**Exhibit10.24**

 
| **** | **BIO–TECHNOLOGY GENERAL CORP.** |
|------|---------------------------------------|

 

**EmploymentAgreement**

**for**

**RobertM. Shaw**

**SeniorVice President, General Counsel & Secretary**

 

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**Contents**

 
| Article 1. Term of  Employment                  |
|-------------------------------------------------|
|                                            |
| Article  2. Definitions                         |
|                                            |
| Article 3.  Position and Responsibilities       |
|                                            |
| Article 4. Standard of Care                     |
|                                            |
| Article  5. Compensation                        |
|                                            |
| Article  6. Expenses                            |
|                                            |
| Article 7. Employment  Terminations             |
|                                            |
| Article 8. Change in  Control                   |
|                                            |
| Article  9. Assignment                          |
|                                            |
| Article 10. Legal  Fees and Notice              |
|                                            |
| Article 11.  Confidentiality and Noncompetition |
|                                            |
| Article 12. Outplacement  Assistance            |
|                                            |
| Article 13. Miscellaneous                       |
|                                            |
| Article  14. Governing Law                      |

 

 

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**Employment Agreement**

 

This Agreement is made, entered into, and is effectiveas of the Effective Date, by and between the Company and the Executive.

 

**Article 1. Term of Employment**

 

1.1                                 The Company hereby agrees to employ theExecutive and the Executive hereby agrees to serve the Company in accordancewith the terms and conditions set forth herein, for a period of three (3)years, commencing as of the Effective Date.

 

1.2                                 Commencing on the third (3rd)anniversary of the Effective Date, and each anniversary thereafter, the term ofthis Agreement shall automatically be extended for one (1) additional year,unless at least ninety (90) days prior to such anniversary, the Company or theExecutive shall have given notice in accordance with Section 10.2 hereof thatit or he does not wish to extend the term of the Agreement.

 

**Article 2. Definitions**

 

2.1**                                ****“Agreement”** means this Employment Agreement.

 

2.2**                                ****“Annual Bonus”** means the annual bonus to be paid to the Executive inaccordance with the Company’s annual bonus program as described in Section 5.3herein.

 

2.3**                                ****“Base Salary”** means the salary of record paid to the Executive asannual salary, pursuant to Section 5.2, excluding amounts received underincentive or other bonus plans, whether or not deferred.

 

2.4**                                ****“Beneficial Owner”** shall have the meaning ascribed to such termin Rule 13d-3 of the General Rules and Regulations under the SecuritiesExchange Act.

 

2.5**                                ****“Beneficiary**” means the persons or entities designated or deemeddesignated by the Executive pursuant to Section 13.6 herein.

 

2.6**                                ****“Board”**or **“Board of Directors”** means the Board of Directorsof the Company.

 

2.7**                                ****“Cause”**means:

 

(a)               Executive materially breached any of the terms of thisAgreement and failed to correct such breach within fifteen (15) days afterwritten notice thereof from the Company;

 

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(b)              Executive has been convicted of a criminal offenseinvolving a felony giving rise to a sentence of imprisonment;

 

(c)               Executive has breached a fiduciary trust for thepurpose of gaining a personal profit, including, without limitation,embezzlement; or

 

(d)              Despite adequate warnings, Executive intentionally andwillfully failed to perform reasonably assigned duties within the normal andcustomary scope of the Position.

 

2.8**                                ****“Change in Control” or “CIC”** of the Company shall be deemed to have occurred as ofthe first day that any one or more of the following conditions is satisfied:

 

(a)                                  Any consolidationor merger in which the Company is not the continuing or surviving entity orpursuant to which shares of the Common Stock would be converted into cash,securities, or other property, other than (i) a merger of the Company in whichthe holders of the Common Stock immediately prior to the merger have the sameproportionate ownership of common stock of the surviving corporationimmediately after the merger, or (ii) a consolidation or merger which wouldresult in the voting securities of the Company outstanding immediately priorthereto continuing to represent (by being converted into voting securities ofthe continuing or surviving entity) more than 50% of the combined voting powerof the voting securities of the continuing or surviving entity immediatelyafter such consolidationor merger and which would result in themembers of the Board immediately prior to such consolidation or merger (includingfor this purpose any individuals whose election or nomination for election wasapproved by a vote of at least two-thirds of such members) constituting amajority of the Board (or equivalent governing body) of the continuing orsurviving entity immediately after such consolidation or merger;

 

(b)                                 Any sale, lease, exchange, or othertransfer (in one transaction or a series of related transactions) of all orsubstantially all the Company’s assets;

 

(c)                                  The Company’s stockholders approve anyplan or proposal for the liquidation or dissolution of the Company;

 

(d)                                 Any Person shall become the BeneficialOwner of forty (40) percent or more of the Common Stock other than pursuant toa plan or arrangement entered into by such Person and the Company; or

 

(e)                                  During any period of two consecutiveyears, individuals who at the beginning of such period constitute the entireBoard of Directors shall cease for any reason to constitute a majority of theBoard unless the election or nomination for election by the Company’sstockholders of each new director was approved by a vote of at lest two-thirdsof the directors then still in office who were directors at the beginning ofthe period.

 

2.9**                                ****“CIC Severance Benefits”**means the payment of severance compensation associatedwith a Qualifying Termination occurring subsequent to a Change in Control, asdescribed in Section 8.3.

 

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2.10**         “Code”**means the United States Internal Revenue Code of 1986,as amended.

 

2.11**         “Common Stock”** means the common stock of the Company,$.01 par value.

