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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 (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
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
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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 thro
