Executive for any adverse tax effect
associated with any payments or benefits made to Executive in connection with
Executive’s employment with the Company.

 

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15. Governing Law; Disputes; Interpretation; Notices. This Transition Agreement
shall be construed and regulated in all respects under the laws of the State of
New York without regard to conflict of law principles. Any dispute or
controversy arising under or in connection with this Transition Agreement shall
be settled exclusively by arbitration in Albany, New York, in accordance with
the rules of the American Arbitration Association then in effect. Judgment may
be entered in any court having jurisdiction. In the event of any dispute, this
Transition Agreement is intended by the Parties to be construed as a whole, to
be interpreted in accordance with its fair meaning, and not to be construed
strictly for or against either Party or the “drafter” of all or any portion of
this Transition Agreement. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (i) when delivered by hand, (ii) when transmitted by facsimile and
receipt is acknowledged, or (iii) if mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so
mailed:

 

To the Company:

 

Albany Molecular Research, Inc.

21 Corporate Circle

Albany, New York 12203-5154

Facsimile: (518) 867-4375

Attention: Board of Directors

 

To the Executive, at the address on file with the Company

 

or to such other address of which any party may notify the other parties as
provided above. Notices shall be effective as of the date of such delivery or
mailing.

 

16. Successors and Assigns. This Transition Agreement shall inure to the benefit
of successors of the Company by way of merger, consolidation or transfer of all
or substantially all of the assets of the Company, and may not be assigned by
the Executive. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
and agree to perform this Agreement to the same extent that the Company would be
required to perform it if no succession had taken place. Failure of the Company
to obtain an assumption of this Agreement at or prior to the effectiveness of
any succession shall be a material breach of this Agreement.

 

17. Counterparts. This Transition Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be taken to be
an original, but all of which together shall constitute one and the same
document. Facsimile and pdf signatures shall be deemed to be of equal force and
effect as originals.

 

 

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IN WITNESS WHEREOF, the Parties, intending to be legally bound, have executed
this Transition Agreement on the date(s) indicated below.

 

 

ALBANY MOLECULAR RESEARCH, INC.

 

By: /s/ William S. Marth     William S. Marth     Chairman of the Board of
Directors         Date: September 6, 2013  

  

/s/ Thomas D’Ambra     THOMAS E. D’AMBRA, PH.D.  

 

Date: September 6, 2013  

 

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