SEVERANCE OBLIGATIONS UNDER THIS AGREEMENT, WHICH REPRESENT PAYMENTS
AND OBLIGATIONS THAT EXECUTIVE WOULD NOT OTHERWISE BE ENTITLED TO RECEIVE FROM
THE COMPANY. ACCORDINGLY, EXECUTIVE UNDERSTANDS AND WARRANTS THAT NO AMOUNT
OTHER THAN AS SET FORTH IN THIS SECTION 2 (WHICH SUPERCEDES AND GOES BEYOND
POST-TERMINATION BENEFITS OTHERWISE AVAILABLE UNDER THE EMPLOYMENT AGREEMENT) IS
OR SHALL BE DUE OR CLAIMED TO BE DUE FROM THE COMPANY AND/OR FROM ANY OTHER
PERSON OR ENTITY RELEASED IN PARAGRAPH 5 BELOW WITH RESPECT TO ANY CLAIM OR
CLAIMS RELEASED IN SECTION 5 BELOW, INCLUDING, BUT NOT LIMITED TO, ANY AND ALL
CLAIMS FOR ATTORNEYS' FEES AND THE COSTS OF LITIGATION THAT HE MAY HAVE UNDER
ANY FEDERAL, STATE OR LOCAL LAW, COMMON LAW OR IN EQUITY.
3.
ADVISORY SERVICES
(A)
EFFECTIVE WITH EXECUTIVE'S TERMINATION OF
EMPLOYMENT, AND CONTINUING UNTIL THE EARLIER OF TERMINATION OF THIS AGREEMENT OR
TWELVE (12) MONTHS FROM THE DATE HEREOF (THE "CONSULTING TERM"), EXECUTIVE'S
STATUS SHALL CHANGE TO THAT OF A CONSULTANT TO, AND NOT AN EMPLOYEE OF, THE
COMPANY.
DURING THE CONSULTING TERM, EXECUTIVE WILL BE REASONABLY AVAILABLE TO
NEOPHARM PERSONNEL DURING NORMAL BUSINESS HOURS FOR ADVICE ON MATTERS RELATING
TO THE COMPANY'S BUSINESS OPERATIONS AND STRATEGIES, INCLUDING, BUT NOT LIMITED
TO, THE COMPANY'S DEVELOPMENT OF DRUGS AND NONDRUGS WHICH ARE CURRENTLY BEING
RESEARCHED AND DEVELOPED BY THE COMPANY; PROVIDED, HOWEVER, THAT SUCH
CONSULTATION SHALL NOT EXCEED TWENTY (20) HOURS PER WEEK.
(B)
DURING THE CONSULTING TERM, EXECUTIVE'S
PREVIOUSLY GRANTED OPTIONS WILL CONTINUE TO VEST IN ACCORDANCE WITH THE CURRENT
VESTING SCHEDULE APPLICABLE TO SUCH OPTIONS AND SHALL REMAIN EXERCISABLE UNTIL
THE DATE THAT IS NINETY (90) DAYS AFTER THE TERMINATION OF THE CONSULTING TERM.
4.
RESTRICTIVE COVENANTS FOR EXECUTIVE.
(A)
EXECUTIVE HEREBY COVENANTS AND AGREES WITH
THE COMPANY THAT, IN CONSIDERATION FOR THE PAYMENTS AND OTHER VALUABLE
CONSIDERATION TO BE PROVIDED TO EXECUTIVE UNDER THIS AGREEMENT, FOR A PERIOD
(THE "RESTRICTED PERIOD") OF TWELVE (12) MONTHS FROM THE DATE OF THIS AGREEMENT,
EXECUTIVE SHALL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY, WHICH
CONSENT SHALL BE WITHIN THE SOLE AND EXCLUSIVE DISCRETION OF THE COMPANY, EITHER
DIRECTLY OR INDIRECTLY, ON HIS OWN ACCOUNT OR AS AN EXECUTIVE, CONSULTANT,
AGENT, PARTNER, JOINT VENTURER, OWNER, OFFICER, DIRECTOR OR SHAREHOLDER OF ANY
OTHER PERSON, FIRM, CORPORATION, PARTNERSHIP, LIMITED LIABILITY COMPANY OR OTHER
ENTITY:
(I)
PERFORM SERVICES FOR ANY COMPETING
BUSINESS, AS HEREINAFTER DEFINED, THAT ARE SUBSTANTIALLY SIMILAR IN WHOLE OR IN
PART TO THOSE THAT HE PERFORMED FOR THE COMPANY IN HIS ROLE AS PRESIDENT AND
CEO, INCLUDING SPECIFICALLY, BUT NOT LIMITED TO, PARTICIPATING IN THE RESEARCH,
DEVELOPMENT, SALE OR MARKETING OF DRUG OR NON-DRUG PRODUCTS OR THE MANAGEMENT OF
INDIVIDUALS
2
INVOLVED IN THE RESEARCH, DEVELOPMENT, SALE OR MARKETING OF DRUG OR NON-DRUG
PRODUCTS.
FOR PURPOSES OF THIS AGREEMENT, THE TERM "COMPETING BUSINESS" SHALL
MEAN ANY ENTITY ENGAGED IN THE RESEARCH, DEVELOPMENT, MARKETING OR SALE OF DRUG
AND NONDRUG PRODUCTS WHICH ARE OR WOULD BE COMPETITIVE WITH:
(1) THOSE PRODUCTS
BEING MARKETED BY THE COMPANY AT THE TIME