Document:

Exhibit 10.39

 

EXECUTION COPY

 

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT (the “Agreement”) dated March 10, 2008 by and between Lantheus Medical Imaging, Inc., a Delaware corporation (the “Company”) and Michael Duffy (“Executive”).

 

The Company desires to employ Executive and to enter into an agreement embodying the terms of such employment;

 

Executive desires to accept such employment and enter into such an agreement;

 

In consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

 

1.             At-Will Employment.  Executive’s employment with the Company commenced as of January 16, 2008 (the “Effective Date”).  Such employment shall be “at-will” employment.  Subject to the terms of this Agreement, the Company may terminate Executive’s employment and this Agreement for any reason at any time, with or without prior notice and with or without Cause (as defined herein), but subject to certain terms set forth in Section 8 below.  Similarly, subject to the terms of this Agreement, Executive may terminate his employment at any time, subject to Section 8 below.

 

2.             Position.

 

a.             Commencing as of the Effective Date, Executive shall serve as the Company’s Vice President and General Counsel and shall report to the Chief Executive Officer of the Company (the “CEO”).  Executive shall have such duties and responsibilities as are consistent with such title and position and/or such other duties and responsibilities as may be assigned from time to time by the CEO or the Board of Directors of Lantheus MI Holdings, Inc. (the “Board”).  If requested, Executive shall serve as an officer or a member of the Board of Directors of any of the Company’s subsidiaries or affiliates without additional compensation.

 

b.             Executive will devote Executive’s full business time and best efforts to the performance of Executive’s duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services either directly or indirectly, without the prior written consent of the Board; provided that nothing herein shall preclude Executive, subject to the prior approval of the Board, from accepting appointment to or continuing to serve on any board of directors or trustees of any business corporation or any charitable organization; provided in each case, and in the aggregate, that such activities do not conflict or interfere with the performance of Executive’s duties hereunder or conflict with Section 9.

 

 

3.             Base Salary.  During Executive’s employment hereunder, the Company shall pay Executive a base salary at the annual rate of $265,000, payable in regular installments in accordance with the Company’s payment practices from time to time.  Executive shall be entitled to annual performance and salary review, and any increase in base salary shall be in the sole discretion of the Compensation Committee of the Board.  Executive’s annual base salary, as in effect from time to time, is hereinafter referred to as the “Base Salary”.

 

4.             Annual Bonus.  With respect to each fiscal year ending during Executive’s employment hereunder, Executive shall be eligible to earn an annual bonus award of up to thirty percent (30%) of Executive’s Base Salary (the “Target”) based upon achievement of annual EBITDA and/or other performance targets established by the Compensation Committee of the Board within the first three months of each fiscal year (the “Annual Bonus”).  The Annual Bonus, if any, shall be paid to Executive at the same time as an annual bonus is paid to other similarly situated executives; provided, that Executive is an active employee in good standing with the Company on such date of payment.

 

5.             Equity.  Executive shall be eligible to receive equity awards from time to time pursuant to the Lantheus MI Holdings, Inc. 2008 Equity Incentive Plan, commensurate with Executive’s level of responsibilities and the level of awards for similarly situated executives, as determined by the Compensation Committee of the Board in its sole discretion.  The terms and conditions of any such equity awards shall be set forth in a separate award agreement.

 

6.             Employee Benefits.  During Executive’s employment hereunder, Executive shall be entitled to participate in the Company’s health, life and disability insurance, and retirement and fringe employee benefit plans as in effect from time to time (collectively “Employee Benefits”), on the same basis as those benefits are generally made available to other similarly situated executives of the Company.

 

7.             Business Expenses.  During Executive’s employment hereunder, reasonable business expenses incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the Company in accordance with Company policies.

 

8.             Termination.  Executive’s employment hereunder may be terminated by either party at any time and for any reason; provided that Executive will be required to give the Company at least 60 days advance written notice of any resignation of Executive’s employment.  Notwithstanding any other provision of this Agreement, the provisions of this Section 8 shall exclusively govern Executive’s rights upon termination of employment with the Company and its affiliates.

 

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a.             By the Company For Cause or By Executive Resignation.

 

(i)            Executive’s employment hereunder may be terminated by the Company for Cause (as defined below) and shall terminate automatically upon Executive’s resignation; provided that Executive will be required to give the Company at least 60 days advance written notice of a resignation.

 

(ii)           For purposes of this Agreement, “Cause” shall mean (A) Executive’s breach of any fiduciary duty or material legal or contractual obligation to the Company or any of its affiliates (including, without limitation, pursuant to a Company or affiliate policy or the restrictive covenants set forth in Section 9 or Section 10 of this Agreement or any other applicable restrictive covenants between the Executive and the Company or any of its affiliates), or the Company’s direct or indirect equity holders, (B) Executive’s failure to follow the reasonable instructions of the CEO or the Board, which are consistent with Section 2(a) hereof (other than as a result of total or partial incapacity due to physical or mental illness), which breach, if curable, is not cured within 30 days after notice to Executive specifying in reasonable detail the nature of such breach, or, if cured, recurs within 180 business days, (C) Executive’s gross negligence, willful misconduct, fraud, insubordination, acts of dishonesty or conflict of interest relating to the Company or any of its affiliates or direct or indirect equityholders or (D) Executive’s commission of any misdemeanor which has a material impact on the affairs, business or reputation of the Company or any of its affiliates or Executive’s indictment for, or plea of nolo  contendere to, a crime constituting a felony under the laws of the United States or any state thereof.

 

(iii)          If Executive’s employment is terminated by the Company for Cause, or if Executive resigns, Executive shall be entitled to receive (A) the Base Salary through the date of termination and (B) reimbursement, within 30 days following submission by Executive to the Company of appropriate supporting documentation, for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy prior to the date of Executive’s termination; provided claims for such reimbursement (accompanied by appropriate supporting documentation) are submitted to the Company within 30 days following the date of Executive’s termination of employment.  In the event of Executive’s resignation (but, for the avoidance of doubt, not upon a termination of employment by the Company for Cause), Executive shall also be entitled to such vested or accrued Employee Benefits, if any, as to which Executive may be entitled under the employee benefit plans of the Company (the amounts described in clauses (A) and (B) hereof, together with all accrued Employee Benefits, if any, being referred to as the “Accrued Rights”).

 

Following such termination of Executive’s employment by the Company for Cause or resignation by Executive, except as set forth in this Section 8(a)(iii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

 

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b.             Disability or Death.

 

(i)            Executive’s employment hereunder shall terminate upon Executive’s death and may be terminated by the Company due to Executive’s physical or mental illness, injury or infirmity which is reasonably likely to prevent and/or prevents Executive from performing his essential job functions for a period of (A) ninety (90) consecutive calendar days or (B) an aggregate of one hundred twenty (120) calendar days out of any consecutive twelve (12) month period (such illness, injury or infirmity is hereinafter referred to as “Disability”).  Any question as to the existence of the Disability of Executive as to which Executive and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to Executive and the Company.  If Executive and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing.  The determination of Disability made in writing to the Company and Executive shall be final and conclusive for all purposes of the Agreement.

