Exhibit
10.17
February 1, 2006
P ERSONAL & C ONFIDENTIAL
Dr. Warren P.
Levy
President & Chief Executive
Officer
Unigene Laboratories, Inc.
110 Little Falls Road
Fairfield, New Jersey 07004
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Re:
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Nonqualified
Deferred Compensation Agreement
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Dear Warren:
The purpose of this letter agreement
(this “Agreement”) is to set out our agreement on your
compensation deferral arrangement commencing January 1, 2006
(the “Effective Date”) and memorializes the Unigene
Deferred Compensation Plan adopted pursuant to a resolution of the
Board of Directors of Unigene Laboratories, Inc. (the
“Company”) on December 14, 2005.
Company
Credits .
The Company will set aside for you an amount equal to $25,000 on
January 1, 2006 and an additional $25,000 annually (the
“Annual Credit”) on each subsequent
January 1 st through and including
January 1, 2014. The Company will credit the Annual Credit to
an unfunded, bookkeeping deferred compensation account for your
benefit (the “Account”). The Annual Credits will be
made without regard to whether you remain employed by the Company
or are otherwise rendering services to the Company. You will at all
times be 100% vested in your Account. No additional credits will be
made to your Account and you will not have the opportunity to make
additional contributions to your Account.
Acceleration of Annual
Credits . Notwithstanding
anything herein to the contrary, in the event of your death or in
the event that the Company has a “change in control” as
defined in Section 409A of the Internal Revenue Code and the
applicable guidance issued thereunder (a “Change in
Control”), all remaining Annual Credits will be accelerated
and immediately credited to your Account.
Earnings and Losses
. The amount credited to your
Account will be adjusted for earnings and losses. The earnings and
losses will be determined based upon the hypothetical investment of
your Account balance as directed by you (or, in the event of your
death, your beneficiary) among the investment options you (or your
beneficiary, as applicable) choose and consented to by the Company;
provided that such consent shall not be unreasonably withheld by
the Company. You may change your investment elections as desired in
advance in the form and manner prescribed by the Company. The
Company is not required to actually invest in the investment
options you choose, but those permissible investment options will
be used to credit earnings and losses to your account. The Company
may arrange for a third-party administrator to track the earnings
and losses in your account, provide a mechanism for you to change
your elections and provide you with periodic reports. The amount of
any taxes and out-of-pocket expenses, costs and fees, if any,
incurred by the Company due to the deemed or actual investment of
your Account will be borne solely by your Account and will be
deducted from the amount owed to you by the Company under this
Agreement.
Distributions . Normal distributions from your Account shall
be made as follows:
(1) Upon attainment of age 75, 25%
of your Account balance will be distributed;
(2). Upon attainment of age 76,
33.33% of your remaining Account balance will be
distributed;
(3) Upon attainment of age 77, 50%
of your remaining Account balance will be distributed;
(4) Upon attainment of age 78, your
entire remaining Account balance will be distributed
Notwithstanding the foregoing, in
the event of your death or disability (whether or not your death or
disability occurs prior to attaining age 75), (1) 50% of your
remaining Account balance will be immediately distributed to you,
or in the event of your death, to your beneficiary, and
(2) the remainder of your Account balance will be distributed
to you (or your beneficiary) on the first anniversary of your death
or disability, as applicable. For purposes of this Agreement,
“disability” shall mean you are (1) unable to
engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a
continuous period of not less than 12 months, or (2) by reason
of any medically determinable physical or mental impairment which
can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than 3 months under
an accident and health plan maintained by the Company.
Except as specifically set forth
above, distributions from your Account shall not be accelerated or
subsequently deferred.
Beneficiary
. You may name one
