EMPLOYMENT
AGREEMENT
This Employment Agreement (the “
Agreement ”), is made as of August 19, 2009, effective
as of July 15, 2009 by and between THE QUIGLEY CORPORATION ,
a corporation organized under the laws of the State of Delaware
(the “ Company ”), and ROBERT V.
CUDDIHY (“ Executive ”).
W I T N E S E T H:
WHEREAS , the Company and Executive desire to provide
for the employment of the Executive as the Chief Operating Officer
of the Company, to engage in such activities and to render such
services under the terms and conditions hereof;
WHEREAS , the Company appointed the Executive as Chief
Operating Officer on July 15, 2009, and has authorized and approved
the execution of this Agreement, and Executive desires to be
employed by the Company under the terms and conditions hereinafter
provided; and
WHEREAS , this Agreement constitutes the entire
understanding and agreement between the Company and Executive
regarding its subject matter and supersedes all prior or
contemporaneous negotiations and agreements, whether oral or
written, between them with respect to such subject
matter.
NOW, THEREFORE , in consideration of the mutual covenants and
undertakings herein contained, the parties agree as
follows:
1. Effective Date,
Appointment, Title and Duties . The effective date
of this Agreement is July 15, 2009 (“ Effective Date
”). As of the Effective Date, the Company employs
Executive to serve as its Chief Operating Officer. In
such capacity, Executive shall report to the Chief Executive
Officer, and shall have such duties, powers and responsibilities as
are customarily assigned to a Chief Operating Officer of a publicly
held corporation, but shall also be responsible to the Board of
Directors and to any committee thereof. In addition,
Executive shall have such other duties and responsibilities as the
Chief Executive Officer and/or the Board of Directors may
reasonably assign him, with his consent, including serving with the
consent or at the request of the Board of Directors as an officer
or on the board of directors of affiliated corporations,
provided that such duties are commensurate with and
customary for a senior executive officer bearing Executive’s
experience, qualifications, title and position.
2. Term of
Agreement . The term of the Executive’s
employment under this Agreement shall commence on the Effective
Date and shall terminate on July 15, 2012.
3. Acceptance of
Position . Executive accepts the position of Chief
Operating Officer, and agrees that during the term of this
Agreement he will faithfully perform his duties and, except as
expressly approved by the Board of Directors, will devote
substantially all of his business time to the business and affairs
of the Company, and will not engage, for his own account or for the
account of any other person or entity, in a business which directly
competes with the Company. It is acknowledged and agreed
that Executive may serve as an officer and/or director of companies
in which the Company owns voting or non-voting stock. In
addition, it is acknowledged and agreed that Executive may, from
time to time, serve as a member of the board of directors of other
companies, in which event the Board of Directors of the Company
must expressly approve such service pursuant to a Board resolution
maintained in the Company’s minute books. Any
compensation or remuneration which Executive receives in
consideration of his service on the board of directors of other
companies shall be the sole and exclusive property of Executive,
and the Company shall have no right or entitlement at any time to
any such compensation or remuneration.
4. Salary and
Benefits . During the term of this
Agreement:
(a) The Company shall
pay to Executive a base salary at an annual rate of not less than
Two Hundred Seven Five Thousand Dollars ($275,000) per annum
(“ Base Salary ”), paid in approximately equal
installments at intervals based on any reasonable Company
policy. The Company agrees from time to time to consider
increases in such base salary in the discretion of the Board of
Directors. Any increase, once granted, shall
automatically amend this Agreement to provide that thereafter
Executive’s base salary shall not be less than the annual
amount to which such base salary has been increased.
(b) During the term
hereof, Executive shall be eligible to participate in all health,
retirement, Company-paid insurance, sick leave, vacation,
disability, expense reimbursement and other benefit programs which
the Company or its subsidiaries makes available to any of its
senior executives.
(c) In addition to the
Base Salary, Executive shall be granted an amount of shares of
common stock of the Company that is equal to $50,000 per
year. The shares to be granted under this Section 4(c)
shall be granted quarterly during the term of this Agreement (on
the basis of a value of $12,500 of shares per quarter) in arrears,
promptly following the close of each quarter. The value
of the shares shall be calculated based on the average closing
price of the Company’s shares for the first five (5) trading
days of the quarter in which the shares are earned.
(d) Executive may be
awarded an annual bonus (in cash or stock of the Company) in the
sole discretion of the Board of Directors. Executive
also shall be eligible to participate in any Company incentive
stock, option or bonus plan offered by the Company to its senior
executives, subject to the terms thereof and at the sole discretion
of the Board of Directors.
5. Certain Terms
Defined . For purposes of this Agreement:
(a) Executive shall be
deemed to be “disabled” if a physical or mental
condition shall occur and persist which, in the written opinion of
a licensed physician selected by the Board of Directors in good
faith, has rendered Executive unable to perform the duties set
forth in Section 1 hereof for a period of sixty (60) days or more
and, in the written opinion of such physician, the condition will
continue for an indefinite period of time, rendering Executive
unable to return to his duties.
(b) A termination of
Executive’s employment by the Company shall be deemed for
“Cause” if, and only if, it is based upon
(i) conviction of a felony by a federal or state court of
competent jurisdiction; (ii) material disloyalty to the
Company such as embezzlement, misappropriation of corporate assets
or, except as permitted pursuant to Section 3 of this Agreement,
breach of Executive’s agreement not to engage in business for
another enterprise of the type engaged in by the Company; or
(iii) the engaging in unethical or illegal behavior which is
of a public nature, brings the Company into disrepute, and result
in material damage to the Company. The Company shall
have the right to suspend Executive with pay, for a reasonable
period to investigate allegations of conduct which, if proven,
would establish a right to terminate this Agreement for Cause, or
to permit a felony charge to be tried. Immediately upon
the conclusion of such temporary period, unless Cause to terminate
this Agreement has been established, Executive shall be restored to
all duties and responsibilities as if such suspension had never
occurred.
(c) A resignation by
Executive shall not be deemed to be voluntary and shall be deemed
to be a resignation with “Good Reason” if it is based
upon (i) a diminution in Executive’s title, duties, or
salary; (ii) a material reduction in benefits; (iii) a
direction by the Board of Directors that Executive report to any
person or group other than the Board of Directors, or (iv) a
geographic relocation of Executive’s place of work a distance
for more than sixty (60) miles from the Company’s offices
located in Doylestown, Pennsylvania.
(d)
“Affiliate” means with respect to any Person, a Person
who, directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control, with the
Person specified.
(e) “Base
Salary” means, as of any date of termination of employment,
the highest base salary of Executive in the then current fiscal
year or in any of the last four fiscal years immediately preceding
such date of termination of employment.
(f) “Beneficial
Owner” shall have the meaning given to such term in Rule
13d-3 under the Exchange Act.
(g) A “Change in
Control” occurs if:
(i) Any Person or
related group of Persons (other than Executive and his Related
Persons, the Company or a Person that directly or indirectly
controls, is controlled by, or is under common control with, the
Company) is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 30% or more
of the combined voting power of the Company’s then
outstanding securities;
(ii) The stockholders
of the Company approve a merger or consolidation of the Company
with any other corporation (or other entity), other than a merger
or consolidation which 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) more than 66-2/3%
of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation; provided, however , that a merger
or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person acquires 30% or
more of the combined voting power of the Company’s then
outstanding securities shall not constitute a Change in
Control;
(iii) 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 a