Document:

Fulbright & Jaworski Document

Exhibit

10.20

 

	

  

  	

  BIO–TECHNOLOGY GENERAL CORP.

  

 

Employment

Agreement

for

Norman

W. Barton

Senior

Vice President, Chief Medical Officer

 

 

 

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

  

 

 

 

Employment

Agreement

 

This Agreement is made,

entered into, and is effective as 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 the

Executive and the Executive hereby agrees to serve the Company in accordance

with 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 of this

Agreement shall automatically be extended for one (1) additional year, unless

at least ninety (90) days prior to such anniversary, the Company or the

Executive shall have given notice in accordance with Section 10.2 hereof that

it 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 in

accordance with the Company’s annual bonus program as described in Section 5.3

herein.

 

2.3     “Base

Salary” means the salary of record paid to the Executive as annual

salary, pursuant to Section 5.2, excluding amounts received under incentive or

other bonus plans, whether or not deferred.

 

2.4     “Beneficial

Owner” shall have the meaning ascribed to such term in Rule

13d-3 of the General Rules and Regulations under the Securities Exchange Act.

 

2.5     “Beneficiary”

means the persons or entities designated or deemed designated by the Executive

pursuant to Section 13.6 herein.

 

2.6     “Board”

or “Board of Directors” means the

Board of Directors of the Company.

 

2.7     “Cause”

means:

 

(a)   Executive materially breached any of the

terms of this Agreement and failed to correct such breach within fifteen (15)

days after written notice thereof from the Company;

 

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(b)   Executive has been convicted of a criminal

offense involving a felony giving rise to a sentence of imprisonment;

 

(c)   Executive has breached a fiduciary trust for

the purpose of gaining a personal profit, including, without limitation, embezzlement;

or

 

(d)   Despite adequate warnings, Executive

intentionally and willfully failed to perform reasonably assigned duties within

the normal and customary scope of the Position.

 

2.8              “Change in Control” or “CIC” of the Company shall be deemed to have

occurred as of the first day that any one or more of the following conditions

is satisfied:

 

(a)           Any consolidation or merger in which

the Company is not the continuing or surviving entity or pursuant 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 which the holders of the

Common Stock immediately prior to the merger have the same proportionate

ownership of common stock of the surviving corporation immediately after the

merger, or (ii) a consolidation or merger which would result in the voting

securities of the Company outstanding immediately prior thereto continuing to

represent (by being converted into voting securities of the continuing or

surviving entity) more than 50% of the combined voting power of the voting

securities of the continuing or surviving entity immediately after such

consolidation or merger and which would result in the members of the Board

immediately prior to such consolidation or merger (including for this purpose

any individuals whose election or nomination for election was approved by a

vote of at least two-thirds of such members) constituting a majority of the

Board (or equivalent governing body) of the continuing or surviving entity

immediately after such consolidation or merger;

 

(b)           Any sale, lease, exchange, or other

transfer (in one transaction or a series of related transactions) of all or

substantially all the Company’s assets;

 

(c)           The Company’s stockholders approve

any plan or proposal for the liquidation or dissolution of the Company;

 

(d)           Any Person shall become the

Beneficial Owner of forty (40) percent or more of the Common Stock other than

pursuant to a plan or arrangement entered into by such Person and the Company;

or

 

(e)           During any period of two consecutive

years, individuals who at the beginning of such period constitute the entire

Board of Directors shall cease for any reason to constitute a majority of the

Board unless the election or nomination for election by the Company’s stockholders

of each new director was approved by a vote of at lest two-thirds of the

directors then still in office who were directors at the beginning of the

period.

 

2.9              “CIC Severance Benefits” means the payment of severance

compensation associated with a Qualifying Termination occurring subsequent to a

Change in Control, as described 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 of the Board, or any other committee      appointed by the Board to perform the functions of such

committee.

 

2.13        “Company” means Bio-Technology General Corp., a

Delaware corporation, or any Successor Company thereto as provided in Section

9.1 herein.

 

2.14   “Director”

means any individual who is a member of the Board of Directors of the Company.

 

2.15        “Disability” or “Disabled”

means for all purposes of this Agreement, the meaning ascribed to such term in

the Company’s long-term disability 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 of the

Executive’s employment occurs.

 

2.18   “Employment

Date” means April 26, 1996.

 

2.19        “Executive” means Norman W. Barton, M.D., Ph.D. who,

as of the Effective Date, resides at 19 Overshot Court, Phoenix, Maryland  21131.

 

2.20        “Good Reason” shall mean, without the Executive’s

express written consent, 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

benefits under or relative level of participation in the Company’s employee

benefit or retirement plans, policies, practices, or arrangements in which the

Executive participates as of the Effective Date of this Agreement, including

any perquisite program; provided, however, that any such change that applies

consistently to all executive officers of the Company or is required by

applicable law shall not be deemed to constitute Good Reason;

 

(c)      Failing to require any Successor Company

to assume and agree to perform the Company’s obligations hereunder;

 

(d)      The occurrence of any one or more of the

following events on or after the announcement of the transaction which leads to

the CIC and up to twenty-four (24) calendar months following the effective date

of a CIC:

 

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(1)   Requiring Executive to be based at a location

that requires the Executive to travel at least an additional thirty-five (35)

miles per day;

 

(2)   Requiring Executive to report to a position

which is at a lower level than the highest level to which Executive reported

within the six (6) months prior to the CIC;

 

(3)   Demoting Executive to a level lower than

Executive’s level in the Company as of the Effective Date.

 

2.21        “Notice of Termination” means a written notice which shall

indicate the specific termination provision in this Agreement relied upon, and

shall set forth in reasonable detail the facts and circumstances claimed to

provide a basis for termination of the Executive’s employment under the

provisions so indicated, and, where applicable, shall specifically include

notice pursuant to Section 1.2 that Company has elected not to renew this

Agreement.

 

2.22        “Person” shall have the meaning ascribed to such

term in Section 3(a)(9) of the Securities Exchange Act and used in Sections 13(d)

and 14(d) thereof, including a “group” as defined in Section 13(d) thereof.

 

2.23   “Position”

shall have the meaning ascribed to it in Section 3.1.

 

2.24        “Qualifying Termination” means any of the events described in

Section 8.2 herein, the occurrence of which triggers the payment of CIC

Severance Benefits hereunder.

 

2.25        “Securities Exchange Act” means the United States Securities

Exchange Act of 1934, as amended.

 

2.26   “Service

Multiple” shall have the meaning ascribed to it in Section 7.4(c).

 

2.27        “Severance Benefits” means the payment of severance

compensation as provided in Sections 7.4 and 7.6 herein, and not payable due to

a Change in Control of the Company.

 

2.28   “Successor

Company” shall have the meaning ascribed to it in Section 9.1.

 

2.29   “Term”

shall mean that period of time commencing on the Effective Date and ending on

the Effective Date of Termination.

 

Article

3. Position and Responsibilities

 

3.1              During the term of this Agreement, the Executive

agrees to serve as Senior Vice President, Chief Medical Officer of the Company

or in such other position which Executive shall agree to accept or to which

Executive shall be promoted during the Term and Executive shall report directly

to the President or such other position which is at a higher position or level

in the 

 

4

 

                             Company than Executive and as shall be

determined by the Chief Executive Officer in his sole discretion, and shall

maintain the level of duties and responsibilities as in effect as of the

Effective Date, or such higher level of duties and responsibilities as

Executive may be assigned during the Term (the “Position”).

 

Article 4. Standard of Care

 

4.1              During the term of this Agreement, the Executive

agrees to devote substantially his full time, attention, and energies to the

Company’s business and shall not be engaged in any other business activity,

whether or not such business activity is pursued for gain, profit, or other

pecuniary advantage unless such business activity is approved by the

Compensation Committee (or, in the event the Compensation Committee ceases to

exist, the Board).  However, subject to

Article 11 herein and approval by the Compensation Committee (or the Board, as

the case may be), the Executive may serve as a director of other companies so

long as such service is not injurious to the Company.

 

Article 5. Compensation

 

5.1              As remuneration for all services to be rendered by the

Executive during the term of this Agreement, and as consideration for complying

with the covenants herein, the Company shall pay and provide to the Executive

those items set forth in Sections 5.2 through 5.8.

 

5.2              Base Salary. The Company shall pay the Executive a

Base Salary in an amount which shall be established from time to time by the Board

of Directors of the Company or the Board’s designee; provided, however, that

such Base Salary shall not be less than

TWO-HUNDRED-THIRTY-SIX-THOUSAND-FIVE-HUNDRED DOLLARS (US$236,500) per year.

 

(a) This Base Salary

shall be paid to the Executive in equal installments throughout the year,

consistent with the normal payroll practices of the Company.

 

(b) The Base Salary shall

be reviewed at least annually following the Effective Date of this Agreement,

while this Agreement is in force, to ascertain whether, in the judgment of the

Board or the Board’s designee, such Base Salary should be increased based

primarily on the performance of the Executive during the year. If so increased,

the Base Salary as stated above shall, likewise, be increased for all purposes

of this Agreement and shall not, in any event, be decreased in any year.

 

5.3              Annual Bonus. In addition to his Base Salary, the

Executive shall be entitled to participate in the Company’s annual short-term

incentive program, as such program may exist from time to time, at a level

commensurate with the Position.  The

percentage of Base Salary targeted as annual short-term incentive compensation

shall be established for the Position by the Company’s Compensation Committee

in its sole discretion (the “targeted Annual Bonus 

 

5

 

                             award”). Executive acknowledges that the

amount of annual short-term incentive, if any, to be awarded shall be at the

sole discretion of the Company’s Compensation Committee, may be less or more

than the targeted Annual bonus award, and will be based on a number of factors

set in advance by the Compensation Committee for each calendar year, including

the Company’s performance and the Executive’s individual performance. Nothing

in this Section 5.3 shall be construed as obligating the Company or the Board

to refrain from changing, and/or amending the short-term incentive program, so

long as such changes are equally applicable to all executive employees in the

Company.

