Document:

Exhibit 10.22

 

 

 

 

 

 

 

 

 

MONOSOL RX, LLC

AMENDED AND RESTATED

PERFORMANCE UNITS PLAN B

 

Amended and Restated Effective
September 18, 2006

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE
  I-DEFINITIONS

  	
  1

  
	
  ARTICLE
  II-ADMINISTRATION

  	
  4

  
	
  2.01

  	
  Advisory Board; Duties

  	
  4

  
	
  2.02

  	
  Agents

  	
  4

  
	
  2.03

  	
  Binding Effect of Decisions

  	
  4

  
	
  2.04

  	
  Indemnity of Advisory Board

  	
  4

  
	
  ARTICLE
  III-PARTICIPATION

  	
  4

  
	
  3.01

  	
  Participation

  	
  4

  
	
  3.02

  	
  Performance Units

  	
  4

  
	
  3.03

  	
  Vesting of Performance Units

  	
  5

  
	
  3.04

  	
  Dilution and Other Adjustments

  	
  6

  
	
  ARTICLE
  IV-BENEFITS

  	
  6

  
	
  4.01

  	
  Benefit Payments Following Retirement, Termination or
  Change in Control

  	
  6

  
	
  4.02

  	
  Forfeiture Provisions

  	
  7

  
	
  4.03

  	
  Withholding; Payroll Taxes

  	
  8

  
	
  ARTICLE
  V-BENEFICIARY DESIGNATION

  	
  8

  
	
  5.01

  	
  Beneficiary Designation

  	
  8

  
	
  5.02

  	
  Amendments

  	
  8

  
	
  ARTICLE
  VI-AMENDMENT AND TERMINATION

  	
  9

  
	
  6.01

  	
  Right to Amend

  	
  9

  
	
  6.02

  	
  Termination

  	
  9

  
	
  ARTICLE
  VII-CLAIMS PROCEDURE & DISPUTES

  	
  9

  
	
  7.01

  	
  Claim Filing Procedure

  	
  9

  
	
  7.02

  	
  Consideration of Claim; Rendering of Decision

  	
  9

  
	
  7.03

  	
  Limitation on Claims Procedure

  	
  10

  
	
  7.04

  	
  Dispute over Benefits

  	
  10

  
	
  ARTICLE
  VIII-MISCELLANEOUS

  	
  10

  
	
  8.01

  	
  Headings and Gender

  	
  10

  
	
  8.02

  	
  No Right to Employment or Retention

  	
  10

  
	
  8.03

  	
  Action by Officers

  	
  11

  
	
  8.04

  	
  Assignment of Benefits

  	
  11

  
	
  8.05

  	
  Applicable Law; Validity

  	
  11

  
	
  8.06

  	
  Expenses

  	
  11

  
	
  8.07

  	
  Plan Funding

  	
  11

  

 

i

 

 

MONOSOL RX, LLC

AMENDED AND RESTATED

PERFORMANCE UNITS PLAN B

 

Amended and Restated Effective September 18, 2006

 

MONOSOL
RX, LLC, a Delaware limited liability company (the “Company”), does hereby
amend and restate the Performance Units Plan B (newly designated as Performance
Units Plan B and hereinafter referred to as the “Plan”).  The Plan was established by the Company,
effective as of January 22, 2004, for the purpose of enhancing the long-term
growth in earnings of the Company by providing incentives to key employees
and/or other service providers of the Company. 
The Plan helps the Company attract and retain employees and other
service providers of exceptional ability.

ARTICLE I

DEFINITIONS

For the purposes of this Plan, the following words and
phrases shall have the meanings indicated, unless the context clearly indicates
otherwise:

“Additional Performance Units Plan” shall mean the other
Performance Units Plan established by the Company effective as of January 22,
2004 for the following participants: 
Richard C. Fuisz, Joe Fuisz, Garry Myers, and Robert Yang.

“Advisory Board” shall mean the Advisory Board
contemplated by the Company Agreement which administers the Plan pursuant to
Article II.

“Base Value” shall mean $100,000,000.00
as of September 18, 2006.  The Base Value
is determined by the Advisory Board as of the date of grant of Performance
Units and separate Base Values may apply to blocks of Performance Units based
upon the date of grant.

“Beneficiary” shall mean the person, persons or
entity designated by the Participant, as provided in Article V, to receive any
benefits payable under the Plan following the death of the Participant.

