EXHIBIT 10.32
EMPLOYMENT AGREEMENT
THIS AGREEMENT made by and between CAMBREX CORPORATION, a Delaware
corporation (the "Company"), and Paolo Russolo, (the "Employee"), as of the 6th
day of February, 2007.
WHEREAS, the Employee presently is a key management employee of a
subsidiary of the Company, namely the President of the Cambrex Profarmaco
Business Unit; and
WHEREAS, the Board of Directors of the Company (the "Board"), on the
advice of its Compensation Committee, has determined that it is in the best
interests of the Company and its stockholders to assure that the Company will
have the continued dedication of the Employee, notwithstanding the possibility,
threat, or occurrence of a Change of Control (as defined below) of the Company.
The Board believes it is imperative to diminish the inevitable distraction of
the Employee by virtue of the personal uncertainties and risks created by a
pending or threatened Change of Control, to encourage the Employee's full
attention and dedication to the Company currently and in the event of any
threatened or pending Change of Control which provides the Employee with
individual financial security and which are competitive with those of other
corporations. In order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions.
(a) The "Effective Date" shall be the first date during the "Change of
Control Period" (as defined in Section 1(b)) on which a Change of Control
occurs. Anything in this Agreement to the contrary notwithstanding, if the
Employee's employment with the Company is terminated prior to the date on which
a Change of Control occurs, and it is reasonably demonstrated that such
termination (1) was at the request of a third party who has taken steps
reasonably calculated to effect a Change of Control or (2) otherwise arose in
connection with or anticipation of a Change of Control, then for all purposes of
this Agreement the "Effective Date" shall mean the date immediately prior to the
date of such termination.
(b) The "Change of Control Period" is the period commencing on the date
hereof and ending on the third anniversary of such date; provided, however, that
commencing on the date one year after the date hereof, and on each successive
anniversary thereof (each such anniversary being hereinafter referred to as a
"Renewal Date"), the Change of Control Period shall be automatically extended so
as to end on the third anniversary of such Renewal Date unless at least sixty
(60) days prior to such Renewal date the Company shall give notice that the
Change of Control Period shall not be so extended, in which event the then
current Change of Control Period shall not be extended and shall end on the then
applicable ending date.
2. Change of Control. For the purpose of this Agreement, a "Change of
Control" shall mean:
(a) the acquisition (other than from the Company) by any person, entity
or "group" (within the meaning of Section 13 (d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the "Exchange Act") but excluding for this
purpose the Company or its subsidiaries or any employee benefit plan of the
Company or its subsidiaries which acquires beneficial ownership of voting
securities of the Company) of "beneficial ownership" (within the meaning of Rule
13d-3
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promulgated under the Exchange Act) of fifteen percent (15%) or more of either
the then outstanding shares of common stock or the combined voting power of the
Company's then outstanding voting securities entitled to vote generally in the
election of directors; or
(b) individuals who, as of the date hereof, constitute the Board (as of
the date hereof the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided that any person becoming a member of the
Board subsequent to the date hereof whose election or nomination for election by
the Company's stockholders (other than an election or nomination of an
individual whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be, for purposes of this
Agreement, considered a member of the Incumbent Board; or
(c) approval by the stockholders of the Company of either a
reorganization, or merger, or consolidation, with respect to which persons who
were the stockholders of the Company immediately prior to such reorganization,
merger or consolidation do not, immediately thereafter, own more than fifty
percent (50%) of the combined voting power entitled to vote generally in the
election of directors of the reorganized, merged or consolidated entity's then
outstanding voting securities, or a liquidation or dissolution of the Company,
or the sale of all or substantially all of the assets of the Company; or
(d) the sale or disposition by the Company of all or substantially all
of the assets of the Company; or
(e) any other event or series of events or which, notwithstanding any
of the foregoing provisions of this Section 2 to the contrary, is determined by
a majority of the Incumbent Board to constitute a Change of Control for the
purposes of this Agreement.
