EXHIBIT 10.20
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EMPLOYMENT AGREEMENT
AGREEMENT made as of March 1, 2007 by and between ▇▇▇▇▇▇ PHARMACEUTICALS,
Inc. , a New Jersey corporation (hereinafter referred to as the "Company"),
having an office at ▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, with
offices at ▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter referred to as the
"Executive").
W I T N E S S E T H :
WHEREAS, the Company desires to engage the services of the Executive, and
the Executive desires to render such services;
NOW, THEREFORE, in consideration of the premises, the parties agree as
follows:
1. Employment. The Company hereby employs the Executive as non-executive
Chairman of the Board of Directors, and the Executive hereby accepts such
employment, subject to the terms and conditions hereinafter set forth.
2. Term. The term of the Executive's employment hereunder shall commence on
the date that the Company's Registration Statement on Form SB-2 is declared
effective by the Securities and Exchange Commission and the Company's Class A
Common Stock thereafter is distributed to the shareholders of iVoice, Inc. and
shall continue to December 31, 2012.
3. Duties. The Executive agrees that the Executive will serve the Company
on an as-needed basis faithfully and to the best of his ability as the
Non-executive Chairman of the Board of Directors of the Company, subject to the
general supervision of the Board of Directors of the Company. The Company and
the Executive acknowledge that the position and the responsibilities of the
Non-executive Chairman of the Board shall be a part-time position, with the
Executive free to undertake other unrelated duties, so long as these other
duties shall not conflict with his duties as set forth herein. The Executive
further agrees to serve as a director of the Company and/or of any parent,
subsidiary or affiliate of the Company if the Executive is elected to such
directorship.
4. Compensation.
(a) In consideration of the services to be rendered by the Executive
hereunder, including, without limitation, any services rendered by the Executive
as director of the Company or of any parent, subsidiary or affiliate of the
Company, the Company agrees to pay the Executive, and the Executive agrees to
accept fixed compensation at the rate Eighty-five Thousand ($85,000), subject to
all required federal, state and local payroll deductions, that shall increase on
the first anniversary date of this Agreement and upon every annual anniversary
thereafter, based upon any increase in the Consumer Price Index (All Urban
Consumers, Northeast Region, All Items (1982-1984=100)).
(b) The Executive shall also be entitled to three weeks vacation, unlimited
sick leave and fringe benefits, health insurance, disability insurance and an
annual bonus in accordance with Company policies and plans in effect, from time
to time, for executive officers of the Company.
(c) The Executive shall participate in the Company's Corporate Compensation
Program as approved and authorized by the Board of Directors of the Company,
subject to amendment by the Board of Directors or the Compensation Committee of
the Board of Directors of the Company ("Incentive Compensation"). The Executive
shall not receive any Incentive Compensation should the Executive be terminated
for Termination for Cause. Such Incentive Compensation for the particular fiscal
year shall be paid to the Executive no later than upon the filing of the
Company's Form 10-KSB, or equivalent form, or if no Form 10-KSB need be filed,
then within ninety (90) days after the end of each fiscal year.
(d) Except as hereinafter provided in Section 5(a), the Company shall pay
the Executive, for any period during which the Executive is unable fully to
perform his duties because of physical or mental illness or incapacity, an
amount equal to the fixed compensation due the Executive for such period less
the aggregate amount of all income disability benefits which the Executive may
receive or to which the Executive may be entitled under or by reason of (i) any
group health and/or disability insurance plan provided by the Company; (ii) any
applicable state disability law; (iii) the Federal Social Security Act; (iv) any
applicable worker's compensation law or similar law; and (v) any plan towards
which the Company or any parent, subsidiary or affiliate of the Company has
contributed or for which it has made payroll deductions, such as group accident,
health and/or disability policies.
(e) The Executive shall be granted a stock option under the Company's stock
option plan as adopted by the Board of Directors (the "Plan") in the sole
discretion of the Company's Board of Directors. The Company will provide the
Executive a Stock Option Contract for his signature which will set out the terms
of the option. This Stock Option shall be subject to the terms of the Plan.
