Exhibit 10.25
EXECUTION COPY
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (this
“Agreement”) is entered into as of April 29, 2009
(the “Effective Date”) between Abraxis BioScience,
Inc., a Delaware corporation (“Parent”), and its
wholly-owned operating subsidiary Abraxis BioScience, LLC, a
Delaware limited liability company (the “Company”), on
the one hand, and Leon O. Moulder, Jr. (“Executive”),
on the other hand.
RECITAL
Parent and the Company desire to
employ Executive, and Executive desires to be so employed by Parent
and the Company, on the terms and subject to the conditions set
forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of
the premises and the mutual promises set forth in this Agreement,
the parties hereby agree as follows:
1. Definitions . Unless
otherwise defined herein, the capitalized terms defined in
Exhibit A shall have the meanings therein specified for all
purposes of this Agreement.
2. Employment .
(a) Subject to the terms and
conditions contained herein, Parent and the Company hereby agree to
employ Executive, and Executive accepts such employment, on the
Effective Date until the Termination Date (the “Employment
Term”).
(b) During Executive’s
employment under this Agreement, Executive shall render services to
the Company and Parent in the positions of President and Chief
Executive Officer of the Company and Parent and President and Chief
Executive Officer of Abraxis Oncology, an operating division of the
Company, plus such additional title or titles as may be assigned to
Executive by the board of directors of Parent (the
“Board”). Executive shall perform the duties and have
the authorities and responsibilities commensurate with the duties,
authorities and responsibilities of persons in similar capacities
in similarly sized public companies, subject to additional duties
(that are not materially inconsistent with duties and
responsibilities as are normally related to such positions) as may
be assigned by the Board and subject to the terms and conditions
hereof. Executive will report to the Board. In addition, so long as
Patrick Soon-Shiong, M.D. serves as the Executive Chairman of the
Board (whether before or after any Spin Transaction), Executive
will also report to Dr. Soon-Shiong as Executive Chairman. As
of the Effective Date, the Board shall appoint Executive as Vice
Chairman of the Board.
(c) Except as set forth on the
Reporting Schedule, all employees of the Company and Parent shall
report to Executive or his designee. In performing his services
hereunder, Executive shall abide by the rules, regulations and
practices of the Company and Parent as adopted or modified from
time to time in the sole discretion of the Company and
Parent.
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(d) Executive will devote
substantially all of his entire business time, energy, attention
and skill to the services of the Company and Parent and to the
promotion of its interests. So long as Executive is employed by the
Company, Executive shall not, without the written consent of the
Company (except as provided below):
(i) engage in any other activity for
compensation, profit or other pecuniary advantage, whether received
during or after the term of this Agreement; or
(ii) render or perform services of a
business, professional, or commercial nature other than to or for
the Company, Parent and their affiliates, either alone or as an
employee, consultant, director, officer, or partner of another
business entity (including serving on boards of directors), whether
or not for compensation;
provided, that it shall not be a
violation of this Agreement for Executive, without the
Company’s or Board’s consent, to (A) serve on
civic or charitable boards, (B) manage personal and family
investments, (C) serve on corporate boards of those companies
as the Chairman of the Board or the Board may approve, or
(D) engage in such other activities as the Chairman of the
Board or the Board may approve, in each case so long as such
activities do not interfere materially with the performance of
Executive’s duties and responsibilities to the Company and
Parent.
(e) Prior to or concurrently with
the execution of this Agreement, Executive has executed a
Proprietary Interest Protection Agreement (the
“Confidentiality Agreement”) and Parent’s
standard form of indemnification agreement (the
“Indemnification Agreement”), copies of which are
attached hereto as Exhibit B and Exhibit C, respectively.
To the extent any part of this Agreement conflicts or is
inconsistent with any part of the Confidentiality Agreement or the
Indemnification Agreement, the terms and conditions of this
Agreement shall govern, and the conflicting or inconsistent
provisions of the Confidentiality Agreement and the Indemnification
Agreement shall have no force or effect.
3. Location of Employment .
Executive’s principal place of employment shall be at the
Company’s offices in Bridgewater, New Jersey; provided, that
Executive shall from time to time be required to travel to various
domestic and foreign locations for purposes consistent with his
duties hereunder.