3. Employment Period. The Company hereby agrees to employ the Employee,
and the Employee hereby agrees to remain in the employ of the Company, for the
period (the "Employment Period") commencing on the Effective Date and ending on
the second anniversary of such date; provided, however, that if a Change of
Control actually occurs but the Employee's employment is terminated by the
Company other than for Cause (as defined in Section 5(b) hereof) prior to the
occurrence of such Change of Control but within twelve (12) months after
(a) the commencement of a tender offer for at least 15% of the
Company's common stock by any person (other than the Company, one
of its subsidiaries or any employee benefit plan sponsored or
maintained by the Company or one of its subsidiaries) that has not
been withdrawn on or before the date of such termination;
(b) the commencement of a proxy contest intended to remove control of
the Company's business from the Incumbent Board that has not been
abandoned on or before the date of such termination; or
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(c) the execution of a definitive agreement to merge or otherwise
consolidate the Company with or into another corporation or to
sell a substantial portion of the Company's assets (in each case,
other than a transaction involving only the Company and one or
more corporations or other entities directly or indirectly owned
and controlled by the Company) that is still binding on the
parties thereto at the date of such termination;
the Effective Date of this Agreement shall be deemed to be the day immediately
prior to the date of such termination and the date of such termination shall be
deemed to be the Employee's Date of Termination (as defined in Section 5(e)
hereof) for the purposes of this Agreement.
4. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, (A) the Employee's position
shall be at least commensurate in all substantial respects with the Employee's
position with the Company and its subsidiaries during the ninety-day period
immediately preceding the Effective Date and (B) the Employee's services shall
be performed at the location where the Employee was employed immediately
preceding the Effective Date or any office or location less than thirty-five
(35) miles from such location.
(ii) During the Employment Period, the Employee agrees to devote
reasonable attention and time during normal business hours to the business and
affairs of the Company and, to the extent necessary to discharge the
responsibilities assigned to the Employee hereunder, to use the Employee's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. It is expressly understood and agreed that to the extent that
any outside activities have been conducted by the Employee prior to the
Effective Date, the continued conduct of such activities subsequent to the
Effective Date shall not thereafter be deemed to interfere with the performance
of the Employee's responsibilities to the Company.
(b) Compensation.
(i) Base Salary. During the Employment Period, the Employee shall
receive a base salary ("Base Salary")at a monthly rate at least equal to the
highest monthly base salary paid or payable to the Employee by the Company and
its subsidiaries during the twelve-month period immediately preceding the month
in which the Effective Date occurs. During the Employment Period, the Base
Salary shall be reviewed at least annually and shall be increased at any time
and from time to time as shall be substantially consistent with increases in
base salary awarded in the ordinary course of business to other key employees of
the Company and its subsidiaries. Any increase in Base Salary shall not serve to
limit or reduce any other obligation to the Employee under this Agreement.
(ii) Annual Bonus. In addition to Base Salary, the Employee shall
be eligible (but not entitled) to receive, for each fiscal year during the
Employment Period, an annual bonus (an "Annual Bonus") (either pursuant to any
incentive bonus plan maintained by the
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Company or otherwise) in cash, restricted stock, restricted stock units or other
forms of remuneration on the same basis as with respect to the fiscal year
immediately preceding the fiscal year in which the Effective Date occurs.
5. Termination.
(a) Death or Disability. This Agreement shall terminate automatically
upon the Employee's death. If the Company determines in good faith that the
Disability of the Employee has occurred (pursuant to the definition of
"Disability" set forth below), it may give to the Employee written notice of its
intention to terminate the Employee's employment. In such event, the Employee's
employment with the Company shall terminate effective on the thirtieth (30th)
day after receipt of such notice by the Employee (the "Disability Effective
Date"), provided that, within the thirty (30) days after such receipt, the
Employee shall not have returned to full-time performance of the Employee's
duties. For purposes of this Agreement, "Disability" means disability which, at
least twenty-six (26) weeks after its commencement, is determined to be total
and permanent by a physician selected by the Company or its insurers and
acceptable to the Employee or the Employee's legal representative (such
agreement as to acceptability not to be withheld unreasonably).
