Document:

Exhibit
10.19

 

ROSEMONT
PHARMACEUTICALS LIMITED

 

 

Employment
Agreement

for

Andre
Groenewegen

 

 

 

 

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. Notice

  
	
  Article 11. Confidentiality and
  Noncompetition

  
	
  Article 12. Outplacement Assistance

  
	
  Article 13. Directorship

  
	
  Article 14. Disciplinary and Grievance
  Procedures and Sickness Procedures

  
	
  Article 15. Miscellaneous

  
	
  Article 16. 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, unless and until terminated in accordance with the provisions of this
Agreement.

 

1.2                                 The
Manager warrants that, in entering into this Agreement and performing his
obligations under it, he will not be in breach of any terms of obligations
under any further or other agreement with any third party.

 

Article 2. Definitions

 

2.1                                 “Affiliate” means,
in respect of any company, a company which is its subsidiary, subsidiary
undertaking or holding company, or a company which is a subsidiary or
subsidiary undertaking of that holding company.

 

2.2                                 “Agreement”
means this Employment Agreement.

 

2.3                                 “Annual
Bonus” means the annual bonus to be paid to the Executive in
accordance with BTG’s annual bonus program as described in Section 5.3 herein.

 

2.4                                 “Base
Salary” means the gross 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.

 

2.5                                 “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.

 

2.6                                 “Beneficiary”
means the persons or entities designated or deemed designated by the Executive
pursuant to Section 13.6 herein.

 

2.7                                 “Board” or
“Board of
Directors” means the Board of Directors of BTG.

 

2.8                                 “BTG” means
Bio-Technology General Corp., a Delaware corporation, or any Successor Company
thereto as provided in Section 9.1 herein.

 

2.9                                 “Cause” means:

 

1

 

(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;

 

(b)         Executive has been
convicted of an indictable criminal offense (other than an offense which, in
the opinion of the Chief Executive of BTG does not affect his position as an
employee of the Company);

 

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

 

(d)         Despite adequate
warnings, Executive failed to perform reasonably assigned duties within the
normal and customary scope of the Position;

 

(e)          Executive is guilty of
any gross misconduct or gross neglect in the discharge of his duties under this
Agreement;

 

(f)            Executive, by his
actions or omissions, brings the name of the Company or any Group Company into
serious disrepute or prejudices the interests of the business of the Company or
any other Group Company; or

 

(g)         Executive is or becomes
prohibited by law from being a director.

 

2.10                           “Change in
Control” or “CIC” of BTG or 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 BTG or 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 BTG or 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 BTG or 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 or BTG’s stockholders approve any plan or proposal for the
liquidation or dissolution of BTG or the Company;

 

2

 

(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 BTG or 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 BTG’s stockholders of each new director was approved by a vote of
at least two-thirds of the directors then still in office who were directors at
the beginning of the period.

 

2.11                           “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.

 

2.12                           “Common
Stock” means the common stock of BTG, $.01 par value or equity share
capital of the Company.

 

2.13                           “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.

 

2.14                           “Company”
means Rosemont Pharmaceuticals Limited, registered in England and Wales as
company number 924648 and having its registered office at Rosemont House,
Yorkdale Industrial Park, Braithwaite Street, Leeds LS11 9WE.

 

2.15                           “Director”
means any individual who is a member of the Board of Directors of BTG.

 

2.16                           “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.

 

2.17                           “Effective
Date” means December  19,
2002.

 

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

 

2.19                           “Employment
Date” means August 1, 2001.

 

2.20                           “Executive” means
Andre Groenewegen  who, as of the
Effective Date, resides at Riddersdal 11, 3090 Overijse, Belgium.

 

2.21                           “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

 

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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:

 

(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.

 

2.22                           “Group” means
the Company and any Affiliate of the Company and “Group Company” shall be
construed accordingly.

 

2.23                           “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.

 

2.24                           “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.

 

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

 

2.26                           “Prospective
Client” means any person who, at the date of termination of the
Executive’s employment or at any time during the 12 month period immediately
prior to the date of termination, was a prospective client or prospective
customer of the Company or any Group Company and with whom during the 12 month
period prior to the termination of the Executive’s employment the Executive
shall have had business dealings.

 

2.27                           “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.

 

2.28                           “Remedial
Notice” means a written notice  which shall indicate that the Executive
relies on section 7.6 of this Agreement and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination
of the Executive’s employment for Good Reason.

 

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2.29                           “Restricted
Business” means the business of the Company or any Group Company
relating to oral liquid pharmaceuticals.