4. Compensation .
(a) In exchange for full performance
of Executive’s obligations and duties under this Agreement,
the Company shall pay Executive a salary at the rate of Six Hundred
Fifty Thousand Dollars ($650,000.00) per year (“Base
Salary”). The Base Salary shall be paid in accordance with
the Company’s regularly established payroll practice. The
Base Salary will be reviewed from time to time in accordance with
the established procedures of the Company for increasing salaries
for executive officers and may be increased in the sole discretion
of the Board or Parent’s Compensation Committee. The Base
Salary shall not be reduced except in the case of a reduction of
base salary applied generally to the other executive officers of
the Company, provided that such reduction of Executive’s Base
Salary is no more than ten percent (10%) from the highest Base
Salary during the Employment Term. Any such adjusted salary shall
become the “Base Salary.”
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(b) During Executive’s
employment under this Agreement, Executive shall also be reimbursed
by the Company for reasonable business expenses actually incurred
or paid by Executive, consistent with the policies established by
the Company, in rendering to the Company, Parent and their
affiliates the services provided for in this Agreement. All
business expense reimbursements shall be made in accordance with
the Company’s reimbursement policy.
(c) Executive shall be entitled to
vacation and sick leave on terms equivalent to those of other
executive officers of the Company. Executive shall accrue vacation
at the rate of four (4) weeks per year of employment with the
Company in accordance with the Company’s standard vacation
policy.
(d) Executive shall be entitled to
participate in all benefit plans (including, but not limited to,
any medical, dental, life insurance, retirement and disability
plans) and to all perquisites which shall be available from time to
time to the executive officers of the Company generally. Executive
acknowledges and agrees that the Company may, in its discretion,
terminate at any time or modify from time to time any such benefit
plans so long as such termination or modification is applicable to
all executive officers.
(e) To assist Executive and his
immediate family with relocating to the New Jersey area, the
Company will pay or reimburse Executive up to an aggregate of
$50,000 for (i) all reasonable moving costs, (ii) the
reasonable costs for up to two exploratory trips to the New Jersey
area, including airfare, lodging, meals, rental car and other
incidental expenses, and (iii) reasonable temporary housing in
the New Jersey area for up to six (6) months; provided, that
Executive must incur such costs on or before December 31, 2009
and must provide the Company with reasonably detailed backup
documentation supporting the costs incurred; provided, further,
that the Company shall not be responsible for broker’s fees,
real estate transfer taxes or any other costs associated with the
relocation of Executive or his immediate family. If the Company
terminates Executive’s employment for Cause pursuant to
Section 6(c) or Executive voluntarily terminates his
employment with the Company pursuant to Section 6(e) (other
than for Good Reason as set forth in Section 6(f)), in each
case on or before the expiration of the one (1) year
anniversary of the Effective Date, then Executive shall repay the
Company all relocation costs paid or reimbursed by the Company
pursuant to this subsection (e) within thirty (30) days
of his Termination Date.
(f) As of the Effective Date, Parent
will grant Executive with an option to purchase two hundred
thousand (200,000) shares of Parent’s common stock under
Parent’s 2007 Stock Incentive Plan, which option shall
(a) have an exercise price equal to the closing trading price
of Parent’s common stock on the grant date, (b) vest in
equal annual installments over a four-year period, starting on the
first anniversary of the grant date, (c) vest in full upon the
consummation of a Transaction, provided Executive either
(i) is employed with the Company on the date of such
Transaction or (ii) was terminated without Cause or resigned
for Good Reason within six (6) months prior to such
Transaction and such termination or event permitting a resignation
for Good Reason is in contemplation of a Transaction and
(d) be subject to the terms and conditions of the stock option
agreement substantially in the form attached hereto as
Exhibit D.
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(g) As of the Effective Date, Parent
will grant Executive fifty thousand (50,000) restricted stock
units under Parent’s 2007 Stock Incentive Plan, which
restricted stock units shall (a) entitle Executive to one
share of Parent’s common stock for each vested restricted
stock unit, (b) vest in equal annual installments over a
four-year period, starting on the first anniversary of the grant
date, (c) vest in full upon the consummation of a Transaction,
provided Executive either (i) is employed with the Company on
the date of such Transaction or (ii) was terminated without
Cause or resigned for Good Reason within six (6) months prior
to such Transaction and such termination or event permitting a
resignation for Good Reason is in contemplation of a Transaction
and (d) be subject to the terms and conditions of the
restricted stock unit agreement substantially in the form attached
hereto as Exhibit E.
