Exhibit 10.6

 

Execution Version

 

AMENDED EMPLOYMENT AGREEMENT

  

This AMENDED EMPLOYMENT AGREEMENT (the “Agreement”) is made this eighth day of
February, 2017, by and between Albany Molecular Research, Inc., a Delaware
corporation (the “Company”), and William S. Marth (the “Executive”).

 

WHEREAS, the Executive has been the Chief Executive Officer and President of the
Company since January 1, 2014 (the “Employment Date”) and is a party to an
Employment Agreement with the company dated September 5, 2013; and

 

WHEREAS, the parties wish to amend certain provisions of the Employment
Agreement that will be effective as of the date hereof; and

 

WHEREAS, the parties hereto desire to assure that the Executive’s knowledge and
familiarity with the business of the Company will continue to be available to
the Company after the Employment Date.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants herein
contained, the parties agree as follows:

 

1.           Employment. Subject to the provisions of Section 6, the Company
hereby employs the Executive, effective on the Employment Date, and the
Executive agrees to accept such employment on the Employment Date upon the terms
and conditions hereinafter set forth. In the event that the Executive becomes an
employee of the Company on any date other than January 1, 2014, then the actual
date of employment shall be considered the Employment Date hereunder.

 

2.           Term of Employment. The term of the Executive’s employment pursuant
to this Agreement shall commence on the Employment Date (the “Effective Date”)
and shall remain in effect for a period of three (3) years from the Effective
Date (the “Term”). The Term shall be renewed automatically for periods of two
(2) years (each a “Renewal Term”) commencing at the third anniversary of the
Effective Date and on each subsequent anniversary thereafter, unless notice that
this Agreement will not be extended is given by either the Executive or the
Company not less than one hundred eighty (180) days prior to the expiration of
the Term (as extended by any Renewal Term). The period during which the
Executive serves as an employee of the Company in accordance with and subject to
the provisions of this Agreement is referred to in this Agreement as the “Term
of Employment.”

 

   

 

3.           Capacity.

 

(a)          Duties. During the Term of Employment, the Executive shall report
directly to the Board of Directors of the Company and (i) shall serve as an
executive officer of the Company with the title Chief Executive Officer and
President, (ii) shall remain as a member of the Board of Directors of the
Company, subject to continued re-election by the shareholders of the Company,
but shall resign as Chairman of the Board effective as of the Employment Date;
(iii) shall perform such duties and responsibilities as may be reasonably
determined by the Board of Directors of the Company consistent with the
Executive’s title and position, provided that such duties and responsibilities
shall be within the general area of the Executive’s experience and skills, (iv)
upon the request of the Board of Directors of the Company, shall serve as an
officer and/or director of any of the Company’s subsidiaries or affiliates
(provided that the Company shall indemnify the Executive for liabilities
incurred as such in accordance with its current practices to the fullest extent
permitted by applicable law); and (v) shall render all services incident to the
foregoing.

 

(b)          Extent of Service. The Executive agrees to diligently serve the
interests of the Company and shall devote substantially all of his working time,
attention, skill and energies to the advancement of the interests of the Company
and its subsidiaries and affiliates and the performance of his duties and
responsibilities hereunder; provided that nothing in this Agreement shall be
construed as preventing the Executive from (i) investing the Executive’s assets
in any entity in a manner not prohibited by Section 7 and in such form or manner
as shall not require any material activities on the Executive’s part in
connection with the operations or affairs of the entities in which such
investments are made, (ii) engaging in religious, charitable or other community
or non-profit activities that do not impair the Executive’s ability to fulfill
the Executive’s duties and responsibilities under this Agreement or (iii)
serving as a director of Upsher-Smith Laboratories or KV Pharmaceutical Company
and such additional companies as to which the Board of Directors may consent,
such consent not to be unreasonably withheld or delayed, provided that the
Executive’s service as a director for such company(ies) does not impair the
Executive’s ability to fulfill his duties and responsibilities under this
Agreement, and provided further that the Executive may not serve on more than
two outside boards of directors at any time and, without prior consent of the
Board of Directors, may not serve as board or committee chair.

 

4.           Compensation.

 

(a)    Salary. During the Term of Employment, the Company shall pay the
Executive a salary (the “Base Salary”) at an annual rate as shall be determined
from time to time by the Board of Directors of the Company or the Compensation
Committee of the Board of Directors consistent with the general policies and
practices of the Company and subject to periodic review in accordance with the
policies and practices of the Company; provided, however, that in no event shall
such rate per annum be less than $650,000. Such salary shall be subject to
withholding under applicable law and shall be payable in periodic installments
in accordance with the Company’s usual practice for its senior executives, as in
effect from time to time. The Executive agrees that effective on the Employment
Date, he shall no longer be eligible for or receive any separate or additional
compensation for his service on the Company’s Board of Directors.

 

(b)     Bonus. Annually, the Company shall review the performance of the Company
and of the Executive during the prior year, and the Company may provide the
Executive with additional compensation as a bonus in accordance with any bonus
plan then in effect from time to time for senior executives of the Company. Any
such bonus plan shall have such performance metrics as determined by the Board
of Directors of the Company or the Compensation Committee of the Board of
Directors during the annual planning process. The Executive’s potential bonus
shall be 60% of his Base Salary at target performance, 30% of his Base Salary at
threshold performance and 90% of his Base Salary at superior performance. Any
bonuses earned for a calendar year shall be paid between January 1 and March 15
of the following calendar year.

 

 2 

 

 

(c)          Relocation. The Company will provide the Executive with a
relocation bonus of $350,000 (the “Relocation Bonus”), payable within sixty (60)
days of the Employment Date.