“Cause” shall mean the involuntary termination of a
Participant’s employment or other service-providing relationship with the
Company resulting from (i) willful and continued failure of such Participant to
perform his or her duties, including, without limitation, such Participant’s
failure or refusal to follow the legitimate directions of the Company and/or of
any of the persons to whom such Participant reports (other than any such
failure resulting from his or her death or permanent disability), (ii) willful,
reckless or negligent conduct by such Participant in connection with his or her
employment with, or provision of services to, the Company, (iii) the conviction
of such Participant of any felony or any crime involving moral turpitude, (iv)
such Participant’s reporting to work or performing services impaired by or
under the influence of alcohol or illegal drugs, (v) such Participant’s
engaging in the unlawful use (including being under the influence) or
possession of

 

 

illegal drugs on the Company’s premises, (vi) such Participant’s
engaging in sexual harassment or otherwise violated any harassment or
discrimination law, or (vii) dishonesty of such Participant.

“Change in Control” shall mean the occurrence,
after the effective date of the Plan, in a single transaction or series of
transactions, of any one of the following events or circumstances: (i) merger,
consolidation or reorganization of the Company where the beneficial owners of
the interests or securities possessing the right to vote with respect to the
Company immediately preceding the merger, consolidation or reorganization
beneficially own less than 20% of the interests or securities possessing the
right to vote with respect to the survivor entity, after giving effect to such
merger, consolidation, or reorganization; (ii) acquisition by any person or
group, as defined for purposes of Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended, of beneficial ownership of interests or securities
possessing the right to vote with respect to the Company where the beneficial
owners of the interests or securities possessing the right to vote with respect
to the Company immediately preceding such acquisition own less than 20% of the
interests or securities possessing the right to vote with respect to the
Company, after giving effect to such acquisition; (iii) approval by the members
of the Company of a plan of liquidation or dissolution with respect to the
Company, provided such liquidation or dissolution is consummated; (iv) the
sale, exchange, or contribution of all or substantially all the Company’s
assets to an entity where the beneficial owners of the interests or securities
possessing the right to vote with respect to the Company immediately preceding
the sale, exchange, or contribution beneficially own less than 20% of the
interests or securities possessing the right to vote with respect to the
acquiring entity; or (v) an initial public offering under the Securities Act of
1933, as amended, of the business of the Company to the public which does not
otherwise meet the definition of a Change in Control in clause (i) — (iv)
hereof.  In the event the exact date of a
Change in Control cannot be determined, such Change in Control will be deemed
to have occurred on the earliest date on which it could have occurred.

“Claim” shall mean a request by a Claimant in accordance
with Article VII for a benefit under the Plan.

“Claimant” shall mean any Participant or Beneficiary who
claims to be entitled to a benefit under the Plan.

“Company” shall mean MonoSol Rx, LLC, a Delaware limited
liability company, and any successor to the business thereof.

“Company Agreement” shall mean
the Limited Liability Operating Agreement of the Company, as amended from time
to time.

“Market
Value”, at any point in time, shall mean the fair market value of the Company’s
business as of such time.  The fair
market value of the Company’s business shall be the price a willing buyer would
pay to purchase the Company’s entire business, subject to existing liabilities,
in a lump sum, cash payment.  In the case
of an actual sale of the Company’s business or other transaction resulting in a
Change in Control, the sale price or value of consideration given shall be
determinative of the fair market value of the Company’s business.  In the absence of an actual sale or other
transaction resulting in a Change in Control of the Company, the fair market
value of the Company’s business shall be the Advisory Board’s most recent
determination thereof (unless otherwise determined by mutual agreement between
the Advisory Board and the Participant);

 

2

 

provided,
however, that if the Participant objects to the Advisory Board’s most recent
determination of the fair market value of the Company’s business, or if the
Advisory Board and the Participant are unable to agree on the fair market value
of the Company’s business, within 30 days following the Participant’s
retirement or termination of employment or a Change in Control, as the case may
be, the Participant may retain, at his or her own expense, a qualified,
independent appraiser to perform an appraisal of the Company’s business.  If the fair market value determined by the
appraisal commissioned by the Participant is not greater than 110% of the most
recent fair market value determined by the Advisory Board, then the most recent
fair market value determined by the Advisory Board shall be determinative.  If the fair market value determined by the
appraisal commissioned by the Participant is more than 110% of the most recent
fair market value determined by the Advisory Board, then the Advisory Board
may, in its sole discretion, (i) select another appraiser jointly with the
Participant whose appraisal shall conclusively bind the parties or (ii) use the
average value based on the most recent fair market value determined by the
Advisory Board and the appraised value based on the appraisal commissioned by
the Participant.  In determining the fair
market value, the appraiser(s) shall be instructed to ignore any liability
recorded on the books of the Company which represents the liability under the
Plan to the Participant in question.  The
Advisory Board may determine the fair market value of the Company’s business at
any time; provided, however, that it is anticipated that such determination
will be made at least once each fiscal year of the Company.