 

2.30                           “Restricted
Client” means any person who, on the date of termination of the
Executive’s employment or at any time during the 12 month period immediately
prior to the date of termination, was a client or customer of the Company or
any Group Company and with whom during the 12 month period prior to the termination
of the Executive’s employment the Executive shall have had business dealings.

 

2.31                           “Securities
Exchange Act” means the United States Securities Exchange Act of
1934, as amended.

 

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

 

2.33                           “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.

 

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

 

2.35                           “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 Managing Director
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 Executive Vice President of BTG or such other position
which is at a higher position or level in BTG than the Executive and as shall
be determined by the Chief Executive Officer of BTG 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”).   It is currently anticipated that the
Executive will also be appointed as Executive Officer in the role of Senior
Vice President of Bio-Technology General Corporation, an Affiliate of the
Company in which capacity he shall report directly to the Executive Vice
President of BTG.

 

3.2                                 It
is agreed to treat the Executive’s period of continuous employment with the
Company as commencing on 1 August 2001.

 

3.3                                 The
Executive agrees:

 

(A)                              that
the Board may, in its absolute discretion, require the Executive not to render
all or any of his duties under this Agreement and/or exclude him from any
premises of the Company or of any Group Company (without providing a reason
therefor) and;

 

5

 

(B)                                that
such action taken on the part of the Company shall not constitute a breach of
this Agreement of any kind whatsoever in respect of which the Executive has any
claim against the Company

 

provided always
that throughout the period of any such action, the Executive’s salary and
contractual benefits shall not cease to be payable by reason thereof (unless
and until this Agreement shall be terminated).

 

Article 4. Standard of Care and Mobility

 

4.1                                 During
the term of this Agreement, the Executive agrees to devote substantially his
full working 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 or to any Group Company. 
Approval may be withdrawn at any time on reasonable notice.

 

4.2                                 The
Executive shall work normal business hours which are 8.30 to 17.30 Monday to
Friday inclusive and such additional hours as may be necessary in the
performance of his duties and powers under this Agreement.  The Executive agrees to be contactable
during weekends and vacations for urgent matters.  No overtime will be paid with respect to any hours worked by the
Executive outside normal business hours.

 

4.3                                 The
Executive’s principal place of work at the Effective Date is Rosemont House,
Yorkdale Industrial Park, Braithwaite Street, Leeds LS11 9WE.  The Executive will spend all his working
time at the principal place of work except when traveling on business, or when
on vacation.  The Executive’s principal
place of work may be in such place or places as the Company or Group Company
shall reasonably require.

 

4.4                                 The
Executive may be required to travel both inside and outside the United Kingdom
on the business of the Company or any Group Company in the proper performance
of his duties from time to time.

 

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

 

6

 

designee; provided,
however, that such Base Salary shall not be less than ONE HUNDRED AND FORTY
THOUSAND GBP (GBP 140,000) 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 on
the performance (and any other relevant factors) of the Executive during the
year but there shall be no obligation on the Company to increase such salary.  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
BTG’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 BTG’s
Compensation Committee in its sole discretion (the “targeted Annual Bonus
award”). The Executive acknowledges that the amount of annual short-term
incentive, if any, to be awarded shall be at the sole discretion of BTG’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 and
Group Company’s performance and the Executive’s individual performance. Nothing
in this Section 5.3 shall be construed as obligating the Company, BTG 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 BTG.

 

5.4                                 Long-Term Incentives.  The
Executive shall be eligible to participate in BTG’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,
BTG 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 BTG.

 

5.5                                 Retirement
Benefits.  The Company shall provide to the Executive
participation in any BTG 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, BTG or the Board to refrain from changing, and/or
amending the nonqualified retirement programs, so long as such changes are
equally applicable to all executive employees in BTG.

 

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 BTG 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 BTG generally.

 

7

 

(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 insurance.

 

(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 BTG.

 

5.7                                 Vacation.  The Company’s holiday year commences on 1
January and expires on 31 December (the “Holiday Year”).  The Executive shall be entitled to 25 days
paid vacation in addition to English statutory and bank holidays, during each
Holiday Year as shall be approved by the Executive Vice President of BTG in
advance; 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 Holiday Year.

 

For the purposes of
calculation of holiday entitlement, holiday entitlement shall be taken to
accrue at the rate of 2.08 days per completed month in a Holiday Year and
payments in lieu of or deductions with respect to holidays shall be calculated
as 1/365th of the Executive’s salary for each day’s holiday.