 

(d)          Equity Grants. Effective on the Employment Date, the Company will
grant to Executive shares of restricted stock with a Fair Market Value on the
date of grant equal to $1 million. Such restricted stock grant will have
time-based vesting over four (4) years, with twenty-five percent (25%) of the
shares vesting on the first anniversary of the date of grant and the remaining
seventy-five percent (75%) vesting in equal installments on each annual
anniversary of the date of the grant, subject to continued employment. The
Executive shall also be entitled to receive shares of restricted stock and a
non-qualified stock option to purchase shares of common stock with a Fair Market
Value of $1 million, which grant shall be made at the same time that annual
awards are made to other Company executives in early 2014 and all such awards
shall be performance awards, with vesting tied to achievement of performance
metrics to be determined by the Board of Directors of the Company or the
Compensation Committee of the Board of Directors. The Executive also shall be
eligible for additional annual grants of restricted stock and non-qualified
options to purchase shares of the Company’s common stock. For purposes of this
Agreement, the Fair Market Value of 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)
and the number of options to be granted will be determined through the use of
the Black-Scholes valuation model as used by the Company in its most recent
quarterly or annual filing, such valuation model applied 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). The restricted stock and stock options will be
granted pursuant to the Company’s 2008 Stock Option and Incentive Plan. Such
restricted stock and stock options will be evidenced by standard agreements to
be entered into between Executive and the Company and the terms and conditions
of vesting of such shares will be set forth in such agreements. For the
avoidance of doubt, such agreements will provide only double trigger vesting and
not single trigger vesting acceleration upon a Change in Control of the Company
if a Change in Control occurs in the first year of employment. If a Change in
Control occurs after the Executive has completed one year of employment, the
Executive will become fully vested in any outstanding stock options, Restricted
Stock or other stock grants awarded under this Agreement upon the consummation
of the Change in Control.

 

 3 

 

 

5.           Benefits.

 

(a)         Regular Benefits. During the Term of Employment, the Executive shall
be entitled to participate in any and all medical, dental, pension and life
insurance plans, disability income plans and other employee benefit plans as in
effect from time to time for senior executives of the Company. Such
participation shall be subject to (i) the terms of the applicable plan
documents, (ii) generally applicable policies of the Company and (iii) the
discretion of the Board of Directors of the Company or the administrative or
other committee provided for in, or contemplated by, such plan. Compliance with
this Section 5(a) shall in no way create or be deemed to create any obligation,
express or implied, on the part of the Company or any subsidiary or affiliate of
the Company with respect to the continuation of any benefit or other plan or
arrangement maintained as of or prior to the Effective Date or the creation and
maintenance of any particular benefit or other plan or arrangement at any time
after the Effective Date.

 

(b)          Reimbursement of Expenses. The Company shall promptly reimburse the
Executive for all reasonable business expenses incurred by the Executive during
the Term of Employment in accordance with the Company’s practices for senior
executives of the Company, as in effect from time to time. In addition, the
Company agrees to pay or reimburse the Executive for the legal fees of his
attorneys (Sills Cummis & Gross, P.C.) in connection with the negotiation and
documentation of this Agreement and related matters, up to an aggregate amount
of $15,000.

 

(c)        Vacation. During the Term of Employment, the Executive shall receive
at least four (4) weeks paid vacation annually or such greater amount as is in
accordance with the Company’s practices for senior executives of the Company, as
in effect from time to time.

 

6.           Termination of Employment. Notwithstanding the provisions of
Section 2, the Executive’s employment under this Agreement shall terminate under
the following circumstances set forth in this Section 6. In the event that the
Executive’s employment terminates at any time from the Employment Date to the
date that is twenty-four (24) months following the Relocation Date and such
termination is pursuant to Section 6(b) or 6(d); then within thirty (30) days of
the Date of Termination the Executive shall repay the Relocation Bonus in full
to the Company.

 

For purposes of this Agreement, “Date of Termination” means (i) if the
Executive’s employment is terminated by his death as provided in Section 6(c),
the date of his death; (ii) if the Executive’s employment is terminated due to
his permanent disability as provided in Section 6(c), the date on which notice
of termination is given; (iii) if the Executive’s employment is terminated by
the Company without Cause under Section 6(e) or Section 6(g), sixty (60) days
after the date on which notice of termination is given; and (iv) if the
Executive’s employment is terminated under Section 6(f) or for Good Reason under
Section 6(g), the date on which the applicable cure period expires.

 

(a)          Mutual Consent. The Executive’s employment under this Agreement may
be terminated at any time by the mutual consent of the Executive and the Company
on such terms as both parties shall mutually agree.

 

(b)          Termination by the Company for Cause. The Executive’s employment
under this Agreement may be terminated by the Company for Cause at any time upon
written notice to the Executive without further liability on the part of the
Company. For purposes of this Agreement, a termination shall be for Cause if:

 

 4 

 

 

(i)          the Executive shall commit an act of fraud, embezzlement,
misappropriation or breach of fiduciary duty against the Company or any of its
subsidiaries or affiliates or shall be convicted by a court of competent
jurisdiction or shall plead guilty or nolo contendere to any felony or any crime
involving moral turpitude;

 

(ii)         the Executive shall commit a material breach of any of the
covenants, terms or provisions of Section 7, 8 or 9 hereof which breach has not
been cured within fifteen (15) days after delivery to the Executive by the
Company of written notice thereof;

 

(iii)        the Executive shall commit a material breach of any of the
covenants, terms or provisions hereof (other than pursuant to Section 7, 8 or 9
hereof) which breach has not been remedied within thirty (30) days after
delivery to the Executive by the Company of written notice thereof; or

 

(iv)        the Executive shall have disobeyed reasonable written instructions
from the Company’s Board of Directors, Compensation Committee or other
appropriate governing committee which are consistent with the terms and
conditions of this Agreement or shall have deliberately, willfully,
substantially and continuously failed to perform the Executive’s duties
hereunder, after written notice and under circumstances effectively constituting
a voluntary resignation of the Executive’s position with the Company.

 

Upon termination for Cause as provided in this Section 6(b), all obligations of
the Company under this Agreement shall thereupon immediately terminate other
than any obligations with respect to earned but unpaid Base Salary. The Company
shall have any and all rights and remedies under this Agreement and applicable
law.