“Outstanding Unit Amount” at any point in time
(and subject to adjustment under Section 3.04) shall mean (i) the maximum
number of Performance Units that may be granted under the Plan as of such time,
plus (ii) the number of Performance Units that, solely for purposes of the
Plan, represents the maximum number of Performance Units that may be granted
under the Additional Performance Units Plan, plus (iii) the number of
Performance Units that, solely for purposes of the Plan, represents the total
outstanding member interests of members of the Company as of such time (as
determined by the Advisory Board).  Based
upon adjustments under Section 3.04 since the establishment of the Plan on
January 22, 2004, the Outstanding Unit Amount as of September 18, 2006, shall
be 100,000,000.

“Participant” shall mean an individual who is eligible
to participate in the Plan as provided in Article III.

“Performance Units” shall mean contractual rights
awarded to a Participant as provided in Article III.

“Target
Year of Service” shall mean a one-year period established by the Advisory Board
for a particular Participant on the last day of which such Participant is
employed by the Company.

“Vested”
shall mean the extent to which a Participant has earned a right to receive
benefit payments with respect to his or her Performance Units pursuant to
Section 3.03, subject to the forfeiture provisions of Section 4.02.

 

3

 

ARTICLE
II

ADMINISTRATION

                2.01         Advisory Board; Duties.  The Plan shall be administered by the
Advisory Board.  Members of the Advisory
Board may be Participants under the Plan. 
The Advisory Board shall also have the authority to make, amend,
interpret, and enforce all appropriate rules and regulations for the
administration of the Plan and decide or resolve any and all questions,
including interpretations of the Plan, as may arise in connection with the
Plan.

Subject
to the provisions of the Plan, the Advisory Board shall have exclusive power to
(a) designate the employees and/or other service providers to become
Participants and be granted Performance Units; (b) determine the number of
Performance Units to be granted and/or criteria for granting Performance Units
to each Participant; (c) determine the time or times when Performance Units
will be granted; (d) determine whether Participants shall be of a single class
or in different classes; and (e) determine the one-year periods for Target
Years of Service.  The one-year period
for Target Years of Service may vary from Participant to Participant.

                2.02         Agents.  In the administration of the Plan, the
Advisory Board may, from time to time, employ agents and delegate to them such
administrative duties as it sees fit and may from time to time consult with
legal counsel who may also be legal counsel to the Company.

                2.03         Binding Effect of Decisions.  The decision or action of the Advisory Board
in respect of any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final and conclusive and binding
upon all persons having any interest in the Plan.

                2.04         Indemnity of Advisory Board.  The Company shall
indemnify and hold harmless the members of the Advisory Board against any and
all claims, loss, damage, expense or liability arising from any action or
failure to act with respect to the Plan, except in the case of gross negligence
or willful misconduct by the Advisory Board.

ARTICLE III

PARTICIPATION

                3.01         Participation.  Participation in the Plan shall be limited to
a select group of key employees and/or other service providers of the Company
designated by the Advisory Board.  The
Advisory Board shall notify all employees and/or other service providers who
are designated to participate in the Plan of their designation and of their
grant of Performance Units within 30 days of their designation and/or grant.

                3.02         Performance Units.  Performance Units granted by the Advisory
Board to Participants shall be credited to a Performance Unit account to be
maintained by the Advisory Board for each Participant.  The grant of Performance Units to a
Participant shall not entitle the Participant to voting or any other rights
belonging to a member of the Company. 
All rights of a Participant are set forth herein.

 

4

 

Following the adjustments
described below, the maximum number of Performance Units that may be granted
under the Plan shall be 2,500,000 in the aggregate (with such number subject to
adjustment pursuant to the provisions of Section 3.04 to correspond to the
changes to the Outstanding Unit Amount). Initially, 3,750,000 Performance Units
could be granted under the Plan and such number was increased by amendment to
5,000,000.  Pursuant to the establishment
of the Additional Performance Units Plan, 2,500,000 Performance Units were
transferred to, and granted pursuant to, the Additional Performance Units Plan
leaving 2,500,000 Performance Units for issuance under the Plan (with such
number subject to adjustment pursuant to the provisions of Section 3.04 to
correspond to the changes to the Outstanding Unit Amount).  If any Performance Units granted under the
Plan are forfeited or cancelled, such Performance Units may again be granted
under the Plan.