(b) Cause. The Company may terminate the Employee's employment for
"Cause". For purposes of this Agreement, "Cause" shall constitute either (i)
personal dishonesty or breach of fiduciary duty involving personal profit; (ii)
the commission of a criminal act related to the performance of duties, or the
furnishing of proprietary confidential information about the Company to a
competitor, or potential competitor or third party whose interests are adverse
to those of the Company; (iii) habitual intoxication by alcohol or drugs during
work hours; or (iv) conviction of a felony.
(c) Good Reason. The Employee's employment may be terminated by the
Employee for Good Reason. For purposes of this Agreement, "Good Reason" means:
(i) relocation of the principal place at which the Employee's
duties are to be performed to a location more than thirty-five (35) miles from
the principal place where the Employee's duties were performed during the
ninety-day period immediately preceding the Effective Date;
(ii) a substantial reduction in the Base Salary, or in the
benefits or perquisites provided the Employee from those which pertained during
the 90-day period immediately preceding the Effective Date;
(iii) a substantial reduction in the Employee's, responsibilities,
authorities or functions from those which pertained during the 90-day period
immediately preceding the Effective Date;
(iv) a substantial adverse change in the Employee's work
conditions from those which pertained during the 90-day period immediately
preceding the Effective Date; and
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(v) any failure by the Company to comply with and satisfy Section
II(c) of this Agreement.
(d) Notice of Termination. Any termination by the Company for Cause or
by the Employee for Good Reason shall be communicated by Notice of Termination
to the other party hereto given in accordance with Section 12(b) of this
Agreement. For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee's
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than fifteen (15) days after
the giving of such notice). The failure by the Employee to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Good Reason shall not waive any right of the Employee hereunder or preclude the
Employee from asserting such fact or circumstance in enforcing his rights
hereunder.
(e) Date of Termination. "Date of Termination" means the date of
receipt of the Notice of Termination or any later date specified therein, as the
case may be; provided, however, that (i) if the Employee's employment is
terminated by the Company other than Cause or Disability, the Date of
Termination shall be the date on which the Company notifies the Employee of such
termination and (ii) if the Employee's employment is terminated by reason of
death or Disability, the Date of Termination shall be the date of death of the
Employee or the Disability Effective Date, as the case may be.
6. Obligation of the Company upon Termination.
(a) Death. If the Employee's employment is terminated by reason of the
Employee's death, this Agreement shall terminate without further obligations to
the Employee's legal representatives under this Agreement, other than those
obligations accrued or earned and vested (if applicable) by the Employee as of
the Date of Termination, including, for this purpose (i) the Employee's full
Base Salary through the Date of Termination at the rate in effect on the Date of
Termination or, if higher, at the highest rate in effect at any time from the
ninety-day period preceding the Effective Date through the Date of Termination
(the "Highest Base Salary"), (ii) the product of the Annual Bonus paid to the
Employee for the last full fiscal year and a fraction, the numerator of which is
the number of days in the current fiscal year through the Date of Termination,
and the denominator of which is three hundred sixty-five (365) and (iii) any
compensation previously deferred by the Employee (together with accrued interest
thereon, if any) and not yet paid by the Company and any accrued vacation pay
not yet paid by the Company (such amounts specified in clauses (i), (ii) and
(iii) are hereinafter referred to as "Accrued Obligations"). All such Accrued
Obligations shall be paid to the Employee's estate or beneficiary, as
applicable, in a lump sum in cash within thirty (30) days of the Date of
Termination. Anything in this Agreement to the contrary notwithstanding, the
Employee's family shall be entitled to receive benefits at least equal to the
most favorable benefits provided by the Company and any of its subsidiaries
under such plans, programs, practices and policies relating to family death
benefits, if any, in accordance with the most favorable plans, programs,
practices and policies of the company and its subsidiaries in effect at any time
during the ninety-day period immediately preceding the Effective Date or, if
more favorable to the
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Employee and/or the Employee's family, as in effect on the date of the
Employee's death with respect to other key employees of the Company and its
subsidiaries and their families.