 

(c)          Death; Disability. The Executive’s employment under this Agreement
may be terminated by the Company upon the earlier of death or permanent
disability (as defined below) of the Executive continuing for a period of one
hundred eighty (180) days. Upon any such termination of the Executive’s
employment, all obligations of the Company under this Agreement shall thereupon
immediately terminate other than any obligations with respect to (i) earned but
unpaid Base Salary through the Date of Termination, (ii) bonus payments with
respect to the calendar year within which such termination occurred on the basis
of and to the extent contemplated in any bonus plan then in effect with respect
to senior executive officers of the Company, pro-rated on the basis of the
number of days of the Executive’s actual employment hereunder during such
calendar year through the Date of Termination, and (iii) in the case of
permanent disability, continuation at the Company’s expense of health insurance
benefits (medical and dental) until the first anniversary of the Date of
Termination to the extent permitted under the Company’s group health insurance
policy. As used herein, the term “permanent disability” or “permanently
disabled” means the inability of the Executive, by reason of injury, illness or
other similar cause, after reasonable accommodation by the Company, to perform
his duties and responsibilities in connection with the conduct of the business
and affairs of the Company. The Company shall provide written notice to the
Executive of the termination of his employment hereunder due to permanent
disability. Should a dispute occur concerning the Executive’s mental or physical
capacity as described in this Section 6(c), a doctor selected by the Executive
and a doctor selected by the Company shall be entitled to examine the Executive.
If the opinion of the Company’s doctor and the Executive’s doctor conflict, the
Company’s doctor and the Executive’s doctor shall together agree upon a third
doctor, whose opinion shall be binding. This Section 6(c) shall survive the
termination of this Agreement for any reason.

 

 5 

 

 

(d)          Voluntary Termination by the Executive. At any time during the Term
of Employment, the Executive may terminate his employment under this Agreement
upon sixty (60) days’ prior written notice to the Company. Upon termination by
the Executive as provided in this Section 6(d), all obligations of the Company
under this Agreement shall thereupon immediately terminate other than any
obligations with respect to earned but unpaid Base Salary.

 

(e)          Termination by the Company Without Cause. The Executive’s
employment under this Agreement may be terminated by the Company at any time
without Cause by the Company upon sixty (60) days’ prior written notice to the
Executive. Any termination by the Company of the Executive’s employment under
this Agreement which does not constitute a termination for Cause under Section
6(b) and is not a termination on account of death or disability under Section
6(c) shall be deemed a termination without Cause, including any termination by
reason of the Company electing not to extend the term of the Executive’s
employment upon the expiration of the initial Term or any Renewal Term. Upon any
such termination of the Executive’s employment, all obligations of the Company
under this Agreement shall thereupon immediately terminate other than any
obligations with respect to earned but unpaid Base Salary and bonus under
Section 4. In addition, subject to the Executive signing a separation agreement
containing, among other things, a general release of claims, confidentiality,
non-disparagement and return of property, substantially in the form of Exhibit A
attached hereto (the “Release”) within 30 days of the Date of Termination, and
the Release becoming irrevocable and further subject to the Executive’s
compliance with the provisions of Sections 7 and 8 hereof, the Company shall
continue to pay the Executive his Base Salary at the rate then in effect
pursuant to Section 4(a) for a period of two (2) years from the Date of
Termination and shall pay to the Executive in monthly installments over a period
of two (2) years, an amount equal to the Executive’s cash bonus, if any,
received in respect of the year immediately preceding the year of termination
pursuant to Section 4(b), beginning with the first payroll date that begins
thirty (30) days after the Date of Termination. The Company will also make a
bonus payment to Executive with respect to the year of termination on the basis
of and to the extent contemplated in any bonus plan then in effect with respect
to senior executives of the Company, pro-rated on the basis of the number of
days of the Executive’s actual employment hereunder during such calendar year
through the Date of Termination. Such pro-rated bonus, if earned, will be paid
prior to March 15 of the following calendar year. For purposes of Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), each monthly
payment shall be considered a separate payment. The Company shall also pay 100%
of the costs to provide up to twelve (12) months of outplacement support
services at a level appropriate for the Executive’s title and responsibility and
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 time of
termination for a period of twenty four (24) months from the Date of Termination
to the extent permitted under the Company’s group health insurance policy.

 

 6 

 

 

(f)          Termination by the Executive upon Company Breach. The Executive
shall have the right to terminate his employment hereunder upon written notice
to the Company in the event of (i) a change in the Executive’s title or
reporting directly to the Company’s Board of Directors, or a material diminution
in the nature or scope of the powers, duties or responsibilities of the
Executive or (ii) a breach by the Company of any of its material obligations
hereunder, in each case after the Executive has given written notice to the
Company specifying such default by the Company within ninety (90) days of the
occurrence of the default and giving the Company a reasonable time, not less
than thirty (30) days, to conform its performance to its obligations hereunder.
Upon any such termination of the Executive’s employment, all obligations of the
Company under this Agreement shall thereupon immediately terminate other than
any obligations with respect to earned but unpaid Base Salary and bonus under
Section 4. In addition, subject to the Executive signing the Release within 30
days of the Date of Termination and the Release becoming irrevocable, and
further subject to the Executive’s compliance with the provisions of Sections 7
and 8 hereof, the Company shall continue to pay the Executive his Base Salary at
the rate then in effect pursuant to Section 4(a) for a period of two (2) years
from the Date of Termination and shall pay to the Executive in monthly
installments over a period of two (2) years, an amount equal to the Executive’s
cash bonus, if any, received in respect of the year immediately preceding the
year of termination pursuant to Section 4(b), beginning with the first payroll
date that occurs thirty (30) days after the Date of Termination. The Company
will also make a bonus payment to Executive with respect to the year of
termination on the basis of and to the extent contemplated in any bonus plan
then in effect with respect to senior executives of the Company, pro-rated on
the basis of the number of days of the Executive’s actual employment hereunder
during such calendar year through the Date of Termination. Such pro-rated bonus,
if earned, will be paid prior to March 15 of the following calendar year. For
purposes of Section 409A of the Code, each monthly payment shall be considered a
separate payment. The Company shall also pay 100% of the costs to provide up to
twelve (12) months of outplacement support services at a level appropriate for
the Executive’s title and responsibility and 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 time of termination for a period of twenty
four (24) months from the Date of Termination to the extent permitted under the
Company’s group health insurance policy.