(f) The Company shall reimburse the Executive for the cost of leasing,
insuring and maintaining (including the cost of fuel) a luxury automobile of the
Executive's choice not to exceed $1200 per month.
(g) Upon the closing of an acquisition or merger by the Company, the
Executive shall receive acquisition compensation equal to six percent (6%) of
the gross consideration paid or received by the Company, payable in the form of
cash, debt or in shares of the Company's Class B Common stock, at the
Executive's option, related to a merger or acquisition transaction(s)
consummated with the Company during the term of this Agreement.
5. Compensation Upon Termination.
Upon termination of the Executive's employment or during a period of
Disability the Executive shall be entitled to the following benefits:
(a) Termination for Cause Disability, Death or Retirement etc.
(i) If the Executive's employment shall be terminated by the Company
or the Executive for Disability, or by either the Company or the Executive for
Retirement, the Company shall pay to the Executive the Executive's full base
salary for five years from date of termination at the highest salary under the
agreement, plus all other amounts to which the Executive is entitled under any
compensation plan of the Company in effect on the date the payments are due, in
addition to any other benefits set forth in this Agreement. If the Executive's
employment shall be terminated by the Company for Death, the Company shall pay
to the estate of the Executive the Executive's full base salary through the
period of eight (8) years following the Date of Termination at the highest rate
in effect at the date that Notice of Termination is given, plus all other
amounts to which the Executive is entitled under any compensation plan of the
Company in effect on the date the payments are due, in addition to any other
benefits set forth in this Agreement, and the Company shall have no further
obligations to the Executive under this Agreement. If the Executive's employment
shall be terminated by the Company for Termination of Cause, the Executive shall
be paid his base compensation through the Date of Termination and all other
obligations for payments and benefits to the Executive shall terminate on the
date thereof.
(ii) If the Executive's employment shall be terminated by the
Executive for any reason other than for Termination for Cause, Death,
Disability, Retirement or Good Reason after a Change in Control, the Company
shall pay to the Executive the Executive's full base salary through the Term of
this Agreement, plus an additional five (5) years following the Date of
Termination, at the highest rate in effect at the date that Notice of
Termination is given, plus all other amounts to which the Executive is entitled
under any compensation plan of the Company in effect on the date the payments
are due , in addition to any other benefits set forth in this Agreement, and the
Company shall have no further obligations to the Executive under this Agreement.
(b) Severance Benefits. If the Executive's employment shall be terminated
by the Company within three (3) years after a Change in Control of the Company,
for reasons other than for Termination for Cause, Retirement, Death or
Disability, or terminated by the Executive for Good Reason within three (3)
years after a Change in Control of the Company, then, subject to the
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limitations set forth in Subparagraph 5(d) below, the Executive shall be
entitled to the benefits provided below:
(i) in lieu of any further salary payments to the Executive for
periods subsequent to the Date of Termination, except as provided in Paragraph
5(d) below, the Company shall pay as severance pay to the Executive a lump sum
severance payment equal to 300% of an average annual based compensation paid by
the Company or any parent or subsidiary of the Company to the Executive and
included in the Executive's gross income for services rendered in each of the
five prior calendar years (or shorter period during which the Executive shall
have been employed by the Company or any parent or subsidiary of the Company),
less $100;
(ii) The Company shall also pay to the Executive all legal fees and
expenses incurred by the Executive as a result of such termination (including
all such fees and expenses, if any, incurred in contesting or disputing any such
termination or in seeking to obtain or enforce any right or benefit provided by
this Agreement or in connection with any tax audit or proceeding related to any
payment or benefit provided hereunder).
(c) Date Benefits Due. The payments provided for in Paragraph 5(b) above
shall be made not later than the fifth day following the Date of Termination,
provided, however, that if the amounts of such payments cannot be finally
determined on or before such day, the Company shall pay to the Executive on such
day an estimate, as determined in good faith by the Company, of the minimum
amount of such payments and shall pay the remainder of such payments (together
with interest at the rate provided in Section 7872(f)(2) of the Code) as soon as
the amount thereof can be determined but in no event later than the thirtieth
day after the Date of Termination. In the event that the amount of the estimated
payments exceeds the amount subsequently determined to have been due, such
excess shall constitute a loan by the Company to the Executive repayable on the
fifth day after demand by the Company (together with interest at the rate
provided in Section 7872(f)(2) of the Code).