 

(ii)           Upon termination of Executive’s employment hereunder for either Disability or death, Executive or Executive’s estate (as the case may be) shall be entitled to receive the Accrued Rights.

 

Following Executive’s termination of employment due to death or Disability, except as set forth in this Section 8(b)(ii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

 

c.             By the Company Without Cause.

 

(i)            If Executive’s employment is terminated by the Company without Cause (other than by reason of death or Disability), Executive shall be entitled to receive:

 

(A)          the Accrued Rights;

 

(B)          subject to Executive’s continued compliance with the provisions of Sections 9, 10 and 11 and contingent upon Executive executing an effective release of claims against the Company and its affiliates (i.e., not revoked), in the form provided as Exhibit A hereto (the “Release”), a pro rata portion of the Target Annual Bonus amount that Executive would have been eligible to receive pursuant to Section 4 hereof in such year of termination, based upon the percentage of the fiscal year that shall have elapsed through the date of Executive’s termination of employment, payable at such time as the Annual Bonus would have otherwise been payable to Executive pursuant to Section 4 had Executive’s employment not terminated;

 

(C)          subject to Executive’s continued compliance with the provisions of Sections 9, 10 and 11 and contingent upon Executive’s

 

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execution of an effective Release (i.e., not revoked), continued payment of the Base Salary in accordance with the Company’s normal payroll practices for (x) six (6) months after the date of termination if such termination occurs on or prior to the second anniversary of the Effective Date and (y) twelve (12) months after the date of termination if such termination occurs after the second anniversary of the Effective Date (such six- or twelve-month period, as applicable, being the “Severance Period”); provided that the aggregate amount described in this clause (C) shall be reduced by the present value of any other cash severance or termination benefits payable to Executive under any other plans, programs or arrangements of the Company or its affiliates or applicable law; provided, further, each payment of Base Salary is intended to constitute a separate payment within the meaning of Section 409A of the United States Internal Revenue Code of 1986, as amended, and the regulations thereunder (collectively, the “Code”); and

 

(D)          subject to Executive’s continued compliance with the provisions of Sections 9, 10 and 11 and contingent upon Executive’s execution of an effective Release (i.e., not revoked), continued life insurance and group medical coverage during the Severance Period for Executive and Executive’s eligible dependents upon the same terms as provided to similarly situated executive officers of the Company and at the same coverage levels as in effect for active employees during the Severance Period; provided that such continued life insurance and/or group medical coverage shall cease upon Executive becoming eligible for life insurance and/or medical coverage, as applicable, from a prior employer or Executive becoming employed by another employer and eligible for life insurance and/or medical coverage, as applicable, with such other employer.

 

(ii)           Following Executive’s termination of employment by the Company without Cause (other than by reason of Executive’s death or Disability), except as set forth in Section 8(c)(i), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

 

d.             Notice of Termination.  Any purported termination of employment by the Company or by Executive (other than due to Executive’s death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 13(j) hereof.  For purposes of this Agreement, a “Notice of Termination” shall mean a 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 employment under the provision so indicated.

 

e.             Board/Committee Resignation.  Upon termination of Executive’s employment for any reason, Executive agrees to resign, as of the date of such termination and to the extent applicable, from the Board (and any committees thereof) and the Board of Directors (and any committees thereof) of any of the Company’s subsidiaries or affiliates.

 

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9.             Non-Competition.

 

a.             Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company and its affiliates and accordingly agrees as follows:

 

(1)           During Executive’s employment with the Company and, for a period of one year following the date Executive ceases to be employed by the Company (the “Restricted Period”), Executive will not, whether on Executive’s own behalf or on behalf of or in conjunction with any person, firm, partnership, joint venture, association, corporation or other business organization, entity or enterprise whatsoever (“Person”), directly or indirectly solicit or assist in soliciting in competition with the Company, the business of any client or prospective client:

 

(i)            with whom Executive had personal contact or dealings on behalf of the Company during the one-year period preceding Executive’s termination of employment;

 

(ii)           with whom employees reporting to Executive had personal contact or dealings on behalf of the Company during the one year immediately preceding the Executive’s termination of employment; or

 

(iii)          for whom Executive had direct or indirect responsibility during the one year immediately preceding Executive’s termination of employment.

 

(2)           During the Restricted Period, Executive will not directly or indirectly:

 

(i)            engage in any business that competes with the business or businesses of the Company or any of its affiliates, namely in the testing, development and manufacturing services for the development, manufacture, distribution, marketing or sale of radiopharmaceutical products, contrast imaging agents and/or radioactive generators for the global medical imaging and pharmaceutical industries, and including, without limitation, businesses which the Company or its affiliates have specific plans to conduct in the future and as to which Executive is aware of such planning (a “Competitive Business”);

 

(ii)           enter the employ of, or render any services to, any Person (or any division or controlled or controlling affiliate of any Person) who or which engages in a Competitive Business;

 

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(iii)          acquire a financial interest in, or otherwise become actively involved with, any Competitive Business, directly or indirectly, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant; or

 

(iv)          interfere with, or attempt to interfere with, business relationships (whether formed before, on or after the date of this Agreement) between the Company or any of its affiliates and customers, clients, suppliers, partners, members or investors of the Company or its affiliates.

 

(3)           Notwithstanding anything to the contrary in this Agreement, Executive may, directly or indirectly, own, solely as an investment, securities of any Person engaged in the business of the Company or its affiliates which are publicly traded on a national or regional stock exchange or on the over-the-counter market if Executive (i) is not a controlling person of, or a member of a group which controls, such Person and (ii) does not, directly or indirectly, own 5% or more of any class of securities of such Person.

 

(4)           During the Restricted Period, Executive will not, whether on Executive’s own behalf or on behalf of or in conjunction with any Person, directly or indirectly:

 

(i)            solicit or encourage any employee or consultant of the Company or its affiliates to leave the employment of, or cease providing services to, the Company or its affiliates; or

 

(ii)           hire any such employee or consultant who was employed by or providing services to the Company or its affiliates as of the date of Executive’s termination of employment with the Company or who left the employment of or ceased providing services to the Company or its affiliates coincident with, or within one year prior to or after, the termination of Executive’s employment with the Company.

 

b.             It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section 9 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable.  Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be

 

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amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

 

c.             The provisions of this Section 9 shall survive the termination of this Agreement and Executive’s employment for any reason.

 

10.          Non-Disparagement.  The Executive shall not at any time (whether during or after Executive’s employment with the Company) make, or cause to be made, any statement or communicate any information (whether oral or written) that disparages or reflects negatively on the Company or any of its affiliates, except for truthful statements that may be made pursuant to legal process, including without limitation in litigation, arbitration or similar dispute resolution proceedings.  This Section 10 shall survive the termination of this Agreement and Executive’s employment for any reason.

 

11.          Confidentiality; Intellectual Property.

 

a.             Confidentiality.

 

(i)            Executive will not at any time (whether during or after Executive’s employment with the Company) (x) retain or use for the benefit, purposes or account of Executive or any other Person; or (y) disclose, divulge, reveal, communicate, share, transfer or provide access to any Person outside the Company (other than its professional advisers who are bound by confidentiality obligations), any non-public, proprietary or confidential information — including, without limitation, trade secrets, know-how, research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals — concerning the past, current or future business, activities and operations of the Company, its subsidiaries or affiliates and/or any third party that has disclosed or provided any of same to the Company on a confidential basis (“Confidential Information”) without the prior written authorization of the Board.