 

5.4              Long-Term Incentives. The Executive shall be eligible to

participate in the Company’s long-term incentive plan, as such shall be amended

or superseded from time to time provided, however, that nothing in this Section

5.4 shall be construed as obligating the Company or the Board to refrain from

changing, and/or amending the long-term incentive plan, so long as such changes

are equally applicable to all executive employees in the Company.

 

5.5              Retirement Benefits. The Company shall provide to the

Executive participation in any Company qualified defined benefit and defined

contribution retirement plans as may be established during the term of this

Agreement; provided, however, that nothing in this Section 5.5 shall be

construed as obligating the Company to refrain from changing, and/or amending

the nonqualified retirement programs, so long as such changes are equally

applicable to all executive employees in the Company.

 

5.6              Employee Benefits. During the Term, and as otherwise

provided within the provisions of each of the respective plans, the Company

shall provide to the Executive all benefits to which other executives and

employees of the Company are entitled to receive, as commensurate with the

Position, subject to the eligibility requirements and other provisions of such arrangements

as applicable to executives of the Company generally.

 

(a)           Such benefits shall include, but

shall not be limited to, group term life insurance, comprehensive health and

major medical insurance, dental and life insurance, and short-term and long-term

disability.

 

(b)           The Executive shall likewise

participate in any additional benefit as may be established during the term of

this Agreement, by standard written policy of the Company.

 

5.7              Vacation. The Executive shall be entitled to such

paid vacation as is customary for the Position in corporate institutions of

similar size and character, but in any event not less than twenty (20) paid

vacation days during each calendar year; provided, however, that without prior

written approval, Executive may carry forward into the next year no more than

ten (10) unused vacation days from the current year.

 

5.8              Perquisites. The Company shall provide to the

Executive, at the Company’s expense, all perquisites 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 the Company or the Board to

refrain from changing, and/or amending the perquisite program, so long as such

changes are equally applicable to all executive employees in the Company.

 

6

 

 

5.9              Right to Change Plans. The Company shall not be obligated to

institute, maintain, or refrain from changing, amending, or discontinuing any

benefit plan, program, or perquisite, so long as such changes are equally

applicable to all executive employees in the Company.

 

Article 6. Expenses

 

6.1              Upon presentation of appropriate documentation, the

Company shall pay, or reimburse the Executive for all ordinary and necessary

expenses, in a reasonable amount, which the Executive incurs in performing his

duties under this Agreement including, but not limited to, travel,

entertainment, professional dues and subscriptions, and all dues, fees, and

expenses associated with membership in various professional, business, and

civic associations and societies.

 

Article

7. Employment Terminations

 

7.1              Termination Due to Death. In the event the Executive’s employment

is terminated while this Agreement is in force by reason of death, the

Company’s obligations under this Agreement shall immediately expire.

Notwithstanding the foregoing, the Company shall be obligated to pay to the

Executive the following:

 

(a)   Base Salary through the Effective Date of

Termination;

 

(b)   An amount equal to the Executive’s unpaid

targeted Annual Bonus award, established for the fiscal year in which such

termination is effective, multiplied by a fraction, the numerator of which is

the number of completed days in the then-existing fiscal year through the

Effective Date of Termination, and the denominator of which is three hundred

sixty-five (365);

 

(c)   All outstanding long-term incentive awards

shall be subject to the treatment provided under the applicable long-term

incentive plan of the Company;

 

(d)   Accrued but unused vacation pay through the

Effective Date of Termination; and

 

(e)   All other rights and benefits the Executive

is vested in, 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 as

racticable following the Effective Date of Termination, but in no event beyond

thirty (30) days from such date. All other payments due to the Executive upon

termination of employment, including those in Sections 7.1(b) and (c), shall be

paid in accordance with the terms of such applicable plans or programs.

 

7

 

(g)   With the exception of the covenants contained

in Articles 9 and 14 and Sections 7.1(f), 13.3, 13.5, and 13.7 herein

(which shall survive such termination), the Company and the Executive

thereafter shall have no further obligations under this Agreement.

 

7.2              Termination Due to Disability. 

In the event that the Executive becomes Disabled during the term of this

Agreement and is, therefore, unable to perform his duties herein for more than

one hundred eighty (180) total calendar days during any period of twelve

(12) consecutive months, or in the event of the Board’s reasonable expectation

that the Executive’s Disability will exist for more than a period of one

hundred eighty (180) calendar days, the Company shall have the right to

terminate the Executive’s active employment as provided in this Agreement.

 

(a)   The Board shall deliver written notice to the

Executive 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

of Directors of the Company upon receipt of and in reliance on competent medical

advice from one (1) or more individuals, selected by the Board, who are

qualified to give such professional medical advice.

 

(c)   A termination for Disability shall become

effective upon the end of the thirty (30) day notice period. Upon the Effective

Date of Termination, the Company’s obligations under this Agreement shall

immediately expire.

 

(d)   Notwithstanding the foregoing, the Company

shall be obligated 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

targeted Annual Bonus award, established for the fiscal year in which the

Effective Date of Termination occurs, multiplied by a fraction, the numerator

of which is the number of completed days in the then-existing fiscal year

through the Effective Date of Termination, and the denominator of which is

three hundred sixty-five (365);

 

(3)   All outstanding long-term incentive awards

shall be subject to the treatment provided under the applicable long-term incentive

plan of the Company;

 

(4)   Accrued but unused vacation pay through the

Effective Date of Termination; and

 

(5)   All other rights and benefits the Executive

is vested in, 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

as practicable following the Effective Date of Termination, but in no event

beyond thirty (30) days from such date. All other payments due to the Executive

upon termination of employment, including those in Sections 

 

8

 

7.2(d)(2) and (d)(3),

shall be paid in accordance with the terms of such applicable plans or program.

 

(f)    With the exception of the covenants

contained in Articles 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

Executive thereafter shall have no further obligations under this Agreement.

 

7.3              Voluntary Termination by the

Executive. The

Executive may terminate this Agreement at any time by giving Notice of

Termination to the Board of Directors of the Company, delivered at least

fourteen (14) calendar days prior to the Effective Date of Termination.

 

(a)   The termination automatically shall become

effective upon the expiration of the fourteen (14) day notice period.

Notwithstanding the foregoing, the Company may waive the fourteen (14) day

notice period; however, the Executive shall be entitled to receive all elements

of compensation described in Sections 5.1 through 5.6 for the fourteen

(14) day notice period, subject to the eligibility and participation

requirements of any qualified retirement plan.

 

(b)   Upon the Effective Date of Termination,

following the expiration of the fourteen (14) day notice period, the Company

shall pay the Executive his full Base Salary and accrued but unused vacation

pay, at the rate then in effect, through the Effective Date of Termination,

plus all other benefits to which the Executive has a vested right at that time

(for this purpose, the Executive shall not be paid any Annual Bonus with

respect to the fiscal year in which voluntary termination under this Section

occurs).

 

(c)   With the exception of the covenants contained

in Articles 8, 9, 11, and 14 and Sections 13.3, 13.5, and 13.7 herein (which

shall survive such termination), the Company and the Executive thereafter shall

have no further obligations under this Agreement.

 

7.4              Involuntary Termination by the

Company without Cause. At all times during the Term, the Board may terminate the Executive’s

employment for reasons other than death, Disability, or for Cause, by providing

to the Executive a Notice of Termination, at least sixty (60) calendar days

(ninety (90) calendar days when termination is due to non-renewal of this

Agreement by the Company pursuant to Section 1.2) prior to the Effective Date

of Termination; provided, however, that such notice shall not preclude the

Company from requiring Executive to leave the Company immediately upon receipt

of such notice.

 

(a)   Such Notice of Termination shall be

irrevocable absent express, mutual consent of the parties.

 

(b)   Upon the Effective Date of Termination (not a

Qualifying Termination), following the expiration of the sixty (60) day notice

period (90 days in the case of non-renewal), the Company shall pay and provide

to the Executive:

 

(1)   An amount equal to the Service Multiple times

the Executive’s annual Base Salary established for the fiscal year in which the

Effective Date of Termination occurs;

 

9

 

(2)   An amount equal to the Service Multiple times

the Executive’s targeted Annual Bonus award established for the fiscal year in

which the Effective Date of Termination occurs; provided, however, that no

payment shall be made under this Section 7.4(b)(2) if the Effective Date of

Termination 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, then provision at the Company’s expense but subject to payment

by Executive of those payments which Executive would have been obligated to

make under the Company’s then current plan, of substantially similar welfare

benefits from one or more third party providers) after the Effective Date of

Termination for a number of months equal to the Service Multiple times twelve

(12).  These benefits shall be provided

to the Executive at the same coverage level as in effect as of the Effective

Date of Termination, and at the same premium cost to the Executive which 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 change for all employees

of the Company, or for management employees with respect to supplemental

benefits, the cost and/or coverage level, likewise, shall change for the

Executive in a corresponding manner. 

The continuation of these welfare benefits shall be discontinued if

prior to the expiration of the period, the Executive has available

substantially similar benefits at a comparable cost to the Executive from a subsequent

employer, as determined by the Compensation Committee (or, in the event the

Compensation Committee ceases to exist, the Board);

 

(4)   All outstanding long-term incentive awards

shall be subject to the treatment provided under the applicable long-term

incentive plan of the Company;

 

(5)   An amount equal to the Executive’s unpaid

Base Salary and accrued but unused vacation pay through the Effective Date of

Termination; and

 

(6)   All other benefits to which the Executive has

a vested right at the time, according to the provisions of the governing plan

or program.