 

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, BTG 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 BTG.

 

5.9                                 Relocation
Costs. The Company will pay reasonable relocation costs (up to
£8,000), associated with any such relocation to Leeds from Brussels provided
always that Inland Revenue rules relating to eligibility are met.  This will include the cost of the Company
paying the reasonable cost of apartment accommodation for the Executive, until
the earlier of 30 May 2003 or the relocation of the Executive and his family
from Brussels to Leeds, provided this costs the Company no more than £900 per
month.  The Company would expect all
costs to be incurred within a reasonable period of time but, in any event, the
Company will not reimburse any such costs incurred after 5 April 2004 (for
taxation reasons).

 

5.10                           Right to
Change Plans. The Company 
and BTG 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
BTG.

 

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 wholly, exclusively and necessarily in performing
his duties under this Agreement including, but not limited to, travel,
entertainment, professional dues and

 

8

 

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.

 

(g)         With the exception of the
covenants contained in Articles 9 and 16 and Sections 7.1(g), 15.3, 15.5
and 15.7 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.

 

9

 

(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.  The Executive shall submit himself to a
medical examination by a doctor appointed by the Company at the request of the
Board, at the expense of the Company, at any time during the continuance of
this Agreement, whether or not the Executive is absent by reason of sickness,
injury or other incapacity.  Subject to
compliance by the Company with the Access to Medical Reports Act 1988 (if
applicable) the Executive hereby authorizes the Company pursuant to the Access
to Medical Reports Act 1988 to have unconditional access to any report or
reports (including copies thereof) prepared as a result of any such examination
as the Board may from time to time require.

 

(c)          A termination for
Disability shall become effective upon the end of the 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 BTG;

 

(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 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 16 and Sections 7.2(e), 15.3,
15.5 and 15.7 herein (which shall survive such termination), the Company and
the Executive thereafter shall have no further obligations under this
Agreement.

 

10

 

(g)         Notwithstanding anything
herein to the contrary, the Company’s payment obligations under this Section
7.2 shall be offset by any amounts that the Company is required to pay to the
Executive under a national statutory severance program or legal claim relating
to the termination applicable to such Executive such payment being in full and
final settlement of any claim the Executive may have.

 

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 ninety (90) calendar days prior to the
Effective Date of Termination.

 

(a)          The termination
automatically shall become effective upon the expiration of the notice period.
Notwithstanding the foregoing, the Company may waive the notice period;
however, the Executive shall be entitled to receive all elements of
compensation described in Sections 5.1 through 5.6 for the ninety (90) 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 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 16 and Sections 15.3, 15,5
and 15.7, 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 Chief Executive Officer of the Company 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
(or, if greater, the statutory minimum period) 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) (or greater) day notice period, 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;

 

(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

 

11

 

Section 7.4(b)(2)
if the Effective Date of Termination is less than eighteen (18) 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 or
BTG’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 or BTG’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 that 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 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 BTG;

 

(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 the purposes of this
Section 7.4, the term “Service Multiple” shall be equal to:-

 

(1)   if the Effective Date of Termination is 31
December 2004 or before, 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 six (6) months) and (b) eighteen
(18) and the denominator of which is twelve; or

 

(2)   if the Effective Date of Termination is later
than 31 December 2004, 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 six (6) months) and (b) twelve
(12) and the denominator of which is twelve.

 

(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 that 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.

 

12

 

(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
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, 11.3 and 11.4 of this
Agreement, conditional on the continued compliance with the restrictive
covenants.

 

(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 16 and Sections 7.4, 15.3,
15.5  and 15.7 (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 or legal claim
relating to the termination applicable to such Executive such payment being in
full and final settlement of any claim the Executive may have.

 

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.

 

In the event this Agreement is terminated by the Chief
Executive Officer of BTG 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 16 and Sections 15.3, 15,5 and 15.7 herein
(which shall survive such termination).

 

7.6                           Termination
for Good Reason.  Except where Section 2.21(d) is
applicable, this Section 7.6 shall only become effective when at least twelve
(12) months have elapsed since the Employment Date.  The Executive shall have sixty (60) days from the date he learns
of action taken by the Company that may allow the Executive to terminate his
employment for Good Reason to provide the Board with a Remedial Notice.

 

(a)          The Remedial Notice must
set forth in reasonable detail the facts and circumstances claimed to provide a
basis for such Good Reason termination.

 

13

 

(b)         The Company shall have
thirty (30) days to cure such Company action (the “Remedial Period”) following
receipt of the Remedial Notice.