 

(ii)           Confidential Information shall not include any information that is (A) generally known to the industry or the public other than as a result of Executive’s breach of this covenant or any breach of other confidentiality obligations by third parties; (B) made legitimately available to Executive by a third party without breach of any confidentiality obligation; or (C) required by law to be disclosed; provided that Executive shall give prompt written notice to the Company of such requirement, disclose no more information than is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment.

 

(iii)          Except as required by law, Executive will not disclose to anyone, other than Executive’s immediate family and legal or financial advisors, the

 

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existence or contents of this Agreement; provided that Executive may disclose to any prospective future employer the provisions of Sections 9, 10 and 11 of this Agreement provided they agree to maintain the confidentiality of such terms.

 

(iv)          Upon termination of Executive’s employment with the Company for any reason, Executive shall (x) cease and not thereafter commence use of any Confidential Information or intellectual property (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name, logo, domain name or other source indicator) owned or used by the Company, its subsidiaries or affiliates; (y) immediately return to the Company all Company property and destroy, delete, or return to the Company, at the Company’s option, all originals and copies in any form or medium (including memoranda, books, papers, plans, computer files, letters and other data) in Executive’s possession or control (including any of the foregoing stored or located in Executive’s office, home, laptop or other computer, whether or not Company property) that contain Confidential Information or otherwise relate to the business of the Company, its affiliates and subsidiaries, except that Executive may retain only those portions of any personal notes, notebooks and diaries that do not contain any Confidential Information; and (z) notify and fully cooperate with the Company regarding the delivery or destruction of any other Confidential Information of which Executive is or becomes aware and promptly return any other Company property in Executive’s possession.

 

b.             Intellectual Property.

 

(i)            If Executive has created, invented, designed, developed, contributed to or improved any works of authorship, inventions, intellectual property, materials, documents or other work product (including without limitation, research, reports, software, databases, systems, applications, presentations, textual works, content, or audiovisual materials) (“Works”), either alone or with third parties, prior to Executive’s employment by the Company, that are relevant to or implicated by such employment (“Prior Works”), Executive hereby grants the Company a perpetual, non-exclusive, royalty-free, worldwide, assignable, sublicensable license under all rights and intellectual property rights (including rights under patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) therein for all purposes in connection with the Company’s current and future business.  A list of all such material Works as of the date hereof is attached hereto as Exhibit B.

 

(ii)           If Executive creates, invents, designs, develops, contributes to or improves any Works, either alone or with third parties, at any time during Executive’s employment by the Company and within the scope of such employment and/or with the use of any Company resources (“Company Works”), Executive shall promptly and fully disclose such works to the Company and hereby irrevocably assigns, transfers and conveys, to the maximum extent permitted by applicable law, all rights and intellectual property rights therein (including rights under patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) to the Company to the extent ownership of any such rights does not vest originally in the Company.

 

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(iii)          Executive agrees to keep and maintain adequate and current written records (in the form of notes, sketches, drawings, and any other form or media requested by the Company) of all Company Works.  The records will be available to and remain the sole property and intellectual property of the Company at all times.

 

(iv)          Executive shall take all requested actions and execute all requested documents (including any licenses or assignments required by a government contract) at the Company’s expense (but without further remuneration) to assist the Company in validating, maintaining, protecting, enforcing, perfecting, recording, patenting or registering any of the Company’s rights in the Prior Works and Company Works.  If the Company is unable for any other reason to secure Executive’s signature on any document for this purpose, then Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive’s agent and attorney-in-fact, to act for and on Executive’s behalf to execute any documents and to do all other lawfully permitted acts in connection with the foregoing.

 

(v)           Executive shall not improperly use for the benefit of, bring to any premises of, divulge, disclose, communicate, reveal, transfer or provide access to, or share with the Company any confidential, proprietary or non-public information or intellectual property relating to a former employer or other third party without the prior written permission of such third party.  Executive hereby indemnifies, holds harmless and agrees to defend the Company and its officers, directors, partners, employees, agents and representatives from any breach of the foregoing covenant.  Executive shall comply with all relevant policies and guidelines of the Company, including regarding the protection of confidential information and intellectual property and potential conflicts of interest.  Executive acknowledges that the Company may amend any such policies and guidelines from time to time, and that Executive remains at all times bound by their most current version.

 

c.             The provisions of this Section 11 shall survive the termination of this Agreement and Executive’s employment for any reason.

 

12.          Specific Performance.  Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Section 9, Section 10 or Section 11 would be inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach.  In recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to cease making any payments or providing any benefit otherwise required by this Agreement and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

 

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13.          Miscellaneous.

 

a.             Governing Law.  This Agreement shall be governed by, construed and interpreted in all respects, in accordance with the laws of the State of New York, without regard to conflicts of laws principles thereof.

 

b.             Entire Agreement/Amendments.  This Agreement contains the entire understanding of the parties with respect to the employment of Executive by the Company and supersedes all prior agreements, understandings, discussions, negotiations and undertakings, whether written or oral between the Executive and the Company or any of its affiliates with respect to the Executive’s employment, including, without limitation, the Offer of Employment by and between the Company and the Executive, dated as of January 11, 2008.  There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein.  This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto.

 

c.             No Waiver.  The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

 

d.             Severability.  In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

 

e.             Assignment.  This Agreement, and all of Executive’s rights and duties hereunder, shall not be assignable or delegable by Executive.  Any purported assignment or delegation by Executive in violation of the foregoing shall be null and void ab  initio and of no force and effect.  This Agreement may be assigned by the Company to a person or entity which is an affiliate or a successor in interest to substantially all of the business operations of the Company.  Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such affiliate or successor person or entity.

 

f.             Set Off.  The Company’s obligation to pay Executive the amounts provided and to make the arrangements provided hereunder shall be subject to set-off, counterclaim or recoupment of amounts owed by Executive to the Company or its affiliates.

 

g.             Dispute Resolution.  Except with respect to Sections 9, 10, 11 and 12 hereof, any controversy or claim arising out of or related to any provision of this Agreement that cannot be mutually resolved by the parties hereto shall be settled by final, binding and nonappealable arbitration in New York, NY by a single arbitrator.

 

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Subject to the following provisions, the arbitration shall be conducted in accordance with the applicable rules of American Arbitration Association then in effect.  Any award entered by the arbitrator shall be final, binding and nonappealable and judgment may be entered thereon by either party in accordance with applicable law in any court of competent jurisdiction.  This arbitration provision shall be specifically enforceable.  The arbitrator shall have no authority to modify any provision of this Agreement or to award a remedy for a dispute involving this Agreement other than a benefit specifically provided under or by virtue of the Agreement.  Each party shall be responsible for its own expenses relating to the conduct of the arbitration or litigation (including attorney’s fees and expenses) and shall share the fees of the American Arbitration Association and the arbitrator equally.