(d) Reduction to Avoid Non-Deductibility. Any of the other provisions of
this Agreement notwithstanding, if any payment to be made by the Company
pursuant to this Agreement to the Executive or for the Executive's benefit (the
"Payments") otherwise would not be deductible by the Company for Federal income
tax purposes due to the provisions of the Code Section 280G, the aggregate
present value (determined as of the date of the Change in Control) of the
Payments shall be reduced (but not to a negative amount) to an amount expressed
in the present value as of such date (the "Reduced Amount") that maximizes the
present value of the Payments without causing any payment to be nondeductible by
the Company due to the Code Section 280G. The determination of the Reduced
Amount and the accompanying reduction in Payments shall be made by the
independent certified public accountants for the Company. Any such decrease in
Payments shall be applied to the amounts to be paid to the Executive or for the
Executive's benefit hereunder in the following order but only to the extent such
amounts would be taken into account in determining whether the Payments
constitute "parachute payments" within the meaning of the Code Section
280G(b)(2)(A): (i) to decrease the amounts payable to the Executive pursuant to
Subparagraph 5(b)(i); (ii) to decrease the amounts payable to the Executive
pursuant to Section 5(j); (iii) to decrease the amounts payable to the Executive
pursuant Subparagraph 5(b)(ii); and (iv).to decrease the amounts payable to the
Executive pursuant to Section 5(a)
(e) Determination of Reduced Amount. The determination of the Reduced
Amount and of the reduction in the Payments shall be communicated to the
Executive in writing by the Company. If the Executive does not agree with such
determinations, the Executive may give written notice of such disagreement to
the Board within five (5) days of the Executive's receipt of the determination,
and within fifteen (15) days after the Executive's notice of disagreement, the
Executive shall deliver to the Board the Executive's calculation of the
reduction in Payments. If the Executive fails to give notice of disagreement or
to furnish the Executive's calculation in accordance with the provisions of the
immediately preceding sentence, the Executive shall be conclusively deemed to
have accepted the determinations made by the independent public accountants for
the Company. If the accountants for the Company and the Executive's accountants
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are unable to agree upon the reduction of Payments within ten (10) days of the
receipt of the Board of the Executive's calculation, the determination of the
reduction in Payments shall be made by a third accounting firm picked by the
Company's accountants and the Executive's accountants (the "Arbiter") whose
determination shall be final and binding upon the Executive and the Company,
except to the extent provided below. The Company shall withhold for income tax
purposes all amounts that the Company's independent certified public accountants
believe that the Company is required to withhold.
(f) Arbiter to Resolve Disputes. If the Arbiter's and the Company's
accountant's fees shall be borne solely by the Company. The Executive's
accountant's fees shall be borne by the Executive.
(g) Final Payment. As promptly as practicable after the final determination
of the reduction in Payments, the Company shall pay to the Executive or for the
Executive's benefit the amounts determined to be payable.
(h) IRS Ruling. In the event there is a final determination by the Internal
Revenue Service or by a court of competent jurisdiction that any portion of the
Payments are not deductible by the Company by reason of Section 280G, then the
amount of the Payments that exceeds the amount deductible by the Company shall
be deemed to be a loan by the Company to the Executive, which shall be repaid by
the Executive five (5) days after delivery of a demand by the Company therefor
together with interest from the date paid by the Company to the date repaid by
the Executive at the rate provided for a demand loan in Section 7872(f)(2) of
the Code.
(i) Interpretation. The provisions of this Section 4 shall be interpreted
in a manner that will avoid the disallowance of a deduction to the Company
pursuant to Section 280G and the imposition of excise taxes on the Executive
under Section 4899 of the Code.