 

(c)   For purposes of this Section 7.4, the term

“Service Multiple” shall be equal to the quotient resulting from a formula the

numerator of which is the lesser of (a) full number of completed months that

have elapsed since 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’s employment without Cause on or after the date of the announcement

of the transaction which leads to a CIC, the Executive shall be entitled to the

CIC Severance Benefits as provided in Section 8.3 in lieu of the Severance

Benefits outlined in this Section 7.4.

 

(e)   Payment of all of the benefits described in

Section 7.4(b)(1) shall be paid in cash to the Executive in equal bi-weekly

installments over a period of consecutive months equal to 

 

10

 

the Service Multiple times twelve (12) and beginning

on the fifteenth day of the month following the month in which the Effective

Date of Termination occurs.

 

(f)    Payment of all but forty thousand dollars

($40,000) of the benefits described in Section 7.4(b)(2) shall be paid in

cash to the Executive in a single lump sum as soon as practicable following the

Effective Date of Termination, but in no event beyond thirty (30) days from

such date.  The forty thousand dollars

($40,000) which was withheld shall be paid in cash to the Executive in a single

lump sum at the end of the twelve (12) month restrictive period set forth in

Sections 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

employment shall be paid in accordance with the terms of such applicable plans

or programs.

 

(h)   With the exception of the covenants contained

in Articles 8, 9, 10, 11, 12 and 14 and Sections 7.4, 13.3, 13.5, and 13.7

(which shall survive such termination), the Company and the Executive

thereafter shall have no further obligations under this Agreement.

 

(i)    Notwithstanding anything herein to the

contrary, the Company’s payment obligations under this Section 7.4 shall be

offset by any amounts that the Company is required to pay to the Executive

under a national statutory severance program applicable to such Executive.

 

7.5              Termination for Cause. Nothing in this Agreement shall be

construed to prevent the Board from terminating the Executive’s employment

under this Agreement for Cause.

 

(a)   To be effective, the Notice of Termination

must set forth in reasonable detail the facts and circumstances claimed to

provide a basis for such termination for Cause.

 

(b)   In the event this Agreement is terminated by

the Board for Cause, the Company shall pay the Executive his Base Salary and

accrued vacation pay through the Effective Date of Termination, and the

Executive shall immediately thereafter forfeit all rights and benefits (other

than vested benefits) he would otherwise have been entitled to receive under

this Agreement. The Company and the Executive thereafter shall have no further

obligations under this Agreement with the exception of the covenants contained

in Articles 9, 10, 11, and 14 and Sections 13.3, 13.5, and 13.9 herein (which

shall survive such termination).

 

7.6              Termination for Good Reason. Except where Section 2.20(d) is

applicable, 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 of

termination by Executive may only be given pursuant to Section 7.3.  The Executive shall have sixty (60) days

from the date he learns of action taken by the Company that allows the

Executive to terminate his employment for Good Reason to provide the Board with

a Notice of Termination.

 

(a)   The Notice of Termination must set forth in

reasonable detail the facts and circumstances claimed to provide a basis for

such Good Reason termination.

 

11

 

(b)   The Company shall have thirty (30) days to

cure such Company action following receipt of the Notice of Termination.

 

(c)   The Executive is required to continue his

employment for the sixty (60) day period following the date in which he

provided the Notice of Termination to the Board. The Company may waive the

sixty (60) day notice period; however, the Executive shall be entitled to

receive all elements of compensation described in Sections 5.1 through 5.6 for

the sixty (60) day notice period, subject to the eligibility and participation

requirements of any qualified retirement plan.

 

(d)   Upon a termination of the Executive’s

employment for Good Reason during the Term, and following the expiration of the

sixty (60) day notice period, the Company shall pay and provide to the

Executive the following:

 

(1)   An amount equal to one-and-one-half (1.5)

times the Executive’s annual Base Salary established for the fiscal year in

which the Effective Date of Termination occurs;

 

(2)   An amount equal to one-and-one-half (1.5)

times the Executive’s targeted Annual Bonus award established for the fiscal

year in which 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 coverage for one-and-one-half (1.5) years after the Effective Date of

Termination (or if continuation under the Company’s then current plans is not

allowed, then provision at the Company’s expense but subject to payment by

Executive of those payments which Executive would have been obligated to make

under the Company’s then current plan, of substantially similar welfare

benefits from one or more third party providers). These benefits shall be

provided to the Executive at the same coverage level, as in effect as of the Effective

Date of Termination and at the same premium cost to the Executive which 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 change for all employees

of the Company, or for management employees with respect to supplemental

benefits, the cost and/or coverage level, likewise, shall change for the

Executive in a corresponding manner. The continuation of these welfare benefits

shall be discontinued prior to the end of the one-and-one-half (1.5) year

period in the event the Executive has available substantially similar benefits

at a comparable cost to the Executive from a subsequent employer, as determined

by the Compensation Committee (or, in the event the Compensation Committee

ceases to exist, the Board);

 

(4)   All outstanding long-term incentive awards

shall be subject to the treatment provided under the applicable long-term

incentive plan of the Company;

 

(5)   An amount equal to the Executive’s unpaid

Base Salary and accrued but unused vacation pay through the Effective Date of

Termination; and

 

(6)   All other benefits to which the Executive has

a vested right at the time, according to the provisions of the governing plan

or program.

 

12

 

(e)   In the event of termination of Executive’s

employment for Good Reason on or after the date of the announcement of the

transaction which leads to the CIC and up to twenty-four (24) months following

the date of the CIC, the Executive shall be entitled to the CIC Severance

Benefits as provided in Section 8.3 in lieu of the Severance Benefits outlined

in this Section 7.6.

 

(f)    The Executive’s right to terminate

employment for Good Reason shall not be affected by the Executive’s incapacity

due to physical or mental illness unless such incapacity is determined to

constitute a Disability as provided herein.

 

(g)   Payment of all but forty thousand dollars

($40,000) of the benefits described in Section 7.6(d)(1) and payment of all of

the benefits described in Section 7.6(d)(2) shall be paid in cash to the

Executive in a single lump sum as soon as practicable following the Effective

Date of Termination, but in no event beyond thirty (30) days from such date.

The forty thousand dollars ($40,000) which was withheld shall be paid in cash

to the Executive in a single lump sum at the end of the twelve (12) month

restrictive period set forth in Sections 11.2 and 11.3 of this Agreement.

 

(h)   Except as specifically provided in Section

7.6(g), all other payments due to the Executive upon termination of employment

shall be paid in accordance with the terms of such applicable plans or

programs.

 

(i)    Notwithstanding anything herein to the

contrary, the Company’s payment obligations under this Section 7.6 shall be

offset by any amounts that the Company is required to pay to the Executive

under a national statutory severance program applicable to such Executive.

 

(j)    With the exceptions of the covenants

contained in Articles 8, 9, 10, 11, 12 and 14 and Sections 7.6, 13.3, 13.5, and

13.7 (which shall survive such termination) herein, the Company and the

Executive thereafter 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 receive from the Company CIC Severance

Benefits if a Notice of Termination for a Qualifying Termination of the

Executive has been delivered; provided, that:

 

(a)   The Executive shall not be entitled to

receive CIC Severance Benefits if he is terminated for Cause (as provided in

Section 7.5 herein), or if his employment with the Company ends due to death,

or Disability, or due to voluntary termination of employment by the Executive

without Good Reason.

 

(b)   CIC Severance Benefits shall be paid in lieu

of all other benefits provided to the Executive under the terms of this

Agreement.

 

13

 

8.2              Qualifying Termination. The occurrence of any one or more of the

following events on or after the date of the announcement of the transaction

which leads to the CIC and up to twenty-four (24) months following the date of

the CIC shall trigger the payment of CIC Severance Benefits to the Executive

under this Agreement:

 

(a)   An involuntary termination of the Executive’s

employment by the Company for reasons other than Cause, death, or Disability,

as evidenced by a Notice of Termination delivered by the Company to the

Executive;

 

(b)   A voluntary termination by the Executive for

Good Reason as evidenced by a Notice of Termination delivered to the Company by

the Executive;

 

(c)   Failure to renew this Agreement (if the

Agreement would expire unless renewed within such period), as evidenced by a

Notice of Termination delivered by the Company to the Executive; or

 

(d)   The Company or any Successor Company

materially breaches any material provision of this Agreement and does not cure

such breach within thirty (30) days of receiving a written notice from the

Executive with such notice explaining in reasonable detail the facts and

circumstances claimed to provide a basis for the Executive’s claim.

 

8.3              Severance Benefits Paid upon a

Qualifying Termination. In the event the Executive becomes entitled to receive CIC Severance

Benefits, the Company shall pay to the Executive and provide him the following:

 

(a)                               An amount equal to two (2) times the

Executive’s annual Base Salary established for the fiscal year in which the

Effective Date of Termination occurs;

 

(b)                              An amount equal to two (2) times the

Executive’s targeted Annual Bonus award established for the fiscal year in

which the Executive’s Effective Date of Termination occurs;

 

(c)                               An amount equal to the Executive’s unpaid

Base Salary and accrued but unused vacation pay through the Effective Date of

Termination;

 

(d)                              All outstanding long-term incentive

awards shall be subject to the treatment provided under the applicable

long-term incentive plan of the Company;

 

(e)                               A continuation of the welfare benefits of

health care, life and accidental death and dismemberment, and disability

insurance coverage for two (2) full years after the Effective Date of

Termination (or if continuation under the Company’s then current plans is not

allowed, then provision at the Company’s expense but subject to payment by

Executive of those payments which Executive would have been obligated to make

under the Company’s then current plan, of substantially similar welfare

benefits from one or more third party providers).

 

14

 

(1)               These benefits shall be provided to the Executive at

the same coverage level, as in effect as of the Effective Date of Termination

or, if greater, as in effect sixty (60) days prior to the date of the Change in

Control, and at the same premium cost to the Executive which was paid by the

Executive at the time such benefits were provided.