 

h.             Compliance with Section 409A of the Code.  The parties acknowledge and agree that the interpretation of Section 409A of the Code and its application to the terms of this Agreement is uncertain and may be subject to change as additional guidance and interpretations become available.  Anything to the contrary herein notwithstanding, all benefits or payments provided by the Company to the Executive that would be deemed to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code are intended to comply with Section 409A of the Code.  If, however, any such benefit or payment is deemed to not comply with Section 409A of the Code, the Company and the Executive agree to renegotiate in good faith any such benefit or payment (including, without limitation, as to the timing of any severance payments payable hereof), if possible, so that either (i) Section 409A of the Code will not apply or (ii) compliance with Section 409A of the Code will be achieved.  The Company shall consult with Executive in good faith regarding the implementation of the provisions of this Section 13(h); provided that neither the Company nor any of its employees or representatives shall have any liability to Executive with respect to thereto.

 

i.              Successors; Binding Agreement.  This Agreement shall inure to the benefit of and be binding upon personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

 

j.              Notice.  For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below in this Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

 

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If to the   Company:
    	
 
    	
Lantheus Medical   Imaging, Inc.
   331 Treble Cove Rd.
   Bldg. 600-2  N.
   Billerica, MA 01862
   Attention: Don Kiepert
    
	
 
    	
 
    	
 
    
	
With a copy to:
    	
 
    	
Lantheus MI   Holdings, Inc.
   c/o Avista Capital Partners, LP
   65 East 55th Street, 18th Floor
   New York, New York 10022
   Attention: Ben Silbert, Esq.
    
	
 
    	
 
    	
 
    
	
If to Executive:
    	
 
    	
To Executive’s   address on file with the
   Company
    

 

k.             Executive Representation.  Executive hereby represents to the Company that (i) Executive has been provided with sufficient opportunity to review this Agreement and has been advised by the Company to conduct such review with an attorney of his choice and (ii) the execution and delivery of this Agreement by Executive and the Company and the performance by Executive of Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which Executive is a party or otherwise bound.

 

l.              Cooperation.  Executive shall provide Executive’s reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding) which relates to events occurring during Executive’s employment hereunder.  This provision shall survive any termination of this Agreement or Executive’s employment.

 

m.           Withholding Taxes.  The Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

n.             Counterparts.  This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

[Signatures on following page]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

 

	
Lantheus Medical   Imaging, Inc.
    	
MICHAEL DUFFY
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Donald   Kiepert
    	
 
    	
/s/ Michael P.   Duffy
    
	
By:
    	
Donald Kiepert
    	
 
    
	
Title:
    	
President and   Chief Executive Officer
    	
 
    
				

 

[Signature Page to Duffy Employment Agreement]

 

 

EXHIBIT A

 

RELEASE

 

This RELEASE (“Release”) dated as of                       , 20     between Lantheus Medical Imaging, Inc., a Delaware corporation (the “Company”), and Michael Duffy (the “Executive”).

 

WHEREAS, the Company and the Executive previously entered into an employment agreement dated March     , 2008 (the “Employment Agreement”); and

 

WHEREAS, the Executive’s employment with the Company has terminated effective                  , 20    ;

 

NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein and in the Employment Agreement, the Company and the Executive agree as follows:

 

1.             Executive agrees to and does waive any claims he may have for employment by the Company and agrees not to seek such employment or reemployment by the Company in the future.  The Executive, on his own behalf and on behalf of his heirs, estate and beneficiaries, further does hereby release the Company, and in such capacities, any of its subsidiaries or affiliates, and each of their respective past, present and future officers, directors, agents, employees, shareholders, investors, employee benefit plans and their administrators or fiduciaries, insurers of any such entities, and its and their successors and assigns and others related to such entities from any and all claims made, to be made, or which might have been made of whatever nature, whether known or unknown, from the beginning of time, including those that arose as a consequence of his employment with the Company, or arising out of the separation from the Company, the severance of such employment relationship, or any act committed or omitted during or after the existence of such employment relationship, all up through and including the date on which this Release is executed, including, but not limited to, those which were, could have been or could be the subject of an administrative or judicial proceeding filed by the Executive or on his behalf under federal, state or local law, whether by statute, regulation, in contract or tort, and including, but not limited to, every claim for front pay, back pay, wages, bonus, fringe benefit, any form of discrimination, wrongful termination, tort, emotional distress, pain and suffering, breach of contract, fraud, defamation, compensatory or punitive damages, interest, attorney’s fees, reinstatement or reemployment, and any rights or claims under the Civil Rights Act of 1866, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the Civil Rights Act of 1964, Title VII, as amended, the Civil Rights Act of 1991, the Employee Retirement Income Security Act of 1974, as amended, the Equal Pay Act, the Worker Adjustment and Retraining Notification Act, the New York State Human Rights Law, the New York City Human Rights Law, the Massachusetts Civil Rights Act, the Massachusetts Equal Pay and Maternity Benefits Law, the Massachusetts Equal Rights for Elderly and Disabled Law, the Massachusetts Small Necessities Leave Act, the Massachusetts Age Discrimination Law, or any other federal, state or local law relating to employment, discrimination in employment, termination of employment, wages, benefits or otherwise.  The Executive acknowledges and agrees that even though claims and facts in addition to those now known or believed by him to exist may subsequently be discovered, it is his intention to fully settle and release all claims he may have against the Company and the persons and entities described above, whether known, unknown or suspected.  Employee does not waive his right to file a charge with the Equal Employment Opportunity Commission (“EEOC”) or participate in an investigation conducted by the EEOC; however, Employee expressly waives his right to

 

15

 

monetary or other relief should any administrative agency, including but not limited to the EEOC, pursue any claim on Employee’s behalf.

 

2.             The Company and the Executive acknowledge and agree that the release contained in Paragraph 1 does not, and shall not be construed to, release or limit the scope of any existing obligation of the Company and/or any of its subsidiaries or affiliates (i) to indemnify the Executive for his acts as an officer or director of the Company and/or its subsidiaries or affiliates in accordance with their respective charters or bylaws or under an indemnification agreement to which the Executive and the Company or any of its subsidiaries are parties or under any applicable Directors and Officers insurance policies or under any applicable law or (ii) to the Executive and his eligible, participating dependents or beneficiaries under any existing group welfare (excluding severance), equity, or retirement plan of the Company in which the Executive and/or such dependents are participants.

 

3.                 The Executive acknowledges that before entering into this Release, he has had the opportunity to consult with any attorney or other advisor of the Executive’s choice, and the Executive is hereby advised to do so if he chooses.  The Executive further acknowledges that by signing this Release, he does so of his own free will and act, that it is his intention to be legally bound by its terms, and that no promises or representations have been made to the Executive by any person to induce the Executive to enter into this Release other than the express terms set forth herein.  The Executive further acknowledges that he has carefully read this Release, knows and understands its contents and its binding legal effect, including the waiver and release of claims set forth in Paragraph 1 above.