(j) Additional Fringe Benefits. If the Executive's employment shall be
terminated by the Company other than for Termination for Cause, Retirement,
Death or Disability or by the Executive within three years after a Change in
Control of the Company for Good Reason, then for an (8) year period after such
termination, the Company shall arrange to provide the Executive with life,
disability, Health and accident insurance benefits substantially similar to
those that the Executive was receiving immediately prior to the Notice of
Termination. In addition to the benefits set forth above, the Company shall
reimburse the Executive for the cost of leasing, insuring and maintaining
(including the cost of fuel) a luxury automobile of the Executive's choice not
to exceed $800 per month during the eight (8) year period following the
Executive's termination.
Benefits otherwise receivable by the Executive pursuant to this Paragraph
5(j) shall be reduced to the extent comparable benefits are otherwise received
by the Executive during the three (3) year period following the Executive's
termination and any such benefits otherwise received by the Executive shall be
reported to the Company.
(k) No Mitigation. The Executive shall not be required to mitigate the
amount of any payment provided for in this Paragraph 5 by seeking other
employment or otherwise, nor shall the amount of any payment or benefit provided
for in this Paragraph 5 be reduced by any compensation earned by the Executive
as the result of the Executive's employment by another employer, by any
retirement benefits, by offset against any amount claimed to be owing by the
Executive to the Company, or otherwise, except as specifically provided in this
Paragraph 5.
(l) The benefits provided in this Paragraph 5 shall replace benefits
provided to the Executive other than in this Agreement only in the circumstances
set forth herein, and under all other circumstances, the Executive's benefits
will be determined in accordance with other agreements between the Company and
the Executive and other plans, arrangements and programs of the Company in which
the Executive participates.
(m) Notwithstanding anything in this Agreement, the Company shall arrange
to provide the Executive and his immediate family with health insurance benefits
substantially similar to those
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that the Executive was receiving, immediately prior to the Notice of
Termination, for the remainder of his and his spouse's life.
6. Termination for Cause. Termination by the Company of the Executive's
employment for cause (hereinafter referred to as "Termination for Cause), shall
mean termination upon (i) the willful and continued failure by the Executive to
substantially perform, on an "as-needed" basis, the Executive's material duties
with the Company (other than any such failure resulting from the Executive's
incapacity due to physical or mental illness or any such failure after the
issuance by the Executive for Good Reason of a Notice of Termination (as the
terms "Good Reason" and "Notice of Termination" are defined in this Agreement)
after a written demand for substantial performance is delivered to the Executive
by the Board, which demand specifically identifies the material duties that the
Board believes that the Executive has not substantially performed, (ii) the
willful engaging by the Executive in conduct that is demonstrably and materially
injurious to the Company, monetarily or otherwise, (iii) the conviction of the
Executive of a felony, or pleading nolo contendre, (iv) the commission of any
act by the Executive against the Company that may be construed as the crime of
embezzlement, larceny, and/or grand larceny. Except for Subparagraph 6(iii), any
other provision in this paragraph to the contrary notwithstanding, the Executive
shall not be deemed to have been terminated for Termination for Cause unless and
until the Board duly adopts a resolution by the affirmative vote of no less than
three-quarters (3/4) of the entire membership of the Board, at a meeting of the
Board called and held for such purpose (after reasonable notice to the Executive
and an opportunity for the Executive, together with the Executive's counsel, to
be heard before the Board), finding that in the good faith opinion of the Board,
the Executive was guilty of conduct described in Subparagraphs (i), (ii) or (iv)
of this paragraph and specifying the particulars thereof in detail and a
certified copy of such resolution is delivered to the Executive. For purposes of
this Paragraph 6, no act, or failure to act, on the Executive's part, shall be
deemed "willful" unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that the Executive's action or omission
was in the best interest of the Company,
7. Non-Disclosure of Confidential Information and Non- Competition
(a) The Executive acknowledges that the Executive has been informed that it
is the policy of the Company to maintain as secret and confidential all
information (i) relating to the products, processes, designs and/or systems used
by the Company and (ii) relating to the customers and employees of the Company
(all such information hereafter referred to as "confidential information"), and
the Executive further acknowledges that such confidential information is of