 

(g)          Change of Control and Termination Pursuant to a Change of Control.
If there is a Change of Control, as defined below, during the Term of
Employment, the provisions of this Section 6(g) shall apply and shall continue
to apply throughout the remainder of the Term (as extended by any Renewal Term).
If, within two (2) years following a Change of Control, the Executive’s
employment is terminated by the Company without Cause (in accordance with
Section 6(e) above) or by the Executive for “Good Reason” (as defined in Section
6(g)(ii) below), in lieu of any severance and other benefits payable under
Section 6(e) or Section 6(f), subject to the Executive signing the Release
within 30 days of the Date of Termination and the Release becoming irrevocable,
(i) the Executive shall become fully vested in all Company contributions made to
the Executive’s 401(k), Profit Sharing or other retirement account(s), (ii) the
Company shall pay to the Executive a lump sum equal to the Executive’s pro rata
target cash bonus for the year in which the termination occurred (as such may be
set forth in the Company’s bonus plan for such year and calculated assuming
target achievement of corporate and personal goals), such pro rata amount to be
determined based on the actual date of the termination, (iii) the Company shall
pay to the Executive (or the Executive’s estate, if applicable) a lump sum
amount equal to two (2) times the sum of (x) the Executive’s Base Salary at the
rate then in effect pursuant to Section 4(a), plus (y) an amount equal to the
Executive’s target cash bonus for the year in which termination occurred (as
such may be set forth in the Company’s cash bonus plan for such year and
assuming target achievement of corporate and personal goals),, on the first
payroll date that occurs thirty (30) days after the Date of Termination.
Notwithstanding the foregoing, to the extent the cash severance payment to the
Executive is considered deferred compensation subject to Section 409A of the
Code and if the Change of Control does not constitute a “change in control
event” within the meaning of Section 409A of the Code, such cash severance shall
be payable in installments over the same period as provided in Section 6(e). The
Company shall also pay 100% of the costs to provide up to twelve (12) months of
outplacement support services at a level appropriate for the Executive’s title
and responsibility and 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 time of termination for a period of twenty four (24) months from
the Date of Termination.

 

 7 

 

 

(i)          “Change of Control” shall mean the occurrence of any one of the
following events: (A) the sale of all or substantially all of the assets of the
Company on a consolidated basis to an unrelated person or entity, (B) a merger,
reorganization or consolidation in which the outstanding shares of Stock are
converted into or exchanged for securities of the successor entity and the
holders of the Company’s outstanding voting power immediately prior to such
transaction do not own a majority of the outstanding voting power of the
successor entity immediately upon completion of such transaction, or (C) the
sale of all or substantially all of the Stock of the Company to an unrelated
person or entity.

 

(ii)         “Good Reason” shall mean the occurrence of any of the following:

 

(A)         a change of the Executive’s title or reporting directly to the
Company’s Board of Directors, or a material diminution in the nature or scope of
the powers, duties or responsibilities of the Executive; or

 

(B)         a breach by the Company of any of its material obligations
hereunder.

 

(iii)        The Executive shall provide the Company with reasonable notice and
an opportunity to cure any of the events listed in Section 6(g)(ii) within
ninety (90) days of the occurrence of the event and shall not be entitled to
compensation pursuant to this Section 6(g) unless the Company fails to cure
within a reasonable period of not less than thirty (30) days.

 

(h)          Additional Limitation. Anything in this Agreement to the contrary
notwithstanding, in the event that the amount of any compensation, payment or
distribution by the Company to or for the benefit of the Executive, whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, calculated in a manner consistent with Section 280G of
the Code and the applicable regulations thereunder (the “Severance Payments”),
would be subject to the excise tax imposed by Section 4999 of the Code, the
following provisions shall apply:

 

 8 

 

 

(A)         If the Severance Payments, reduced by the sum of (1) the Excise Tax
and (2) the total of the federal, state, and local income and employment taxes
payable by the Executive on the amount of the Severance Payments which are in
excess of the Threshold Amount, are greater than or equal to the Threshold
Amount, the Executive shall be entitled to the full amount of Severance
Payments.

 

(B)         If the Threshold Amount is less than (x) the Severance Payments, but
greater than (y) the Severance Payments reduced by the sum of (1) the Excise Tax
and (2) the total of the federal, state, and local income and employment taxes
on the amount of the Severance Payments which are in excess of the Threshold
Amount, then the Severance Payments shall be reduced (but not below zero) to the
extent necessary so that the sum of all Severance Payments shall not exceed the
Threshold Amount. In such event, the Severance Payments shall be reduced in the
following order: (i) cash payments not subject to Section 409A of the Code; (ii)
cash payments subject to Section 409A of the Code; (iii) equity-based payments
and acceleration; and (iv) non-cash forms of benefits. To the extent any payment
is to be made over time (e.g., in installments, etc.), then the payments shall
be reduced in reverse chronological order.

 

For the purposes of this Section 6(h) “Threshold Amount” shall mean three (3)
times the Executive’s “base amount” within the meaning of Section 280G (b)(3) of
the Code and the regulations promulgated thereunder less one dollar ($1.00); and
“Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code, and
any interest or penalties incurred by the Executive with respect to such excise
tax.

 

The determination as to which of the alternative provisions of this Section 6(h)
shall apply to the Executive shall be made by a nationally recognized accounting
firm selected by the Company (the “Accounting Firm”), which shall provide
detailed supporting calculations both to the Company and the Executive within
fifteen (15) business days of the Date of Termination, if applicable, or at such
earlier time as is reasonably requested by the Company or the Executive. For
purposes of determining which of the alternative provisions of this Section 6(h)
above shall apply, the Executive shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation applicable to individuals
for the calendar year in which the determination is to be made, and state and
local income taxes at the highest marginal rates of individual taxation in the
state and locality of the Executive’s residence on the Date of Termination, net
of the maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes. Any determination by the Accounting
Firm shall be binding upon the Company and the Executive.

