EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of the
31st day of March 2008 , by and between BMP SUNSTONE
CORPORATION, a Delaware corporation (“BMP”), and
Fred M. Powell (the “Executive”).
WHEREAS, BMP desires to offer the
Executive’s employment as Chief Financial Officer and the
Executive desires to accept such employment with BMP, upon the
terms and conditions set forth in this Agreement; and
WHEREAS, this Agreement will
formalize the terms and conditions governing the Executive’s
employment with BMP and the termination of that employment.
NOW, THEREFORE, the parties hereto
agree as follows:
PART ONE — DEFINITIONS
For
purposes of this Agreement, the following definitions shall be in
effect:
1. “Agreement” means
this Employment Agreement, as the same may, from time to time, be
amended in accordance with the provisions hereof.
2. “Board” means
BMP’s Board of Directors.
3. “Change in
Control” means a change in the ownership or control of BMP
effected through any of the following transactions:
(i) a
merger, consolidation or other reorganization approved by
BMP’s stockholders, unless securities representing
more than fifty percent (50%) of the total combined voting power of
the voting securities of the successor corporation are immediately
hereafter beneficially owned, directly or indirectly and in
substantially the same proportion, by the persons who beneficially
owned BMP’s outstanding voting securities immediately prior
to such transaction,
(ii) a
stockholder-approved sale, transfer or other disposition of all or
substantially all of BMP’s assets,
(iii) the
closing of any transaction or series of related transactions
pursuant to which any person or any group of persons comprising a
“group” within the meaning of Rule 13d-5(b)(1) of
the 1934 Act (other than BMP or a person that, prior to such
transaction or series of related transactions, directly or
indirectly controls, is controlled by or is under common control
with, BMP) becomes directly or indirectly the beneficial owner
(within the meaning of Rule 13d-3 of the 1934 Act) of
securities possessing (or convertible into or exercisable for
securities possessing) more than fifty percent (50%) of the total
combined voting power of BMP’s securities (as measured in
terms of the power to vote with respect to the election of Board
members) outstanding immediately after the consummation of such
transaction or series of related transactions, whether such
transaction involves a direct issuance from BMP or the acquisition
of outstanding securities held by one or more of BMP’s
existing stockholders, or
However,
the term Change in Control shall not include either
of the following events undertaken at the election of BMP:
a. any
transaction, the sole purpose of which is to change the state in
which BMP is incorporated; or
b. a
transaction, the result of which is to sell all or substantially
all of the assets of BMP to another corporation (the
“surviving corporation”) provided that the surviving
corporation is owned directly or indirectly by the stockholders of
BMP immediately following such transaction in substantially the
same proportions as their ownership of BMP’s common stock
immediately preceding such transaction.
4. “Change in Control
Severance Benefits” means the various payments and benefits
to which the Executive may become entitled to under
Paragraph 14 of Part Four of this Agreement upon his
Involuntary Termination in connection with a Change in
Control.
5. “Code” means the
Internal Revenue Code of 1986, as amended and the regulations
promulgated thereunder.
6. “Competing
Organization” means any person or legal entity engaged in,
about to engage in, or intending to engage in, the business of
providing services to foreign and/or domestic pharmaceutical
companies, specifically: drug distribution; physician-oriented drug
promotion; product registration; clinical trial management; and
pre-market entry analyses.
7. “Competing
Service” means any service of any person or legal entity
other than BMP, or a parent, subsidiary or affiliate of BMP, in
existence or under development, which during the term of this
Agreement, competes with or is an alternative to any present or
planned future service of BMP, whether or not actively marketed by
BMP.
8. “Customer” means
any individual, firm, partnership, corporation, company, joint
venture or governmental or military unit or any other entity or any
parent, subsidiary or affiliate of any of them which is negotiating
or has a contract with BMP or a parent, subsidiary or affiliate of
BMP for the purchase, sale or lease of BMP’s or a
parent’s, subsidiary’s or affiliate’s services or
which has been solicited by BMP or a parent, subsidiary or
affiliate of BMP with respect to such purchase or lease during the
Executive’s employment with BMP.
9. “Disability”
means a physical or mental disability which renders it
impracticable for the Executive to continue to perform his duties
under this Agreement, whether with or without reasonable
accommodation. The Executive shall be deemed to have incurred such
disability if (i) a physician selected by BMP and reasonably
satisfactory to the Executive advises BMP that the
Executive’s physical or mental condition will render him
unable to perform his duties under this Agreement for a period of
six (6) consecutive months, or (ii) due to a physical or
mental condition the Executive has not substantially performed the
material duties required of him hereunder for eighty percent (80%)
or more of the normal working days during a period of six
(6) consecutive months.
