þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
|
For the fiscal year ended
December 31, 2006
|
||
OR
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934 |
|
For the transition period
from to
|
Delaware
(State or other jurisdiction of incorporation or organization) |
22-2476135
(I.R.S. Employer Identification No.) |
|
One Meadowlands Plaza,
East Rutherford, New Jersey (Address of principal executive offices) |
07073
(Zip Code) |
Title of each class
|
Name of each exchange on which registered
|
|
Common Stock, $.10 par
value
|
New York Stock Exchange |
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o |
1
Item 1
Business
Niche Market Focus: The Company participates in niche
markets where significant technical expertise provides
competitive advantage and market differentiation.
Market Leadership: The Company secures leading market
positions through excellent customer service, proprietary
technologies, specialized capabilities and an outstanding
regulatory record and leverages these capabilities across the
market segments in which it participates.
New Products and Services: The Company continues to invest
in research and product development in order to introduce
innovative products and services to accelerate revenue growth,
provide competitive advantage and maintain its leading market
positions. The new products and services are developed to
address the changing needs of life sciences customers for
increased automation,
speed-to-market
and testing relevance.
Operational Excellence: The Company maintains its
commitment to continually improve productivity and customer
service levels and maintains excellent quality and regulatory
compliance systems.
Acquisition and Licensing: The Company may drive growth in
strategic business segments through the prudent acquisition of
products, product lines, technologies and capabilities to
enhance the Companys position in its niche markets.
2
3
Years Ended December 31
2006
2005
2004
$
163,119
$
149,498
$
136,108
52,477
41,698
43,270
236,659
223,565
216,528
$
452,255
$
414,761
$
395,906
2006
2005
Change
% Change
$
80,394
$
75,810
$
4,584
6.0
%
82,725
73,688
9,037
12.3
%
$
163,119
$
149,498
$
13,621
9.1
%
4
2006
2005
Change
% Change
$
176,407
$
162,710
$
13,697
8.4
%
29,786
30,578
(792
)
(2.6
)%
30,466
30,277
189
0.6
%
$
236,659
$
223,565
$
13,094
5.9
%
5
6
7
Item 1A
Risk
Factors
8
9
10
limiting our ability to obtain any necessary financing in the
future for working capital, capital expenditures, debt service
requirements, or other purposes;
11
limiting our flexibility in planning for, or reacting to,
changes in our business;
placing us at a competitive disadvantage relative to our
competitors who have lower levels of debt;
making us more vulnerable to a downturn in our business or the
economy generally; and
requiring us to use a substantial portion of our cash to pay
principal and interest on our debt, instead of contributing
those funds to other purposes such as working capital and
capital expenditures.
foreign currencies we receive for sales outside the
U.S. could be subject to unfavorable exchange rates with
the U.S. dollar and reduce the amount of revenue that we
recognize;
the possibility that unfriendly nations or groups could boycott
our products;
general economic and political conditions in the markets in
which we operate;
potential increased costs associated with overlapping tax
structures;
more limited protection for intellectual property rights in some
countries;
unexpected changes in regulatory requirements;
the difficulties of compliance with a wide variety of foreign
laws and regulations;
longer accounts receivable cycles in certain foreign countries;
and
import and export licensing requirements.
quarterly fluctuations in our operating income and earnings per
share results;
technological innovations or new product introductions by us or
our competitors;
economic conditions;
disputes concerning patents or proprietary rights;
changes in earnings estimates and market growth rate projections
by market research analysts;
sales of common stock by existing holders;
12
loss of key personnel;
securities class actions or other litigation; and
the Companys ability to retain financing in order to pay
special dividends.
13
14
Item 1B
Unresolved
Staff Comments
57 acres
Cambrex
Charles City, Inc.
Active Pharmaceutical Ingredients,
Pharmaceutical Intermediates, Imaging Chemicals, Animal Health
Products and Fine Custom Chemicals
42 acres
Cambrex
Karlskoga AB
Active Pharmaceutical Ingredients,
Pharmaceutical Intermediates, Imaging Chemicals and Fine Custom
Chemicals
13 acres
Cambrex
Profarmaco Milano S.r.l.
Active Pharmaceutical Ingredients
116 acres
Cambrex Bio Science Walkersville,
Inc.
Cells and Media and Endotoxin
Detection
9 acres
Cambrex Bio Science Verviers Sprl
Cells and Media
93 acres
Cambrex Bio Science Rockland, Inc.
Electrophoresis and Chromatography
Leased
Cambrex Bio Science Copenhagen ApS
Electrophoresis and Chromatography
Leased
Cambrex Bio Science Baltimore, Inc.
Contract Biopharmaceutical Services
Leased
Cambrex Bio Science Hopkinton, Inc.