 

2.12**                          ****“Compensation Committee”** means the Compensation and Stock Option Committee ofthe Board, or any other committee appointed by the Board to perform thefunctions of such committee.

 

2.13**                          ****“Company”** means Bio-Technology General Corp., a Delawarecorporation, or any Successor Company thereto as provided in **Section** 9.1herein.

 

2.14**         “Director”** means any individual who is a member ofthe Board of Directors of the Company.

 

2.15**                          ****“Disability”** or **“Disabled”** means for all purposes of thisAgreement, the meaning ascribed to such term in the Company’s long-termdisability plan, or in any successor to such plan.

 

2.16**         “Effective Date”** means January 1, 2002.

 

2.17**         “Effective Date of Termination”**means the date on which a termination ofthe Executive’s employment occurs.

 

2.18**         “Employment Date”**means April 1, 1998.

 

2.19**         “Executive”**means Robert M. Shaw who, as of theEffective Date, resides at 55 Waters Edge, Sparta, New Jersey 07871.

 

2.20**                          ****“Good Reason”**shall mean, without the Executive’s express writtenconsent, the occurrence of any one or more of the following:

 

(a)               Reducing the Executive’s Base Salary;

 

(b)              Failing to maintain Executive’s amount of benefitsunder or relative level of participation in the Company’s employee benefit orretirement plans, policies, practices, or arrangements in which the Executiveparticipates as of the Effective Date of this Agreement, including anyperquisite program; provided, however, that any such change that applies consistentlyto all executive officers of the Company or is required by applicable law shallnot be deemed to constitute Good Reason;

 

(c)               Failing to require any Successor Company to assume andagree to perform the Company’s obligations hereunder;

 

(d)              The occurrence of any one or more of the followingevents on or after the announcement of the transaction which leads to the CICand up to twenty–four (24) calendar months following the effective dateof a CIC:

 

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(1)               Requiring Executive to be based at a location thatrequires the Executive to travel at least an additional thirty-five (35) milesper day;

 

(2)               Requiring Executive to report to a position which isat a lower level than the highest level to which Executive reported within thesix (6) months prior to the CIC;

 

(3)               Demoting Executive to a level lower than Executive’slevel in the Company as of the Effective Date.

 

2.21**                          ****“Notice of Termination”**means a written notice****which shall indicate thespecific termination provision in this Agreement relied upon, and shall setforth in reasonable detail the facts and circumstances claimed to provide abasis for termination of the **Executive’s** employment under the provisionsso indicated, and, where applicable, shall specifically include notice pursuantto Section 1.2 that Company has elected not to renew this Agreement.

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2.22**                          ****“Person”**shall have the meaning ascribed to such term inSection 3(a)(9) of the Securities Exchange Act and used inSections 13(d) and 14(d) thereof, including a “group” as defined inSection 13(d) thereof.

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2.23**         “Position”** shall have the meaning ascribed to it inSection 3.1.

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2.24**                          ****“Qualifying Termination”** means any of the events described in Section 8.2herein, the occurrence of which triggers the payment of CIC Severance Benefitshereunder.

 

2.25**         “Securities Exchange Act”**means the United States SecuritiesExchange Act of 1934, as amended.

** **

2.26**         “Service Multiple”**shall have the meaning ascribed to it inSection 7.4(c).

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2.27**                          ****“Severance Benefits”**means the payment of severance compensation asprovided in Sections 7.4 and 7.6 herein, and not payable due to a Changein Control of the Company.

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2.28**         “Successor Company”**shall have the meaning ascribed to it inSection 9.1.

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2.29**         “Term”**shall mean that period of time commencing on theEffective Date and ending on the Effective Date of Termination.

 

**Article3. Position and Responsibilities**

 

3.1                                 During the term of this Agreement, theExecutive agrees to serve as Senior Vice President, General Counsel and Secretaryof the Company or in such other position which Executive shall agree to acceptor to which Executive shall be promoted during the Term and Executive shallreport directly to the Chief Executive Officer or such other position which isat a higher 

 

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                                                position or level in the Company thanExecutive and as shall be determined by the Chief Executive Officer in his solediscretion, and shall maintain the level of duties and responsibilities as ineffect as of the Effective Date, or such higher level of duties andresponsibilities as Executive may be assigned during the Term (the “Position”).

 

**Article 4. Standard of Care**

 

4.1                                 During the term of this Agreement, theExecutive agrees to devote substantially his full time, attention, and energiesto the Company’s business and shall not be engaged in any other businessactivity, whether or not such business activity is pursued for gain, profit, orother pecuniary advantage unless such business activity is approved by theCompensation Committee (or, in the event the Compensation Committee ceases toexist, the Board).  However, subject toArticle 11 herein and approval by the Compensation Committee (or the Board, asthe case may be), the Executive may serve as a director of other companies solong as such service is not injurious to the Company.

 

**Article 5. Compensation**

 

5.1                                 As remuneration for all services to berendered by the Executive during the term of this Agreement, and asconsideration for complying with the covenants herein, the Company shall payand provide to the Executive those items set forth in Sections 5.2 through 5.8.

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5.2**                                ****Base Salary**.****The Company shall pay the Executive a BaseSalary in an amount which shall be established from time to time by the Boardof Directors of the Company or the Board’s designee; provided, however, thatsuch Base Salary shall not be less than TWO-HUNDRED-NINETY-THOUSAND DOLLARS(US$290,000) per year.

 

(a)               This Base Salary shall be paid to the Executive inequal installments throughout the year, consistent with the normal payrollpractices of the Company.

