OF EMPLOYMENT AS OF THE
EFFECTIVE DATE, AND CONTINUING UNTIL THE EARLIER OF EXECUTIVE TAKING A POSITION
WITH A COMPETING BUSINESS (WITHOUT THE WRITTEN CONSENT OF THE PRESIDENT OF
NEOPHARM, WHICH CONSENT WILL NOT BE UNREASONABLY WITHHELD), TERMINATION OF THIS
AGREEMENT, OR THE DATE THAT IS NINE (9) MONTHS FROM THE EFFECTIVE 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 FINANCIAL REPORTING AND
ACCOUNTING MATTERS WHICH WERE OVERSEEN BY EXECUTIVE AS CHIEF FINANCIAL OFFICER
OF 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
NINE (9) MONTHS FROM THE EFFECTIVE DATE, EXECUTIVE SHALL NOT, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE PRESIDENT OF THE COMPANY, WHICH CONSENT WILL NOT BE
UNREASONABLY WITHHELD, 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 EXECUTIVE VICE PRESIDENT AND CFO,
INCLUDING SPECIFICALLY, BUT NOT LIMITED TO, PARTICIPATING IN THE FINANCING OR
DEVELOPMENT OF DRUG OR NON-DRUG PRODUCTS OR THE MANAGEMENT OF INDIVIDUALS
INVOLVED IN THE RESEARCH, FINANCING, DEVELOPMENT, SALE OR MARKETING OF DRUG OR
NON-DRUG PRODUCTS. FOR PURPOSES OF
2
THIS AGREEMENT, THE TERM "COMPETING BUSINESS" SHALL MEAN ANY ENTITY ENGAGED IN
THE RESEARCH, FINANCING, 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 OF EXECUTIVE'S TERMINATION; OR (2) THOSE
PRODUCTS THAT EXECUTIVE WAS AWARE WERE UNDER RESEARCH AND DEVELOPMENT BY THE
COMPANY AND EXPECTED TO BE MARKETED WITHIN FIVE YEARS OF EXECUTIVE'S
TERMINATION. THIS COVENANT SHALL APPLY ONLY WITHIN THE "TERRITORY" WHICH IS
DEFINED AS THE FIFTY STATES OF THE UNITED STATES. EXECUTIVE RECOGNIZES AND
AGREES THAT IN HIS CAPACITY AS EXECUTIVE VICE PRESIDENT AND CFO OF THE COMPANY,
HIS DUTIES EXTENDED THROUGHOUT THE ENTIRE SERVICE AREA OF THE COMPANY WHICH
INCLUDES, AT A MINIMUM, THE FIFTY STATES OF THE UNITED STATES AND THAT, BECAUSE
OF THE EXECUTIVE NATURE OF