 

4.                 The Executive acknowledges that he has been provided at least 21 days to review the Release.  In the event the Executive elects to sign this Release prior to this 21 day period, he agrees that it is a knowing and voluntary waiver of his right to wait the full 21 days.  The Executive further understand that he has 7 days after the signing hereof to revoke this Release by so notifying the Company ([ADDRESS], Attn: [NAME]) in writing, such notice to be received by the Company within the 7 day period.  This Release shall not become effective or enforceable, and no payments or benefits under Sections 8(c)(i)(B),(C) and (D) of the Employment Agreement, as applicable, shall be made or provided, until this seven (7) day revocation period expires without the Executive having revoked this Release.

 

IN WITNESS WHEREOF, the parties have executed this Release on the date first above written.

 

	
 
    	
Lantheus Medical   Imaging, Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

16

 

	
 
    	
MICHAEL DUFFY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

17

 

EXHIBIT B

 

PRIOR WORKS

 

[None]

 

18Exhibit 10.40

 

 

December 7, 2011

 

PERSONAL AND CONFIDENTIAL

 

Mr. Robert Gaffey

32 Amherst Road

Belmont, MA 02478

 

Re:  Continued Services and General Release

 

Dear Bob,

 

This letter is intended to summarize the terms of your service with Lantheus Medical Imaging, Inc. (the “Company”) as a consultant following your retirement as an employee of the Company on the Transition Date (as defined below).  Please read this agreement and general release (this “Agreement”) carefully.  If you agree to its terms, please sign in the space provided below and return it to me on or before January 21, 2012 as provided in Section 5.c. below.

 

1.              Retirement; Continued Consulting Services.  Unless otherwise modified or terminated prior to the Transition Date, you will be retiring as an employee of the Company effective as of the close of business on January 3, 2012 (the “Transition Date”). Your employment with the Company shall continue until your retirement on the Transition Date, at which time your employment with the Company shall cease and end in all respects.  Following the Transition Date and through March 30, 2012, you shall be a consultant to the Company and shall provide consulting services to the Company equal to an average of 24 hours per week at an hourly rate described below, generally present at the Company’s offices. Beginning April 1, 2012 and through April 8, 2018, you shall remain as a consultant to the Company providing consulting services at an hourly rate described below as may be determined, if at all, from time to time by the Company in its sole discretion and mutually agreed to by you; provided, however, that such services shall not exceed an aggregate of 120 hours per calendar year (and in the case of 2012 only, the calendar year shall be measured from April 1, 2012 through December 31, 2012). For the purposes of this Agreement, the term “Term” shall mean the period of time from the Transition Date through April 8, 2018 or such earlier date as is specified below.  After April 1, 2012 you will not be required to be present at the Company’s offices unless requested by the Company for the performance of such consulting services; it being understood that the Term shall automatically end on any Breach Date or the date on which the Company terminates your services hereunder for “Cause” (as defined under the Employee Shareholders Agreement (as defined below)).

 

2.              Compensation; Benefits.  In consideration of you agreeing to provide consulting services to the Company hereunder, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, during the Term you shall receive or be entitled to the following:

 

a.              Hourly rate.  You shall be entitled to compensation at the rate (the “Hourly Rate”) of (i) $200 per hour for the period from the Transition Date through March 31, 2012, to be paid bi-weekly in accordance with the Company’s customary pay practices, and (ii) $150.00 per hour for all periods thereafter, to be paid within 30 days after such services are rendered subject to the confirmation thereof by the Company.

 

b.              Options.  Notwithstanding the cessation of your employment with the Company on the Transition Date or anything to the contrary contained in the Lantheus MI Holdings, Inc. 2008 Equity Incentive Plan (the “Plan”) and that certain Lantheus MI Holdings, Inc. 2008 Equity

 

1

 

Incentive Plan Option Grant Award Agreement dated as of April 8, 2008 (the “Option Agreement”), during the Term you shall be eligible to continue to vest in your outstanding options to purchase Company common stock (“Options”) pursuant to, and in accordance with, the terms of the Plan and the Option Agreement, as amended hereby.

 

c.               Dividend Equivalent Rights.  For the avoidance of doubt, you shall be eligible to continue to vest in your outstanding dividend equivalent rights (“Dividend Equivalent Rights”) granted to you pursuant to the terms of the Plan and that certain Lantheus MI Holdings, Inc. 2008 Equity Incentive Plan Dividend Equivalent Right Award Agreement (Time Options) dated as of March 21, 2011 and that certain Lantheus MI Holdings, Inc. 2008 Equity Incentive Plan Dividend Equivalent Right Award Agreement (EBITDA Options) dated as of March 21, 2011 (collectively, the “DER Agreements”), subject to, and in accordance with, the terms and conditions of the Plan, the DER Agreements and the Option Agreement (as amended and modified by Section 3 b. of this Agreement).

 

d.              Expenses Reimbursement.  During the Term, the Company shall reimburse you for reasonable and necessary expenses actually incurred by you directly in connection with the performance of any consulting services hereunder upon presentation of proper receipts or other proof of expenditure and in accordance with the guidelines and limitations established by the Company from time to time; provided, however, that you shall present all such proper receipts or other proof of expenditure promptly following the date the expense was incurred, but in no event later than one (1) week after the date the expense was incurred, and reimbursement shall be made promptly thereafter.

 

e.               No Other Compensation.  You hereby acknowledge and agree that, except as set forth in this Agreement or as otherwise required by applicable law, you shall not be entitled to any other compensation or benefits from the Company as a result of the cessation of your employment with the Company on the Transition Date, your provision of services during the Term, or the termination of the Term or your services at any time, other than any 401(k), pension or post-retirement benefits with respect to which you are vested as of the Transition Date; it being understood that you will not be entitled nor have any right to receive any severance as a result of the cessation of your employment with the Company or at the end of the Term under any benefit plan or severance policy generally available to the Company’s employees or otherwise.

 

f.                Unemployment Benefits.  The Company agrees that it will not contest any application you may make for unemployment benefits.  The Company makes no promise or representation regarding your eligibility for unemployment compensation.

 

3.              Clawback.              Notwithstanding anything to the contrary contained in this Agreement, the Option Agreement or the DER Agreements, should you breach the terms and conditions of the restrictive covenants as set forth in Exhibit A attached hereto (each, a “Restrictive Covenant Breach”), then:

 

a.                                      Any Options that (i) vested on or after the Transition Date and that are outstanding and unexercised as of the date of any such breach (the “Breach Date”), or (ii) are outstanding and unvested as of the Breach Date, in each case, shall immediately be forfeited by you without consideration;

 

b.                                      You may exercise any Options that vested prior to the Transition Date and that are outstanding and unexercised as of the Breach Date, subject to, and in accordance with, the terms and conditions provided in the Option Agreement and subject to the terms of the Employee

 

2

 

Shareholders Agreement (as defined below) (including the repurchase rights in favor of Lantheus MI Holdings, Inc. (“Holdings”) thereunder); and

 

c.                                       Any outstanding and unvested Dividend Equivalent Rights, together with any vested Dividend Equivalent Rights that have not yet been paid to you as of the Breach Date, in each case, shall immediately be forfeited by you without consideration.

 

You hereby acknowledge and agree that a Restrictive Covenant Breach shall be considered a “Termination Event” for the purposes of Section 4.03 of the Employee Shareholders Agreement and a Breach Date shall be the “Termination Date” under the Employee Shareholders Agreement.