 

(b)              The Base Salary shall be reviewed at least annuallyfollowing the Effective Date of this Agreement, while this Agreement is inforce, to ascertain whether, in the judgment of the Board or the Board’sdesignee, such Base Salary should be increased based primarily on theperformance of the Executive during the year. If so increased, the Base Salaryas stated above shall, likewise, be increased for all purposes of this Agreementand shall not, in any event, be decreased in any year.

 

5.3                                 **Annual Bonus**.****In addition to his Base Salary, theExecutive shall be entitled to participate in the Company’s annual short-term incentive program, as such programmay exist from time to time, at a level commensurate with the Position.  The percentage of Base Salary targeted asannual short-term incentive compensation shall be established for the Positionby the Company’s Compensation Committee in its sole discretion (the “targetedAnnual Bonus

 

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                                                award”). Executive acknowledges that theamount of annual short-term incentive, if any, to be awarded shall be at thesole discretion of the Company’s Compensation Committee, may be less or morethan the targeted Annual bonus award, and will be based on a number of factorsset in advance by the Compensation Committee for each calendar year, includingthe Company’s performance and the Executive’s individual performance. Nothingin this Section 5.3 shall be construed as obligating the Company or the Boardto refrain from changing, and/or amending the short-term incentive program, solong as such changes are equally applicable to all executive employees in theCompany.

 

5.4**                                ****Long-Term Incentives**.****The Executive shall be eligible toparticipate in the Company’s long-term incentive plan, as such shall be amendedor superseded from time to time provided, however, that nothing in this Section5.4 shall be construed as obligating the Company or the Board to refrain fromchanging, and/or amending the long-term incentive plan, so long as such changesare equally applicable to all executive employees in the Company.

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5.5**                                ****Retirement Benefits**.****The Company shall provide to the Executiveparticipation in any Company qualified defined benefit and defined contributionretirement plans as may be established during the term of this Agreement;provided, however, that nothing in this Section 5.5 shall be construed asobligating the Company to refrain from changing, and/or amending thenonqualified retirement programs, so long as such changes are equallyapplicable to all executive employees in the Company.

 

5.6**                                ****Employee Benefits**.****During the Term, and as otherwise providedwithin the provisions of each of the respective plans, the Company shallprovide to the Executive all benefits to which other executives and employeesof the Company are entitled to receive, as commensurate with the Position,subject to the eligibility requirements and other provisions of sucharrangements as applicable to executives of the Company generally.

 

(a)               Such benefits shall include, but shall not be limitedto, group term life insurance, comprehensive health and major medicalinsurance, dental and life insurance, and short-term and long-termdisability.

 

(b)              The Executive shall likewise participate in anyadditional benefit as may be established during the term of this Agreement, bystandard written policy of the Company.

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5.7**                                ****Vacation.**  The Executiveshall be entitled to such paid vacation as is customary for the Position incorporate institutions of similar size and character, but in any event not lessthan twenty (20) paid vacation days during each calendar year; provided,however, that without prior written approval, Executive may carry forward intothe next year no more than ten (10) unused vacation days from the current year.

 

5.8**                                ****Perquisites**.****The Company shall provide to theExecutive, at the Company’s expense, allperquisites which the Board may determine from time to time to provide; provided,however, that nothing in this Section 5.8 shall be construed as obligating theCompany or the Board to refrain from changing, and/or amending the perquisiteprogram, so long as such changes are equally applicable to all executiveemployees in the Company.

 

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5.9**                                ****Right to Change Plans**. The Company shall not be obligated to institute,maintain, or refrain from changing, amending, or discontinuing any benefitplan, program, or perquisite, so long as such changes are equally applicable toall executive employees in the Company.

 

**Article 6. Expenses**

 

6.1                                 Upon presentation of appropriatedocumentation, the Company shall pay, or reimburse the Executive for allordinary and necessary expenses, in a reasonable amount, which the Executiveincurs in performing his duties under this Agreement including, but not limitedto, travel, entertainment, professional dues and subscriptions, and all dues,fees, and expenses associated with membership in various professional,business, and civic associations and societies.

 

**Article7. Employment Terminations**

 

7.1**                                ****Termination Due to Death**.****In the event the Executive’s employment isterminated while this Agreement is in force by reason of death, the Company’sobligations under this Agreement shall immediately expire. Notwithstanding theforegoing, the Company shall be obligated to pay to the Executive thefollowing:

 

(a)               Base Salary through the Effective Date of Termination;

 

(b)              An amount equal to the Executive’s unpaid targetedAnnual Bonus award, established for the fiscal year in which suchtermination is effective, multiplied by a fraction, the numerator of which isthe number of completed days in the then-existing fiscal year through theEffective Date of Termination, and the denominator of which is three hundredsixty-five (365);

 

(c)               All outstanding long-term incentive awards shall besubject to the treatment provided under the applicable long-term incentive planof the Company;

 

(d)              Accrued but unused vacation pay through the EffectiveDate of Termination; and

 

(e)               All other rights and benefits the Executive is vestedin, pursuant to other plans and programs of the Company.

 

(f)                 The benefits described in Sections 7.1(a) and (d)shall be paid in cash to the Executive in a single lump sum as soon aspracticable following the Effective Date of Termination, but in no event beyondthirty (30) days from such date. All other payments due to the Executive upontermination of employment, including those in Sections 7.1(b) and (c), shall bepaid in accordance with the terms of such applicable plans or programs.

 

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(g)              With the exception of the covenants contained inArticles 9 and 14 and Sections 7.1(f), 13.3, 13.5, and 13.7 herein (whichshall survive such termination), the Company and the Executive thereafter shallhave no further obligations under this Agreement.

