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Exhibit 10.5

Certain portions of this document have been omitted pursuant to Item 601(b)(10)
of Regulation S‑K and, where applicable, have been marked with “[***]” to
indicate where omissions have been made. The marked information has been omitted
because it is (i) not material and (ii) would likely cause competitive harm to
the registrant if publicly disclosed. The registrant hereby undertakes to
provide further information regarding such marked information to the Securities
and Exchange Commission upon request.

BIOSPECIFICS TECHNOLOGIES CORPORATION
2019 OMNIBUS INCENTIVE COMPENSATION PLAN
PERFORMANCE STOCK UNIT AWARD AGREEMENT
 
This PERFORMANCE STOCK UNIT AWARD AGREEMENT (the “Award Agreement”), dated as of
February 3, 2020 (the “Date of Grant”), is delivered by BioSpecifics
Technologies Corporation (the “Company”) to J. Kevin Buchi (the “Participant”).
 
RECITALS
 
The BioSpecifics Technologies Corporation 2019 Omnibus Incentive Compensation
Plan (the “Plan”) provides for the grant of restricted stock units that vest if
certain performance goals or other conditions are met (such restricted stock
units shall be referred to as “performance stock units”), in accordance with the
terms and conditions of the Plan.  The Committee has decided to make this Award
of performance stock units as an inducement for the Participant to promote the
best interests of the Company and its stockholders.  This Award Agreement is
made pursuant to the Plan and is subject in its entirety to all applicable
provisions of the Plan.  Capitalized terms used herein and not otherwise defined
will have the meanings set forth in the Plan.
 
1.           Grant of Performance Stock Units.  Subject to the terms anad
conditions set forth in this Award Agreement and in the Plan, the Company hereby
grants the Participant an Award of performance stock units (the “Performance
Stock Units”), subject to the terms set forth below, in Exhibit A attached
hereto (and which is incorporated by reference), and in the Plan.  The
Participant is eligible to earn a target number of 28,333 Performance Stock
Units.  Each Performance Stock Unit represents the right of the Participant to
receive a share of common stock of the Company (“Company Stock”), if and when
the specified conditions set forth below and on Exhibit A are met, on the
applicable payment date set forth in Section 5 below.
 
2.           Performance Stock Units.  Performance Stock Units represent
hypothetical shares of Company Stock, and not actual shares of stock.  No shares
of Company Stock shall be issued to the Participant at the time the Award is
made, and the Participant shall not be, and shall not have any of the rights or
privileges of, a stockholder of the Company with respect to any Performance
Stock Units (including any right to receive dividends).  The Participant shall
not have any interest in any fund or specific assets of the Company by reason of
this Award.
 
3.           Vesting.
 
(a)          Vesting of the Performance Stock Units shall be subject to the
terms of Section 3 and Section 4 of this Award Agreement and to the achievement
of specified performance conditions set forth on Exhibit A attached hereto.  The
performance conditions set forth on Exhibit A shall be measured over a one year
performance period, commencing on January 1, 2020 and ending on December 31,
2020, and the number of Performance Stock Units that are earned based on the
achievement of the performance conditions set forth on Exhibit A, as determined
by the Committee in accordance with Exhibit A, shall be referred to herein as
the “Achieved PSUs”.
 

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(b)          Except as set forth in Section 4 below, 50% of the Achieved PSUs
shall vest on December 31, 2020, and 50% of the Achieved PSUs shall vest on
December 31, 2021, if the Participant remains employed by the Company through
the applicable vesting date.
 
4.            Termination of Employment.
 
(a)         Except as set forth in this Section 4, if the Participant ceases to
be employed by the Company or its subsidiaries for any reason, any unvested
Performance Stock Units shall automatically terminate and shall be forfeited as
of the date of the Participant’s termination of employment.  No payment shall be
made with respect to any unvested Performance Stock Units that terminate as
described in this Section 4.
 