Contract Biopharmaceutical Services
Leased
Cambrex Bio Science Clermont
Ferrand SAS
Microbial and GMO Detection Kits
and BioAssay Products
Leased
Cambrex Bio Science Walkersville,
Inc.
Poietics
tm
Leased
Cambrex Bio Science Walkersville,
Inc.
Endotoxin Detection
15
Item 3
Legal
Proceedings
Item 4
Submission
of Matters to a Vote of Security Holders
16
20
55
76
77
Item 5
Market
for the Registrants Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
High
Low
$
22.11
$
18.52
21.62
18.89
22.76
19.78
24.22
20.38
High
Low
$
26.22
$
20.70
21.20
17.51
20.96
18.46
19.41
16.88
Column (a)
Column (b)
Column (c)
Number of securities
remaining for future
Number of securities
issuance under
to be issued upon
Weighted average
equity compensation
exercise of
exercise price of
plans (excluding
outstanding options,
outstanding options,
securities reflected
warrants and rights
warrants and rights
in column (a))
2,418,618
$
28.12
507,385
344,775
$
30.82
28,209
2,763,393
$
28.46
535,594
17
18
Item 6
Selected
Financial Data
Years Ended December 31,
2006(1)
2005(2)
2004(3)
2003(4)
2002(5)
$
452,255
$
414,761
$
395,906
$
366,891
$
362,480
455,474
418,470
401,128
372,732
367,814
171,349
160,125
164,086
155,559
172,437
117,312
103,258
97,774
92,005
83,573
21,190
21,469
18,759
16,247
14,966
82,383
48,720
11,342
4,238
32,847
(46,985
)
(1,167
)
35,965
69,660
13,917
9,786
9,339
10,223
10,145
1,454
47
112
112
8,181
17,476
(56,818
)
(10,618
)
25,630
51,334
18,721
26,413
14,613
26,029
13,226
(1,245
)
(83,231
)
(25,231
)
(399
)
38,108
(28,627
)
(27,227
)
(1,639
)
(53,664
)
(4,699
)
(29,872
)
(110,458
)
(26,870
)
(54,063
)
33,409
(228
)
(30,100
)
(110,458
)
(26,870
)
(54,063
)
33,409
$
(0.05
)
$
(3.15
)
$
(0.97
)
$
(0.02
)
$
1.47
$
(1.06
)
$
(1.03
)
$
(0.06
)
$
(2.08
)
$
(0.18
)
$
(0.01
)
$
$
$
$
$
(1.12
)
$
(4.18
)
$
(1.03
)
$
(2.10
)
$
1.29
$
(0.05
)
$
(3.15
)
$
(0.97
)
$
(0.02
)
$
1.44
$
(1.06
)
$
(1.03
)
$
(0.06
)
$
(2.08
)
$
(0.18
)
$
(0.01
)
$
$
$
$
$
(1.12
)
$
(4.18
)
$
(1.03
)
$
(2.10
)
$
1.26
26,816
26,456
26,094
25,775
25,954
26,816
26,456
26,094
25,775
26,520
19
Years Ended December 31,
2006(1)
2005(2)
2004(3)
2003(4)
2002(5)
$
0.12
$
0.12
$
0.12
$
0.12
$
0.12
$
117,616
$
139,207
$
182,915
$
138,458
$
154,324
606,376
612,472
791,985
778,503
835,283
162,371
186,819
226,187
212,369
265,945
246,646
243,251
391,316
396,630
410,954
(1)
Loss from continuing operations include pre-tax charges of
$8,607 within administrative expenses for the costs related to
the evaluation of strategic alternatives to enhance shareholder
value, $1,791 within research and development expenses due to
the acquisition of Cutanogen, $1,475 for the write-down of an
investment in equity securities within other expense, $5,272
within interest expense due to the pre-payment of a portion of
the Companys long-term debt and tax expense of $1,696
related to prior years returns included in the provision for
income taxes. Discontinued operations include the loss on sale
of the Cork and Landen businesses of $23,244, $200 related to a
Rutherford Chemicals environmental reserve and a goodwill
impairment charge of $2,092.
(2)
Loss from continuing operations include pre-tax charges for
goodwill impairment of $67,950 and long-lived asset impairment
charge of $14,433 in the Biopharma segment. Results also include
pre-tax charges for executive severance of $4,223 and an
increase in an environmental reserve of $1,300 recorded in
operating expenses, and a tax benefit due to a favorable Swedish
court decision of $3,329 and an increase in valuation allowances
against domestic deferred tax assets totaling $16,926 within the
provision for income taxes. Discontinued operations include
goodwill impairment of $8,435 and long-lived asset impairment
charge of $16,359 and a tax benefit related to the long-lived
asset impairment of $1,673.
(3)
Loss from continuing operations include a pre-tax charge of
$48,720 for goodwill impairment related to the Biopharma segment.