 

7.2**                                ****Termination Due to Disability.**  In the eventthat the Executive becomes Disabled during the term of this Agreement and is,therefore, unable to perform his duties herein for more than one hundredeighty (180) total calendar days during any period of twelve (12) consecutivemonths, or in the event of the Board’s reasonable expectation that theExecutive’s Disability will exist for more than a period of one hundred eighty(180) calendar days, the Company shall have the right to terminate theExecutive’s active employment as provided in this Agreement.

 

(a)               The Board shall deliver written notice to theExecutive of the Company’s intent to terminate for Disability at least thirty(30) calendar days prior to the Effective Date of Termination.

 

(b)              Such Disability to be determined by the Board ofDirectors of the Company upon receipt of and in reliance on competent medicaladvice from one (1) or more individuals, selected by the Board, who arequalified to give such professional medical advice.

 

(c)               A termination for Disability shall become effectiveupon the end of the thirty (30) day notice period. Upon the Effective Date ofTermination, the Company’s obligations under this Agreement shall immediatelyexpire.

 

(d)              Notwithstanding the foregoing, the Company shall beobligated to pay to the Executive the following:

 

(1)               Base Salary through the Effective Date of Termination;

 

(2)               An amount equal to the Executive’s unpaid targetedAnnual Bonus award, established for the fiscal year in which the EffectiveDate of Termination occurs, multiplied by a fraction, the numerator of which isthe number of completed days in the then-existing fiscal year through theEffective Date of Termination, and the denominator of which is three hundredsixty-five (365);

 

(3)               All outstanding long-term incentive awards shall besubject to the treatment provided under the applicable long-term incentive planof the Company;

 

(4)               Accrued but unused vacation pay through the EffectiveDate of Termination; and

 

(5)               All other rights and benefits the Executive is vestedin, pursuant to other plans and programs of the Company.

 

(e)               The benefits described in Sections 7.2(d)(1) and (d)(4)shall be paid in cash to the Executive in a single lump sum as soon aspracticable following the Effective Date of Termination, but in no event beyondthirty (30) days from such date. All other payments due to the Executive upontermination of employment, including those in Sections 

 

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                                                7.2(d)(2) and (d)(3), shall be paid inaccordance with the terms of such applicable plans or program.

 

(f)                 With the exception of the covenants contained inArticles 8, 9, 11, and 14 and Sections 7.2(e), 13.3, 13.5, and 13.7 herein(which shall survive such termination), the Company and the Executivethereafter shall have no further obligations under this Agreement.

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7.3**                                ****Voluntary Termination by the Executive**. The Executive may terminate thisAgreement at any time by giving Notice of Termination to the Board of Directorsof the Company, delivered at least fourteen (14) calendar days prior to theEffective Date of Termination.

 

(a)               The termination automatically shall become effectiveupon the expiration of the fourteen (14) day notice period. Notwithstanding theforegoing, the Company may waive the fourteen (14) day notice period; however,the Executive shall be entitled to receive all elements of compensationdescribed in Sections 5.1 through 5.6 for the fourteen (14) day noticeperiod, subject to the eligibility and participation requirements of anyqualified retirement plan.

 

(b)              Upon the Effective Date of Termination, following theexpiration of the fourteen (14) day notice period, the Company shall pay theExecutive his full Base Salary and accrued but unused vacation pay, at the ratethen in effect, through the Effective Date of Termination, plus all otherbenefits to which the Executive has a vested right at that time (for thispurpose, the Executive shall not be paid any Annual Bonus with respect to thefiscal year in which voluntary termination under this Section occurs).

 

(c)               With the exception of the covenants contained inArticles 8, 9, 11, and 14 and Sections 13.3, 13.5, and 13.7 herein (which shallsurvive such termination), the Company and the Executive thereafter shall haveno further obligations under this Agreement.

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7.4**                                ****Involuntary Termination by the Company without Cause**. At all times during the Term, the Boardmay terminate the Executive’s employment for reasons other than death,Disability, or for Cause, by providing to the Executive a Notice ofTermination, at least sixty (60) calendar days (ninety (90) calendar days whentermination is due to non-renewal of this Agreement by the Company pursuant toSection 1.2) prior to the Effective Date of Termination; provided, however,that such notice shall not preclude the Company from requiring Executive toleave the Company immediately upon receipt of such notice.

 

(a)               Such Notice of Termination shall be irrevocable absentexpress, mutual consent of the parties.

 

(b)              Upon the Effective Date of Termination (not aQualifying Termination), following the expiration of the sixty (60) day noticeperiod (90 days in the case of non-renewal), the Company shall pay and provideto the Executive:

 

(1)               An amount equal to the Service Multiple times theExecutive’s annual Base Salary established for the fiscal year in which theEffective Date of Termination occurs;

 

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(2)               An amount equal to the Service Multiple times theExecutive’s targeted Annual Bonus award established for the fiscal year inwhich the Effective Date of Termination occurs; provided, however, that nopayment shall be made under this Section 7.4(b)(2) if the Effective Date ofTermination is less than twelve (12) months after the Employment Date;

 

(3)               A continuation of the welfare benefits of health care,life and accidental death and dismemberment, and disability insurance coverage(or if continuation under the Company’s then current plans is not allowed, thenprovision at the Company’s expense but subject to payment by Executive of thosepayments which Executive would have been obligated to make under the Company’sthen current plan, of substantially similar welfare benefits from one or morethird party providers) after the Effective Date of Termination for a number ofmonths equal to the Service Multiple times twelve (12). These benefits shall beprovided to the Executive at the same coverage level as in effect as of theEffective Date of Termination, and at the same premium cost to the Executivewhich was paid by the Executive at the time such benefits were provided.However, in the event the premium cost and/or level of coverage shall changefor all employees of the Company, or for management employees with respect tosupplemental benefits, the cost and/or coverage level, likewise, shall changefor the Executive in a corresponding manner. The continuation of these welfarebenefits shall be discontinued if prior to the expiration of the period, theExecutive has available substantially similar benefits at a comparable cost tothe Executive from a subsequent employer, as determined by the CompensationCommittee (or, in the event the Compensation Committee ceases to exist, theBoard);