(h) As of the Effective Date, Parent
will grant Executive two hundred thousand (200,000) restricted
stock units under Parent’s 2007 Stock Incentive Plan, which
restricted stock units shall (a) entitle Executive to one
share of Parent’s common stock for each vested restricted
stock unit, (b) vest only in accordance with Schedule A
and (c) be subject to the terms and conditions of the
restricted stock unit agreement substantially in the form attached
hereto as Exhibit F.
(i) Beginning in 2010 and in each
fiscal year during the Employment Term afterwards, Executive shall
be eligible to receive a long-term equity incentive award,
consistent with awards to other executive officers of the Company,
in such amount and form, and subject to such terms and conditions,
as may be determined in the sole discretion of the Board or
Parent’s Compensation Committee.
(j) Executive shall be eligible to
receive an annual bonus in such amount, and subject to such
performance targets and other factors, as may be determined in the
sole discretion of the Board or Parent’s Compensation
Committee (“Annual Bonus”), and performance targets for
Executive shall be established at the same time such amounts and
targets are established for the other executive officers of the
Company. The target amount of each Annual Bonus for each fiscal
year during the Employment Term shall not be less than seventy-five
percent (75%) of Executive’s Base Salary (“Target
Bonus”). As the Annual Bonus is subject to the attainment of
performance targets, it may be paid, to the extent earned or not
earned, at below target levels, and above target levels (with a
maximum of 150% of Target Bonus for the applicable fiscal year).
Subject to the Company’s policies or practices regarding
vesting of the Annual Bonus, any Annual Bonus earned shall be paid
at the same time as bonuses for other executive officers but in no
event later than March 15th of the calendar year immediately
following the year in which such Annual Bonus becomes vested. The
Company and Parent acknowledge that Executive’s target Annual
Bonus amount for the 2009 fiscal year will be seventy-five percent
(75%) of his Base Salary for the partial fiscal
year.
(k) Within thirty (30) days
after the Effective Date, the Company shall pay to Executive a
one-time sign on bonus of One Hundred Thousand Dollars
($100,000.00) in cash (“Sign On Bonus”), subject to any
required withholdings pursuant to Section 4(l). If the Company
terminates Executive’s employment for Cause pursuant to
Section 6(c) or Executive voluntarily
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terminates his employment with the
Company pursuant to Section 6(e) (other than for Good Reason
as set forth in Section 6(f)), in each case on or before the
expiration of the one (1) year anniversary of the Effective
Date, Executive shall repay the Company the Sign On Bonus in cash
within thirty (30) days of his Termination Date.
(l) The Company and Parent shall
cover Executive under directors’ and officers’
liability insurance both during and, while potential liability
exists, after employment in the same amount and to the same extent
as the Company and Parent provides to its other officers and
directors. These obligations shall survive the termination of
Executive’s employment with the Company.
(m) Notwithstanding anything else
herein to the contrary, the Company and/or Parent may withhold (or
cause there to be withheld, as the case may be) from any amounts
otherwise due or payable under or pursuant to this Agreement or
otherwise such non-U.S., U.S., federal, state and local income,
employment, or other taxes as may be required to be withheld
pursuant to any applicable law or regulation.
5. Term . Executive’s
employment hereunder shall commence on the Effective Date and shall
continue in effect until terminated pursuant to Section 6
below.
6. Termination .
Executive’s employment hereunder may be terminated as
follows:
(a) The employment of Executive
under this Agreement shall terminate on the date of
Executive’s death.
(b) The employment of Executive
under this Agreement may be terminated by the Company immediately
upon giving Executive notice if Executive becomes Disabled.
Notwithstanding the foregoing, in the event that as a result of
earlier absence because of a mental or physical incapacity
Executive incurs a “separation from service” pursuant
to Treasury Regulation 1.409A-1(h)(1)(i) Executive shall on such
date automatically be terminated from employment because Executive
has become Disabled.
(c) The employment of Executive
under this Agreement may be terminated by the Company upon giving
Executive notice following the occurrence of an event constituting
Cause.
(d) In addition to the circumstances
described in subsection (c) above, the Company may terminate
Executive’s employment at any time (immediately upon giving
notice to Executive) for any reason or no reason, with or without
Cause or prior notice; provided, that a cessation of the
Company’s employment of Executive in connection with a
Transaction shall not be deemed for purposes of this Agreement to
be a termination of Executive by the Company if the Successor
assumes and agrees in writing to perform the Company’s
obligations hereunder.