 

(2)               In the event the premium cost and/or level of coverage

shall change for all employees of the Company, or for management employees with

respect to supplemental benefits, the cost and/or coverage level, likewise,

shall change for the Executive in a corresponding manner.

 

(3)               The continuation of these welfare benefits shall be

discontinued prior to the end of the two year period in the event the Executive

has available substantially similar benefits at a comparable cost to the

Executive from a subsequent employer, as determined by the Compensation

Committee (or, in the event the Compensation Committee ceases to exist, the

Board).

 

8.4              Form and Timing of Severance Benefit. Payment of all of the benefits

described in Sections 8.3(a) through (c) shall be paid in cash to the Executive

in a single lump sum as soon as practicable following the Effective Date of

Termination, but in no event beyond thirty (30) days from such date. All other

payments due to the Executive upon termination of employment shall be paid in

accordance with the terms of such applicable plans or programs.

 

8.5              Excise Tax. In the event that a Change in Control

occurs, and a determination is made by the Company pursuant to Section 280G and

4999 of the Code that a golden parachute excise tax is due, the benefits

provided to the Executive under this Agreement that are classified as

“parachute payments” (as such term is defined in Section 280G of the Code),

shall be limited to the amount just necessary to avoid the excise tax.

 

(a)   This limitation shall be applied if, and only

if, such a limitation results in a greater net (of excise tax) cash benefit to

the Executive than he would receive had the benefits not been capped and an

excise tax been levied.

 

8.6              With the exceptions of the covenants contained in

Articles 8, 9, 10, 11, 12 and 14 and Sections 13.3, 13.5, and 13.7 (which hall

survive such termination) herein, the Company and the Executive thereafter

shall have no further obligations under this Agreement.

 

Article 9. Assignment

 

9.1              Assignment by Company. This Agreement may and shall be assigned

or transferred to, and shall be binding upon and shall inure to the benefit of

any Successor Company, with Successor Company for purposes of this Agreement

being 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 in

the event of a CIC.

 

15

 

(a)   Any such Successor Company shall be deemed

substituted for all purposes of the “Company” under the terms of this

Agreement.

 

(b)   Failure of the Company to obtain the

agreement of any Successor Company to be bound by the terms of this Agreement

prior to the effectiveness of any such succession shall be a breach of this

Agreement, and shall immediately entitle the Executive to benefits from the

Company in the same amount and on the same terms as the Executive would be

entitled to receive in the event of a termination of employment for Good Reason

as provided in Section 7.7 (failure not related to a Change in Control) or

Section 8.3 (if the failure of assignment follows or is in connection with a

Change in Control).

 

(c)   Except as herein provided, this Agreement may

not otherwise be assigned by the Company.

 

9.2              Assignment by Executive. This Agreement shall inure to the

benefit of and be enforceable by the Executive’s personal or legal

representatives, executors, administrators, successors, heirs, distributees,

devisees, and legatees.

 

(a)   If the Executive dies while any amount would

still be payable to him pursuant to this Agreement had he continued to live,

all such amounts, unless otherwise provided herein, shall be paid in

accordance with the terms of this Agreement, to the Executive’s Beneficiary.

 

(b)   If the Executive has not named a Beneficiary,

then such amounts shall be paid to the Executive’s devisee, legatee, or other

designee, 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 the extent permitted by law, the

Company shall pay all legal fees, costs of litigation, prejudgment interest,

and other expenses incurred by Executive in contesting a termination, if

Executive prevails.

 

10.2        Notice. Any notices, requests, demands, or other

communications provided by this Agreement shall be sufficient if in writing and

if sent by registered or certified mail to the Executive at the last address he

has filed in writing with the Company or, in the case of the Company, at its

principal offices to the attention of the General Counsel.

 

16

 

 

Article 11.

Confidentiality and Noncompetition

 

11.1        Disclosure of Information. The Executive recognizes that he has

access to and knowledge of confidential and proprietary information of the

Company that is essential to the performance of his duties under this Agreement.

 

(a)   The Executive will not, during and for five

(5) years after the term of his employment by the Company, in whole or in part,

disclose such information to any person, firm, corporation, association, or

other entity for any reason or purpose whatsoever, nor shall he make use of any

such information for his own purposes, so long as such information has not

otherwise been disclosed to the public or is not otherwise in the public domain

except as required by law or pursuant to administrative or legal process.

 

11.2        Covenants Regarding Other Employees. During the term of this Agreement, and

for a period of twelve (12) months following the Executive’s termination of

employment for any reason, the Executive agrees not to actively solicit any

employee of the Company to terminate his or her employment with the Company or

to interfere in a similar manner with the business of the Company.

 

11.3        Noncompete Following a Termination of

Employment. From

the Effective Date of this Agreement until six (6) months following the

Executive’s Effective Date of Termination for any reason, the Executive will

not: (a) directly or indirectly own any equity or proprietary interest in

(except for ownership of shares in a publicly traded company not exceeding

three percent (3%) of any class of outstanding securities), or be an employee,

agent, director, advisor, or consultant to or for any competitor of the

Company, whether on his own behalf or on behalf of any person; or (b) undertake

any action to induce or cause any customer or client to discontinue any part of

its business with the Company.

 

11.4        Waiver of Covenants Upon a Change in

Control. Upon the

occurrence of a Change in Control, the Executive shall be released from each of

the covenants set forth in Section 11.2 and 11.3, if such Executive is

terminated by the Company without Cause or if the Executive terminates his

employment with the Company for Good Reason.

 

Article

12. Outplacement Assistance

 

12.1        Following a termination of employment, other than for

Cause, the Executive shall be reimbursed by the Company for the costs of all

outplacement services obtained by the Executive within the two (2) year period

after the Effective Date of Termination; provided, however, that the total

reimbursement shall be limited to an amount equal to twenty percent (20%) of

the Executive’s Base Salary as of the effective date of termination.

 

17

 

 

Article 13. Miscellaneous

 

13.1        Entire Agreement. With the exception of the Company’s

Proprietary Information and Inventions Agreement previously executed by

Executive, this Agreement supersedes any prior agreements (specifically, the

prior severance agreement executed by the Executive as of April 26, 1996, and

any and all amendments thereto), or understandings, oral or written, between

the parties hereto or between the Executive and the Company, with respect to

the subject matter hereof, and constitutes the entire agreement of the parties

with respect thereto.

 

13.2        Modification. This Agreement shall not be varied,

altered, modified, canceled, changed, or in any way amended except by mutual

agreement of the parties in a written instrument executed by the parties hereto

or their legal representatives.

 

13.3        Severability. In the event that any provision or

portion of this Agreement shall be determined to be invalid or unenforceable

for any reason, the remaining provisions of this Agreement shall be unaffected

thereby and 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

all of which together will constitute one and the same Agreement.

 

13.5        Tax Withholding. The Company may withhold from any

benefits payable under this Agreement all federal, state, city, or other taxes

as may be required pursuant to any law or governmental regulation or ruling.

 

13.6        Beneficiaries. To the extend allowed by law, any

payments or benefits hereunder due to the Executive at the time of his death

shall nonetheless be paid or provided and the Executive may designate one or

more persons or entities as the primary and/or contingent beneficiaries of any

amounts to be received under this Agreement. Such designation must be in the

form of a signed writing acceptable to the Board or the Board’s designee. The

Executive may make or change such designation at any time.

 

13.7        Payment Obligation Absolute. Absent actions deliberately or willfully

taken by the Executive to materially injure the Company, the Company’s

obligation to make the payments and the arrangement provided for herein shall

be absolute and unconditional, and shall not be affected by any circumstances,

including, without limitation, any offset, counterclaim, recoupment, defense,

or other right which the Company may have against the Executive or anyone else.

 

(a)   All amounts payable by the Company hereunder

shall be paid without notice or demand. Subject to the provisions set forth in

Sections 7.4 and 7.6, and Article 11, each and every payment made hereunder by

the Company shall be final, and the Company shall not seek to recover all or

any part of such payment from the Executive or from whomsoever may be entitled

thereto, for any reasons whatsoever.

 

18

 

(b)   With the exception of the Company’s willful

material breach of its payment obligations under Articles 7 and 8 of this

Agreement (provided, however, that no such breach shall be deemed to have

occurred until the Executive has provided the Board with written notice of such

breach and a reasonable opportunity for cure), the restrictive covenants

contained in Article 11 are independent of any other contractual obligations in

this Agreement or otherwise owed by the Company to the Executive. Except as provided

in this paragraph, the existence of any claim or cause of action by Executive

against the Company, whether based on this Agreement or otherwise, shall not

create a defense to the enforcement by the Company of any restrictive covenant

contained herein.

 

(c)   The Executive shall not be obligated to seek

other employment in mitigation of the amounts payable or arrangements made

under any provision of this Agreement, and the obtaining of any such other

employment shall in no event effect any reduction of the Company’s obligations

to make the payments and arrangements required to be made under this Agreement.

 

Article 14. Governing Law

 

14.1        To the extent not preempted by federal law, the

provisions of this Agreement shall be construed and enforced in accordance with

the laws of the state of New Jersey.

 

IN

WITNESS WHEREOF,

the Company, through its duly authorized representative, and the Executive have

executed this Agreement as of the Effective Date.

 

	

   

  	

  Executive:

  
	

   

  	

   

  
	

   

  	

  /s/ Norman W. Barton

  	

   

  
	

   

  	

  Norman W. Barton, M.D., Ph.D.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Company:

  
	

   

  	

   

  
	

   

  	

  Bio-Technology General Corp.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Sim Fass

  	

   

  
	

   

  	

  Sim Fass

  
	

   

  	

  Chairman &

  CEO

  
					

 

19Fulbright & Jaworski Document

Exhibit 10.21

 

	

  

  	

  BIO–TECHNOLOGY GENERAL CORP.