 

(4)               All outstanding long-term incentive awards shall besubject to the treatment provided under the applicable long-term incentive planof the Company;

 

(5)               An amount equal to the Executive’s unpaid Base Salaryand accrued but unused vacation pay through the Effective Date of Termination;and

 

(6)               All other benefits to which the Executive has a vestedright at the time, according to the provisions of the governing plan orprogram.

 

(c)               For purposes of this Section 7.4, the term “ServiceMultiple” shall be equal to the quotient resulting from a formula the numeratorof which is the lesser of (a) full number of completed months that have elapsedsince the Employment Date (but not less than 6 months) and (b) eighteen (18)and the denominator of which is twelve (12);

 

(d)              In the event that the Board terminates the Executive’semployment without Cause on or after the date of the announcement of thetransaction which leads to a CIC, the Executive shall be entitled to the CICSeverance Benefits as provided in Section 8.3 in lieu of the SeveranceBenefits outlined in this Section 7.4.

 

(e)               Payment of all of the benefits described in Section7.4(b)(1) shall be paid in cash to the Executive in equal bi-weeklyinstallments over a period of consecutive months equal to 

 

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                             the Service Multiple times twelve (12)and beginning on the fifteenth day of the month following the month in whichthe Effective Date of Termination occurs.

 

(f)                 Payment of all but forty thousand dollars ($40,000) ofthe benefits described in Section 7.4(b)(2) shall be paid in cash to theExecutive in a single lump sum as soon as practicable following the EffectiveDate of Termination, but in no event beyond thirty (30) days from suchdate.  The forty thousand dollars($40,000) which was withheld shall be paid in cash to the Executive in a singlelump sum at the end of the twelve (12) month restrictive period set forth inSections 11.2 and 11.3 of this Agreement.

 

(g)              Except as specifically provided in Section 7.4(e) and(f), all other payments due to the Executive upon termination of employmentshall be paid in accordance with the terms of such applicable plans orprograms.

 

(h)              With the exception of the covenants contained inArticles 8, 9, 10, 11, 12 and 14 and Sections 7.4, 13.3, 13.5, and 13.7 (whichshall survive such termination), the Company and the Executive thereafter shallhave no further obligations under this Agreement.

 

(i)                  Notwithstanding anything herein to the contrary, theCompany’s payment obligations under this Section 7.4 shall be offset by anyamounts that the Company is required to pay to the Executive under a nationalstatutory severance program applicable to such Executive.

 

7.5**                                ****Termination for Cause**. Nothing in this Agreement shall be construed toprevent the Board from terminating the Executive’s employment under thisAgreement for Cause.

 

(a)               To be effective, the Notice of Termination must setforth in reasonable detail the facts and circumstances claimed to provide abasis for such termination for Cause.

 

(b)              In the event this Agreement is terminated by the Boardfor Cause, the Company shall pay the Executive his Base Salary and accruedvacation pay through the Effective Date of Termination, and the Executive shallimmediately thereafter forfeit all rights and benefits (other than vestedbenefits) he would otherwise have been entitled to receive under thisAgreement. The Company and the Executive thereafter shall have no furtherobligations under this Agreement with the exception of the covenants containedin Articles 9, 10, 11, and 14 and Sections 13.3, 13.5, and 13.9 herein (whichshall survive such termination).

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7.6**                                ****Termination for Good Reason**.****Except where Section 2.20(d) isapplicable, this Section 7.6 shall only become effective when at least twelve(12) months have elapsed since the Employment Date.   Prior to this Section 7.6 becoming effective, any notice oftermination by Executive may only be given pursuant to Section 7.3.  The Executive shall have sixty (60) daysfrom the date he learns of action taken by the Company that allows theExecutive to terminate his employment for Good Reason to provide the Board witha Notice of Termination.

 

(a)               The Notice of Termination must set forth in reasonabledetail the facts and circumstances claimed to provide a basis for such GoodReason termination.

 

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(b)              The Company shall have thirty (30) days to cure suchCompany action following receipt of the Notice of Termination.

 

(c)               The Executive is required to continue his employmentfor the sixty (60) day period following the date in which he provided theNotice of Termination to the Board. The Company may waive the sixty (60) daynotice period; however, the Executive shall be entitled to receive all elementsof compensation described in Sections 5.1 through 5.6 for the sixty (60) daynotice period, subject to the eligibility and participation requirements of anyqualified retirement plan.