10. “Employment
Period” means the duration of the Executive’s
employment with BMP pursuant to the terms of this Agreement.
11. “Involuntary
Termination” means (i) BMP’s termination of the
Executive’s employment for any reason other than a
Termination for Cause, (ii) the termination of the
Executive’s employment by reason of his death, (iii) the
termination of the Executive’s employment by the Company by
reason of the Executive’s Disability, or (iv) the
Executive’s voluntary resignation following (A) a
material reduction in the scope of his duties and responsibilities,
(B) a material diminution by the Company of the
Executive’s authority, duties or responsibilities that
results in a change in his level of reporting so that he no longer
directly reports to the Board, (C) a national reduction in the
annual rate of his base salary by more than fifteen percent (15%),
(D) a material change in the geographic location of the
Executive’s principal place of employment that results in a
relocation of his principal place of employment by more than fifty
(50) miles, or (E) a material breach by BMP of any of its
obligations under this Agreement.
A greater than fifteen percent (15%)
aggregate reduction in the Executive’s base salary shall
not constitute grounds for an Involuntary Termination
under clause (C) above if substantially all of the other
executive officers of BMP are subject to the same aggregate
reduction to their base salary.
Notwithstanding the foregoing, no
event or condition described in clauses (A) through (E) shall
constitute an Involuntary Termination for purposes of this
Agreement unless (a) the Executive gives BMP written notice of
his intention to resign from employment with BMP for one of the
reasons set forth in (A) through (E) and specifies the
grounds for such resignation, (b) the notice described in
(a) is provided within sixty (60) days after the event
giving rise to the Executive’s right to resign first occurs,
and (c) such grounds for resignation (if susceptible to
correction) are not corrected by BMP within thirty (30) days
after its receipt of such notice. If BMP does not correct the
ground(s) for resignation during the thirty (30) day period
following the Executive’s notice of intent to resign, the
Executive’s resignation must become effective within
90 days after the expiration of the cure period in order for
such resignation to be treated as an Involuntary Termination under
this Agreement.
12. “1934 Act” means
the Securities Exchange Act of 1934, as amended.
13. “Option” means
any option granted to the Executive under the Plan or otherwise to
purchase shares of common stock which is outstanding at the time of
(i) a Change in Control or (ii) his Involuntary
Termination, whether or not in connection with a Change in
Control.
14. “Plan” means
(i) BMP’s 2007 Omnibus Equity Compensation Plan, as
subsequently amended or restated from time to time, and
(ii) any other equity incentive plan established or
implemented by BMP.
15. “Termination for
Cause” means the termination of the Executive’s
employment for any of the following reasons: (i) the
Executive’s conviction of a felony or his commission of any
act of personal dishonesty involving the property or assets of BMP,
(ii) a material breach by the Executive of one or more of his
obligations under his Agreement or his Proprietary Information and
Inventions Agreement with BMP, (iii) any intentional
misconduct by the Executive which has a material adverse effect
upon BMP’s business or reputation, (iv) the
Executive’s material dereliction of the major duties,
functions and responsibilities of his executive position,
(v) a
material
breach by the Executive of any of his fiduciary obligations as an
officer of BMP, or (vi) the Executive’s willful and
knowing participation in the preparation or release of false or
materially misleading financial statements relating to the false or
erroneous certification required of him under the Sarbanes-Oxley
Act of 2002 or any securities exchange on which shares of
BMP’s common stock are at the time listed for trading.
PART TWO — TERMS AND CONDITIONS OF EMPLOYMENT
1. Duties and
Responsibilities .
A. The
Executive shall serve as the Chief Financial Officer of BMP and
shall in such capacity report to the President and Chief Executive
Officer.
B.
During the employment period specified in Paragraph 2, the
Executive agrees that he will: (i) serve BMP faithfully,
diligently and to the best of his ability under the direction of
the Board, (ii) devote his best efforts and his entire working
time, attention and energy to the performance of his duties
hereunder and to promoting and furthering the interests of BMP, and
(iii) not, without the prior written approval of the Board,
become associated with or engaged in, any business other than that
of BMP, and he will do nothing inconsistent with his duties to
BMP.
2. Employment Period .
The Executive’s employment with BMP shall be governed by the
provisions of this Agreement for the period commencing
March 31, 2008 , and continuing through March 30,
2009. However, the term of the Executive’s employment
pursuant to the terms of this Agreement shall automatically be
extended for successive one-year periods hereafter, unless
either BMP or the Executive elects, by written notice delivered to
the other not later than sixty (90) days prior to the start of
any such one-year period, not to renew the term of this Agreement.
