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EXHIBIT 10.20
EMPLOYMENT AGREEMENT
THIS AGREEMENT made by and between CAMBREX CORPORATION, a
Delaware
corporation (the "Company"), and _________________, residing at
_________________________ (the "Employee"), as of the 6th day of
February, 2006.
WHEREAS, the Employee presently is a key management employee of
the
Company, namely its __________________________________; 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 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
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(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.
The term "the sale or disposition by the Company of all or
substantially all of
the assets of the Company" shall mean a sale or other disposition
transaction or
series of related transactions involving assets of the Company or
of any direct
or indirect subsidiary of the Company (including the stock of any
direct or
indirect subsidiary of the Company) in which the value of the
assets or stock
being sold or otherwise disposed of (as measured by the purchase
price being
paid therefor or by such other method as the Board determines is
appropriate in
a case where there is no readily ascertainable purchase price)
constitutes 35%
or more of the enterprise value of the Company (as hereinafter
defined). The
"enterprise value of the Company" shall be the aggregate market
value of the
then Outstanding Company Common Stock (on a fully diluted basis)
plus aggregate
debt minus cash. The aggregate market value of the shares of
Outstanding Company
Common Stock shall be determined by multiplying the number of
shares of
Outstanding Company Common Stock (on a fully diluted basis)
outstanding on the
date of the execution and delivery of a definitive agreement with
respect to the
transaction or series of related transactions (the "Transaction
Date") by the
average closing price of the shares of Outstanding Company Common
Stock for the
ten trading days immediately preceding the Transaction Date. Debt
and cash shall
be measured by the actual debt and cash on hand as of the end of
the month
preceding the Transaction Date.
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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 third 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
(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.
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(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 Company or otherwise) in
cash 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.
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(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
(v) any failure by the Company to comply with and satisfy
Section
II(c) of this Agreement.
For purposes of this Section 5(c), any good faith determination
of
"Good Reason" made by the Employee shall be conclusive.
Notwithstanding anything
in this Agreement to the contrary, a termination by the Employee
for any reason
during the 30-day period immediately following the first
anniversary of the
Effective Date shall be deemed to be a termination for Good Reason
for all
purposes 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
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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