                3.03         Vesting of Performance Units.  A Participant shall have no right to receive
benefit payments on account of any specified part of his or her Performance
Units except to the extent the Participant is Vested in his or her Performance
Units.

                For
purposes of benefit payments under the Plan, a Participant shall become Vested
in his or her Performance Units based on the following schedule:

	
  Target Years of Service

  	
   

  	
  Percent Vested

  	
   

  
	
  0

  	
   

  	
  0%

  	
   

  
	
  1

  	
   

  	
  25%

  	
   

  
	
  2

  	
   

  	
  50%

  	
   

  
	
  3

  	
   

  	
  100%

  	
   

  

 

A Participant shall be credited
with a Target Year of Service only if the Participant is employed by, or
providing services to, the Company on the last day of such one-year
period.  Anything else to the contrary
notwithstanding, the Advisory Board may grant Vested status to a Participant
with respect to all of such Participant’s Performance Units who would not
otherwise be Vested under this Section 3.03 in all granted Performance Units
(including all previously granted Performance Units).  A Change in Control will accelerate vesting
of Performance Units so that a Participant will become Vested in all of his or
her Performance Units as of the date of such Change in Control.

Certain Participants (the “MonoSol
Participants”) were employees of MonoSol, LLC, a Delaware limited liability
company and member of the Company (“MonoSol”), and they were granted
Performance Units in recognition of their services, as key employees of
MonoSol, to the Company in connection with its formation and acquisition of
business assets from Kosmos Pharma Limited and their continuing provision of
administrative services on behalf of MonoSol to the Company.  Notwithstanding anything to the contrary
contained in this Plan, the MonoSol Participants shall be credited with a
Target Year of Service only if the MonoSol Participant is employed by MonoSol
(or its successors or assigns) on the last day of such one-year period.

                3.04         Dilution and Other Adjustments.  In the event of any change in the outstanding
ownership interests of the Company by reason of any issuance of new or
additional member interests in the Company, or any restructuring,
recapitalization, merger, consolidation, conversion,

 

5

 

spin-off, reorganization, combination or exchange
of interests or other similar change, the Advisory Board may equitably adjust
the Outstanding Unit Amount (including adjustment to the component thereof
which represents the total outstanding member interests of members of the
Company) and/or the number or kind of Performance Units then subject to the
Plan and/or held in Participants’ Performance Unit accounts in order to reflect
such changes.  The Advisory Board’s
determination as to the terms of any such adjustment shall be binding and
conclusive on all persons. 
Notwithstanding the foregoing, Performance Units may be diluted as the
result of the authorization and issuance of additional Performance Units.

 

ARTICLE IV

BENEFITS

4.01         Benefit Payments Following Retirement,
Termination or Change in Control.  If the Advisory Board so elects in its sole
discretion within 12 months following a Participant’s retirement or termination
of employment or other service-providing relationship for any reason, including
an involuntary termination by reason of death or permanent disability (subject
to the forfeiture provisions of Section 4.02) with the Company, the
Participant shall receive cash payments in an amount equal to the following:

	
  Number of such Participant’s

  	
   

  
	
  Vested Performance Units

  	
    X  (Market Value minus
  Base Value)  =  Total
  Payments

  
	
  Outstanding Unit Amount

  	
   

  

The number of such Participant’s Vested Performance Units, the Outstanding
Unit Amount, and the Market Value shall be determined as of the date of such
Participant’s retirement or termination of employment or other service-providing
relationship.  Separate calculations
pursuant to the above formula shall be made for each block of Performance Units
having a separate Base Value.  If the
Advisory Board does not so elect within 12 months following a Participant’s
retirement or termination of employment or other relationship, the Participant
or his or her estate or heirs shall continue to be eligible for benefit
payments upon a Change in Control.

If the Advisory Board so elects, amounts payable
under this Section 4.01 following a Participant’s retirement or termination of
employment or other service-providing relationship shall be paid at the sole
discretion of the Advisory Board either (a) in a single, lump sum or (b) in 24
equal monthly installments, together with interest on the unpaid balance at the
minimum rate of interest required to be charged on such obligation at the date
of the Participant’s retirement or termination of employment or other
service-providing relationship to avoid the imputation of interest for federal
income tax purposes under the Internal Revenue Code of 1986, as amended, but in
no event shall such interest rate exceed the applicable legal maximum interest
rate then prevailing.  Benefits payable
under this Section 4.01 shall be paid or commenced no later than 12 months
following the date of the retirement or termination of the Participant’s
employment or other service-providing relationship (other than for Cause) with
the Company.  The payment of a
Participant’s entire benefit, if any, under this Section 4.01 shall terminate
the Participant’s interest and status as a Participant under the Plan and
result in the cancellation of such Participant’s Performance Units.