(b) Disability. If the Employee's employment is terminated by reason of
the Employee's Disability, this Agreement shall terminate without further
obligations to the Employee; other than those obligations accrued or earned and
vested (if applicable) by the Employee as of the Date of Termination, including
for this purpose, all Accrued Obligations. All such Accrued Obligations shall be
paid to the Employee in a lump sum in cash within thirty (30) days of the Date
of Termination. Anything in this Agreement to the contrary notwithstanding, the
Employee shall be entitled after the Disability Effective Date to receive
disability and other benefits at least equal to the most favorable of those
provided by the Company and its subsidiaries to disabled employees and/or their
families in accordance with such plans, programs, practices and policies of the
Company and its subsidiaries in effect at any time during the ninety-day period
immediately preceding the Effective Date or, if more favorable to the Employee
and/or the Employee's family, as in effect at any time thereafter with respect
to other key employees of the Company and its subsidiaries and their families.
(c) Cause; Other than for Good Reason. If the Employee's employment
shall be terminated for Cause, this Agreement shall terminate without further
obligations to the Employee other than the obligation to pay to the Employee the
Highest Base Salary through the Date of Termination plus the amount of any
compensation previously deferred by the Employee (together with accrued interest
thereon, if any). If the Employee terminates employment other than for Good
Reason, this Agreement shall terminate without further obligations to the
Employee, other than those obligations accrued or earned and vested (if
applicable) by the Employee through the Date of Termination, including for this
purpose, all Accrued Obligations. All such Accrued Obligations shall be paid to
the Employee in a lump sum in cash within thirty (30) days of the Date of
Termination.
(d) Good Reason; Other than for Cause or Disability. If, during the
Employment Period, the Company shall terminate the Employee's employment other
than for Cause, Disability, or death or if the Employee shall terminate his
employment for Good Reason:
(i) the Company shall pay to the Employee in a lump sum in cash
within thirty (30) days after the Date of Termination the aggregate of the
following amounts:
A. to the extent not theretofore paid, the Employee's
Highest Base Salary through the Date of Termination; and
B. the product of (x) the highest Annual Bonus earned by the
Employee during the two fiscal years immediately preceding the Date of
Termination and (y) a fraction, the numerator of which is the number of days in
the current fiscal year through the Date of Termination and the denominator of
which is three hundred sixty-five (365); and
C. the product of (x) a fraction, the numerator of which is
twenty-four (24) minus the number of whole months the Employee has been employed
by the Company following the first anniversary of the Effective Date and the
denominator of which is twelve (12) and (y) the annualized Highest Base Salary;
and
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D. the product of (x) fraction, the numerator of which is
twenty-four (24) minus the number of whole months the Employee has been employed
by the Company following the first anniversary of the Effective Date and the
denominator of which is twelve (12) and (y) the highest Annual Bonus earned by
the Employee during two fiscal years immediately preceding the Date of
Termination, provided that Employee's Annual Bonus under this Section shall be
his Target Bonus until an Annual Bonus has actually been earned; and
E. any accrued vacation pay not yet paid by the Company; and
F. all outstanding equity awards shall immediately vest and,
as applicable, become exercisable.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Employee's continuing or future participation in any benefit, bonus,
incentive or other plans, programs, policies or practices, provided by the
Company or any of its subsidiaries and for which the Employee may qualify, nor
shall anything herein limit or otherwise affect such rights as the Employee may
have under any stock option or other agreements with the Company or any of its
subsidiaries. Amounts which are vested benefits or which the Employee is
otherwise entitled to receive under any plan, policy, practice or program of the
Company or any of its subsidiaries at or subsequent to the Date of Termination
shall be payable in accordance with such plan, policy, practice or program
provided, however, that in the event the terms of any such plan, policy,
practice or program concerning the payment of benefits thereunder shall conflict
with any provision of this Agreement, the terms of this Agreement shall take
precedence but only if and to the extent the payment would not adversely affect
the tax exempt status (if applicable) of any such plan, policy, practice or
program and only if the Employee agrees in writing that such payment shall be in
lieu of any corresponding payment from such plan, policy, practice or program.