(b)          If the Participant ceases to be employed by the Company or its
subsidiaries as a result of termination by the Company or its subsidiaries
without Cause or termination by the Participant for Good Reason, in either case
on or after January 1, 2021 and prior to December 31, 2021, then subject to the
Participant’s execution of the Release in accordance with the Employment
Agreement, as of such termination date, the Participant shall become vested in a
pro-rata portion of the unpaid Achieved PSUs.  Such pro-rata portion shall be
equal to the product of the number of unpaid Achieved PSUs (if any), multiplied
by a fraction, the numerator which is the number of days that elapsed during the
fiscal year in which Participant’s termination of employment occurs, and the
denominator of which is the number of calendar days in such fiscal year.
 
(c)         If the Participant ceases to be employed by the Company or its
subsidiaries as a result of  termination by the Company or its subsidiaries
without Cause or termination by the Participant for Good Reason, in either case,
within twelve months following a Change in Control, then subject to the
Participant’s execution of the Release in accordance with the Employment
Agreement, as of such termination date, the Participant shall become vested in
the following: (i) if such termination occurs on or on or prior to December 31,
2020, the target number of Performance Stock Units set forth in Section 1 and
(ii) if such termination occurs on or after January 1, 2021 and prior to
December 31, 2021, 100% of the unvested Achieved PSUs, if any.
 
(d)        Notwithstanding any provision of this Award Agreement, upon the
Participant’s termination of employment by the Company or its subsidiaries for
Cause, any Performance Stock Units which have not been paid as of the date of
such termination (including for the avoidance of doubt, any Achieved PSUs and
any vested but unpaid Performance Stock Units) shall automatically terminate and
shall be forfeited as of the date of the Participant’s termination of employment
and no payment shall be made with respect thereto.
 
(e)          For purposes of this Award Agreement, “Employment Agreement” shall
mean the employment agreement among the Participant, the Company, and the
Company’s wholly owned subsidiary, Advance Biofactures Corporation, dated
October 8, 2019, and “Cause”, “Good Reason” and “Release” shall each have the
meaning set forth in the Employment Agreement.
 
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5.           Payment of Performance Stock Units and Tax Withholding.
 
(a)          If any Performance Stock Unit vests in accordance with the terms of
this Award Agreement, the Company shall issue to the Participant one share of
Company Stock for each such vested Performance Stock Unit, subject to applicable
tax withholding obligations.  Subject to Sections 5(b) and 12, the issuance of
shares of Company Stock pursuant to the preceding sentence of this Section 5(a)
shall be made as soon as administratively practicable following the applicable
vesting date (but no later than March 15 of the fiscal year immediately
following the year in which the applicable vesting date occurs and, in the case
of  shares issued with respect to any Performance Stock Units that vest pursuant
to Section 4, no later than 60 days following the Participant’s termination of
employment.
 
(b)          All obligations of the Company and its subsidiaries under this
Award Agreement shall be subject to the rights of the Company and its
subsidiaries as set forth in the Plan to withhold amounts required to be
withheld for any taxes, if applicable.  Such withholding shall be satisfied by
reducing the number of shares issued to the Participant by a number of shares of
Company Stock with a Fair Market Value equal to an amount of the FICA, federal
income, state, local and other tax liabilities required by law to be withheld
with respect to the payment of the Performance Stock Units, provided that,
unless otherwise approved by the Committee, such withholding shall not exceed
the minimum tax withholding amount applicable to the Participant.  To the extent
not withheld in accordance with the immediately preceding sentence, the
Participant shall be required to pay to the Company or its subsidiaries, or make
other arrangements satisfactory to the Company or its subsidiaries to provide
for the payment of, any FICA, federal, state, local or other taxes that the
Company or its subsidiaries is required to withhold with respect to the
Performance Stock Units.  Notwithstanding any other provision of this Award
Agreement or the Plan, the Company shall not be obligated to guarantee any
particular tax result for the Participant with respect to the Performance Stock
Units and/or payment provided to the Participant hereunder, and the Participant
shall be responsible for any taxes imposed on the Participant with respect to
such Performance Stock Units and/or payment.
 
(c)         The obligation of the Company to deliver Company Stock shall also be
subject to the condition that if at any time the Board shall determine in its
discretion that the listing, registration or qualification of the shares upon
any securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the issuance of shares, the shares may not
be issued in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Board.  The issuance of shares, if any, to the Participant
pursuant to this Award Agreement is subject to any applicable taxes and other
laws or regulations of the United States or of any state, municipality or other
country having jurisdiction thereof.
 