 

(i)          No Mitigation. Without regard to the reason for the termination of
the Executive’s employment hereunder, the Executive shall be under no obligation
to mitigate damages with respect to such termination under any circumstances and
in the event the Executive is employed or receives income from any other source,
there shall be no offset against the amounts due from the Company hereunder.

 

 9 

 

 

(j)          Section 409A.

 

(i)          Anything in this Agreement to the contrary notwithstanding, if at
the time of the Executive’s separation from service within the meaning of
Section 409A of the Code, the Company determines that the Executive is a
“specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code,
then to the extent any payment or benefit that the Executive becomes entitled to
under this Agreement would be considered deferred compensation subject to the
twenty percent (20%) additional tax imposed pursuant to Section 409A(a) of the
Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code,
such payment shall not be payable and such benefit shall not be provided until
the date that is the earlier of (A) six (6) months and one (1) day after the
Executive’s separation from service, or (B) the Executive’s death. If any such
delayed cash payment is otherwise payable on an installment basis, the first
payment shall include a catch-up payment covering amounts that would otherwise
have been paid during the six-month period but for the application of this
provision, and the balance of the installments shall be payable in accordance
with their original schedule. Any such delayed cash payment shall earn interest
at an annual rate equal to the prime rate reported by The Wall Street Journal as
of the date of separation from service, from such date of separation from
service until the payment.

 

(ii)         The parties intend that this Agreement will be administered in
accordance with Section 409A of the Code. To the extent that any provision of
this Agreement is ambiguous as to its compliance with Section 409A of the Code,
the provision shall be read in such a manner so that all payments hereunder
comply with Section 409A of the Code. The parties agree that this Agreement may
be amended, as reasonably requested by either party, and as may be necessary to
fully comply with Section 409A of the Code and all related rules and regulations
in order to preserve the payments and benefits provided hereunder without
additional cost to either party.

 

(iii)        To the extent that any payment or benefit described in this
Agreement constitutes “non-qualified deferred compensation” under Section 409A
of the Code, and to the extent that such payment or benefit is payable upon the
Executive’s termination of employment, then such payments or benefits shall be
payable only upon the Executive’s “separation from service.” The determination
of whether and when a separation from service has occurred shall be made in
accordance with the presumptions set forth in Treasury Regulation Section
1.409A-1(h).

 

(iv)        The Company makes no representation or warranty and shall have no
liability to the Executive or any other person if any provisions of this
Agreement are determined to constitute deferred compensation subject to Section
409A of the Code but do not satisfy an exemption from, or the conditions of,
such Section.

 

(k)          Rights of Executive. Notwithstanding anything to the contrary set
forth in this Agreement, upon the termination of the employment of the Executive
with the Company for any reason (with or without Cause), the Executive shall be
entitled to receive and retain (i) his entire vested interest as of the Date of
Termination in any 401(k), profit sharing, pension or other benefit plan, (ii)
reimbursement under any medical, dental or other insurance plan for any medical
expenses incurred prior to the Date of Termination, (iii) payment or
reimbursement by the Company of any business expenses incurred by the Executive
in accordance with Section 5(c) hereof prior to the Date of Termination, (iv)
all of his personal property (including pictures and personal effects) at the
Company’s offices and (v) all of this rights hereunder and under applicable law
with respect to his employment with the Company, except as the same may be
released pursuant to the Release.

 

 10 

 

 

7.          Non-Competition and No Solicitation.

 

(a)          Because the Executive’s services to the Company are special and
because the Executive has access to the Company’s confidential information,
during employment and for a period of twenty four (24) months following the
Executive’s termination of employment for any reason, the Executive shall not,
without the express written consent of the Company, directly or indirectly,
engage, participate, invest in, be employed by or assist, whether as owner,
part-owner, shareholder, partner, director, officer, trustee, employee, agent or
consultant, or in any other capacity, any Person (as hereinafter defined) other
than the Company and its affiliates primarily engaged in the Designated Industry
(as hereinafter defined); provided, however, that nothing herein shall be
construed as preventing the Executive from making passive investments in a
Person in the Designated Industry if the securities of such Person are publicly
traded and such investment constitutes less than five percent (5%) of the
outstanding shares of capital stock or comparable equity interests of such
Person.

 

(b)          For purposes of this Agreement, the following terms have the
following meanings:

 

“Person” means an individual, a corporation, an association, a partnership, a
limited liability company, an estate, a trust and any other entity or
organization; and

 

“Designated Industry” means the business of providing research and development
services, on a fee-for-services basis, to pharmaceutical and biotechnology
companies involved in drug development and discovery, including, without
limitation, medicinal chemistry, chemical development, biocatalysis and
analytical chemistry services and services relating to small-scale or
large-scale manufacturing and any other business conducted by the Company during
the Executive’s employment with the Company that comprises a major portion of
the Company’s overall business.

 

(c)          For a period of twenty four (24) months following the termination
of this Agreement for any reason, the Executive shall not, directly or
indirectly, alone or as a member of any partnership or limited liability company
or entity, or as an officer, director, shareholder, or employee of any
corporation or entity (a) intentionally solicit or otherwise encourage any
employee or independent contractor of the Company to terminate his/her
relationship with the Company, or (b) recruit, hire or solicit for employment or
for engagement as an independent contractor, any person who is or was employed
by the Company at any time during the two (2) year period immediately preceding
the termination of the Executive’s employment with the Company. This Section
7(c) shall not apply to persons whose employment and/or retention with the
Company has been terminated for a period of twelve (12) months or longer. In
addition, the foregoing provisions of this Section 7(c) shall not restrict the
Executive or any such corporation or entity from (a) engaging in general
solicitation efforts not specifically targeted at any such employee or
independent contractor of the Company, or (b) hiring any employee of the Company
who responds to any such solicitation effort without any other inducement to
leave the employ of the Company.