 

(c)          If the Company cures
such Company action within the Remedial Period, the Executive’s employment will
not terminate for Good Reason, the Executive’s employment will continue and the
Executive shall not be entitled to the payments outlined at 7.6(g)(1) below.

 

(d)         If the Company fails to
cure such Company action within the Remedial Period, the Executive shall have
fourteen (14) days from the end of the Remedial Period to provide the Board
with a Notice of Termination.  The
Notice of Termination must set forth in reasonable detail the facts and
circumstances claimed to provide a basis for such Good Reason termination and
shall be delivered at least thirty (30) days prior to the Effective Date of
Termination.

 

(e)          For the avoidance of
doubt, any termination by the Executive where there may be Good Reason but
where this procedure is not followed, will result in the provisions of section
7.3 applying and the Executive not being entitled to the payments outlined
within this Section 7.6.

 

(f)            The Executive is
required to continue his employment for the notice period following the date on
which he provided the Notice of Termination to the Board. The Company may waive
the notice period; however, the Executive shall be entitled to receive all
elements of compensation described in Sections 5.1 through 5.6 for the notice
period, subject to the eligibility and participation requirements of any
qualified retirement plan.

 

(g)         Upon a termination of the
Executive’s employment for Good Reason, and following the expiration of the
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 that 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

 

14

 

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 BTG;

 

(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.

 

(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(g) but shall still be
required to follow the procedure set forth in Section 7.6(a) to (e) as a
condition of such entitlement.

 

(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(g)(1)
and payment of all of the benefits described in Section 7.6(g)(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, conditional on the continued compliance with the restrictive
covenants.

 

(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 or legal claim
relating to the termination applicable to such Executive such payment being in
full and final settlement of any claim the Executive may have.

 

(j)             With the exceptions
of the covenants contained in Articles 8, 9, 10, 11, 12 and 16 and Sections
7.6, 15.3, 15.5 and 15.7 (which shall survive such termination) herein, the

 

15

 

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

 

7.7                           Return of
Company Property on Termination.  Upon termination of the Executive’s employment with the Company or
when the Executive is under notice of termination and the Company exercises its
rights under section 3.3 above, he shall immediately deliver up to the Company
or its authorized representative any property of the Company or any other Group
Company which may be in his possession, custody or under his control,
including, without limitation, the Company car, the company car keys, minutes,
memoranda, correspondence, notes, records, reports, sketches, plans or other
documents and any copies thereof, whether or not the property was originally
supplied to him by the Company or any other Group Company.

 

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.

 

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;

 

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;

 

16

 

(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).

 

(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                                 With
the exceptions of the covenants contained in Articles 8, 9, 10, 11, 12 and 16
and Sections 15.3, 15,5  and 15.7 (which
shall survive such termination) herein, the Company and the Executive
thereafter shall have no further obligations under this Agreement.

 

17

 

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 and as a result becomes the employer of the Executive.

 

(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 Successor
Company to honor the terms of this Agreement shall immediately entitle the
Executive to benefits 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 7.6 (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. Notice

 

10.1                           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.

 

Article 11. Confidentiality and Non-competition

 

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

 

18

 

performance of his duties
under this Agreement. The Executive acknowledges that the following restraint,
on which he has had the opportunity to take independent legal advice, are
necessary for the reasonably protection by the Company of its business or the
business of the Group, the clients thereof or their respective affairs:-

 

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.

 

Nothing in this Agreement
shall preclude the Executive from making a protected disclosure in accordance
with the provisions set out in the Employment Rights Act 1996.

 

11.2                           Covenants
Regarding Other Employees. 
The Executive shall not during the twelve (12) month period after the
date of termination of his employment, except in the event of a wrongful
termination by the Company, either on his own account or in conjunction with or
on behalf of any other person, solicit or entice away or endeavor to solicit or
to entice away or assist any other person whether by means of the supply of
names or expressing views on suitability or otherwise howsoever to solicit or
entice away from the Company or any Group Company any individual who is a
senior employee or director of the Company or any Group Company and with whom
during the 24 month period prior to the termination of the Executive’s
employment, the Executive has had business dealings whether or not any such
person would commit a breach of contract by reason of his leaving service.