 

For the purposes hereof, “Employee Shareholders Agreement” shall mean the Employee Shareholders Agreement, dated as of May 30, 2008, among Lantheus MI Holdings, Inc., Avista Capital Partners, L.P., Avista Capital Partners (Offshore), L.P., ACP-Lantern Co-Invest LLC and the employee shareholders party thereto, as the same may be amended or modified from time to time.

 

4.              Independent Contractor Status.

 

a.            Relationship of Parties.  Both parties intend and agree that the relationship between you and the Company established by this Agreement following the Transition Date is that of independent contractor, and nothing contained in this Agreement shall be construed to: (i) give the Company the authority to direct and control your day-to-day activities; or (ii) allow you to create or assume obligations on behalf of or otherwise bind the Company.

 

b.            Independent and Discretion.  The manner, means, details or methods by which you perform your obligations under this Agreement during the Term shall be solely within your discretion.  The Company shall not have the authority to, nor shall it, supervise, direct or control the manner, means, details or methods utilized by you to perform your obligations under this Agreement during the Term, and nothing in this Agreement shall be construed to grant the Company any such authority.  Subject to Exhibit A attached hereto, you shall be free to dispose of such portion of your time, energy and skill during the Term as you are not obligated to devote under this Agreement in such a manner as you see fit and to such persons, firms or companies as you deem advisable, limited only by the terms contained herein.  Nothing in this Agreement shall be construed to interfere with or otherwise affect the rendering of services by you during the Term in accordance with your independent judgment.  You shall perform your services during the Term substantially in accordance with generally accepted practices and principles of the industry.

 

c.             No Benefits.  The parties acknowledge and agree that, pursuant to this Agreement, during the Term, you, as an independent contractor, are not entitled to participate in any employee benefit arrangements provided by the Company to its employees, except as otherwise provided under COBRA.

 

d.            No Company Liability for Taxes.  During the Term, you accept the exclusive and sole responsibility and liability for payment of any and all taxes and insurance (including but not limited to unemployment insurance and/or disability insurance) you may owe to any governmental authority, with respect to or on account of any payments made or actions taken by the Company during the Term under this Agreement.  You shall indemnify and hold harmless the Company from any liability, claims and demands for payment of taxes, penalties or interest, social security, disability benefits and other withholdings, deductions and/or payments that may be imposed by any governmental authority, or otherwise authorized from, based upon or required by reason of the payments made to you during the Term as provided in this Agreement.

 

3

 

5.              General Release.

 

a.              In consideration of the pay and benefits set forth in this Agreement and other valuable consideration, the sufficiency of which you hereby acknowledge, you agree to and do waive any claims you may have for employment by the Company following the Transition Date.  You, on your own behalf and on behalf of your heirs, estate and beneficiaries, further do hereby release the Company, any of its subsidiaries, parent companies or affiliates, and each of their respective past, present and future officers, directors, agents, employees, shareholders, investors, employee benefit plans and their administrators or fiduciaries, insurer or any such entities, and its and their successors and assigns and others related to such entities (collectively, the “Company Releasees”), from any and all claims made, to be made, or that might have been made of whatever nature, whether known or unknown, from the beginning of time, including, but not limited to, those that arose as a consequence of your employment with the Company, any act committed or omitted during the existence of such employment relationship, or arising out of the separation from the Company, all up through and including the date of your execution of this Agreement, including, but not limited to, those that were, could have been or could be the subject of an administrative or judicial proceeding filed by you or on your behalf under federal, state or local law, whether by statute, regulation, in contract or tort, and including, but not limited to, every claim for back pay, front pay, wages, bonus, fringe benefits, any form of discrimination, wrongful termination, tort, emotional distress, pain and suffering, breach of contract, fraud, defamation, compensatory or punitive damages, interest, attorney’s fees, reinstatement or reemployment, and any rights or claims under the Civil Rights Act of 1866, the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621 et  seq., the Americans with Disabilities Act, the Family and Medical Leave Act, the Civil Rights Act of 1964, Title VII, as amended, the Civil Rights Act of 1991, the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the Equal Pay Act, the Worker Adjustment and Retraining Notification Act, the Massachusetts Fair Employment Practice Act, the Massachusetts Civil Rights Act, the Massachusetts Equal Pay and Maternity Benefits Law, the Massachusetts Equal Rights for Elderly and Disabled Law, the Massachusetts Small Necessities Leave Act, the Massachusetts Age Discrimination Law, or any other federal, state or local law relating to employment, discrimination in employment, termination of employment, wages, benefits or otherwise.  You acknowledge and agree that even though claims and facts in addition to those now known or believed by you to exist may subsequently be discovered, it is your intention to fully settle and release all claims you may have against the Company and the persons and entities described above, whether known, unknown or suspected.  Notwithstanding the foregoing: (i) You do not waive your right to file a charge with the Equal Employment Opportunity Commission (the “EEOC”) or participate in an investigation conducted by the EEOC; however, you expressly waive your right to monetary relief should any administrative agency, including, but not limited to, the EEOC, pursue any claim on your behalf, (ii) you do not waive any claims and/or rights to indemnification pursuant to the Company’s certificate of incorporation, charter or bylaws, applicable law, and under any Company D&O policy, and (iii) you do not waive any claims and/or rights to vested benefits (including to any vested ERISA benefits) or any claims that may not be waived by applicable law, including, but not limited to, claims of retaliation under Section 806 of the Sarbanes-Oxley Act, Section 23 of the Commodity Exchange Act, Section 21F of the Securities Exchange Act of 1934 or Section 1057 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or a claim challenging the validity of this waiver and release paragraph brought under the Age Discrimination in Employment Act of 1967, as amended.  You also understand that this general release does not extend to any rights or claims that may arise out of acts or events that occur after the date on which you sign this Agreement.

 

4

 

b.              You acknowledge that by signing this Agreement, (i) you do so of your own free will, (ii) it is your intention to be legally bound by its terms and (iii) no promises or representations have been made to you by any person to induce you to enter into this Agreement other than the express terms set forth herein.  You further acknowledge that you have carefully read this Agreement and know and understand its contents and its binding legal effect, including the waiver and release of claims set forth above.

 

c.               You shall have up to 45 days from the date of this Agreement (i.e., until January 21, 2012) to consider the meaning and effect of this Agreement (including, without limitation, the general release contained herein), although you may sign the Agreement sooner, if that is your wish.  You may also wish to consult with an attorney and acknowledge both that you have had the opportunity to do so and that we are advising you to do so.  You have seven (7) days following the date you sign this Agreement to revoke this Agreement by delivering a written notice of such revocation as provided in Section 11 below.  Notwithstanding anything to the contrary contained in this Agreement, if you do not sign this Agreement by January 21, 2012, or if you revoke this Agreement within the applicable seven (7) day period, this Agreement shall have no force and effect and shall be void ab initio.