This Agreement may also be terminated at any time in accordance
with the termination of employment provisions set forth in
Paragraph 10.
3. Cash Compensation
.
A. For
all services to be rendered by the Executive under this Agreement
and such duties as the President and Chief Executive Officer may
assign him, BMP agrees to pay the Executive a base salary of
$325,000 per year, payable at such times as is customary for
salaried employees of BMP and in accordance with the normal payroll
practices of BMP.
B. For
each fiscal year of BMP during the Employment Period, beginning
with the fiscal year commencing January 1, 2008 , the
Executive shall be entitled to receive a cash bonus up to 40% of
his base salary to be determined by the Chief Executive Officer and
approved by the Compensation Committee of the Board of
Directors.
C. BMP
shall deduct and withhold from the compensation payable to the
Executive hereunder any and all applicable taxes and any other
amounts required to be deducted or withheld by Sunstone under
applicable statutes, regulations, ordinances or orders governing or
requiring the withholding or deduction of amounts otherwise payable
as compensation or wages to employees.
4. Equity Compensation
.
A. The
Executive shall be eligible to receive one or more additional
Option grants during the Employment Period, as the President and
Chief Executive Officer and Compensation Committee of the Board may
deem appropriate in order to provide him with sufficient equity
incentive for his position.
B. The
shares of common stock subject to the Options currently held and
additional Options which the Executive may subsequently receive
over the remainder of the Employment Period, shall be subject to
the applicable vesting acceleration provisions of either
Paragraph 12 or Paragraph 14 should an Involuntary
Termination of his employment occur during the Employment
Period.
5. Expense Reimbursement
. BMP shall reimburse the Executive for reasonable out-of-pocket
expenses incurred in connection with BMP’s and/or BMP
China’s business, including travel expenses, food and lodging
while away from home, subject to such polices as BMP may from time
to time reasonably establish for its employees and subject to
substantiation of expenses as required under applicable tax laws
and regulations.
6. Fringe Benefits
.
A. The
Executive shall, throughout the Employment Period, be eligible to
participate in all benefit plans which are made available to
BMP’s China executives and for which the Executive
qualifies.
B. The
Executive shall be entitled to receive four weeks of paid vacation
each year, which shall be taken at such time or times as will not
unreasonably hinder or interfere with BMP’s business or
operations. Vacation time may be accrued from year to year in
accordance with BMP’s general vacation policy.
C. BMP
will obtain and maintain at all times directors’ and
officers’ liability insurance for Executive, so long as such
insurance can be obtained on terms acceptable to the Board.
7. Indemnification . BMP
agrees to defend the Executive and shall indemnify and hold
harmless the Executive to the fullest extent permitted by law from
any and all liability, costs and expenses which may be assessed
against the Executive by reason of the performance of his
responsibilities and duties under the terms of this Agreement,
provided such liability does not result from the willful misconduct
or gross negligence of the Executive.
8. Proprietary
Information .
A. The
Executive hereby acknowledges that BMP and/or BMP China may, from
time to time during the Employment Period, disclose to the
Executive confidential information pertaining to BMP’s and/or
BMP China’s business, strategic plans, technology or
financial affairs. All information, data and know-how, whether or
not in writing, of a private or confidential nature concerning
BMP’s and/or BMP China’s trade secrets, inventions,
processes, systems, designs, drawings, product innovations and
developments, engineering, marketing strategies and future
marketing plans, customer lists, prospective customers, finances
and financial reports, employee information and other
organizational information (collectively,
“Proprietary Information”) is and shall remain the sole
and exclusive property of BMP and/or BMP China and shall not be
used or disclosed by the Executive except to the extent necessary
to perform his duties and responsibilities under this Agreement.
All tangible manifestations of such Proprietary Information
(whether written, printed or otherwise reproduced) shall be
returned by the Executive upon the termination of the Employment
Period, and the Executive shall not retain any copies or excerpts
of the returned items. The foregoing restrictions on the use,
disclosure and disposition of BMP’s and/or BMP China’s
Proprietary Information shall also apply to the Executive’s
use, disclosure and disposition of any confidential information
relating to the business, technology or financial affairs of
BMP’s and/or BMP China’s customers.
B. The
Executive shall, concurrently with the execution of this Agreement,
execute and deliver to BMP a copy of the BMP standard form
Proprietary Information and Inventions Agreement and shall remain
subject to the terms and provisions of that agreement throughout
the Employment Period and for such period hereafter as provided
pursuant to the terms of that agreement.
9. Death or Disability .
Upon the Executive’s death or Disability during the
Employment Period, the employment relationsh
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