 

6

 

Following a Change in Control,
each Participant shall receive cash payments in an amount equal to the
following: 

	
  Number of such Participant’s

  	
   

  
	
  Vested Performance Units

  	
    X  (Market Value
  minus Base Value)  =  Total
  Payments

  
	
  Outstanding Unit Amount

  	
   

  

 

The number of such Participant’s Vested
Performance Units, the Outstanding Unit Amount, and the Market Value shall be
determined as of the date of such Change in Control.  Separate calculations pursuant to the above
formula shall be made for each block of Performance Units having a separate
Base Value.

Amounts payable under this Section 4.01 with respect to a Change in
Control shall be paid either in cash or, at the sole discretion of the Advisory
Board, in kind in the same consideration received by the Company or the members
of the Company as a result of the Change in Control.  Benefits payable under this Section 4.01
shall be paid to the Participants under this Section 4.01 within three months
following the Change of Control; provided, however, that if the consideration
received by the Company or members of the Company as a result of  the Change in Control is deferred and paid
over time, then the Participants payments hereunder shall be deferred and paid
as received by the Company or members as the case may be.  The payment of a Participant’s entire
benefit, if any, under this Section 4.01 shall terminate the Participant’s
interest and status as a Participant under the Plan and result in the
cancellation of his or her Performance Units. 
For purposes of illustration of these provisions and not by way of
limitation, in connection with a Change in Control resulting from the
occurrence of an initial public offering under the Securities Act of 1933, as
amended, of the business of the Company to the public, the Advisory Board may
elect to pay all or any portion of the amount payable to such Participant under
this Section 4.01 in securities of the newly formed public company.  In any event in which the consideration is
paid in kind to the Participants, the Advisory Board will place a value on the
in kind consideration distributed hereunder for purposes of calculating the
amount paid under this plan for purposes of Article IV of the Company
Agreement.  Notwithstanding anything to
the contrary contained in this Agreement, with respect to the occurrence of a
Change in Control which does not constitute a permissible distribution event
under Code Section 409A(a)(2)(A)(v), all amounts payable under this Section
4.01 shall be paid no later than the later of (i) the date that is 2 1⁄2 months
from the end of the Participant’s tax year in which such Change in Control
occurred or (ii) the date that is 2 1⁄2 months from the end of the Company’s tax
year in which such Change in Control occurred.

4.02         Forfeiture Provisions.  Notwithstanding anything herein contained to
the contrary, all rights to any benefits payable under the Plan, shall be
immediately forfeited, whether or not the Participant holds Vested Performance
Units, if any of the following events occur:

(a)           The Participant’s employment or other service-providing relationship
with the Company is terminated for Cause, as defined either in such Participant’s
employment agreement with the Company or, if none, for the purposes of this
Plan.  The judgment of the Advisory
Board, as expressed by a majority vote, shall be final as to the whether the
Participant has been terminated for Cause.

(b)           While
employed by, or otherwise retained to provide services to, the Company or
during the 12-month period following the Participant’s retirement or other
termination of employment or other service-providing relationship with the
Company for

 

7

 

any reason, the Participant directly or
indirectly (1) induces, requests or advises any person or entity to withdraw,
curtail, or cancel that person’s or entity’s business with the Company, or to
obtain services from any person or entity that competes with the Company, or
(2) solicits or induces any employee of the Company to leave the employ of the
Company.

                4.03         Withholding; Payroll Taxes. To the extent required
by the law in effect at the time payments are made, the Company shall withhold
from payments made hereunder any taxes required to be withheld from a
Participant’s benefit for the federal or any state or local government.

ARTICLE V

BENEFICIARY DESIGNATION

                5.01         Beneficiary Designation.  Each Participant shall have the right, at any
time, to designate any person or persons as his or her Beneficiary or
Beneficiaries (both primary as well as contingent) to whom payment under this
Plan shall be paid in the event of his or her death prior to complete
distribution to the Participant of the benefits due him or her under the
Plan.  If a Participant fails to
designate a Beneficiary or if all designated Beneficiaries predecease the
Participant or die prior to complete distribution of the Participant’s
benefits, then the Participant’s Beneficiary shall be deemed to be the estate
of the Participant.  The payment to the
Beneficiary or deemed Beneficiary shall completely discharge the Company’s
obligations under the Plan.