 

 11 

 

 

8.          Confidentiality. In the course of performing services hereunder and
otherwise, the Executive has had, and it is anticipated that the Executive will
from time to time have, access to confidential records, data, customer lists,
trade secrets, technology and similar confidential information owned or used in
the course of business by the Company and its subsidiaries and affiliates (the
“Confidential Information”). The Executive agrees (i) to hold the Confidential
Information in strict confidence, (ii) not to disclose the Confidential
Information to any Person (other than in the regular business of the Company),
and (iii) not to use, directly or indirectly, any of the Confidential
Information for any competitive or commercial purpose; provided, however, that
the limitations set forth above shall not apply to any Confidential Information
which (A) is then generally known to the public, (B) became or becomes generally
known to the public through no fault of the Executive, or (C) is disclosed in
accordance with an order of a court of competent jurisdiction or applicable law.
Upon termination of the Executive’s employment with the Company, all data,
memoranda, customer lists, notes, programs and other papers and items, and
reproductions thereof relating to the foregoing matters in the Executive’s
possession or control, shall be returned to the Company and remain in its
possession. This Section 8 shall survive the termination of this Agreement for
any reason.

 

9.          Third-Party Agreements and Rights. The Executive represents to the
Company that the Executive’s execution of this Agreement, the Executive’s
employment with the Company and the performance of the Executive’s proposed
duties for the Company will not violate any obligations the Executive may have
to any previous employer or other party. In the Executive’s work for the
Company, the Executive will not disclose or make use of any information in
violation of any agreements with or rights of any such previous employer or
other party, and the Executive will not bring to the premises of the Company any
copies or other tangible embodiments of non-public information belonging to or
obtained from any such previous employment or other party.

 

10.         Severability. In case any of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable
in any respect, any such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had been
limited or modified (consistent with its general intent) to the extent necessary
to make it valid, legal and enforceable, or if it shall not be possible to so
limit or modify such invalid, illegal or unenforceable provision or part of a
provision, this Agreement shall be construed as if such invalid, illegal or
unenforceable provision or part of a provision had never been contained in this
Agreement.

 

 12 

 

 

11.         Litigation and Regulatory Cooperation. During and after the
Executive’s employment, the Executive shall cooperate fully with the Company at
the Company’s expense in the defense or prosecution of any claims or actions now
in existence or which may be brought in the future against or on behalf of the
Company which relate to events or occurrences that transpired while the
Executive was employed by the Company. The Executive’s full cooperation in
connection with such claims or actions shall include, but not be limited to,
being available to meet with counsel to prepare for discovery or trial and to
act as a witness on behalf of the Company at mutually convenient times. During
and after the Executive’s employment, the Executive also shall cooperate fully
with the Company in connection with any investigation or review of any federal,
state or local regulatory authority as any such investigation or review relates
to events or occurrences that transpired while the Executive was employed by the
Company. The Company shall reimburse the Executive for any reasonable
out-of-pocket expenses incurred in connection with the Executive’s performance
of obligations pursuant to this Section 11. This Section 11 shall survive the
termination of this Agreement for any reason.

 

12.         Specific Performance. It is specifically understood and agreed that
any breach of the provisions of this Agreement, including, without limitation,
Sections 7 and 8 hereof, by the Executive may result in irreparable injury to
the Company and its subsidiaries and affiliates, that the remedy at law alone
may be inadequate remedy for such breach and that, in addition to any other
remedy it may have, the Company shall be entitled to seek the specific
performance of this Agreement by the Executive and to seek both temporary and
permanent injunctive relief (to the extent permitted by law), without the
necessity of proving actual damages. To the extent that any court action is
permitted consistent with or to enforce Section 7 or 8 of this Agreement, the
parties hereby agree to the sole and exclusive jurisdiction of the Supreme Court
of the State of New York (Albany County) and the United States District Court
for the Northern District of New York (City of Albany). Accordingly, with
respect to any such court action, the Executive (i) submits to the personal
jurisdiction of such courts, (ii) consents to service of process, and (iii)
waives any other requirement (whether imposed by statute, rule of court or
otherwise) with respect to personal jurisdiction or service of process.

 

13.         Notices. 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

 

 13 

 

 

To the Executive, at the address on file with the Company, with a copy to:

 

Sills Cummis & Gross P.C.

One Riverfront Plaza

Newark, NJ 07102

Attention: Ira A Rosenberg, Esq.

 

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.

 

14.         Amendment; Waiver. This Agreement shall not be amended, modified or
discharged in whole or in part except by an Agreement in writing signed by both
of the parties hereto. The failure of either of the parties to require the
performance of a term or obligation or to exercise any right under this
Agreement or the waiver of any breach hereunder shall not prevent subsequent
enforcement of such term or obligation or exercise of such right or the
enforcement at any time of any other right hereunder or be deemed a waiver of
any subsequent breach of the provision so breached, or of any other breach
hereunder.

 

15.         Successors and Assigns. This 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.

 

16.         Entire Agreement. This Agreement constitutes the entire agreement
between the parties concerning the subjects hereof and supersedes all prior
understandings and agreements between the parties relating to the subject matter
hereof.

 

17.         Governing Law. This Agreement shall be construed and regulated in
all respects under the laws of the State of New York.

 

18.         Counterparts. This Agreement may be executed in counterparts, each
of which when so executed and delivered shall be taken to be an original, but
such counterparts shall together constitute one and the same document.

 

[Remainder of Page Intentionally Left Blank]

 

 14 

 

 

IN WITNESS WHEREOF, the parties have executed this Amended Agreement as of the
day and year first above written.

 

  ALBANY MOLECULAR RESEARCH, INC.       By: /s/ David Deming   Name:  David
Deming   Title:  Chairman, Compensation Committee of the Board of Directors    
  EXECUTIVE:       /s/ William S. Marth   William S. Marth

 

 15 

 

 

Exhibit A

 

SEPARATION AGREEMENT

 

This Separation Agreement (“Separation Agreement”) is made between WILLIAM S.
MARTH (“Executive”) and ALBANY MOLECULAR RESEARCH, INC. (the “Company,” together
with Executive, the “Parties”).