6.           No Stockholder Rights; Compliance with Laws and Regulations;
Dividend Equivalents.  Neither the Participant, nor any person entitled to
receive payment in the event of the Participant’s death, shall have any of the
rights and privileges of a stockholder with respect to shares of Company Stock,
including voting or dividend rights, until certificates for shares have been
issued upon payment of Performance Stock Units.  The issuance of shares of
Company Stock pursuant to the payment in respect of Performance Stock Units
pursuant to Section 5 shall be subject to compliance by the Participant with all
applicable requirements of law relating thereto and with all applicable
regulations of any stock exchange on which the Company Stock may be listed for
trading at the time of such issuance.  The Participant acknowledges that no
election under Section 83(b) of the Code is available with respect to
Performance Stock Units.
 
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7.          Grant Subject to Plan Provisions.  This Award is made pursuant to
the Plan, the terms of which are incorporated herein by reference, and in all
respects shall be interpreted in accordance with the Plan.  The grant and
payment of the Performance Stock Units are subject to the provisions of the Plan
and to interpretations, regulations and determinations concerning the Plan
established from time to time by the Committee in accordance with the provisions
of the Plan, including, but not limited to, provisions pertaining to (a) rights
and obligations with respect to withholding taxes, (b) the registration,
qualification or listing of the shares of Company Stock, (c) changes in
capitalization of the Company and (d) other requirements of applicable law.  The
Committee shall have the authority to interpret and construe the Performance
Stock Units pursuant to the terms of the Plan, and its decisions shall be
conclusive as to any questions arising hereunder.
 
8.          No Employment or Other Rights.  The Award of the Performance Stock
Units shall not confer upon the Participant any right to be retained by or in
the employ or service of the Company or its subsidiaries and shall not interfere
in any way with the right of the Company or its subsidiaries to terminate the
Participant’s employment or service at any time. The right of the Company or its
subsidiaries to terminate at will the Participant’s employment or service at any
time for any reason is specifically reserved.  The obligations of the Company
hereunder will be merely that of an unfunded and unsecured promise of the
Company to deliver one share of Company Stock for each vested Performance Stock
Unit, in the future, and the rights of the Participant will be no greater than
that of an unsecured general creditor.  No assets of the Company will be held or
set aside as security for the obligations of the Company hereunder.
 
9.         Assignment and Transfers.  Except as the Committee may otherwise
permit pursuant to the Plan, the rights and interests of the Participant under
this Award Agreement may not be sold, assigned, encumbered or otherwise
transferred except, in the event of the death of the Participant, by will or by
the laws of descent and distribution.  In the event of any attempt by the
Participant to alienate, assign, pledge, hypothecate, or otherwise dispose of
the Performance Stock Units or any right hereunder, except as provided for in
this Award Agreement, or in the event of the levy or any attachment, execution
or similar process upon the rights or interests hereby conferred, the Company
may terminate the Performance Stock Units by notice to the Participant, and the
Performance Stock Units and all rights hereunder shall thereupon become null and
void.  The rights and protections of the Company hereunder shall extend to any
successors or assigns of the Company and to the Company’s parents, subsidiaries,
and affiliates.  This Award Agreement may be assigned by the Company without the
Participant’s consent.
 
10.        Applicable Law; Jurisdiction.  The validity, construction,
interpretation and effect of this Award Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to the conflicts of laws provisions thereof.  Any action arising out of,
or relating to, any of the provisions of this Award Agreement shall be brought
only in the United States District Court for the Southern District of New York,
or if such court does not have jurisdiction or will not accept jurisdiction, in
any court of general jurisdiction in New York, New York, and the jurisdiction of
such court in any such proceeding shall be exclusive.  Notwithstanding the
foregoing sentence, on and after the date a Participant receives shares of
Company Stock hereunder, the Participant will be subject to the jurisdiction
provision set forth in the Company’s bylaws.
 