                5.02         Amendments.  Any Beneficiary designation may be changed by
a Participant by the written filing of such change on a form prescribed by the
Advisory Board.  The filing of a new
Beneficiary designation form will, upon receipt by the Advisory Board, cancel
all Beneficiary designations previously filed.

 

8

 

ARTICLE
VI

AMENDMENT
AND TERMINATION

                6.01         Right to Amend.  The Company reserves the right, through its
Advisory Board, to amend any provisions under the Plan at any time; provided,
however, that (a) such amendment is in writing, (b) such amendment is executed
by a duly authorized member of the Advisory Board of the Company, and (c) such
amendment does not adversely affect the rights of a Participant or his or her Beneficiary
with respect to benefits which have accrued under the Plan prior to such
amendment.

6.02         Termination.  The Company reserves the right at any time
and at its sole discretion to terminate the Plan; provided, any termination of
the Plan shall not affect any benefits previously accrued hereunder; provided
further, any termination of the Plan must be structured to comply with the
requirements of Code Section 409A regarding the permissible acceleration of
payments upon the termination of an arrangement to defer compensation.

ARTICLE VII

CLAIMS PROCEDURE AND DISPUTES

                7.01         Claim Filing Procedure.  If a dispute arises over benefits payable
under the Plan, a Claimant shall have the right to submit a Claim with respect
to such benefits.  Such Claim shall be in
writing, signed by the Claimant under oath, and addressed and delivered to the
Advisory Board either personally or by certified or registered mail, return
receipt requested.  The Claim shall state
with particularity:

(a)                                  The benefit
claimed;

(b)           The
provisions of the Plan and the particular provisions of law, if any, upon which
the Claimant relies in support of his or her Claim; and

(c)           All
facts believed to be relevant in connection with such Claim.

7.02         Consideration of Claim; Rendering of Decision.  Upon receipt of a Claim hereunder, the Advisory
Board shall consider the merits of the Claim and shall within 90 days from the
receipt of the Claim render a decision on the merits and communicate the same
to the Claimant.  In the event the
Advisory Board denies the Claim in whole or in part, the Claimant shall be so
notified in writing, which shall be addressed and delivered to the Claimant
personally or by certified or registered mail, return receipt requested, and
shall set forth the following:

(a)                                  The reason or
reasons for rejection of the Claim;

(b)           The provisions of the Plan and the particular provisions
of law, if any, relied upon in reaching such determination; and

(c)           A
description of any additional information needed from the Claimant in order for
the Claimant to perfect his or her Claim.

 

9

 

The failure of the Advisory
Board to render a decision on the merits of a Claim shall be deemed to be a
denial of such Claim and notice of such denial shall be deemed to have been
given to the Claimant on the ninetieth (90th) day from receipt by the Advisory
Board of the Claim.

                7.03         Limitation on Claims Procedure. Any Claim under
this Claims procedure must be submitted within six months from the earlier of
(1) the date on which the Claimant learned of facts sufficient to enable him or
her to formulate such Claim, or (2) the date on which the Claimant should
reasonably have been expected to learn the facts sufficient to enable him or
her to formulate such Claim.  For this
purpose, the first date on which any document that is either given to or made
available to a Participant or Beneficiary (in pay status), and which discloses
facts sufficient to enable a reasonable person to formulate a Claim hereunder,
shall be conclusively deemed to be the date on which the Claimant should
reasonably have been expected to learn the facts sufficient to enable him or
her to formulate such a Claim.  Claims
submitted after such period shall be deemed to have been waived by the Claimant
and shall thereafter be wholly unenforceable.

                7.04         Dispute over Benefits. If a dispute
arises as to the amount or proper recipient of any payment, the Advisory Board,
in its sole discretion, may withhold or cause to be withheld such payment until
the dispute shall have been settled by the parties concerned or shall have been
determined by an arbitration proceeding. 
In addition, if a dispute continues to exist after a Claim has been
filed and a decision rendered by the Advisory Board under the Claims procedure
set forth above, or in the event of any dispute or controversy concerning the
construction, interpretation, performance or breach of the Plan arising between
a Participant, the Company or the Advisory Board, the same shall be submitted
to arbitration under the appropriate rules of the American Arbitration
Association.  Any arbitration shall be
conducted in Fort Worth, Texas, unless mutually agreed otherwise by the
parties.  All administrative fees
connected with initiating a demand for arbitration shall be split between and
advanced by the parties to the arbitration; subject, however, to final
apportionment by the arbitrator in his or her award.  The parties agree that the arbitrator’s award
shall be binding and may be enforced in any court having jurisdiction thereof
by filing a petition for enforcement of such award.