 

6.              Restrictive Covenants.  You acknowledge and recognize that the services you provided to the Company were extraordinary and unique and that you were privy to highly confidential and proprietary information that would be valuable to a competitor of the Company and that any employment or services rendered by you to a competitor of the Company would inevitably require you to use the Company’s highly confidential and proprietary information, and, accordingly, in consideration of the compensation and benefits set forth herein, including, but not limited to, the extension of vesting under the Option Agreement and the DER Agreements, the tolling during the Term of Holdings’ repurchase rights under the Employee Shareholders Agreement with respect to the equity interests you hold in Holdings, and other valuable consideration, you agree to be bound by the terms and conditions of the restrictive covenants as set forth in Exhibit A attached hereto.

 

7.              Cooperation.  Upon prior request, you agree to cooperate with the Company or its affiliates in connection with any present or future litigation or regulatory proceeding brought or threatened against the Company or any of its affiliates to the extent the Company or any affiliate deems your cooperation necessary.  Such cooperation may include, but shall not be limited to, meeting with counsel for the Company or its affiliate at mutually convenient times and providing testimony if so requested.  The Company or its affiliate shall compensate you at the Hourly Rate for your cooperation under this paragraph other than for testifying at a deposition, at trial or in an administrative hearing and shall reimburse you for reasonable pre-approved out-of-pocket expenses (including, without limitation, legal fees and disbursements) incurred by you or on your behalf as a result of such cooperation.

 

8.              No Admission; Affirmations.  Neither by offering to make nor by making this Agreement does either party admit any failure of performance, wrongdoing or violation of law.  You affirm that:

 

a.               You have not filed or caused to be filed and are not presently a party to any claim against the Company, unless noted below under your signature;

 

b.               You have been paid and/or have received all compensation, wages, bonuses, commissions, and/or benefits to which you may be entitled from the Company;

 

c.                You have been granted by the Company any leave to which you were entitled under the Family and Medical Leave Act or related state or local leave or disability accommodation laws;

 

5

 

d.               You have no known workplace injuries or occupational diseases regarding your employment at the Company, unless previously reported;

 

e.                You have not divulged any proprietary or confidential information of the Company and shall continue to maintain the confidentiality of such information consistent with the Company’s policies and your agreement(s) with the Company and/or common law; and

 

f.                 You have not been retaliated against for reporting any allegations of wrongdoing by the Company or its officers, including any allegations of corporate fraud.

 

In addition, you affirm by your signature below that you are not aware of any wrongdoing, regulatory violations or corporate fraud committed by the Company or its employees unless previously reported to the Company in writing.

 

9.              Miscellaneous; Employee Shareholders Agreement.

 

a.               This Agreement sets forth the entire understanding of the parties with respect to the subject matter hereof and supersedes any and all other prior agreements, oral or written, relating to your employment by the Company or the termination thereof, except for: (a) your rights to indemnification, as set forth in the Company’s and/or the Company’s parent company’s charter, articles of incorporation and/or bylaws, and in any applicable D&O liability insurance policy, which rights remain in full force and effect (i.e., notwithstanding anything to the contrary herein, nothing in this Agreement shall negatively impact or otherwise negatively affect your eligibility for indemnification coverage under any charter, article of incorporation, bylaw, D&O liability policy or employment practices liability policy), (b) any agreements you have signed concerning non-competition, assignment of invention and the protection and non-disclosure of the company’s confidential information and trade secrets, which shall remain in full force and effect in accordance with the terms of any such agreements; provided, however, that the restrictive covenants contained in this Agreement and Exhibit A supersede those set forth in any previous agreement signed by you to the extent inconsistent therewith, (c) the Option Agreement and the DER Agreements, each as amended and modified hereunder, and (d) the Employee Shareholders Agreement.  You acknowledge and agree that you have not relied on any representations, promises, or agreements of any kind made to you in connection with your decision to sign this Agreement and general release, except those stated in this Agreement.  This Agreement may not be modified except in writing, signed by you and by a duly authorized officer of the Company.  This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

b.               You agree and acknowledge that, with respect to the shares of capital stock of Holdings, the Options you hold and the shares of Holdings Stock issuable upon the exercise of such Options, you continue to be subject to the terms of the Employee Shareholders Agreement.  Furthermore, notwithstanding anything to the contrary in the Employee Shareholders Agreement, herein or otherwise, a Restrictive Covenant Breach, a termination of your employment with the Company prior to the Transition Date, your breach of this Agreement, the termination of your service hereunder by the Company for “Cause” (as defined in the Employee Shareholders Agreement) or the expiration of the Term, shall be a Termination Event, and the date on which any of the foregoing occurs shall be the Termination Date, under the Employee Shareholders Agreement, including but not limited to Section 4.03 thereof.

 

6

 

c.                Notwithstanding the foregoing or anything to the contrary herein or in the Employee Shareholders Agreement, the cessation of your employment with the Company on the Transition Date, in and of itself, shall not be considered a Termination Event under the Employee Shareholders Agreement.

 

10.       Enforceability.  In the event that any one or more of the provisions of this agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.  Moreover, if any one or more of the provisions contained in this Agreement, including Exhibit A, is held to be excessively broad as to duration, scope or activity or subject, such provisions shall be construed by limiting and reducing them so as to be enforceable to the maximum extent compatible with applicable law. The foregoing shall be in addition to and not in limitation of Section 6 of Exhibit A.

 

11.       Waiver.  A failure of either you or the Company to insist on strict compliance with any provision of this Agreement shall not be deemed a waiver of such provision or any other provision hereof.

 

12.       Notice.  For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below in this Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

 

	
 
    	
If to the Company:
    	
Lantheus Medical Imaging, Inc.
    
	
 
    	
 
    	
331 Treble Cove Rd.
    
	
 
    	
 
    	
Bldg. 600-1
    
	
 
    	
 
    	
N. Billerica, MA 01862
    
	
 
    	
 
    	
Attention: Philip Lockwood,
    
	
 
    	
 
    	
Vice President Human Resources
    
	
 
    	
 
    	
 
    
	
 
    	
If   to you, to your last known address on file with the Company.
    

 

13.       Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Massachusetts without regard to its choice-of-law rules.

 

14.       Dispute Resolution.  Any controversy or claim arising out of or related to any provision of this Agreement that cannot be mutually resolved by the parties hereto shall be settled by final, binding and nonappealable arbitration in Boston, Massachusetts by a single arbitrator.  Subject to the following provisions, the arbitration shall be conducted in accordance with the Employment Rules of American Arbitration Association then in effect.  Any award entered by the arbitrator shall be final, binding and nonappealable and judgment may be entered thereon by either party in accordance with applicable law in any court of competent jurisdiction.  This arbitration provision shall be specifically enforceable.  The arbitrator shall have no authority to modify any provision of this Agreement or to award a remedy for a dispute involving this Agreement other than a benefit specifically provided under or by virtue of the Agreement.  Each party shall be responsible for its own expenses relating to the conduct of the arbitration or litigation (including attorney’s fees and expenses).  Notwithstanding anything in this paragraph to the contrary, the Company shall be entitled to seek temporary and preliminary injunctive relief in a court of competent jurisdiction as set forth in Exhibit A.

 

7

 

15.       Section 409A.  Notwithstanding anything to the contrary contained in this Agreement:

 

a.              The parties agree that this Agreement shall be interpreted to comply with or be exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations and authoritative guidance promulgated thereunder to the extent applicable (collectively “Section 409A”), and all provisions of this Agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A.