  

 

Employment

Agreement

for

John A.

Bond

Senior

Vice President, Finance and Treasurer

 

 

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

  

 

 

Employment Agreement

 

This Agreement is made, entered into, and is effective

as 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 the

Executive and the Executive hereby agrees to serve the Company in accordance

with 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 of

this Agreement shall automatically be extended for one (1) additional year,

unless at least ninety (90) days prior to such anniversary, the Company or the

Executive shall have given notice in accordance with Section 10.2 hereof that

it 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 in

accordance with the Company’s annual bonus program as described in Section 5.3

herein.

 

2.3                                 “Base Salary” means the salary of record paid to the Executive as

annual salary, pursuant to Section 5.2, excluding amounts received under

incentive or other bonus plans, whether or not deferred.

 

2.4                                 “Beneficial Owner” shall have the meaning ascribed to such term

in Rule 13d-3 of the General Rules and Regulations under the Securities

Exchange Act.

 

2.5                                 “Beneficiary” means the persons or entities designated or deemed

designated by the Executive pursuant to Section 13.6 herein.

 

2.6           “Board” or “Board of Directors” means the Board of

Directors of the Company.

 

2.7           “Cause” means:

 

(a)          Executive materially breached any of the terms of this

Agreement and failed to correct such breach within fifteen (15) days after

written notice thereof from the Company;

 

1

 

(b)         Executive has been convicted of a criminal offense

involving a felony giving rise to a sentence of imprisonment;

 

(c)          Executive has breached a fiduciary trust for the

purpose of gaining a personal profit, including, without limitation, embezzlement;

or

 

(d)         Despite adequate warnings, Executive intentionally and

willfully failed to perform reasonably assigned duties within the normal and

customary scope of the Position.

 

2.8                                 “Change in Control” or “CIC” of the Company shall be deemed to have occurred as of

the first day that any one or more of the following conditions is satisfied:

 

(a)                                  Any consolidation

or merger in which the Company is not the continuing or surviving entity or

pursuant 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 which

the holders of the Common Stock immediately prior to the merger have the same

proportionate ownership of common stock of the surviving corporation

immediately after the merger, or (ii) a consolidation or merger which would

result in the voting securities of the Company outstanding immediately prior

thereto continuing to represent (by being converted into voting securities of

the continuing or surviving entity) more than 50% of the combined voting power

of the voting securities of the continuing or surviving entity immediately

after such consolidation

or merger and which would result in the

members of the Board immediately prior to such consolidation or merger

(including for this purpose any individuals whose election or nomination for

election was approved by a vote of at least two-thirds of such members)

constituting a majority of the Board (or equivalent governing body) of the

continuing or surviving entity immediately after such consolidation or merger;

 

(b)                                 Any sale, lease, exchange, or other

transfer (in one transaction or a series of related transactions) of all or

substantially all the Company’s assets;

 

(c)                                  The Company’s stockholders approve any

plan or proposal for the liquidation or dissolution of the Company;

 

(d)                                 Any Person shall become the Beneficial

Owner of forty (40) percent or more of the Common Stock other than pursuant to

a plan or arrangement entered into by such Person and the Company; or

 

(e)                                  During any period of two consecutive

years, individuals who at the beginning of such period constitute the entire

Board of Directors shall cease for any reason to constitute a majority of the

Board unless the election or nomination for election by the Company’s stockholders

of each new director was approved by a vote of at lest two-thirds of the

directors then still in office who were directors at the beginning of the

period.

 

2.9                                 “CIC Severance Benefits” means the payment of severance compensation associated

with a Qualifying Termination occurring subsequent to a Change in Control, as

described in Section 8.3.

 

2

 

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 of

the Board, or any other committee appointed by the Board to perform the

functions of such  committee.

 

2.13                           “Company” means Bio-Technology General Corp., a Delaware

corporation, or any Successor Company thereto as provided in Section 9.1

herein.

 

2.14                           “Director” means any individual who is a member of the Board of

Directors of the Company.

 

2.15                           “Disability” or “Disabled” means for all purposes of this

Agreement, the meaning ascribed to such term in the Company’s long-term

disability 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 of

the Executive’s employment occurs.

 

2.18                           “Employment Date” means June 4, 2001.

 

2.19                           “Executive” means John A. Bond who, as of the Effective Date,

resides at 130 Colket Lane, Devon, Pennsylvania 19333.

 

2.20                           “Good Reason” shall mean, without the Executive’s express written

consent, 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 benefits

under or relative level of participation in the Company’s employee benefit or

retirement plans, policies, practices, or arrangements in which the Executive

participates as of the Effective Date of this Agreement, including any

perquisite program; provided, however, that any such change that applies

consistently to all executive officers of the Company or is required by

applicable law shall not be deemed to constitute Good Reason;

 

(c)          Failing to require any Successor Company to assume and

agree to perform the Company’s obligations hereunder;

 

(d)         The occurrence of any one or more of the following

events on or after the announcement of the transaction which leads to the CIC

and up to twenty-four (24) calendar months following the effective date of a

CIC:

 

3

 

(1)          Requiring Executive to be based at a location that

requires the Executive to travel at least an additional thirty-five (35) miles

per day;

 

(2)          Requiring Executive to report to a position which is

at a lower level than the highest level to which Executive reported within the

six (6) months prior to the CIC;

 

(3)          Demoting Executive to a level lower than Executive’s

level in the Company as of the Effective Date.

 

2.21                           “Notice of Termination” means a written notice  which shall indicate the

specific termination provision in this Agreement relied upon, and shall set

forth in reasonable detail the facts and circumstances claimed to provide a

basis for termination of the Executive’s employment under the provisions so

indicated, and, where applicable, shall specifically include notice pursuant to

Section 1.2 that Company has elected not to renew this Agreement.

 

2.22                           “Person” shall have the meaning ascribed to such term in

Section 3(a)(9) of the Securities Exchange Act and used in

Sections 13(d) and 14(d) thereof, including a “group” as defined in

Section 13(d) thereof.

 

2.23                           “Position” shall have the meaning ascribed to it in Section 3.1.

 

2.24                           “Qualifying Termination” means any of the events described in Section 8.2

herein, the occurrence of which triggers the payment of CIC Severance Benefits

hereunder.

 

2.25                           “Securities Exchange Act” means the United States Securities Exchange Act of

1934, as amended.

 

2.26                           “Service Multiple” shall have the meaning ascribed to it in Section

7.4(c).

 

2.27                           “Severance Benefits” means the payment of severance compensation as

provided in Sections 7.4 and 7.6 herein, and not payable due to a Change

in Control of the Company.

 

2.28                           “Successor Company” shall have the meaning ascribed to it in Section 9.1.

 

2.29                           “Term” shall mean that period of time commencing on the Effective Date and

ending on the Effective Date of Termination.

 

Article

3. Position and Responsibilities

 

3.1                                 During the term of this Agreement, the

Executive agrees to serve as Senior Vice President, Finance and Treasurer of

the Company or in such other position which Executive shall agree to accept or

to which Executive shall be promoted during the Term and Executive shall report

directly to the President or such other position which is at a higher position

or level in the 

 

4

 

Company than Executive and as shall be determined by

the Chief Executive Officer in his sole discretion, and shall maintain the

level of duties and responsibilities as in effect as of the Effective Date, or

such higher level of duties and responsibilities as Executive may be assigned

during the Term (the “Position”).

 

Article 4. Standard of Care

 

4.1                                 During the term of this Agreement, the

Executive agrees to devote substantially his full time, attention, and energies

to the Company’s business and shall not be engaged in any other business

activity, whether or not such business activity is pursued for gain, profit, or

other pecuniary advantage unless such business activity is approved by the

Compensation Committee (or, in the event the Compensation Committee ceases to

exist, the Board).  However, subject to

Article 11 herein and approval by the Compensation Committee (or the Board, as

the case may be), the Executive may serve as a director of other companies so

long as such service is not injurious to the Company.

 

Article 5. Compensation

 

5.1                                 As remuneration for all services to be

rendered by the Executive during the term of this Agreement, and as

consideration for complying with the covenants herein, the Company shall pay

and provide to the Executive those items set forth in Sections 5.2 through 5.8.

 

5.2                                 Base Salary.  The Company shall pay the Executive a Base

Salary in an amount which shall be established from time to time by the Board

of Directors of the Company or the Board’s designee; provided, however, that

such Base Salary shall not be less than TWO-HUNDRED-THIRTY-THOUSAND DOLLARS

(US$230,000) per year.

 

(a)          This Base Salary shall be paid to the Executive in

equal installments throughout the year, consistent with the normal payroll

practices of the Company.

 

(b)         The Base Salary shall be reviewed at least annually

following the Effective Date of this Agreement, while this Agreement is in

force, to ascertain whether, in the judgment of the Board or the Board’s designee,

such Base Salary should be increased based primarily on the performance of the

Executive during the year. If so increased, the Base Salary as stated above

shall, likewise, be increased for all purposes of this Agreement and shall not,

in any event, be decreased in any year.

 

5.3                                 Annual Bonus.  In addition to his Base Salary, the

Executive shall be entitled to participate in the Company’s annual short-term

incentive program, as such program may exist from time to time, at a level

commensurate with the Position.  The

percentage of Base Salary targeted as annual short-term incentive compensation

shall be established for the Position by the Company’s Compensation Committee

in its sole discretion (the “targeted Annual Bonus

 

5

 

award”). Executive acknowledges that the amount of

annual short-term incentive, if any, to be awarded shall be at the sole

discretion of the Company’s Compensation Committee, may be less or more than

the targeted Annual bonus award, and will be based on a number of factors set

in advance by the Compensation Committee for each calendar year, including the

Company’s performance and the Executive’s individual performance. Nothing in

this Section 5.3 shall be construed as obligating the Company or the Board to

refrain from changing, and/or amending the short-term incentive program, so

long as such changes are equally applicable to all executive employees in the

Company.