ARTICLE VIII

MISCELLANEOUS

                8.01         Headings and Gender.  The headings of the Plan have been inserted
for convenience of reference only and are to be ignored in any construction of
the provisions hereof.  Whenever a
personal pronoun is used in the masculine gender, it shall be deemed to include
the feminine also, unless the context indicates the contrary.

                8.02         No Right to Employment or Retention.  Nothing herein contained shall be construed
as giving any Participant the right to be retained in the service of the
Company.

                8.03         Action by Officers.  Whenever under the terms of this Plan the
Company is permitted or required to take some action, such action may be taken
by any duly authorized member of the Advisory Board or officer of the Company.

 

10

 

                8.04         Assignment of Benefits.  Except as provided in this Section 8.04, no
interest in this Plan shall be subject to assignment, alienation, transfer or
anticipation, either by voluntary or involuntary act of any Participant or
Beneficiary or by operation of law, nor shall payment or right of interest be
subject to the demands or claims of any creditor of such person, nor be liable
in any way for such person’s debts, obligations or liabilities.

                The
Company shall not merge or consolidate with any other entity or otherwise
reorganize unless and until such succeeding entity agrees to assume and
discharge the obligations of the Company under the Plan.  Upon such assumption, the term “Company” as
used in this Plan shall be deemed to refer to such successor entity.

                8.05         Applicable Law; Validity.  The validity of the Plan or any of its
provisions shall be determined under and construed according to the laws of the
State of Delaware.  If any provision of
the Plan shall be held illegal or invalid for any reason, such determination
shall not affect the remaining provisions of the Plan and it shall be construed
as if said illegal or invalid provision had never been included.

                8.06         Expenses.  The administration costs incurred with
respect to the Plan shall be paid by the Company as an ordinary and necessary
business expense incurred in the operation of the Company’s business.

8.07         Plan Funding.  Benefits under the Plan are payable solely by
the Company.  The Company may, in its
sole discretion, determine to set aside funds in a trust or other arrangement
to satisfy its obligations hereunder; provided, the trust or other arrangement
shall be unfunded for purposes of the Code, such trust or other arrangement
shall not be structured in a manner which would cause the assets to be deemed
to have been paid to the Participants under Code Section 409A(b), and no
Participant or Beneficiary shall be considered to have an interest in any such
trust or other arrangement, or the assets held pursuant thereto, except as may
be specifically provided for therein. 
Participants shall be regarded as general creditors of the Company with
respect to any rights derived by Participants from the existence of the Plan.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

11

 

                IN
WITNESS WHEREOF, the Company has caused this Amended and Restated Performance
Units Plan B to be executed by its duly authorized officers to be effective as
of September 18, 2006.

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  MONOSOL RX, LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ John Cochran

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  John Cochran

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  V.P.

  

 

 

12

 

SCHEDULE I

 

One-Year Periods

 

 

(To be determined by Advisory Board)

 

13Exhibit
10.23

May
13, 2007

 

Mr.
Joseph M. Fuisz

1200 23rd Street, Apartment 911

Washington, DC 20037

 

Dear
Mr. Fuisz:

 

                Reference is made to the
Performance Units Plan of Monosol Rx, LLC, a Delaware limited liability company
(the “Company”), established effective January 22, 2004, as amended and
restated effective September 18, 2006 (“Plan A”), and the Performance Units
Plan B of the Company amended and restated effective September 18, 2006 (“Plan
B;” and, together with Plan A, the “PUP”). 
Each of the Company and Joseph M. Fuisz (“Fuisz”) acknowledges that the
execution of this letter agreement (this “Letter Agreement”) is in
consideration of the mutual covenants and agreements set forth in one or more
instruments or agreements entered into in connection herewith as of the date
hereof between the parties hereto (collectively the “Agreements”), and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged.

 

                Notwithstanding anything to the
contrary contained in the Agreements or the PUP (including any subsequent
amendment thereto after the date hereof), the parties hereto agree as follows:

 

                1.             Definition of Cause in PUP.  With respect to all of Fuisz’s outstanding
units under the PUP, including those granted under Plan A and Plan B, the
Company will apply the definition of “Cause” as set forth in Plan A as
originally adopted effective January 22, 2004 and prior to any amendment to the
original Plan A.