(4)
Loss from continuing operations include a pre-tax charge of
$11,342 recorded in operating expenses for the settlement of
certain class action lawsuits involving Mylan Laboratories and
the establishment of valuation allowances against net domestic
deferred tax assets totaling $21,487 within the provision for
income taxes.
(5)
Income from continuing operations include a pre-tax charge of
$4,238 for asset impairment and severance related to the closure
of a small manufacturing facility and a $7,344 pre-tax charge
for investment impairments recorded in other expense.
Item 7
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
A charge of approximately $8,600 recorded within administrative
expenses for the costs related to the evaluation of strategic
alternatives to enhance shareholder value.
A $5,272 charge recorded within interest expense due to the
pre-payment of a portion of the Companys long-term debt.
A $1,791 charge recorded within research and development
expenses due to the acquisition of Cutanogen.
A $1,475 charge for the write-down of an investment in equity
securities.
21
22
23
Years Ended December 31,
2006
2005
2004
$
163,119
$
149,498
$
136,108
52,477
41,698
43,270
236,659
223,565
216,528
$
452,255
$
414,761
$
395,906
$
455,474
$
418,470
$
401,128
$
171,349
$
160,125
$
164,086
36.1
%
36.0
%
34.4
%
11.6
10.1
10.9
52.3
53.9
54.7
100.0
%
100.0
%
100.0
%
2006
2005
Gross
Gross
Gross
Gross
Gross
Gross
Sales
Profit
Profit %
Sales
Profit
Profit %
$
163,119
$
84,350
51.7
%
$
149,498
$
77,908
52.1
%
52,477
3,236
6.2
41,698
(3,811
)
(9.1
)
236,659
83,763
35.4
223,565
86,028
38.5
$
452,255
$
171,349
37.9
%
$
414,761
$
160,125
38.6
%
24
2006
2005
$
222,058
$
196,970
202,261
191,155
17,963
17,958
9,973
8,678
$
452,255
$
414,761
25
2005
2004
$
196,970
$
205,749
191,155
164,228
17,958
17,493
8,678
8,436
$
414,761
$
395,906
26
27
28
Total
2007
2008
2009
2010
2011+
$
163,871
$
1,500
$
1,674
$
1,823
$
158,874
$
40,485
10,528
10,360
10,315
8,643
639
20,777
4,968
4,392
4,080
2,925
4,412
15,779
10,708
1,724
1,349
999
999
3,200
1,600
1,600
$
244,112
$
29,304
$
19,750
$
17,567
$
171,441
$
6,050
29
30
31
32
33
34
35
36
Item 7a
Quantitative
and Qualitative Disclosures about Market Risk
37
Item 8
Financial
Statements and Supplementary Data
Page Number
(in this Report)
39
41
42
43
44
45
86
38
39
40
(dollars in thousands, except share data)
41
(dollars in thousands, except share data)
Years Ended December 31,
2006
2005
2004
$
452,255
$
414,761
$
395,906
1,955
2,649
1,557
450,300
412,112
394,349
5,174
6,358
6,779
455,474
418,470
401,128
284,125
258,345
237,042
171,349
160,125
164,086
117,312
103,258
97,774
21,190
21,469
18,759
82,383
48,720
32,847
(46,985
)
(1,167
)
(820
)
(1,066
)
(1,436
)
14,737
10,852
10,775
1,454
47
112
17,476
(56,818
)
(10,618
)
18,721
26,413
14,613
$
(1,245
)
$
(83,231
)
$
(25,231
)
(28,627
)
(27,227
)
(1,639
)
(29,872
)
(110,458
)
(26,870
)
(228
)
$
(30,100
)
$
(110,458
)
$
(26,870
)
$
(0.05
)
$
(3.15
)
$
(0.97
)
$
(1.06
)
$
(1.03
)
$
(0.06
)
$
(0.01
)
$
$
$
(1.12
)
$
(4.18
)
$
(1.03
)
$
(0.05
)
$
(3.15
)
$
(0.97
)
$
(1.06
)
$
(1.03
)
$
(0.06
)
$
(0.01
)
$
$
$
(1.12
)
$
(4.18
)
$
(1.03
)
26,816
26,456
26,094
26,816
26,456
26,094
42
(dollars in thousands, except share data)