 

5.4                                 Long-Term Incentives.  The Executive shall be eligible to

participate in the Company’s long-term incentive plan, as such shall be amended

or superseded from time to time provided, however, that nothing in this Section

5.4 shall be construed as obligating the Company or the Board to refrain from

changing, and/or amending the long-term incentive plan, so long as such changes

are equally applicable to all executive employees in the Company.

 

5.5                                 Retirement Benefits.  The Company shall provide to the Executive

participation in any Company qualified defined benefit and defined contribution

retirement plans as may be established during the term of this Agreement;

provided, however, that nothing in this Section 5.5 shall be construed as

obligating the Company to refrain from changing, and/or amending the

nonqualified retirement programs, so long as such changes are equally

applicable to all executive employees in the Company.

 

5.6                                 Employee Benefits.  During the Term, and as otherwise provided

within the provisions of each of the respective plans, the Company shall

provide to the Executive all benefits to which other executives and employees

of the Company are entitled to receive, as commensurate with the Position,

subject to the eligibility requirements and other provisions of such

arrangements as applicable to executives of the Company generally.

 

(a)          Such benefits shall include, but shall not be limited

to, group term life insurance, comprehensive health and major medical

insurance, dental and life insurance, and short-term and long-term

disability.

 

(b)         The Executive shall likewise participate in any

additional benefit as may be established during the term of this Agreement, by

standard written policy of the Company.

 

5.7                                 Vacation.  The Executive

shall be entitled to such paid vacation as is customary for the Position in

corporate institutions of similar size and character, but in any event not less

than twenty (20) paid vacation days during each calendar year; provided,

however, that without prior written approval, Executive may carry forward into

the next year no more than ten (10) unused vacation days from the current year.

 

5.8                                 Perquisites.  The Company shall provide to the

Executive, at the Company’s expense, all

perquisites 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 the

Company or the Board to refrain from changing, and/or amending the perquisite

program, so long as such changes are equally applicable to all executive

employees in the Company.

 

6

 

5.9                                 Right to Change Plans. The Company shall not be obligated to institute,

maintain, or refrain from changing, amending, or discontinuing any benefit

plan, program, or perquisite, so long as such changes are equally applicable to

all executive employees in the Company.

 

Article 6. Expenses

 

6.1                                 Upon presentation of appropriate

documentation, the Company shall pay, or reimburse the Executive for all

ordinary and necessary expenses, in a reasonable amount, which the Executive

incurs in performing his duties under this Agreement including, but not limited

to, travel, entertainment, professional dues and subscriptions, and all dues,

fees, and expenses associated with membership in various professional,

business, and civic associations and societies.

 

Article

7. Employment Terminations

 

7.1                                 Termination Due to Death.  In the event the Executive’s employment is

terminated while this Agreement is in force by reason of death, the Company’s

obligations under this Agreement shall immediately expire. Notwithstanding the

foregoing, the Company shall be obligated to pay to the Executive the

following:

 

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

 

(b)         An amount equal to the Executive’s unpaid targeted

Annual Bonus award, established for the fiscal year in which such

termination is effective, multiplied by a fraction, the numerator of which is

the number of completed days in the then-existing fiscal year through the

Effective Date of Termination, and the denominator of which is three hundred

sixty-five (365);

 

(c)          All outstanding long-term incentive awards shall be

subject to the treatment provided under the applicable long-term incentive plan

of the Company;

 

(d)         Accrued but unused vacation pay through the Effective

Date of Termination; and

 

(e)          All other rights and benefits the Executive is vested

in, 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 as

practicable following the Effective Date of Termination, but in no event beyond

thirty (30) days from such date. All other payments due to the Executive upon

termination of employment, including those in Sections 7.1(b) and (c), shall be

paid in accordance with the terms of such applicable plans or programs.

 

7

 

(g)         With the exception of the covenants contained in

Articles 9 and 14 and Sections 7.1(f), 13.3, 13.5, and 13.7 herein (which

shall survive such termination), the Company and the Executive thereafter shall

have no further obligations under this Agreement.

 

7.2                                 Termination Due to Disability.  In the event

that the Executive becomes Disabled during the term of this Agreement and is,

therefore, unable to perform his duties herein for more than one hundred

eighty (180) total calendar days during any period of twelve (12) consecutive

months, or in the event of the Board’s reasonable expectation that the

Executive’s Disability will exist for more than a period of one hundred eighty

(180) calendar days, the Company shall have the right to terminate the

Executive’s active employment as provided in this Agreement.

 

(a)          The Board shall deliver written notice to the

Executive 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 of

Directors of the Company upon receipt of and in reliance on competent medical

advice from one (1) or more individuals, selected by the Board, who are

qualified to give such professional medical advice.

 

(c)          A termination for Disability shall become effective

upon the end of the thirty (30) day notice period. Upon the Effective Date of

Termination, the Company’s obligations under this Agreement shall immediately

expire.

 

(d)         Notwithstanding the foregoing, the Company shall be

obligated 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 targeted

Annual Bonus award, established for the fiscal year in which the Effective

Date of Termination occurs, multiplied by a fraction, the numerator of which is

the number of completed days in the then-existing fiscal year through the

Effective Date of Termination, and the denominator of which is three hundred

sixty-five (365);

 

(3)          All outstanding long-term incentive awards shall be

subject to the treatment provided under the applicable long-term incentive plan

of the Company;

 

(4)          Accrued but unused vacation pay through the Effective

Date of Termination; and

 

(5)          All other rights and benefits the Executive is vested

in, 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 as

practicable following the Effective Date of Termination, but in no event beyond

thirty (30) days from such date. All other payments due to the Executive upon

termination of employment, including those in Sections

 

8

 

 

7.2(d)(2) and (d)(3),

shall be paid in accordance with the terms of such applicable plans or program.

 

(f)            With the exception of the covenants contained in

Articles 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 Executive

thereafter shall have no further obligations under this Agreement.

 

7.3                                 Voluntary Termination by the Executive. The Executive may terminate this

Agreement at any time by giving Notice of Termination to the Board of Directors

of the Company, delivered at least fourteen (14) calendar days prior to the

Effective Date of Termination.

 

(a)          The termination automatically shall become effective

upon the expiration of the fourteen (14) day notice period. Notwithstanding the

foregoing, the Company may waive the fourteen (14) day notice period; however,

the Executive shall be entitled to receive all elements of compensation

described in Sections 5.1 through 5.6 for the fourteen (14) day notice

period, subject to the eligibility and participation requirements of any

qualified retirement plan.

 

(b)         Upon the Effective Date of Termination, following the

expiration of the fourteen (14) day notice period, the Company shall pay the

Executive his full Base Salary and accrued but unused vacation pay, at the rate

then in effect, through the Effective Date of Termination, plus all other

benefits to which the Executive has a vested right at that time (for this

purpose, the Executive shall not be paid any Annual Bonus with respect to the

fiscal year in which voluntary termination under this Section occurs).

 

(c)          With the exception of the covenants contained in

Articles 8, 9, 11, and 14 and Sections 13.3, 13.5, and 13.7 herein (which shall

survive such termination), the Company and the Executive thereafter shall have

no further obligations under this Agreement.

 

7.4                                 Involuntary Termination by the Company without Cause. At all times during the Term, the Board

may terminate the Executive’s employment for reasons other than death,

Disability, or for Cause, by providing to the Executive a Notice of

Termination, at least sixty (60) calendar days (ninety (90) calendar days when

termination is due to non-renewal of this Agreement by the Company pursuant to

Section 1.2) prior to the Effective Date of Termination; provided, however,

that such notice shall not preclude the Company from requiring Executive to

leave the Company immediately upon receipt of such notice.

 

(a)          Such Notice of Termination shall be irrevocable absent

express, mutual consent of the parties.

 

(b)         Upon the Effective Date of Termination (not a

Qualifying Termination), following the expiration of the sixty (60) day notice

period (90 days in the case of non-renewal), the Company shall pay and provide

to the Executive:

 

(1)          An amount equal to the Service Multiple times the

Executive’s annual Base Salary established for the fiscal year in which the

Effective Date of Termination occurs;

 

9

 

(2)          An amount equal to the Service Multiple times the

Executive’s targeted Annual Bonus award established for the fiscal year in

which the Effective Date of Termination occurs; provided, however, that no

payment shall be made under this Section 7.4(b)(2) if the Effective Date of

Termination 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, then

provision at the Company’s expense but subject to payment by Executive of those

payments which Executive would have been obligated to make under the Company’s

then current plan, of substantially similar welfare benefits from one or more

third party providers) after the Effective Date of Termination for a number of

months equal to the Service Multiple times twelve (12). These benefits shall be

provided to the Executive at the same coverage level as in effect as of the

Effective Date of Termination, and at the same premium cost to the Executive

which 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 change

for all employees of the Company, or for management employees with respect to

supplemental benefits, the cost and/or coverage level, likewise, shall change

for the Executive in a corresponding manner. The continuation of these welfare

benefits shall be discontinued if prior to the expiration of the period, the

Executive has available substantially similar benefits at a comparable cost to

the Executive from a subsequent employer, as determined by the Compensation

Committee (or, in the event the Compensation Committee ceases to exist, the

Board);

 

(4)          All outstanding long-term incentive awards shall be

subject to the treatment provided under the applicable long-term incentive plan

of the Company;

 

(5)          An amount equal to the Executive’s unpaid Base Salary

and accrued but unused vacation pay through the Effective Date of Termination;

and

 

(6)          All other benefits to which the Executive has a vested

right at the time, according to the provisions of the governing plan or

program.