 

                2.             Vesting.  All
unit awards granted to Fuisz under Plan A are fully vested.  Certain unit awards granted to Fuisz under
Plan B are not fully vested.  Subject to
the provisions of this Letter Agreement, unvested unit awards granted to Fuisz
under Plan B remain subject to vesting as set forth in Plan B.

 

                3.             Special Vesting Rules.

 

                                a.             Notwithstanding anything to the
contrary in Plan B, unvested unit awards under Plan B will continue to vest in
accordance with the vesting schedule set forth in Plan B and any award
thereunder except under the following circumstances: (i) a termination by the
Company of Fuisz’s employment with, or engagement as a consultant by, the
Company for Cause (as defined in accordance with paragraph 1 of this Letter
Agreement); or (ii) a voluntary termination by Fuisz of his employment and
consultant relationships with the Company (except for Good Reason, as defined
in Fuisz’s employment agreement with the Company).  For avoidance of doubt, unvested unit awards
under Plan B will continue to vest following:  (i) any termination by the Company of Fuisz’s
employment with, or engagement as a consultant by, the Company (except for a
termination for Cause as defined in accordance with paragraph 1 of this Letter
Agreement),  (ii) expiration of any
employment or consulting agreement between the

 

 

Company
and Fuisz, and (iii) a voluntary termination by Fuisz of his employment for
Good Reason (as defined in Fuisz’s employment agreement with the Company).

 

                                b.             To the extent that Section 3.2 of
that certain Asset Purchase and Sale Agreement between Kosmos Pharma Limited, a
Delaware corporation (“Kosmos”), the Company and Monosol, LLC, a Delaware
limited liability company, dated January 22, 2004 (the “Asset Purchase
Agreement”), which provides, among other things, that the performance units
granted to Fuisz and others in connection with the transactions contemplated by
the Asset Purchase Agreement will be automatically reduced by 50 percent under
certain circumstances, have not terminated and remain in effect, the Company
agrees:  (i) to hereby terminate the
provisions relating to the performance units granted to Fuisz in connection
with the transactions contemplated by the Asset Purchase Agreement, (ii) to
delete from the PUP, or waive, any adjustment to the unit award granted to
Fuisz related to such provisions, and (iii) not to include in any amendment or
modification to the PUP any adjustment to the unit award granted to Fuisz
related to such provisions.

 

                4.             Forfeiture Provisions.  Notwithstanding anything to the contrary in
the PUP, all outstanding unit awards to Fuisz under the PUP shall be subject to
forfeiture under the PUP only under the following circumstances: (i) a
termination by the Company of Fuisz’s employment with, or engagement as a
consultant by, the Company for Cause (as defined in accordance with paragraph 1
of this Letter Agreement); or (ii) a voluntary termination by Fuisz of his
employment and consultant relationships with the Company (except for Good
Reason, as defined in Fuisz’s employment agreement with the Company).  For avoidance of doubt,  all outstanding unit awards to Fuisz under
the PUP shall not be subject to forfeiture under the PUP following:  (i) any termination by the Company of Fuisz’s
employment with, or engagement as a consultant by, the Company (except for a
termination for Cause as defined in accordance with paragraph 1 of this Letter
Agreement),  (ii) expiration of any
employment or consulting agreement between the Company and Fuisz, and (iii) a
voluntary termination by Fuisz of his employment for Good Reason (as defined in
Fuisz’s employment agreement with the Company).

 

                This letter agreement will
binding on, inure to the benefit of and be enforceable by any legal
representative, heir, executor, or testamentary administrator, trustee or
beneficiary, successor or permitted assigns of the parties hereto.  Each of the parties hereto hereby further
acknowledges and agrees that notwithstanding anything to the contrary in the
PUP or the Agreements, except to the extent expressly modified by the terms and
provisions of this Letter Agreement, each and every term and provision of the
PUP and the Agreements is and shall remain in full force and effect.

 

                If the foregoing accurately
reflects our agreement with respect to all of your outstanding units under the
PUP, please execute a counterpart of this letter in the space indicated below
and return it to the Company.

 

[signature page
follows]

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MONOSOL
  RX, LLC,

  
	
   

  	
  A
  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Cochran

  
	
   

  	
   

  	
  John
  Cochran, as Vice President of Bratton Capital, Inc., the general partner of
  Monosol RX Genpar, L.P., as manager of MonoSol Rx, LLC

  

 

 

ACKNOWLEDGED AND
AGREED AS OF MAY 13, 2007:

 

	
  /s/ Joseph M.
  Fuisz

  	
   

  
	
  Joseph M. Fuisz

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