 

(d)              Upon a termination of the Executive’s employment forGood Reason during the Term, and following the expiration of the sixty (60) daynotice period, the Company shall pay and provide to the Executive thefollowing:

 

(1)               An amount equal to one-and-one-half (1.5) times theExecutive’s annual Base Salary established for the fiscal year in which theEffective Date of Termination occurs;

 

(2)               An amount equal to one-and-one-half (1.5) times theExecutive’s targeted Annual Bonus award established for the fiscal year inwhich the Effective Date of Termination occurs;

 

(3)               A continuation of the welfare benefits of health care,life and accidental death and dismemberment, and disability insurance coveragefor one-and-one-half (1.5) years after the Effective Date of Termination (or ifcontinuation under the Company’s then current plans is not allowed, thenprovision at the Company’s expense but subject to payment by Executive of thosepayments which Executive would have been obligated to make under the Company’sthen current plan, of substantially similar welfare benefits from one or morethird party providers). These benefits shall be provided to the Executive atthe same coverage level, as in effect as of the Effective Date of Terminationand at the same premium cost to the Executive which was paid by the Executiveat the time such benefits were provided. However, in the event the premium costand/or level of coverage shall change for all employees of the Company, or formanagement employees with respect to supplemental benefits, the cost and/orcoverage level, likewise, shall change for the Executive in a correspondingmanner. The continuation of these welfare benefits shall be discontinued priorto the end of the one-and-one-half (1.5) year period in the event the Executivehas available substantially similar benefits at a comparable cost to theExecutive from a subsequent employer, as determined by the CompensationCommittee (or, in the event the Compensation Committee ceases to exist, theBoard);

 

(4)               All outstanding long-term incentive awards shall besubject to the treatment provided under the applicable long-term incentive planof the Company;

 

(5)               An amount equal to the Executive’s unpaid Base Salaryand accrued but unused vacation pay through the Effective Date of Termination;and

 

(6)               All other benefits to which the Executive has a vestedright at the time, according to the provisions of the governing plan orprogram.

 

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(e)               In the event of termination of Executive’s employmentfor Good Reason on or after the date of the announcement of the transactionwhich leads to the CIC and up to twenty-four (24) months following the date ofthe CIC, the Executive shall be entitled to the CIC Severance Benefits asprovided in Section 8.3 in lieu of the Severance Benefits outlined in thisSection 7.6.

 

(f)                 The Executive’s right to terminate employment for GoodReason shall not be affected by the Executive’s incapacity due to physical ormental illness unless such incapacity is determined to constitute a Disabilityas provided herein.

 

(g)              Payment of all but forty thousand dollars ($40,000) ofthe benefits described in Section 7.6(d)(1) and payment of all of thebenefits described in Section 7.6(d)(2) shall be paid in cash to the Executivein a single lump sum as soon as practicable following the Effective Date ofTermination, but in no event beyond thirty (30) days from such date. The fortythousand dollars ($40,000) which was withheld shall be paid in cash to the Executivein a single lump sum at the end of the twelve (12) month restrictiveperiod set forth in Sections 11.2 and 11.3 of this Agreement.

 

(h)              Except as specifically provided in Section 7.6(g), allother payments due to the Executive upon termination of employment shall bepaid in accordance with the terms of such applicable plans or programs.

 

(i)                  Notwithstanding anything herein to the contrary, theCompany’s payment obligations under this Section 7.6 shall be offset by anyamounts that the Company is required to pay to the Executive under a nationalstatutory severance program applicable to such Executive.

 

(j)                  With the exceptions of the covenants contained inArticles 8, 9, 10, 11, 12 and 14 and Sections 7.6, 13.3, 13.5, and 13.7 (whichshall survive such termination) herein, the Company and the Executivethereafter shall have no further obligations under this Agreement.

 

**Article 8. Change in Control**

 

8.1**                                ****Employment Termination Following a Change in Control**.****The Executive shall be entitled to receivefrom the Company CIC Severance Benefits if a Notice of Termination for aQualifying Termination of the Executive has been delivered; provided, that:

 

(a)               The Executive shall not be entitled to receive CICSeverance Benefits if he is terminated for Cause (as provided in Section 7.5herein), or if his employment with the Company ends due to death, orDisability, or due to voluntary termination of employment by the Executivewithout Good Reason.

 

(b)              CIC Severance Benefits shall be paid in lieu of allother benefits provided to the Executive under the terms of this Agreement.

 

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8.2**                                ****Qualifying Termination**.****The occurrence of any one or more of thefollowing events on or after the date of the announcement of the transactionwhich leads to the CIC and up to twenty-four (24) months following the date ofthe CIC shall trigger the payment of CIC Severance Benefits to the Executiveunder this Agreement:

 

(a)               An involuntary termination of the Executive’semployment by the Company for reasons other than Cause, death, or Disability,as evidenced by a Notice of Termination delivered by the Company tothe Executive;

 

(b)              A voluntary termination by the Executive for GoodReason as evidenced by a Notice of Termination delivered to the Company by theExecutive;

 

(c)               Failure to renew this Agreement (if the Agreementwould expire unless renewed within such period), as evidenced by a Notice ofTermination delivered by the Company to the Executive; or

 

(d)              The Company or any Successor Company materiallybreaches any material provision of this Agreement and does not cure such breachwithin thirty (30) days of receiving a written notice from the Executive withsuch notice explaining in reasonable detail the facts and circumstances claimedto provide a basis for the Executive’s claim.

 

8.3**                                ****Severance Benefits Paid upon a Qualifying Termination**.****In the event the Executive becomesentitled to receive CIC Severance Benefits,the Company shall pay to the Executive and provide him the following:

 

(a)                        An amount equal to two (2)****timesthe Executive’s annual Base Salary established for the fiscal year in which theEffective Date of Termination occurs;

 

(b)                       An amount equal to two (2)****timesthe Executive’s targeted Annual Bonus award established for the fiscal year inwhich the Executive’s Effective Date of Termination occurs;

 

(c)                        An amount equal to the Executive’s unpaidBase Salary and accrued but unused vacation pay through the Effective Date ofTermination;

 

(d)                       All outstanding long-term incentive awardsshall be subject to the treatment provided under the applicable long-termincentive plan of the Company;

 

(e)                        A continuation of the welfare benefits ofhealth care, life and accidental death and dismemberment, and disabilityinsurance coverage for two (2)****full years after the Effective Date ofTermination (or if continuation under the Company’s then current plans is notallowed, then provision at the Company’s expense but subject to payment byExecutive of those payments which Executive would have been obligated to makeunder the Company’s then current plan, of substantially similar welfarebenefits from one or more third party providers).

