EMPLOYMENT AGREEMENT

 

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                                                                    Exhibit 10.2

 

 

                              EMPLOYMENT AGREEMENT

 

            THIS AGREEMENT made by and between CAMBREX CORPORATION, a Delaware

corporation (the "Company"), and John R. Leone, residing at 225 Ravenscliff, St.

Davids, PA 19087 (the "Employee"), as of the 23rd day of August, 2004.

 

            WHEREAS, the Employee presently is a key management employee of the

Company, namely its President and Chief Executive Officer; 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.

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            (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

 

            (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

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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) 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 third anniversary of such date; provided, however, that if 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 a Change of Control but within

twelve (12) months after

 

 

            (i)         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;

 

            (ii)        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

 

            (iii)       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.

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      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 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.

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      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;

 

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                  (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 (