 

11.3                           Covenants
Regarding Restricted Clients and Prospective Clients

 

(A)                               The
Executive shall not during the six (6) month period after the date of
termination of his employment, except in the event of a wrongful termination by
the Company, either on his own account or in conjunction with or on behalf of
any other person, solicit, interfere with the Company’s or any Group Company’s
relationship with or entice away or attempt to solicit, interfere with the Company’s
or any Group Company’s relationship with or entice away any person who is a
Restricted Client or Prospective Client provided always that nothing contained
in this article shall be deemed to prohibit the seeking or doing of business
not in direct or indirect competition with the Restricted Business.

 

(B)                                 The
Executive shall not during the six (6) month period after the date of
termination of his employment, except in the event of a wrongful termination by
the Company, either on his own account or in conjunction with or on behalf of
any other person, have business dealings directly or indirectly with any person
who is a Restricted Client or Prospective Client provided always that nothing
contained in this article shall be deemed to prohibit the seeking or doing of
business not in direct or indirect competition with the Restricted Business.

 

11.4                           Covenants
Regarding Competition with the Company.  The Executive shall not during the three (3) month period after
the date of the termination of his employment, except in the event of a
wrongful termination by the Company, be engaged, concerned or interested,
either directly or indirectly in any capacity in any trade or business or
occupation whatsoever which 

 

19

 

would, or might
reasonably be considered to, compete with the Restricted Business, this
restriction to be limited to geographical regions with which the Executive had
any responsibility for or involvement with on behalf of the Restricted
Business.

 

11.5                           The
Executive hereby covenants with the Company in terms identical to those
contained in articles 11.2, 11.3 and 11.4, save that the reference to the
termination of the Executive’s employment shall refer to the termination of the
Executive’s employment for any reason whatsoever whether lawful or wrongful.

 

11.6                           The
periods specified in this article shall each be reduced by the duration of any
period immediately prior to the date of termination during which the Company,
in exercising its rights under the provisions of article 3.3 suspends the
Executive from performance of his duties.

 

11.7                           Each of
the restrictions in this article 11 shall be construed as a separate and
independent restriction and if one or more of the restrictions is found to be
void or unenforceable, the validity of the remaining restrictions shall not be
affected.

 

11.8                           The
restrictions contained in article 11.2, 11.3 and 11.4, on which the Executive
has had the opportunity to take independent legal advice are considered
reasonable by the parties, and necessary for the protection of the legitimate
interests of the Company but if any such restriction shall be found to be void
or voidable but would be valid and enforceable if some part of some parts
thereof were deleted, such restriction shall apply with such modification as
may be necessary to make it valid and enforceable.

 

11.9                           Without
prejudice to article 11.8, if any restriction is found by any court or other
competent authority to be void or unenforceable the parties shall negotiate in
good faith to replace such void or unenforceable restriction with a valid
restriction which, as far as possible, has the same legal and commercial effect
as that which it replaces

 

Article 12. Outplacement Assistance

 

12.1                           Following a termination of employment by the
Company, 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 or until the
Executive secures a new job, whichever is the sooner; 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.

 

Article
13. Directorships

 

13.1                           The Executive
shall accept appointment as a director of the Company and of any such Group
Company or other company as the Board may require in connection with his
appointment under this Agreement and he shall resign without claim for
compensation from office as a director of any such company at any time on
request by the Company, which resignation shall not affect the continuance in
any way of this Agreement.  The
Executive shall immediately account to the Company for any director’s fees or
other emoluments,

 

20

 

remuneration or payments either receivable or received
by him by virtue of his holding office as such director as aforesaid (or waive
any right to the same if so required by the Company).

 

13.2                           Upon
the termination of the Executive’s employment with the Company however arising
and for whatsoever reason the Executive shall, upon the request of the Board,
resign without claim for compensation (but without prejudice to any claim he
may have for damages for breach of this Agreement) from:

 

(A)                               office
as a director of the Company or of any Group Company or of any other company in
which he holds a directorship at the Company’s request; and

 

(B)           from all offices held by him in any
or all of such companies; and

 

(C)                                 all
trusteeships held by him of any pension scheme or other trusts established by
the Company, any Group Company or any other company with whom the Executive has
had dealings as a consequence of his employment by the Company.

 

13.3                           Should
the Executive fail to resign from office as a director or from any other office
or trusteeship in accordance with articles 13.1 or 13.2, either during his
employment, when so requested by the Company, or on termination thereof, the
Company is hereby irrevocably authorised to appoint a person in his name and on
his behalf to execute any documents and to do all things required to give
effect to the resignation.

 

13.4                           Save
with the prior agreement in writing of the Board, the Executive shall not,
during the continuance of this Agreement, resign from any office as a director
of the Company, any Group Company or of any other company in which he holds a
directorship at the Company’s request or do anything that would cause him to be
disqualified from continuing to act as a director.