 

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(1)                                  These benefits shall be provided to theExecutive at the same coverage level, as in effect as of the Effective Date ofTermination or, if greater, as in effect sixty (60) days prior to the date ofthe Change in Control, and at the same premium cost to the Executive which waspaid by the Executive at the time such benefits were provided.

 

(2)                                  In the event the premium cost and/orlevel of coverage shall change for all employees of the Company, or formanagement employees with respect to supplemental benefits, the cost and/orcoverage level, likewise, shall change for the Executive in a correspondingmanner.

 

(3)                                  The continuation of these welfarebenefits shall be discontinued prior to the end of the****two year period in the eventthe Executive has available substantially similar benefits at a comparable costto the Executive from a subsequent employer, as determined by the CompensationCommittee (or, in the event the Compensation Committee ceases to exist, theBoard).

** **

8.4**                                ****Form and Timing of Severance Benefit**. Payment of all of the benefitsdescribed in Sections 8.3(a) through (c) shall be paid in cash to the Executivein a single lump sum as soon as practicable following the Effective Date ofTermination, but in no event beyond thirty (30) days from such date. All otherpayments due to the Executive upon termination of employment shall be paid inaccordance with the terms of such applicable plans or programs.

 

8.5**                                ****Excise Tax**. In the event that a Change in Control occurs, and adetermination is made by the Company pursuant to Section 280G and 4999 of theCode that a golden parachute excise tax is due, the benefits provided to theExecutive under this Agreement that are classified as “parachute payments” (assuch term is defined in Section 280G of the Code), shall be limited to theamount just necessary to avoid the excise tax.

 

(a)               This limitation shall be applied if, and only if, sucha limitation results in a greater net (of excise tax) cash benefit to theExecutive than he would receive had the benefits not been capped and an excisetax been levied.

 

8.6                                 With the exceptions of the covenantscontained in Articles 8, 9, 10, 11, 12 and 14 and Sections 13.3, 13.5, and 13.7(which shall survive such termination) herein, the Company and the Executivethereafter shall have no further obligations under this Agreement.

 

**Article 9. Assignment**

 

9.1**                                ****Assignment by Company**.****This Agreement may and shall be assignedor transferred to, and shall be binding upon and shall inure to the benefit ofany Successor Company, with Successor Company for purposes of this Agreementbeing defined as a company that (i) acquires greater than fifty percent (50%)of the assets of the Company or (ii) acquires greater than fifty percent (50%)of the outstanding stock of the Company, or (iii) is the surviving entity inthe event of a CIC.

 

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(a)               Any such Successor Company shall be deemed substitutedfor all purposes of the “Company” under the terms of this Agreement.

 

(b)              Failure of the Company to obtain the agreement of anySuccessor Company to be bound by the terms of this Agreement prior to theeffectiveness of any such succession shall be a breach of this Agreement, andshall immediately entitle the Executive to benefits from the Company in thesame amount and on the same terms as the Executive would be entitled to receivein the event of a termination of employment for Good Reason as provided inSection 7.7 (failure not related to a Change in Control) or Section 8.3 (if thefailure of assignment follows or is in connection with a Change in Control).

 

(c)               Except as herein provided, this Agreement may nototherwise be assigned by the Company.

** **

9.2**                                ****Assignment by Executive**.****This Agreement shall inure to the benefitof and be enforceable by the Executive’s personal or legal representatives,executors, administrators, successors, heirs, distributees, devisees, andlegatees.

 

(a)               If the Executive dies while any amount would still bepayable to him pursuant to this Agreement had he continued to live, all suchamounts, unless otherwise provided herein, shall be paid in accordancewith the terms of this Agreement, to the Executive’s Beneficiary.

 

(b)              If the Executive has not named a Beneficiary, thensuch amounts shall be paid to the Executive’s devisee, legatee, or otherdesignee, or if there is no such designee, to the Executive’s estate.

 

**Article 10. Legal Fees and Notice**

 

10.1**                          ****Payment of Legal Fees**.****To theextent permitted by law, the Company shall pay all legal fees, costs oflitigation, prejudgment interest, and other expenses incurred by Executive incontesting a termination, if Executive prevails.

** **

10.2**                          ****Notice**.** **Any notices, requests, demands,or other communications provided by this Agreement shall be sufficient if inwriting and if sent by registered or certified mail to the Executive atthe last address he has filed in writing with the Company or, in the caseof the Company, at its principal offices to the attention of the GeneralCounsel.

 

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**Article11. Confidentiality and Noncompetition**

 

11.1**                          ****Disclosure of Information**.****The Executive recognizes that he hasaccess to and knowledge of confidential and proprietary information of theCompany that is essential to the performance of his duties under thisAgreement.

 

(a)               The Executive will not, during and for five (5) yearsafter the term of his employment by the Company, in whole or in part, disclosesuch information to any person, firm, corporation, association, or other entityfor any reason or purpose whatsoever, nor shall he make use of any suchinformation for his own purposes, so long as such information has not otherwisebeen disclosed to the public or is not otherwise in the public domain except asrequired by law or pursuant to administrative or legal process.