great value to the Company. The parties recognize that the services to be
performed by the Executive are special and unique and that by reason of his
employment by the Company, the Executive has and will acquire confidential
information as aforesaid. The parties confirm that it is reasonably necessary to
protect the Company's goodwill, and accordingly the Executive does agree that
the Executive will not directly or indirectly (except where authorized by the
Board of Directors of the Company for the benefit of the Company):
A. At any time during his employment by the Company or after the
Executive ceases to be employed by the Company, divulge to any persons, firms or
corporations, other than the Company (hereinafter referred to collectively as
"third parties"), or use or allow or cause or authorize any third parties to
use, any such confidential information; and
B. At any time during his employment by the Company and for a period
of one (1) year after the Executive ceases to be employed by the Company,
solicit or cause or authorize directly or indirectly to be solicited, for or on
behalf of the Executive or third parties, any business from persons, firms,
corporations or other entities who were at any time within one (1) year prior to
the cessation of his employment hereunder, customers of the Company; and
C. At any time during his employment by the Company and for a period
of one (1) year after the Executive ceases to be employed by the Company, accept
or cause or authorize directly or indirectly to be accepted, for or on behalf of
the Executive or third parties, any business from any such customers of this
Company; and
D. At any time during his employment by the Company and for a period
of one (1) year after the Executive ceases to be employed by the Company,
solicit or cause or
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authorize directly or indirectly to be solicited for employment, for or on
behalf of the Executive or third parties, any persons (excluding any individuals
residing in the same immediate primary residence as the Executive, and/or the
Executive's immediate family) who were at any time within one year prior to the
cessation of his employment hereunder, employees of the Company; and
E. At any time during his employment by the Company and for a period
of one year after the Executive ceases to be employed by the Company, employ or
cause or authorize directly or indirectly to be employed, for or on behalf of
the Executive or third parties, any such employees of the Company; and
F. At any time during his employment by the Company and for a period
of one (1) year after the Executive ceases to be employed by the Company,
compete with the Company in any fashion or work for, advise, be a consultant to
or an officer, director, agent or employee of or otherwise associate with any
person, firm, corporation or other entity which is engaged in or plans to engage
in a business or activity which competes with any business or activity engaged
in by the Company, or which is under development or in a planning stage by the
Company.
Notwithstanding the above, should the Executive not be receiving
compensation from the Company either in a lump sum, or on a regular basis for a
period at least equal to one (8) years, or life, as set forth in this Agreement
following his Date of Termination, then Subparagraphs 7(C), 7(E) and 7(F) shall
be ineffective. Additionally, Subparagraphs 7(C), 7(D), and 7(E) shall be
ineffective as it relates to the spouse of the Executive.
(b) The Executive agrees that, upon the expiration of his employment by the
Company for any reason, the Executive shall forthwith deliver up to the Company
any and all records, drawings, notebooks, keys and other documents and material,
and copies thereof in his possession or under his control which is the property
of the Company or which relate to any confidential information or any
discoveries of the Company.
(c) The Executive agrees that any breach or threatened breach by the
Executive of any provision of this Section 7 shall entitle the Company, in
addition to any other legal remedies available to it, to enjoin such breach or
threatened breach through any court of competent jurisdiction. The parties
understand and intend that each restriction agreed to by the Executive herein
above shall be construed as separable and divisible from every other
restriction, and that the unenforceability, in whole or in part, of any
restriction will not affect the enforceability of the remaining restrictions,
and that one or more or all of such restrictions may be enforced in whole or in
part as the circumstances warrant.
(d) For the purposes of this Section, the term "Company" shall mean and
include any and all subsidiaries, parents and affiliated corporations of the
Company in existence from time to time.
8. Change in Control.
(a). Effectiveness of Change in Control Provisions. The terms set forth in
this Paragraph 8, shall be effective should a Change in Control of the Company,
as defined below, have occurred during the term of this Agreement, or during any
extensions thereof, and shall continue in effect for a period of thirty-six (36)
months beyond the month in which such Change in Control occurred. However, the
definitions set forth in Subparagraph 8(c) shall apply throughout this
Agreement.