(e) Executive may voluntarily
terminate his employment with or without Good Reason (subject to
Section 6(f) below) under this Agreement by giving the
Chairman of the Board or the Board written notice of his
resignation signed by Executive.
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(f) Executive’s voluntary
termination shall be deemed for purposes hereof to have occurred
for Good Reason only if (i) Executive provides written notice
to the Company prior to resignation and within thirty (30)
days following the first occurrence of circumstances giving rise to
Good Reason, (ii) the Company fails to correct the
circumstances giving rise to Good Reason prior to resignation and
within thirty (30) days following receipt of such notice and
(iii) Executive resigns within fifteen (15) days
following such thirty (30) day period.
7. Consequences of
Termination.
(a) If the employment of Executive
under this Agreement is terminated pursuant to Sections 6(a)
(death), 6(b) (Disability), 6(c) (termination with Cause) or 6(e)
(voluntary termination, other than for Good Reason), then
(i) the Company shall pay Executive (or, as applicable, his
heirs, estate or representative) the Accrued Compensation,
(ii) the Company shall provide to Executive (or his
dependents, as applicable) such benefits, if any, as may be
required to be provided by the Company under the Consolidated
Omnibus Budget Reconciliation Act (“COBRA”) and any
disability policy of the Company applicable to Executive,
(iii) Executive (or, as applicable, his heirs, estate or
representative) shall be entitled to any then-vested benefits,
stock options and other equity awards as applicable pursuant to the
terms of such benefits, options or awards and (iv) Executive
shall not be entitled to any other compensation or benefits from
the Company or Parent or their respective affiliates under this
Agreement or otherwise (other than as provided in Section 17
and 21 hereof). Notwithstanding the foregoing, if Executive’s
employment is terminated pursuant to Section 6(a) (death) or
6(b) (Disability), Executive (or, as applicable, his heirs, estate
or representative) shall be entitled to an amount equal to the
Target Bonus for the year in which termination occurs, prorated
based on the number of days of employment during the year in which
the termination has occurred relative to 365 days, payable at the
time an Annual Bonus would otherwise be paid, but no later than
March 15th following the end of the year in which the
termination occurred (the “Pro-Rata Bonus”).
(b) If the employment of Executive
under this Agreement is terminated by the Company without Cause as
provided in Section 6(d) or by Executive for Good Reason
pursuant to Section 6(f) in connection with or within one
(1) year following a Transaction, then Executive shall not be
entitled to any compensation or benefits from the Company under
this Agreement or otherwise, except for the following: (i) the
Accrued Compensation; (ii) the Company shall pay Executive a
lump sum payment equal to twenty-four (24) months of Base
Compensation plus two times the Target Bonus for the year in which
termination occurs; (iii) the Pro-Rata Bonus; and
(iv) the Company shall provide reimbursement of
Executive’s COBRA premiums until he obtains new employment,
up to a maximum of six (6) months from the Termination Date,
subject to Executive’s submission of appropriate
documentation; provided, that Executive shall not be entitled to
receive or retain any post-termination benefits described in this
subsection (b) unless, within twenty-one (21) days (or
forty-five (45) days if required by applicable law) following
the Termination Date, he executes and delivers to the Company a
Release of Claims in the form attached as Exhibit H hereto,
and does not revoke such Release of Claims during any applicable
revocation period. Any payments due pursuant to this subsection
(b) (other than the Accrued Compensation and the Pro-Rata
Bonus, which shall be paid in accordance with the payment
provisions of such defined terms) shall be made during the second
month following the month in which the Termination Date occurs,
subject to any delay required by Section 21(b)below. Benefits
provided under this Section 7(b)
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shall be in lieu of any benefits
provided pursuant to Section 7(c) below. In the event of the
consummation of a Transaction within six (6) months following
the termination of Executive’s employment by the Company
without Cause or by Executive for Good Reason and and such
termination is in contemplation of a Transaction, then Executive
shall be entitled to receive the difference between those benefits
provided pursuant to this subsection (b) and those benefits
already provided pursuant to Section 7(c). Such benefits
(other than the COBRA reimbursement premiums) shall be paid in a
lump sum within two and one half (2.5) months following the
consummation of the Transaction.
(c) Subject to subsection
(b) above, if the employment of Executive under this Agreement
is terminated by the Company without Cause as provided in
Section 6(d) or by Executive for Good Reason pu