 

(c)          For purposes of this Section 7.4, the term “Service

Multiple” shall be equal to the quotient resulting from a formula the numerator

of which is the lesser of (a) full number of completed months that have elapsed

since 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’s

employment without Cause on or after the date of the announcement of the

transaction which leads to a CIC, the Executive shall be entitled to the CIC

Severance Benefits as provided in Section 8.3 in lieu of the Severance

Benefits outlined in this Section 7.4.

 

(e)          Payment of all of the benefits described in Section

7.4(b)(1) shall be paid in cash to the Executive in equal bi-weekly

installments over a period of consecutive months equal to

 

10

 

the Service Multiple

times twelve (12) and beginning on the fifteenth day of the month following the

month in which the Effective Date of Termination occurs.

 

(f)            Payment of all but forty thousand dollars ($40,000) of

the benefits described in Section 7.4(b)(2) shall be paid in cash to the

Executive in a single lump sum as soon as practicable following the Effective

Date of Termination, but in no event beyond thirty (30) days from such

date.  The forty thousand dollars

($40,000) which was withheld shall be paid in cash to the Executive in a single

lump sum at the end of the twelve (12) month restrictive period set forth in

Sections 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 employment

shall be paid in accordance with the terms of such applicable plans or

programs.

 

(h)         With the exception of the covenants contained in

Articles 8, 9, 10, 11, 12 and 14 and Sections 7.4, 13.3, 13.5, and 13.7 (which

shall survive such termination), the Company and the Executive thereafter shall

have no further obligations under this Agreement.

 

(i)             Notwithstanding anything herein to the contrary, the

Company’s payment obligations under this Section 7.4 shall be offset by any

amounts that the Company is required to pay to the Executive under a national

statutory severance program applicable to such Executive.

 

7.5                                 Termination for Cause. Nothing in this Agreement shall be construed to

prevent the Board from terminating the Executive’s employment under this

Agreement for Cause.

 

(a)          To be effective, the Notice of Termination must set

forth in reasonable detail the facts and circumstances claimed to provide a

basis for such termination for Cause.

 

(b)         In the event this Agreement is terminated by the Board

for Cause, the Company shall pay the Executive his Base Salary and accrued

vacation pay through the Effective Date of Termination, and the Executive shall

immediately thereafter forfeit all rights and benefits (other than vested

benefits) he would otherwise have been entitled to receive under this

Agreement. The Company and the Executive thereafter shall have no further

obligations under this Agreement with the exception of the covenants contained

in Articles 9, 10, 11, and 14 and Sections 13.3, 13.5, and 13.9 herein (which

shall survive such termination).

 

7.6                                 Termination for Good Reason.  Except where Section 2.20(d) is

applicable, 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 of

termination by Executive may only be given pursuant to Section 7.3.  The Executive shall have sixty (60) days

from the date he learns of action taken by the Company that allows the

Executive to terminate his employment for Good Reason to provide the Board with

a Notice of Termination.

 

(a)          The Notice of Termination must set forth in reasonable

detail the facts and circumstances claimed to provide a basis for such Good

Reason termination.

 

11

 

(b)         The Company shall have thirty (30) days to cure such

Company action following receipt of the Notice of Termination.

 

(c)          The Executive is required to continue his employment

for the sixty (60) day period following the date in which he provided the

Notice of Termination to the Board. The Company may waive the sixty (60) day

notice period; however, the Executive shall be entitled to receive all elements

of compensation described in Sections 5.1 through 5.6 for the sixty (60) day

notice period, subject to the eligibility and participation requirements of any

qualified retirement plan.

 

(d)         Upon a termination of the Executive’s employment for

Good Reason during the Term, and following the expiration of the sixty (60) day

notice period, the Company shall pay and provide to the Executive the

following:

 

(1)          An amount equal to one-and-one-half (1.5) times the

Executive’s annual Base Salary established for the fiscal year in which the

Effective Date of Termination occurs;

 

(2)          An amount equal to one-and-one-half (1.5) times the

Executive’s targeted Annual Bonus award established for the fiscal year in

which 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 coverage

for one-and-one-half (1.5) years after the Effective Date of Termination (or if

continuation under the Company’s then current plans is not allowed, then

provision at the Company’s expense but subject to payment by Executive of those

payments which Executive would have been obligated to make under the Company’s

then current plan, of substantially similar welfare benefits from one or more

third party providers). These benefits shall be provided to the Executive at

the same coverage level, as in effect as of the Effective Date of Termination

and at the same premium cost to the Executive which 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 change for all employees of the Company, or for

management employees with respect to supplemental benefits, the cost and/or

coverage level, likewise, shall change for the Executive in a corresponding

manner. The continuation of these welfare benefits shall be discontinued prior

to the end of the one-and-one-half (1.5) year period in the event the Executive

has available substantially similar benefits at a comparable cost to the

Executive from a subsequent employer, as determined by the Compensation

Committee (or, in the event the Compensation Committee ceases to exist, the

Board);

 

(4)          All outstanding long-term incentive awards shall be

subject to the treatment provided under the applicable long-term incentive plan

of the Company;

 

(5)          An amount equal to the Executive’s unpaid Base Salary

and accrued but unused vacation pay through the Effective Date of Termination;

and

 

(6)          All other benefits to which the Executive has a vested

right at the time, according to the provisions of the governing plan or

program.

 

12

 

(e)          In the event of termination of Executive’s employment

for Good Reason on or after the date of the announcement of the transaction

which leads to the CIC and up to twenty-four (24) months following the date of

the CIC, the Executive shall be entitled to the CIC Severance Benefits as

provided in Section 8.3 in lieu of the Severance Benefits outlined in this

Section 7.6.

 

(f)            The Executive’s right to terminate employment for Good

Reason shall not be affected by the Executive’s incapacity due to physical or

mental illness unless such incapacity is determined to constitute a Disability

as provided herein.

 

(g)         Payment of all but forty thousand dollars ($40,000) of

the benefits described in Section 7.6(d)(1) and payment of all of the

benefits described in Section 7.6(d)(2) shall be paid in cash to the Executive

in a single lump sum as soon as practicable following the Effective Date of

Termination, but in no event beyond thirty (30) days from such date. The forty

thousand dollars ($40,000) which was withheld shall be paid in cash to the

Executive in a single lump sum at the end of the twelve (12) month

restrictive period set forth in Sections 11.2 and 11.3 of this Agreement.

 

(h)         Except as specifically provided in Section 7.6(g), all

other payments due to the Executive upon termination of employment shall be

paid in accordance with the terms of such applicable plans or programs.

 

(i)             Notwithstanding anything herein to the contrary, the

Company’s payment obligations under this Section 7.6 shall be offset by any

amounts that the Company is required to pay to the Executive under a national

statutory severance program applicable to such Executive.

 

(j)             With the exceptions of the covenants contained in

Articles 8, 9, 10, 11, 12 and 14 and Sections 7.6, 13.3, 13.5, and 13.7 (which

shall survive such termination) herein, the Company and the Executive

thereafter 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 receive

from the Company CIC Severance Benefits if a Notice of Termination for a

Qualifying Termination of the Executive has been delivered; provided, that:

 

(a)          The Executive shall not be entitled to receive CIC

Severance Benefits if he is terminated for Cause (as provided in Section 7.5

herein), or if his employment with the Company ends due to death, or

Disability, or due to voluntary termination of employment by the Executive

without Good Reason.

 

(b)         CIC Severance Benefits shall be paid in lieu of all

other benefits provided to the Executive under the terms of this Agreement.

 

13

 

8.2                                 Qualifying Termination.  The occurrence of any one or more of the

following events on or after the date of the announcement of the transaction

which leads to the CIC and up to twenty-four (24) months following the date of

the CIC shall trigger the payment of CIC Severance Benefits to the Executive

under this Agreement:

 

(a)          An involuntary termination of the Executive’s

employment by the Company for reasons other than Cause, death, or Disability,

as evidenced by a Notice of Termination delivered by the Company to

the Executive;

 

(b)         A voluntary termination by the Executive for Good

Reason as evidenced by a Notice of Termination delivered to the Company by the

Executive;

 

(c)          Failure to renew this Agreement (if the Agreement

would expire unless renewed within such period), as evidenced by a Notice of

Termination delivered by the Company to the Executive; or

 

(d)         The Company or any Successor Company materially

breaches any material provision of this Agreement and does not cure such breach

within thirty (30) days of receiving a written notice from the Executive with

such notice explaining in reasonable detail the facts and circumstances claimed

to provide a basis for the Executive’s claim.

 

8.3                                 Severance Benefits Paid upon a Qualifying Termination.  In the event the Executive becomes

entitled to receive CIC Severance Benefits, the Company shall pay to the

Executive and provide him the following:

 

(a)                                  An amount equal to two (2)  times

the Executive’s annual Base Salary established for the fiscal year in which the

Effective Date of Termination occurs;

 

(b)                                 An amount equal to two (2)  times

the Executive’s targeted Annual Bonus award established for the fiscal year in

which the Executive’s Effective Date of Termination occurs;

 

(c)                                  An amount equal to the Executive’s unpaid

Base Salary and accrued but unused vacation pay through the Effective Date of

Termination;

 

(d)                                 All outstanding long-term incentive

awards shall be subject to the treatment provided under the applicable

long-term incentive plan of the Company;

 

(e)                                  A continuation of the welfare benefits of

health care, life and accidental death and dismemberment, and disability

insurance coverage for two (2)  full years after the Effective Date of

Termination (or if continuation under the Company’s then current plans is not

allowed, then provision at the Company’s expense but subject to payment by

Executive of those payments which Executive would have been obligated to make

under the Company’s then current plan, of substantially similar welfare

benefits from one or more third party providers).