(b) Change in Control. No benefits shall be payable hereunder unless an
event as set forth below shall have occurred (hereinafter called a "Change in
Control"):
(i) Any person including any individual, firm, partnership or other
entity, together with all Affiliates and Associates (as defined by ss.240.12b-2
of the regulations promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") of such person, directly or indirectly acquires
securities of the Company's then outstanding securities representing twenty
percent (20%) or more of the voting securities of the Company, such person being
hereinafter referred to as an Acquiring Person; or, but excluding:
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(A) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any Subsidiary of the Company, or
(B) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of the Company, or
(c) the Company or any Subsidiary of the Company, is or becomes
the Beneficial Owner (as defined in Rule 13d-3 under the Exchange Act), or
(d) a person who acquires securities of the Company directly from
the Company pursuant to a transaction that has been approved by a vote of at
least a majority of the Incumbent Board, or
(ii) Individuals who, on the date hereof, constitute the Incumbent
Board shall cease for any reason to constitute a majority of the Board; or
(iii) The stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation that would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the combined voting power of the voting
securities of the Company or such other surviving entity outstanding immediately
after such merger or consolidation, or the stockholders of the Company approve a
plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets.
(c) Definitions. For the purposes of this Agreement, the following terms
shall mean:
(i) "Incumbent Board" shall mean the members of the Board, who were
members of the Board prior to the date of this Agreement.
(ii) "Subsidiary" shall mean any corporation of which an amount of
voting securities sufficient to elect at least a majority of the directors of
such corporation is beneficially owned, directly or indirectly, by the Company,
or is otherwise controlled by the Company.
(iii) "Good Reason" shall mean, without the Executive's express
written consent, the occurrence of any of the following circumstances unless,
such circumstances are fully corrected prior to the Date of Termination
specified in the Notice of Termination, as defined in Paragraphs 8(c)(iv) and
(v), respectively, given in respect thereof:
(A) the assignment to the Executive of any duties inconsistent
with the Executive's status as Non-executive Chairman of the Company, or a
substantial adverse alteration in the nature or status of the Executive's
responsibilities from those in effect immediately prior to a Change in Control
of the Company;
(B) a reduction by the Company in the Executive's annual base
salary as in effect on the date hereof or as the same may be increased from time
to time, except for across-the-board salary reductions similarly affecting all
senior executives of the Company and all senior executives of any person in
control of the Company;
(C) the relocation of the Company's principal executive offices
to a location which is not within the boundaries of New Jersey, Essex, Morris,
Union, and Middlesex counties within the state of New Jersey or the Company
requiring the Executive to be based anywhere other than the Company's principal
executive offices, except for required travel on the Company's business to an
extent substantially consistent with the Executive's present business travel
obligations, or the adverse and substantial alteration of the office space or
secretarial or support services provided to the Executive for the performance of
the Executive's duties;
(D) the failure by the Company, without the Executive's consent,
to pay to the Executive any portion of the Executive's current compensation,
except pursuant to an across-the-board compensation deferral similarly affecting
all senior executives of the Company and all senior executives of any person in
control of the Company, or the failure by the Company to pay to the Executive
any portion of an installment of deferred compensation under any deferred
compensation program of the Company, within seven (7) days of the date such
compensation is due;
(E) the failure by the Company to continue in effect any
compensation plan in which the Executive participates that is material to the
Executive's total compensation, including but not limited to the Company's
Incentive Stock Option Plan, 401(k) plan, cafeteria or salary reduction plan, or
any other or substitute plans adopted prior to a Change in
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Control of the Company, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such plan, or the
failure by the Company to continue the Executive's participation therein (or in
such substitute or alternative plan) on a basis not materially less favorable,
both in terms of the amount of benefits provided and the level of the
Executive's participation relative to other participants, than the Executive's
participation as it existed at the time of a Change in Control of the Company;
(F) unless such action is pursuant to an across-the-board
reduction in benefits similarly affecting all senior executives of the Company
and all senior executives of any person in control of the Company, the failure
by the Company to continue to provide the Executive with benefits substantially
similar to those enjoyed by the Executive under any of the Company's pension,
life insurance, automobile reimbursement, Company credit card, medical, health
and accident, or disability plans, if any, in which the Executive was
participating at the time of a Change in Control of the Company, or the taking
of any action by the Company that would directly or indirectly materially reduce
any of such benefits or deprive the Executive of any material fringe benefit
enjoyed by the Executive at the time of a Change in Control of the Company, or
the failure by the Company to provide the Executive with the number of paid
vacation or sick days to which the Executive is entitled under this Agreement at
the time of a Change in Control of the Company;
(G) the failure of the Company to obtain a satisfaction agreement
from any successor to assume and agree to perform this Agreement, as
contemplated in Paragraph 5 hereof; or
(H) any purported termination of the Executive's employment that
is not affected pursuant to a Notice of Termination satisfying the requirements
of Subparagraph 8(c)(iv) below (and, if applicable, the requirement of Paragraph
6 above); for purposes of this Agreement, no such purported termination shall be
effective.