 

Article 14. Disciplinary and Grievance Procedure and Sickness
Procedures

 

14.1                           If the Executive is dissatisfied
with any disciplinary decision, or if he wishes to seek redress for any
grievance relating to his employment, he should discuss the matter with the
Executive Vice President of BTG.  If the
Executive Vice President is unable to resolve this matter, the matter will be
referred to the Board whose determination shall be final.

 

14.2                           There are no formal
disciplinary procedures applicable to the Executive’s employment, and,
accordingly, any necessary disciplinary action which the Company may feel
obliged to instigate will be dealt with primarily by the Chief Executive
Officer and (if necessary) subsequently by the Board.

 

14.3                           The
Executive’s employment by the Company is subject to the Company’s rules
relating to sickness absence and sick pay.

 

21

 

Article 15. Miscellaneous

 

15.2                          Entire
Agreement.  With the exception of the Company’s
Proprietary Information and Inventions Agreement previously executed by
Executive, this Agreement supersedes any prior agreements 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.

 

15.2                          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.

 

15.3                          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.

 

15.4                          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.

 

15.5                          Tax
Withholding.  The Company will withhold from any
payments and/or benefits payable under this Agreement all taxes and national
insurance contributions which the Company is by law obliged to deduct.

 

15.6                          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.

 

15.7                          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 obligation in this Agreement or otherwise owed by the Company
to the Executive.  Except as provided in
this paragraph, the existence of any claim of 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.

 

15.8                          Collective
Agreements. There are no collective agreements currently in force
which affect, directly or indirectly the terms and conditions of the
Executive’s employment.

 

15.9                          This
offer and the Executive’s employment with the Company is conditional on the
Executive having the legal right to work in the United Kingdom.

 

22

 

Article 16. Governing Law

 

16.1         This
Agreement shall be governed by, and construed in accordance with English Law.

 

16.2                          In
relation to any legal action or proceedings arising out of or in connection
with this Agreement (“Proceedings”), each of the parties irrevocably submits to
the exclusive jurisdiction of the English Courts and waives any objection to
Proceedings in such courts on the grounds of venue or on the grounds that
Proceedings have been brought in an inappropriate forum.

 

IN WITNESS WHEREOF, the Company, through
its duly authorized representative, and the Executive have executed this
Agreement as of the Effective Date.

 

	
   

  	
   

  	
   

  	
  Executive:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Andre Groenewegen

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Company:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Rosemont
  Pharmaceuticals Limited

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Robert M. Shaw

  	
   

  
							

 

23EXHIBIT
10.20

 

	
  

  	
  BIO-TECHNOLOGY
  GENERAL CORP.

  

 

 

Employment
Agreement

for

Whitney
K. Stearns, Jr.

Senior
Vice President,

Chief
Financial Officer 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 least 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 December 2, 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 December 2, 2001.

 

2.19                           “Executive” means
Whitney K. Stearns, Jr. who, as of the Effective Date, resides at 5 Oak Crest,
Darien, Connecticut 06820.

 

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:

 

(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;

 

3

 

(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 Financial Officer 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
Chief Executive Officer of the Company or such other position which is at a
higher position or level in the 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”).

 

4

 

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-FIFTY-THOUSAND DOLLARS (US$250,000) 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 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, 

 

5

 

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.

 

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.

 

6

 

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.

 

(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

 

7

 

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 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.

 

8

 

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 Chief Executive Officer of the Company 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;

 

(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 eighteen (18) 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 

 

9

 

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
that 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 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 six (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 that 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
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.

 

10

 

(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 Chief Executive Officer 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 Chief Executive Officer of the Company 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.

 

(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.

 

11

 

(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 that 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.

 

(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.

 

12

 

(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.

 

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;

 

13

 

(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).

 

(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.

 

14

 

(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.

 

(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).

 

15

 

(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.

 

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 

 

16

 

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.

 

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 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.

 

17

 

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.

 

(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.

 

18

 

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/ Whitney K. Stearns,
  Jr.

  	
   

  
	
   

  	
  Whitney K. Stearns, Jr.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Company:

  
	
   

  	
   

  
	
   

  	
  Bio-Technology General Corp.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert M. Shaw

  	
   

  
	
   

  	
   

  	
  Robert M. Shaw

  
	
   

  	
   

  	
  Senior Vice President,

  
	
   

  	
   

  	
  General Counsel &
  Secretary

  
					

 

19

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