 

14

 

(1)                                  These benefits shall be provided to the

Executive at the same coverage level, as in effect as of the Effective Date of

Termination or, if greater, as in effect sixty (60) days prior to the date of

the Change in Control, and at the same premium cost to the Executive which was

paid by the Executive at the time such benefits were provided.

 

(2)                                  In the event the premium cost and/or

level of coverage shall change for all employees of the Company, or for

management employees with respect to supplemental benefits, the cost and/or

coverage level, likewise, shall change for the Executive in a corresponding

manner.

 

(3)                                  The continuation of these welfare

benefits shall be discontinued prior to the end of the  two year period in the event

the Executive has available substantially similar benefits at a comparable cost

to the Executive from a subsequent employer, as determined by the Compensation

Committee (or, in the event the Compensation Committee ceases to exist, the

Board).

 

8.4                                 Form and Timing of Severance Benefit. Payment of all of the benefits

described in Sections 8.3(a) through (c) shall be paid in cash to the Executive

in a single lump sum as soon as practicable following the Effective Date of

Termination, but in no event beyond thirty (30) days from such date. All other

payments due to the Executive upon termination of employment shall be paid in accordance

with the terms of such applicable plans or programs.

 

8.5                                 Excise Tax. In the event that a Change in Control occurs, and a

determination is made by the Company pursuant to Section 280G and 4999 of the

Code that a golden parachute excise tax is due, the benefits provided to the

Executive under this Agreement that are classified as “parachute payments” (as

such term is defined in Section 280G of the Code), shall be limited to the

amount just necessary to avoid the excise tax.

 

(a)          This limitation shall be applied if, and only if, such

a limitation results in a greater net (of excise tax) cash benefit to the

Executive than he would receive had the benefits not been capped and an excise

tax been levied.

 

8.6                                 With the exceptions of the covenants

contained 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 Executive

thereafter shall have no further obligations under this Agreement.

 

Article 9. Assignment

 

9.1                                 Assignment by Company.  This Agreement may and shall be assigned

or transferred to, and shall be binding upon and shall inure to the benefit of

any Successor Company, with Successor Company for purposes of this Agreement

being 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 in

the event of a CIC.

 

15

 

(a)          Any such Successor Company shall be deemed substituted

for all purposes of the “Company” under the terms of this Agreement.

 

(b)         Failure of the Company to obtain the agreement of any

Successor Company to be bound by the terms of this Agreement prior to the

effectiveness of any such succession shall be a breach of this Agreement, and

shall immediately entitle the Executive to benefits from the Company in the

same amount and on the same terms as the Executive would be entitled to receive

in the event of a termination of employment for Good Reason as provided in

Section 7.7 (failure not related to a Change in Control) or Section 8.3 (if the

failure of assignment follows or is in connection with a Change in Control).

 

(c)          Except as herein provided, this Agreement may not

otherwise be assigned by the Company.

 

9.2                                 Assignment by Executive.  This Agreement shall inure to the benefit

of and be enforceable by the Executive’s personal or legal representatives,

executors, administrators, successors, heirs, distributees, devisees, and

legatees.

 

(a)          If the Executive dies while any amount would still be

payable to him pursuant to this Agreement had he continued to live, all such

amounts, unless otherwise provided herein, shall be paid in accordance

with the terms of this Agreement, to the Executive’s Beneficiary.

 

(b)         If the Executive has not named a Beneficiary, then

such amounts shall be paid to the Executive’s devisee, legatee, or other

designee, 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 the

extent permitted by law, the Company shall pay all legal fees, costs of

litigation, prejudgment interest, and other expenses incurred by Executive in

contesting a termination, if Executive prevails.

 

10.2                           Notice.  Any notices, requests, demands,

or other communications provided by this Agreement shall be sufficient if in

writing and if sent by registered or certified mail to the Executive at

the last address he has filed in writing with the Company or, in the case

of the Company, at its principal offices to the attention of the General

Counsel.

 

16

 

Article

11. Confidentiality and Noncompetition

 

11.1                           Disclosure of Information.  The Executive recognizes that he has

access to and knowledge of confidential and proprietary information of the

Company that is essential to the performance of his duties under this

Agreement.

 

(a)          The Executive will not, during and for five (5) years

after the term of his employment by the Company, in whole or in part, disclose

such information to any person, firm, corporation, association, or other entity

for any reason or purpose whatsoever, nor shall he make use of any such

information for his own purposes, so long as such information has not otherwise

been disclosed to the public or is not otherwise in the public domain except as

required by law or pursuant to administrative or legal process.

 

11.2                           Covenants Regarding Other Employees. During the term of this Agreement, and

for a period of twelve (12) months following the Executive’s termination of

employment for any reason, the Executive agrees not to actively solicit any

employee of the Company to terminate his or her employment with the Company or

to interfere in a similar manner with the business of the Company.

 

11.3                           Noncompete Following a Termination of Employment.  From

the Effective Date of this Agreement until six (6) months following the Executive’s Effective Date of

Termination for any reason, the Executive will not: (a) directly or indirectly

own any equity or proprietary interest in (except for ownership of shares in a

publicly traded company not exceeding three percent (3%) of any class of

outstanding securities), or be an employee, agent, director, advisor, or consultant

to or for any competitor of the Company, whether on his own behalf or on behalf

of any person; or (b) undertake any action to induce or cause any customer

or client to discontinue any part of its business with the Company.

 

11.4                           Waiver of Covenants Upon a Change in

Control. Upon the occurrence of a Change in Control, the Executive

shall be released from each of the covenants set forth in Section 11.2 and

11.3, if such Executive is terminated by the Company without Cause or if the

Executive terminates his employment with the Company for Good Reason.

 

Article

12. Outplacement Assistance

 

12.1                           Following a

termination of employment, other than for Cause, the Executive shall be

reimbursed by the Company for the costs of all outplacement services obtained by

the Executive within the two (2) year period after the Effective Date of

Termination; provided, however, that the total reimbursement shall be limited

to an amount equal to twenty percent (20%) of the Executive’s Base Salary as of

the effective date of termination.

 

17

 

Article 13. Miscellaneous

 

13.1                           Entire Agreement.  With the exception of the Company’s

Proprietary Information and Inventions Agreement previously executed by

Executive, this Agreement supersedes any prior agreements (specifically, the

prior employment agreement executed by the Executive as of  January 29, 1996, and any and all amendments

thereto), or understandings, oral or written, between the parties hereto or

between the Executive and the Company, with respect to the subject matter

hereof, and constitutes the entire agreement of the parties with respect

thereto.

 

13.2                           Modification.  This Agreement shall not be varied,

altered, modified, canceled, changed, or in any way amended except by mutual

agreement of the parties in a written instrument executed by the parties hereto

or their legal representatives.

 

13.3                           Severability.  In the event that any provision or portion

of this Agreement shall be determined to be invalid or unenforceable for any reason,

the remaining provisions of this Agreement shall be unaffected thereby and

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 all

of which together will constitute one and the same Agreement.

 

13.5                           Tax Withholding.  The Company may withhold from any benefits

payable under this Agreement all federal, state, city, or other taxes as may be

required pursuant to any law or governmental regulation or ruling.

 

13.6                           Beneficiaries.  To the extend allowed by law, any payments

or benefits hereunder due to the Executive at the time of his death shall

nonetheless be paid or provided and the Executive may designate one or more

persons or entities as the primary and/or contingent beneficiaries of any

amounts to be received under this Agreement. Such designation must be in the

form of a signed writing acceptable to the Board or the Board’s designee. The

Executive may make or change such designation at any time.

 

13.7                           Payment Obligation Absolute. Absent actions deliberately or willfully taken by

the Executive to materially injure the Company, the Company’s obligation to

make the payments and the arrangement provided for herein shall be absolute and

unconditional, and shall not be affected by any circumstances, including,

without limitation, any offset, counterclaim, recoupment, defense, or other

right which the Company may have against the Executive or anyone else.

 

(a)          All amounts payable by the Company hereunder shall be

paid without notice or demand. Subject to the provisions set forth in

Sections 7.4 and 7.6, and Article 11, each and every payment made

hereunder by the Company shall be final, and the Company shall not seek to

recover all or any part of such payment from the Executive or from whomsoever

may be entitled thereto, for any reasons whatsoever.

 

18

 

(b)         With the exception of the Company’s willful material

breach of its payment obligations under Articles 7 and 8 of this Agreement

(provided, however, that no such breach shall be deemed to have occurred until

the Executive has provided the Board with written notice of such breach and a

reasonable opportunity for cure), the restrictive covenants contained in

Article 11 are independent of any other contractual obligations in this

Agreement or otherwise owed by the Company to the Executive. Except as provided

in this paragraph, the existence of any claim or cause of action by Executive

against the Company, whether based on this Agreement or otherwise, shall not

create a defense to the enforcement by the Company of any restrictive covenant

contained herein.

 

(c)          The Executive shall not be obligated to seek other

employment in mitigation of the amounts payable or arrangements made under any

provision of this Agreement, and the obtaining of any such other employment

shall in no event effect any reduction of the Company’s obligations to make the

payments and arrangements required to be made under this Agreement.

 

Article 14. Governing Law

 

14.1         To the extent not preempted by federal

law, the provisions of this Agreement shall be construed and enforced in

accordance with the laws of the state of New Jersey.

 

IN WITNESS WHEREOF, the Company, through its duly authorized

representative, and the Executive have executed this Agreement as of the

Effective Date.

 

	

   

  	

  Executive:

  
	

   

  	

   

  
	

   

  	

  /s/ John A. Bond

  	

   

  	

   

  
	

   

  	

  John A. Bond

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Company:

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Bio-Technology

  General Corp.

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Sim Fass

  	

   

  
	

   

  	

   

  	

   

  	

  Sim Fass

  
	

   

  	

   

  	

   

  	

  Chairman & CEO

  
							

 

19

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