The Executive's right to terminate the Executive's employment pursuant to
this paragraph shall not be affected by the Executive's incapacity due to
physical or mental illness. The Executive's continued employment shall not
constitute consent to, or a waiver of right with respect to, any circumstances
constituting Good Reason hereunder.
(iv) "Notice of Termination" shall mean a notice that shall indicate the
specific termination provision of this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated.
(v) "Date of Termination" shall mean (A) if employment is terminated for
Disability, thirty (30) days after Notice of Termination is given (provided,
that the Executive shall not return to the full-time performance of the
Executive's duties during such thirty (30) day period), or (B) if employment is
terminated due to Death of the Executive, upon receipt of Notice of Termination
or (c) if employment is terminated pursuant to any other provision in this
Agreement, the date specified in Notice of Termination (which, in the case of a
termination pursuant to any provision of this Agreement other than for
Disability and Death shall not be less than fifteen (15) nor more than sixty
(60) days, respectively, from the date such Notice of Termination is given).
Notwithstanding the above, provided, that if within fifteen (15) days after
any Notice of Termination is given to the Executive or prior to the Date of
Termination (as determined without regard to this provision) the Executive
receiving such Notice of Termination notifies the Company that a dispute exists
concerning such termination, that during the pendency of any such dispute, the
Company will continue to pay the Executive his full compensation in effect when
the notice giving rise to the dispute was given (including, but not limited to,
base salary) and continue the Executive as a participant in all compensation,
benefit, and insurance plans in which the Executive was participating when the
notice giving rise to the dispute was given, until the dispute is finally
resolved. However, should final resolution of the dispute result in the Notice
of Termination being affirmed in the forum, as set forth in Paragraph 16,
utilized for resolving said dispute, then the Executive shall be liable to the
Company for all compensation, benefit, and insurance plans paid and/or provided
to the Executive during the period that the Notice of Termination was in
dispute.
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Amounts paid under this subparagraph are prior to all other amounts due
under this Agreement and shall not reduce any other amounts due under this
Agreement, which other amounts shall be in addition to, and shall not be offset
by, amounts due under this subparagraph.
Anything to the contrary herein notwithstanding, twenty-four hours after
written notice to the Executive, the Company may relieve the Executive of
authority to act on behalf of, or legally bind, the Company, provided, that any
such action by the Company shall be without prejudice to the Executive's right
to the compensation and benefits provided under this Agreement and the
Executive's right to termination hereunder under such circumstances and with the
compensation and benefits following such termination as provided in this
Agreement.
(vi) "Disability"- If the Executive, due to physical or mental illness or
incapacity, is unable fully to perform his duties herein for twelve (12)
consecutive months.
(vii) "Death"- If the Executive shall die during the term of this
Agreement.
(viii) ""Retirement"- Shall mean termination in accordance with the
Company's retirement policy, if any, including early retirement, generally
applicable to its salaried employees or in accordance with any retirement
arrangement established with the Executive's consent with respect to the
Executive.