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11.         Notice.  Any notice to the Company provided for in this instrument
shall be addressed to the Company in care of the General Counsel at the
corporate headquarters of the Company, and any notice to the Participant shall
be addressed to such Participant at the current address shown on the payroll of
the Company or its subsidiaries.  Any notice shall be delivered by hand, or
enclosed in a properly sealed envelope addressed as stated above, registered and
deposited, postage prepaid, in a post office regularly maintained by the United
States Postal Service or by the postal authority of the country in which the
Participant resides or to an internationally recognized expedited mail courier.
 
12.         Recoupment Policy.  The Participant agrees that, subject to the
requirements of applicable law, the Performance Stock Units, and the right to
receive and retain any Company Stock covered by this Award Agreement, shall be
subject to rescission, cancellation or recoupment, in whole or part, if and to
the extent so provided under any applicable “clawback” or recoupment policies,
securities exchange listing standard, share trading policy or and similar
standard or policy that may be required by law and/or implemented by of the
Company and that is in effect on the Date of Grant or that may be established
thereafter. By accepting the Performance Stock Units, the Participant agrees and
acknowledges that the Participant is obligated to cooperate with, and provide
any and all assistance necessary to, the Company to recover or recoup any such
Performance Stock Units or shares or amounts paid under the Performance Stock
Units subject to clawback or recoupment pursuant to such policy, listing
standard or law.  Such cooperation and assistance shall include, but is not
limited to, executing, completing and submitting any documentation necessary to
recover or recoup any such Performance Stock Units or shares or amount paid from
the Participant’s accounts, or pending or future compensation or Awards under
the Plan.
 
13.         Electronic Delivery. The Company may, in its sole discretion,
deliver any documents relating to the Participant’s Performance Stock Units and
the Participant’s participation in the Plan, or future Awards that may be
granted under the Plan, by electronic means or request the Participant’s consent
to participate in the Plan by electronic means.  The Participant hereby consents
to receive such documents by electronic delivery and, if requested, agrees to
participate in the Plan through an on-line or electronic system established and
maintained by the Company or another third-party designated by the Company.
 
14.          Binding Effect; No Third Party Beneficiaries.  This Award Agreement
shall be binding upon and inure to the benefit of the Company and the
Participant and each of their respective heirs, representatives, successors and
permitted assigns.  This Award Agreement shall not confer any rights or remedies
upon any person other than the Company and the Participant and each of their
respective heirs, representatives, successor and permitted assigns.
 
15.         Severability.  If any provision of this Award Agreement is held to
be unenforceable, illegal or invalid for any reason, the unenforceability,
illegality or invalidity will not affect the remaining provisions of the Award
Agreement, and the Award Agreement is to be construed and enforced as if the
unenforceable, illegal or invalid provision had not been inserted, and the
provisions so held to be invalid, unenforceable or otherwise illegal shall be
reformed to the extent (and only to the extent) necessary to make it
enforceable, valid and legal.
 
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16.         Waiver.  The waiver by the Company with respect to the Participant’s
(or any other participant’s) compliance of any provision of this Award Agreement
shall not operate or be construed as a waiver of any other provision of this
Award Agreement, or of any subsequent breach by such party of a provision of
this Award Agreement.
 
17.         Amendment.  Except as permitted by the Plan, this Award Agreement
may not be amended, modified, terminated or otherwise altered except by the
written consent of the Company and the Participant.
 