 

WHEREAS, Executive is serving as the Company’s Chief Executive Officer and
President;

 

WHEREAS, the Parties entered into an Amended Employment Agreement dated
February __, 2017 (the “Employment Agreement”);

 

WHEREAS, the Parties also entered into a Confidentiality and Non-Disclosure
Agreement dated September __, 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 options 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, pursuant the Employment Agreement, the Company has agreed to provide
Executive with certain termination benefits (the “Termination Benefits”) in the
event of an involuntary termination; provided that, among other things, the
Executive enters into a Separation Agreement which includes a general release of
claims in favor of the Company and related persons and entities;

 

WHEREAS, in exchange for, among other things, Executive’s agreement to the terms
of this Separation Agreement, the Company shall provide Executive with the
Termination Benefits as described below;

 

WHEREAS, the Non-Contingent Payments set forth in Section 1 and the Termination
Benefits set forth in Section 2 are the exclusive source of payments, benefits
and equity rights to Executive in connection with the termination of Executive’s
employment. By entering into this Separation Agreement, which includes the
severance pay and benefits set forth in the Employment 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:

 

 16 

 

 

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 effective 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 earlier of _________________ or the date on which
the Company informs the Employee that he no longer must report to work (the
“Termination Date”), (b) the Employee Agreement shall remain in full force and
effect in accordance with their terms, and (c) except as specifically revised
by, amended by, or as otherwise set forth in, this Separation Agreement, the
Employment Agreement shall remain in full force and effect in accordance with
its terms. On the Termination 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 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 Termination Date, such payment to be
made on the first payroll date following the Termination Date. The Company shall
promptly reimburse Executive for any outstanding, reasonable business expenses
that Executive has incurred on the Company’s behalf through the Termination
Date, provided the Company receives appropriate documentation pursuant to the
Company’s business expense reimbursement policy.

 

2.           Termination Benefits. For purposes of the Employment Agreement,
Executive’s employment shall be treated as having been terminated without Cause.
Accordingly, in exchange for, among other things, his signing, not revoking and
complying with the terms of this Separation Agreement, the Company agrees to
provide Executive with the following Termination Benefits:

 

(a)          the Company shall continue to pay Executive the base salary that is
in effect as of the date hereof for a period commencing on the first payroll
date that occurs thirty (30) days after the Termination Date and continuing
through ______________ [insert date that is 24 months later];1

 

(b)          the Company shall pay Executive an amount equal to Executive’s cash
bonus, if any, received in respect of the year immediately preceding the year of
termination in equal monthly installments for a period commencing on the first
payroll date that occurs thirty (30) days after the Termination Date and
continuing through ______________ [insert date that is 24 months later].1 2

 

(c)          the Company shall pay 100% of the costs to provide up to twelve
(12) months of outplacement support services at a level appropriate for the
Executive’s title and responsibility, which will be paid in a lump sum to the
designated outplacement firm within thirty (30) days of the Termination Date;

 

 

1 Payment will be made in a lump sum if termination occurs after a Change in
Control.

2 If termination occurs after a change in control the bonus payment will be
calculated based on the target bonus payable in the year of termination.

 

 17 

 

 

(d)           the Company shall provide Executive with health and dental
insurance continuation at a level consistent with the level and type Executive
had in place at the Termination Date for a twenty-four (24) month period
beginning on the Termination Date; and

 

(e)          any other equity awards pursuant to the Equity Documents which are
not vested on the Termination Date shall cease to vest on the Termination Date
and exercise of such equity awards shall be subject to the terms of the Equity
Documents.

 

3.           General Release.

 

(a)          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 Separation
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 the termination of his 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 Separation Agreement, any rights reserved under Section 6(k) of the
Employment Agreement or any claims that may arise out of acts or events that
occur after the date on which Executive signs this Separation Agreement.
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 Separation 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 Separation Agreement and that Executive’s willingness to
enter into this Separation Agreement and provide the release set forth in this
Section is in consideration, in part, on that representation.

 

(b)          Executive also agrees to confirm on the Termination Date, in the
form of the confirmation attached to this Separation Agreement, that the general
release set forth in Section 3(a) remains in effect and that it also is
applicable to any claims which may have arisen during the period from the
execution of this Separation Agreement through the Termination Date.

 

 18 

 

 

4.           Communications Regarding Departure and Nondisparagement Other than
to state the fact that the termination of Executive’s employment has occurred
and other public filings required by law, neither the Company nor Executive will
communicate with any of the Company’s current customers, suppliers or business
partners (collectively “Company Contacts”) about his departure from the Company
without the express consent of the other party. Executive further agrees not to
make any disparaging statements concerning the Company or any of its affiliates
or current or former officers, directors, shareholders, employees or agents. The
executives and directors of the Company will be instructed not to make any
disparaging statements concerning Executive.

 

5.           Return of Property. Executive commits to returning to the Company
all Company property, including, without limitation, computer equipment,
software, keys and access cards, credit cards, files and any documents
(including computerized data and any copies made of any computerized data or
software) containing information concerning the Company, its business or its
business relationships (in the latter two cases, actual or prospective).
Executive further commits to deleting and finally purging any duplicates of
files or documents that may contain Company or customer information from any
computer or other device that remains Executive’s property after the Termination
Date (except to the extent any such information was automatically backed up and
is not reasonably accessible).

 

6.           Restrictive Covenants; Injunctive Relief. Executive’s obligations
set forth in the Employment Agreement, including but not limited to Sections 7
and 8 thereof, and in Section 5 of this Separation Agreement 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 by reason of Executive’s material breach thereof,
then Executive also shall be liable to the Company for attorney’s fees and costs
incurred by the Company in enforcing such provision(s).