8. Full Settlement. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against the Employee or
others. In no event shall the Employee be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Employee under any of the provisions of this Agreement. The Company agrees to
pay, to the full extent permitted by law, all legal fees and expenses which the
Employee may reasonably incur as a result of any contest (regardless of the
outcome thereof) by the Company or others of the validity or enforceability of,
or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by the Employee about
the amount of any payment pursuant to Section 9 of this Agreement), plus in each
case interest at the applicable Federal rate provided for in Section 7872(f)(2)
of the Internal Revenue Code of 1986, as amended (the "Code").
9. Non-competition. As a condition to receiving any benefits pursuant to
this Agreement, the Employee agrees that during his period of employment and
through the first anniversary of his Date of Termination, the Employee shall not
engage in or become associated with any Competitive Activity. For purposes of
this Section 9, a
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"Competitive Activity" shall mean any business or other endeavor that engages in
any country in which the Company or its Affiliates have business operations in a
business that directly or indirectly competes with all or any substantial part
of any of the business in which the Company or its Affiliates is engaged at the
time of the Employee's Date of Termination. The Employee shall be considered to
have become "engaged" or "associated" with a Competitive Activity if he becomes
involved as an owner, employee, officer, director, independent contractor,
agent, partner, advisor, lender, or in any other capacity calling for the
rendition of the Employee's personal services, either alone or with any
individual, partnership, corporation or other organization that is engaged in a
Competitive Activity and his involvement relates in any respect to the
Competitive Activity of such entity; provided, however, that the Employee shall
not be prohibited from owning less than two percent of any publicly traded
corporation, whether or not such corporation is in competition with the Company.
If, at any time, the provisions of this Section 9 shall be determined to be
invalid or unenforceable, by reason of being vague or unreasonable as to area,
duration or scope of activity, this Section 9 shall be considered divisible and
shall become and be immediately amended to only such area, duration and scope of
activity as shall be determined to be reasonable and enforceable by the court or
other body having jurisdiction over the matter; and the Employee agrees that
this Section 9 as so amended shall be valid and binding as though any invalid or
unenforceable provision had not been included herein.
10. Confidential Information. The Employee shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its subsidiaries, and their
respective businesses, which shall have been obtained by the Employee during the
Employee's employment by the Company or any of its subsidiaries and which shall
not be or become public knowledge (other than by acts by the Employee or his
representatives in violation of this Agreement). After termination of the
Employee's employment with the Company, the Employee shall not, without the
prior written consent of the Company, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 10 constitute a basis for deferring or withholding any amounts
otherwise payable to the Employee under this Agreement.
11. Successors.
(a) This Agreement is personal to the Employee and without
the prior written consent of the Company shall not be assignable by the Employee
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Employee's legal
representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) 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
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assets of the Company to assume expressly 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. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
12. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof an shall have no force or effect.
(b) All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Employee:
Mr. Paolo Russolo
If to the Company:
Cambrex Corporation
One Meadowlands Plaza
East Rutherford, N.J. 07073
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable under
this Agreement such Federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) The Employee's failure to insist upon strict compliance
with any provision hereof shall not be deemed to be a waiver of such provision
or any other provision thereof.
(f) This Agreement contains the entire understanding of the
Company and the Employee with respect to the subject matter hereof. This
agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
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(g) The Employee and the Company acknowledge that the
employment of the Employee by the Company or any of its subsidiaries prior to
the Effective Date is "at will", and, prior to the Effective Date, may be
terminated by either the Employee or the employer at any time. Upon a
termination of the Employee's employment or upon the Employee's ceasing to be an
officer of the Company, in each case, prior to the Effective Date, there shall
be no further rights under this Agreement.
IN WITNESS WHEREOF, pursuant to the authorization from its
Board of Directors, the Company has caused these presents to be executed in its
name on its behalf, and the Employee has hereunto set his hand, all as of the
day and year first above written.
CAMBREX CORPORATION
By: ___________________________________
James A. Mack, Chairman,
President & Chief Executive Officer
___________________________________
Paolo Russolo