18.         Counterparts.  This Award Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same instrument.
 
19.         Application of Section 409A of the Code.  The Award covered by this
Award Agreement is intended to be exempt from, or otherwise comply with the
provisions of, Section 409A of the Code, as amended, and the regulations and
other guidance promulgated thereunder (“Section 409A”).  Notwithstanding the
foregoing or any other provision of this Award Agreement or the Plan to the
contrary, if the Performance Stock Units are subject to the provisions of
Section 409A (and not exempted therefrom), the provisions of this Award
Agreement and the Plan shall be administered, interpreted and construed in a
manner necessary to comply with Section 409A (or disregarded to the extent such
provision cannot be so administered, interpreted or construed).  If any payments
or benefits hereunder constitute non-conforming “deferred compensation” subject
to taxation under Section 409A, the Participant agrees that the Company may,
without the Participant’s consent, modify the Award Agreement to the extent and
in the manner the Company deems necessary or advisable or take such other action
or actions, including an amendment or action with retroactive effect, that the
Company deems appropriate in order either to preclude any such payment or
benefit from being deemed “deferred compensation” within the meaning of Section
409A or to provide such payments or benefits in a manner that complies with the
provisions of Section 409A such that they will not be subject to the imposition
of taxes and/or interest thereunder.  If, at the time of the Participant’s
separation from service (within the meaning of Section 409A), (A) the
Participant shall be a specified employee (within the meaning of Section 409A
and using the identification methodology selected by the Company from time to
time) and (B) the Company shall make a good faith determination that an amount
payable hereunder constitutes deferred compensation (within the meaning of
Section 409A) the settlement of which is required to be delayed pursuant to the
six-month delay rule set forth in Section 409A in order to avoid taxes or
penalties under Section 409A, then the Company shall not settle such amount on
the otherwise scheduled settlement date but shall instead settle it, without
interest, within 30 days after such six-month period.  Payments with respect to
the Performance Stock Units may only be paid in a manner and upon an event
permitted by Section 409A, and each payment under the Performance Stock Units
shall be treated as a separate payment, and the right to a series of installment
payments under the Performance Stock Units shall be treated as a right to a
series of separate payments.   In no event shall the Participant, directly or
indirectly, designate the calendar year of payment.  Notwithstanding the
foregoing, the Company makes no representations and/or warranties with respect
to compliance with Section 409A, and the Participant recognizes and acknowledges
that Section 409A could potentially impose upon the Participant certain taxes
and/or interest charges for which the Participant is and shall remain solely
responsible.
 
[Signature Page Follows]
 
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IN WITNESS WHEREOF, the Company has caused its duly authorized officer to
execute this Award Agreement, and the Participant has executed this Award
Agreement, effective as of the Date of Grant.
 
 
BIOSPECIFICS TECHNOLOGIES CORPORATION
      /s/ Jennifer Chao  
Name: Jennifer Chao
  Title:   Chair, Compensation Committee

I hereby accept the award of Performance Stock Units described in this Award
Agreement, and I agree to be bound by the terms of the Plan and this Award
Agreement.  I hereby agree that all decisions and determinations of the
Committee with respect to the Performance Stock Units shall be final and
binding.
 

February 3, 2020 /s/ J. Kevin Buchi Date
J. Kevin Buchi

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EXHIBIT A
 
PERFORMANCE CONDITIONS OF PERFORMANCE STOCK UNITS
 

1.
The Performance Stock Units subject to the Award Agreement to which this Exhibit
A is attached are subject to the performance conditions set forth in Section 5
below.  Capitalized terms used, but not otherwise defined, in this Exhibit shall
have the meanings set forth in the Award Agreement.

 

2.
The target number of Performance Stock Units underlying the Award Agreement is
28,333 Performance Stock Units.

 

3.
The performance conditions set forth in Section 5 of this Exhibit A (the
“Performance Conditions”) shall be measured over the twelve month period
commencing on January 1, 2020 and ending on December 31, 2020 (the “Performance
Period”).

 

4.
As soon as administratively practicable following the end of the Performance
Period, the Committee will determine, in its sole discretion, (a) whether and to
what extent the Performance Conditions have been met in the aggregate over the
Performance Period and (b) the number of Performance Stock Units that are earned
based on such achievement of the Performance Conditions (such Performance Stock
Units, the “Achieved PSUs”).  The actual number of Achieved PSUs shall range
from 0% to 100% of the target number set forth in Section 2, as determined by
the Committee.  The number of Performance Stock Units the Participant is
eligible to earn under this Award shall not exceed 28,333.

 

5.
The Performance Conditions are set forth below.

 

 
Performance Condition
Components of Performance Condition

1
 
Executive Leadership
 
[***]
2
 
Financial
 
[***]
3
 
BioSpecifics Technologies Corp.’s (“BSTC”) Relationship/Partnership with Endo
International (“Endo”)
 
[***]
4
 
Maximizing the Value of BSTC’s Current and Potential CCH Assets
 
[***]
5
 
Maximize the Value of BSTC’s Intellectual Property Estate/Manufacturing Ability
 
[***]
6
 
Business Development (“BD”) Activity
 
[***]
7
 
Infrastructure
 
[***]
8
 
Investor Relations
 
[***]

 
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