 

b.              With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits, to be provided in any other taxable year, provided, however, that this clause (i) shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period during which the arrangement is in effect and (ii) such payments shall be made on or before the last day of you taxable year following the taxable year in which the expense occurred.

 

16.       Successors; Binding Agreement.  This Agreement shall inure to the benefit of and be binding upon personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

 

17.       Assignment.  This Agreement, and all of your rights and duties hereunder, shall not be assignable or delegable by you.  Any purported assignment or delegation by you in violation of the foregoing shall be null and void and of no force or effect.  This Agreement may be assigned by the Company to a person or entity that is an affiliate or a successor in interest to substantially all of the business operations of the Company.  Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such affiliate or successor person or entity.

 

On behalf of the Company, I look forward to your continued service.

 

Very truly yours,

 

 

Lantheus Medical Imaging, Inc.

 

 

	
/s/   Philip C. Lockwood
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
Philip   C. Lockwood
    	
 
    	
 
    
	
 
    	
Vice   President, Human Resources
    	
 
    	
 
    

 

[employee’s signature page follows]

 

8

 

I hereby acknowledge that (1) I have read this Agreement and general release, (2) I have knowingly and voluntarily decided to sign this Agreement in order to receive the additional employment continuation terms and compensation being offered to me, (3) I fully understand and agreed to be bound by the covenants contained in Exhibit A, and (4) I have been advised by the Company to take counsel from an attorney of my choosing prior to executing this Agreement.

 

 

	
Signature:
    	
/s/   Robert P. Gaffey
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Robert   P. Gaffey
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
January 3,   2012
    	
 
    

 

9

 

EXHIBIT A

 

RESTRICTIVE COVENANTS

 

Re:  Robert Gaffey

 

1                                         Confidentiality.

 

(a)                                 You will not at any time (x) retain or use for the benefit, purposes or account of yourself or any other Person; or (y) disclose, divulge, reveal, communicate, share, transfer or provide access to any Person outside the Company (other than its professional advisers who are bound by confidentiality obligations), any non-public, proprietary or confidential information — including, without limitation, trade secrets, know-how, research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals — concerning the past, current or future business, activities and operations of the Company, its subsidiaries or affiliates and/or any third party that has disclosed or provided any of same to the Company on a confidential basis (“Confidential Information”) without the prior written authorization of the Board of Directors of the Company.

 

(b)                                 Confidential Information shall not include any information that is (A) generally known to the industry or the public other than as a result of your breach of this covenant or any breach of other confidentiality obligations by third parties; (B) made legitimately available to you by a third party without breach of any confidentiality obligation; or (C) required by law to be disclosed; provided that you shall give prompt written notice to the Company of such requirement, disclose no more information than is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment.

 

(c)                                  Except as otherwise agreed to in writing by the Company, on the last day of the Term, or sooner upon the request and instruction of the Company, you shall (x) cease and not thereafter commence use of any Confidential Information or intellectual property (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name, logo, domain name or other source indicator) owned or used by the Company, its subsidiaries or affiliates; (y) immediately return to the Company all Company property and destroy, delete, or return to the Company, at the Company’s option, all originals and copies in any form or medium (including memoranda, books, papers, plans, computer files, letters and other data) in your possession or control (including any of the foregoing stored or located in your office, home, laptop or other computer, whether or not Company property) that contain Confidential Information or otherwise relate to the business of the Company, its affiliates and subsidiaries, except that you may retain only those portions of any personal notes, notebooks and diaries that do not contain any Confidential Information; and (z) notify and fully cooperate with the Company regarding the delivery or destruction of any other Confidential Information of which you are or become aware and promptly return any other Company property in your possession.

 

(d)                                 The provisions of this Section 1 shall survive the termination of the Agreement for any reason.

 

2                                         Non-Disparagement.  You agree that you shall not make, or cause to be made, any statement or communicate any information (whether oral or written) that disparages or reflects negatively on the Company or its subsidiaries or parent entities, the Company’s officers or directors, or Holding’s shareholders, except for truthful statements that may be made pursuant to legal process, including without

 

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limitation in litigation, arbitration or similar dispute resolution proceedings.  The Executive Leadership Team of the Company shall not make, or cause to be made, any statement or communicate any information (whether oral or written) that disparages or reflects negatively on you, except for truthful statements that may be made pursuant to legal process, including, without limitation, in litigation, arbitration or similar dispute resolution proceedings.  This Section 2 shall survive the termination of the Agreement for any reason.

 

3                                         Non-Competition.  You agree that during the Term, you will not, as an individual, proprietor, partner, stockholder, officer, employee, director, consultant, joint venturer, investor, lender, or in any other capacity whatsoever, become financially interested in, or become employed by, receive any economic benefit from, render services to or advise any entity engaged in any business that competes with the Company (including the contrast media and nuclear medicine business), including, but not limited to, any of following competitors of the Company:  General Electric division that includes contrast media and nuclear medicine businesses, Covidien business units that compete with Lantheus, Pharmalucence, Cardinal Health Nuclear Pharmacy Services, Bayer Schering, Bracco and Draximage.  Notwithstanding the foregoing, this provision shall not prohibit any possible investment in publicly traded stock of a company representing less than two percent of the stock of such company.

 

4                                         Non-Solicitation.  You agree that you shall not: a) during the Term, (i) induce or attempt to induce (including, without limitation, by soliciting business from or performing services for) any customer, supplier, licensee or business relation of the Company to cease doing business with the Company, or (ii) in any way interfere with the relationship between the Company and any of its customers, suppliers, licensors, or other business relations; or b) during the Term, (i) solicit, hire, offer employment to, or in any manner encourage employees of the Company to leave its employ, or (ii) solicit, hire, or offer employment to any former employee of the Company within the first six months after such former employee’s departure from the Company.

 

5                                         Specific Performance.  You acknowledge and agree that the Company’s remedies at law for a breach or threatened breach of any of the provisions of this Exhibit A  would be inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach.  In recognition of this fact, you agree that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to cease making any payments or providing any benefit otherwise required by the Agreement and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.  You agree that, notwithstanding the dispute resolution provision in paragraph 14 of the Agreement, the Company shall be entitled to bring suit in a court of competent jurisdiction located in the State of Massachusetts to obtain temporary and preliminary injunctive relief, and you irrevocably consent to the exclusive jurisdiction of such court to enter temporary and preliminary injunctive relief with respect to your breach or threatened breach of any covenant contained in this Exhibit A.  This Section shall survive the termination of the Agreement for any reason.

 

6                                         Severability.  If a provision of this Exhibit A is, or but for this Section 6 would be, held to be illegal, invalid or unenforceable, in whole or in part, in the jurisdiction to which it pertains but would be legal, valid and enforceable if the time period, geographic scope, business limitation or other relevant feature of that provision were reduced, or part of the provision were deleted, such provision will apply with the minimum modification necessary to make it legal, valid and enforceable in that jurisdiction and any such illegality, invalidity or unenforceability in any jurisdiction will not invalidate or render invalid or unenforceable such provisions in any other jurisdiction.

 

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