(d) Termination Following Change in Control. If any of the events described
in Paragraph 8(b) hereof constituting a Change in Control of the Company shall
have occurred, the Executive shall be entitled to the benefits provided in
Paragraph 5 hereof upon the subsequent termination of the Executive's employment
during the term of this Agreement unless such termination is (i) because of the
Executive's Death, Disability or Retirement, (ii) by the Company for Termination
for Cause, or (iii) by the Executive for Good Reason within three years after a
Change in Control shall have occurred.
(e) Notice of Termination. Any purported termination of the Executive's
employment by the Company or by the Executive shall be communicated by written
Notice of Termination to the other party hereto in accordance with Paragraph 15
hereof.
9. Successors; Binding Agreement.
(a) Assumption by Successor. The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a breach of
this Agreement and shall entitle the Executive to compensation from the Company
in the same amount and on the same terms as the Executive would be entitled
hereunder if the Executive terminates the Executive's employment for Good Reason
following a Change in Control of the Company, except that for purposes of
implementing this paragraph, the date on which any such succession becomes
effective shall be deemed the Date of Termination. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid that assumes and agrees to perform this
Agreement by operation of law, or otherwise.
(b) Successors. Neither this Agreement nor any right or interest hereunder
shall be assignable by the Executive (except by will or intestate succession) or
any successor to the Executive's interest, nor shall it be subject to
attachment, execution, pledge or hypothecation, but this Agreement shall inure
to the benefit of and be enforceable by the Executive's personal or legal
representative, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any amount would still
be payable to the Executive hereunder if the Executive had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to the Executive's devisee, legatee or other
designee or, if there is no such designee, to the Executive's estate.
10. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the
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Executive and such officer as may be specifically designated by the Board. No
waiver by either party hereto of or compliance with, any condition or provision
of this Agreement to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party that is not set forth in this Agreement. All references to sections of the
Exchange Act or the Code shall be deemed also to refer to any successor
provisions to such sections. Any payments provided for hereunder shall be paid
net of any applicable withholding required under federal, state or local law.
The obligations of the Company under Paragraph 5 shall survive the expiration of
the term of this Agreement.
11. Severance and Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
12. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
13. Entire Agreement. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof, supersedes any prior
agreement between the parties, and may not be changed or terminated orally. No
change, termination or attempted waiver of any of the provisions hereof shall be
binding unless in writing and signed by the party to be bound; provided,
however, that the Executive's compensation and benefits may be increased at any
time by the Company without in any way affecting any of the other terms and
conditions of this Agreement, which in all other respects shall remain in full
force and effect.
14. Negotiated Agreement. This Agreement has been negotiated and shall not
be construed against the party responsible for drafting all or parts of this
Agreement.
15. Notices. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally or received by United
States registered or certified mail, return receipt requested, postage prepaid,
or by nationally recognized overnight delivery service providing for a signed
return receipt, addressed to the Executive at the Executive's home address set
forth in the Company's records and to the Company at the address set forth on
the first page of this Agreement, provided that all notices to the Company shall
be directed to the attention of the Board with a copy to counsel to the Company,
at Meritz & ▇▇▇▇▇ LLP, ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., 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.
16. Governing Law and Resolution of Disputes. All matters concerning the
validity and interpretation of and performance under this Agreement shall be
governed by the laws of the State of New Jersey. Any dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration in Newark New Jersey, in accordance with the rules of the
American Arbitration Association ("AAA") then in effect. Any judgment rendered
by the arbitrator as above provided shall be final and binding on the parties
hereto for all purposes and may be entered in any court having jurisdiction;
provided, however, that the Executive shall be entitled to seek specific
performance of the Executive's right to be paid following termination for any
reason during the pendency of any dispute or controversy arising under or in
connection with this Agreement. The Company share bear the total cost of filing
fees for the initial Demand of Arbitration, as well as all charges billed by the
AAA, regardless of which party shall commence the action. The Company shall bear
the cost of the Executive's legal fees regarding any dispute or controversy
arising under or in connection with this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
▇▇▇▇▇▇ PHARMACEUTICALS, INC. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------- -----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
President
Date: March 1, 2007 Date: March 1, 2007
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