** **

11.2**                          ****Covenants Regarding Other Employees**. During the term of this Agreement, andfor a period of twelve (12) months followingthe Executive’s termination of employment for any reason, the Executive agreesnot to actively solicit any employee of the Company to terminate his or heremployment with the Company or to interfere in a similar manner with thebusiness of the Company.

 

11.3**                          ****Noncompete Following a Termination of Employment**.****Fromthe Effective Date of this Agreement until six (6) months following theExecutive’s Effective Date of Termination for any reason, the Executive willnot: (a) directly or indirectly own any equity or proprietary interest in(except for ownership of shares in a publicly traded company not exceedingthree percent (3%) of any class of outstanding securities), or be an employee,agent, director, advisor, or consultant to or for any competitor of theCompany, whether on his own behalf or on behalf of any person; or(b) undertake any action to induce or cause any customer or client todiscontinue any part of its business with the Company.

** **

11.4**                          ****Waiver of Covenants Upon a Change inControl.**Upon the occurrence of a Change in Control, the Executiveshall be released from each of the covenants set forth in Section 11.2 and11.3, if such Executive is terminated by the Company without Cause or if theExecutive terminates his employment with the Company for Good Reason.

** **

**Article12. Outplacement Assistance**

 

12.1                           Following atermination of employment, other than for Cause, the Executive shall bereimbursed by the Company for the costs of all outplacement services obtainedby the Executive within the two (2) year period after the Effective Date ofTermination; provided, however, that the total reimbursement shall be limitedto an amount equal to twenty percent (20%) of the Executive’s Base Salary as ofthe effective date of termination.

 

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**Article 13. Miscellaneous**

 

13.1**                          ****Entire Agreement**.****With the exception of the Company’sProprietary Information and Inventions Agreement previously executed by Executive,this Agreement supersedes any prior agreements (specifically, the prioremployment agreement executed by the Executive as of July 23, 1999, and any andall amendments thereto), or understandings, oral or written, between theparties hereto or between the Executive and the Company, with respect to thesubject matter hereof, and constitutes the entire agreement of the parties withrespect thereto.

** **

13.2**                          ****Modification**.****This Agreement shall not be varied,altered, modified, canceled, changed, or in any way amended except by mutualagreement of the parties in a written instrument executed by the parties heretoor their legal representatives.

** **

13.3**                          ****Severability**.****In the event that any provision or portionof this Agreement shall be determined to be invalid or unenforceable for anyreason, the remaining provisions of this Agreement shall be unaffected therebyand shall remain in full force and effect.

** **

13.4**                          ****Counterparts**.****This Agreement may be executed in one (1)or more counterparts, each of which shall be deemed to be an original, but allof which together will constitute one and the same Agreement.

** **

13.5**                          ****Tax Withholding**.****The Company may withhold from any benefitspayable under this Agreement all federal, state, city, or other taxes as may berequired pursuant to any law or governmental regulation or ruling.

** **

13.6**                          ****Beneficiaries**.****To the extend allowed by law, any paymentsor benefits hereunder due to the Executive at the time of his death shallnonetheless be paid or provided and the Executive may designate one or morepersons or entities as the primary and/or contingent beneficiaries of anyamounts to be received under this Agreement. Such designation must be in theform of a signed writing acceptable to the Board or the Board’s designee. TheExecutive may make or change such designation at any time.

** **

13.7**                          ****Payment Obligation Absolute**. Absent actions deliberately or willfully taken bythe Executive to materially injure the Company, the Company’s obligation tomake the payments and the arrangement provided for herein shall be absolute andunconditional, and shall not be affected by any circumstances, including,without limitation, any offset, counterclaim, recoupment, defense, or otherright which the Company may have against the Executive or anyone else.

 

(a)               All amounts payable by the Company hereunder shall bepaid without notice or demand. Subject to the provisions set forth inSections 7.4 and 7.6, and Article 11, each and every payment madehereunder by the Company shall be final, and the Company shall not seek torecover all or any part of such payment from the Executive or from whomsoevermay be entitled thereto, for any reasons whatsoever.

 

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(b)              With the exception of the Company’s willful materialbreach of its payment obligations under Articles 7 and 8 of this Agreement(provided, however, that no such breach shall be deemed to have occurred untilthe Executive has provided the Board with written notice of such breach and areasonable opportunity for cure), the restrictive covenants contained inArticle 11 are independent of any other contractual obligations in thisAgreement or otherwise owed by the Company to the Executive. Except as providedin this paragraph, the existence of any claim or cause of action by Executiveagainst the Company, whether based on this Agreement or otherwise, shall notcreate a defense to the enforcement by the Company of any restrictive covenantcontained herein.

 

(c)               The Executive shall not be obligated to seek otheremployment in mitigation of the amounts payable or arrangements made under anyprovision of this Agreement, and the obtaining of any such other employmentshall in no event effect any reduction of the Company’s obligations to make thepayments and arrangements required to be made under this Agreement.

** **

**Article 14. Governing Law**

 

14.1                           To the extent not preempted by federallaw, the provisions of this Agreement shall be construed and enforced inaccordance with the laws of the state of New Jersey.

** **

**IN WITNESS WHEREOF**, the Company, through its duly authorizedrepresentative, and the Executive have executed this Agreement as of theEffective Date.

 
|   | Executive:                        |
|--------|-----------------------------------|
|   |                              |
|   | /s/ Robert M. Shaw                |   |
|   |                              | Robert M. Shaw |
|   |                              |
|   | Company:                          |
|   |                              |
|   | **Bio-Technology  General Corp.** |
|   |                              |
|   | By:                               | /s/ Sim Fass |   |
|   |                              | Sim Fass |
|   |                              | Chairman & CEO |
|        |                                   |  |  |  |

 

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