 

7.           Advice of Counsel. This Separation 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 Separation
Agreement with his attorney, that he has carefully read and fully understands
all of the provisions of this Separation Agreement and that Executive is
voluntarily entering into this Separation Agreement.

 

 19 

 

 

8.           Termination of Termination Benefits. Executive acknowledges that
his right to the Termination Benefits is conditional on his compliance with the
Restrictive Covenants. In the event that Executive fails to comply with any of
the Restrictive Covenants, in addition to any other legal or equitable remedies
it may have for such breach, the Company shall have the right to terminate the
Termination Benefits set forth in Section 2 of this Separation 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.

 

9.           Time for Consideration; Effective Date. Executive acknowledges that
he has been provided with the opportunity to consider this Separation Agreement
for [twenty-one (21)][forty-five (45)] days before signing it. To accept this
Separation Agreement, Executive must return a signed original of this Separation
Agreement so that it is received by ___________ on or before the expiration of
this [twenty-one (21)][forty-five (45)] day period. If Executive signs this
Separation Agreement within less than [twenty-one (21)][forty-five (45)] days of
the date of its delivery to him, Executive acknowledges by signing this
Separation Agreement that such decision was entirely voluntary and that he had
the opportunity to consider this Separation Agreement for the entire [twenty-one
(21)][forty-five (45)] day period. Executive and the Company agree that any
changes or modifications to this Separation Agreement shall not restart the
[twenty-one (21)][forty-five (45)] day period. For a period of seven (7) days
from the day of the execution of this Separation Agreement, Executive shall
retain the right to revoke this Separation Agreement by written notice that must
be received by ________________ before the end of such revocation period. This
Separation 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 Separation Agreement during the
revocation period.

 

10.         Enforceability. Executive acknowledges that, if any portion or
provision of this Separation 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.

 

11.         Entire Agreement. This Separation 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 Separation 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.

 

12.         Waiver. No waiver of any provision of this Separation 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 Separation Agreement, or the waiver by either Party of any breach of this
Separation Agreement, shall not prevent any subsequent enforcement of such term
or obligation or be deemed a waiver of any subsequent breach.

 

 20 

 

 

13.         Taxes. The Company shall undertake to make deductions, withholdings
and tax reports with respect to payments and benefits under this Separation
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 Separation
Agreement shall be in amounts net of any such deductions or withholdings.
Nothing in this Separation 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.

 

14.         Governing Law; Disputes; Interpretation. This Separation 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. In the event of any
dispute, this Separation 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 Separation Agreement.

 

15.         Counterparts. This Separation 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.

 

16.         Section 409A.

 

(a)          Anything in this Agreement to the contrary notwithstanding, if at
the time of Executive’s separation from service within the meaning of Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”), the Company
determines that Executive is a “specified employee” within the meaning of
Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit
that Executive becomes entitled to under this Agreement on account of
Executive’s separation from service would be considered deferred compensation
otherwise subject to the 20 percent additional tax imposed pursuant to Section
409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i)
of the Code, such payment shall not be payable and such benefit shall not be
provided until the date that is the earlier of (A) six months and one day after
Executive’s separation from service, or (B) Executive’s death. If any such
delayed cash payment is otherwise payable on an installment basis, the first
payment shall include a catch-up payment covering amounts that would otherwise
have been paid during the six-month period but for the application of this
provision, and the balance of the installments shall be payable in accordance
with their original schedule.

 

(b)          To the extent that any payment or benefit described in this
Agreement constitutes “non-qualified deferred compensation” under Section 409A
of the Code, and to the extent that such payment or benefit is payable upon
Executive’s termination of employment, then such payments or benefits shall be
payable only upon Executive’s “separation from service.” The determination of
whether and when a separation from service has occurred shall be made in
accordance with the presumptions set forth in Treasury Regulation Section
1.409A-1(h).

 

(c)          The parties intend that this Agreement will be administered in
accordance with Section 409A of the Code. To the extent that any provision of
this Agreement is ambiguous as to its compliance with Section 409A of the Code,
the provision shall be read in such a manner so that all payments hereunder
comply with Section 409A of the Code. Each payment pursuant to this Agreement is
intended to constitute a separate payment for purposes of Treasury Regulation
Section 1.409A-2(b)(2). The parties agree that this Agreement may be amended, as
reasonably requested by either party, and as may be necessary to fully comply
with Section 409A of the Code and all related rules and regulations in order to
preserve the payments and benefits provided hereunder without additional cost to
either party.

 

 21 

 

 

(d)          The Company makes no representation or warranty and shall have no
liability to Executive or any other person if any provisions of this Agreement
are determined to constitute deferred compensation subject to Section 409A of
the Code but do not satisfy an exemption from, or the conditions of, such
Section.

 

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

 

ALBANY MOLECULAR RESEARCH, INC.

 

By:       Name     Title  

 

Date: __________________

 

I HAVE READ THIS AGREEMENT THOROUGHLY, UNDERSTAND ITS TERMS AND HAVE SIGNED IT
KNOWINGLY AND VOLUNTARILY. I UNDERSTAND THAT THIS AGREEMENT IS A LEGAL DOCUMENT.

 

    WILLIAM S. MARTH  

 

Date: __________________

 

 22 

 

CONFIRMATION OF RELEASE PROVISION IN SEPARATION AGREEMENT

 

I, William S. Marth, acknowledge and agree:

 

1.          I executed a Separation Agreement dated _____________ with the
advice of counsel.

 

2.          Section 3(a) of the Separation Agreement includes a General Release
which released Claims (as defined in the Separation Agreement) against the
Releasees (as defined in the Separation Agreement) and was applicable to Claims
through the date of execution of the Separation Agreement.

 

3.          As provided in Section 3(b) of the Separation Agreement, I confirm
that, from the date of execution of the Separation Agreement through the
Termination Date (as defined in the Separation Agreement), Section 3(a) of the
Separation Agreement remains in effect and also applies to any and all Claims
which may have accrued against the Releasees (other than excepted rights
described in Section 3(a) of the Separation Agreement) during that period.

 

      William S. Marth   Date

  

 23