Accumulated
Common Stock
Additional
Other
Total
Par Value
Paid-In
Retained
Deferred
Treasury
Comprehensive
Comprehensive
Stockholders
Shares Issued
($.10)
Capital
Earnings
Compensation
Stock
Loss
Income/(Loss)
Equity
28,471,652
$
2,847
$
206,256
$
205,787
$
(1,616
)
$
(22,101
)
$
5,457
$
396,630
(26,870
)
(26,870
)
(26,870
)
20,224
1,276
(3,488
)
13
18,025
18,025
18,025
$
(8,845
)
(3,113
)
(3,113
)
(219
)
(219
)
353,951
36
6,248
6,284
372
(366
)
205
211
244
124
368
$
28,825,603
$
2,883
$
213,120
$
175,804
$
(1,982
)
$
(21,991
)
$
23,482
$
391,316
(110,458
)
(110,458
)
(110,458
)
(40,188
)
(984
)
(117
)
(361
)
(41,650
)
(41,650
)
(41,650
)
$
(152,108
)
(3,176
)
(3,176
)
(75
)
(75
)
292,538
29
3,877
3,906
2,239
(149
)
1,298
3,388
29,118,141
$
2,912
$
219,236
$
62,170
$
(2,131
)
$
(20,768
)
$
(18,168
)
$
243,251
(30,100
)
(30,100
)
(30,100
)
14,443
280
839
(10
)
1,475
17,027
17,027
17,027
$
(13,073
)
(7,088
)
(7,088
)
2,472
2,472
(3,210
)
(3,210
)
(113
)
(113
)
1,069,876
103
20,977
230
21,310
222
159
381
448
448
477
2,131
(340
)
2,268
30,188,017
$
3,015
$
241,360
$
28,860
$
$
(20,832
)
$
(5,757
)
$
246,646
43
(dollars in thousands)
Years Ended December 31,
2006
2005
2004
$
(30,100
)
$
(110,458
)
$
(26,870
)
82,383
48,720
31,466
33,072
35,333
1,445
1,488
1,936
1,228
463
1,532
14,264
937
962
873
(369
)
6,618
4,362
3,390
555
1,126
1,475
(2,175
)
(12,248
)
(5,399
)
(15,110
)
(16,995
)
(8,668
)
(4,081
)
11,707
1,088
12,092
9,939
4,094
1,641
(2,513
)
(10,819
)
23,244
(2,335
)
(3,276
)
1,014
3,448
3,469
5,054
2,092
24,794
34,720
42,435
48,733
(38,239
)
(37,187
)
(35,402
)
(814
)
(5,256
)
(1,392
)
(636
)
(68
)
1,482
223
(919
)
(3,120
)
(4,078
)
(41,254
)
(39,639
)
(44,513
)
(3,210
)
(3,176
)
(3,113
)
225,327
212,119
86,218
(252,005
)
(251,329
)
(72,708
)
21,310
3,906
6,284
(113
)
(75
)
(219
)
20
212
(8,691
)
(38,535
)
16,674
3,629
(9,770
)
6,295
(11,596
)
(45,509
)
27,189
45,342
90,851
63,662
$
33,746
$
45,342
$
90,851
$
13,613
$
11,185
$
11,848
$
16,690
$
12,181
$
20,182
44
(dollars in thousands, except share data)
45
20 to 30 years, or term of
lease if applicable
7 to 15 years
5 to 7 years
3 to 7 years
Amortized over the remaining
life of individual patents
5 to 18 years
5 years
up to 40 years
46
47
48
For the Years Ended,
2006
2005
2004
$
(1,245
)
$
(83,231
)
$
(25,231
)
(28,627
)
(27,227
)
(1,639
)
(228
)
$
(30,100
)
$
(110,458
)
$
(26,870
)
26,816
26,456
26,094
26,816
26,456
26,094
$
(0.05
)
$
(3.15
)
$
(0.97
)
$
(1.06
)
$
(1.03
)
$
(0.06
)
$
(0.01
)
$
$
$
(1.12
)
$
(4.18
)
$
(1.03
)
$
(0.05
)
$
(3.15
)
$
(0.97
)
$
(1.06
)
$
(1.03
)
$
(0.06
)
$
(0.01
)
$
$
$
(1.12
)
$
(4.18
)
$
(1.03
)
*
For 2006, 2005 and 2004, the effect of stock options would be
anti-dilutive and is therefore excluded.
49
Years Ended December 31,
2005
2004
$
(110,458
)
$
(26,870
)
1,936
1,228
21,504
5,969
$
(130,026
)
$
(31,611
)
$
(4.18
)
$
(1.03
)
$
(4.91
)
$
(1.21
)
$
(4.18
)
$
(1.03
)
$
(4.91
)
$
(1.21
)
50
2005
2004
41.20
%
41.75
%
0.57
%
0.55
%
6 - 7 years
6 - 7 years
2.75
% - 4.47%
2.75
% - 3.95%
2006
2005
$
7,359
$
(7,084
)
88
(192
)
1,117
(348
)
(10,544
)
(14,321
)
$
(5,757
)
$
(18,168
)
51
52
53
Human
Bioproducts
Biopharma
Health
Segment
Segment
Segment
Total
$
54,284
$
76,618
$
33,439
$
164,341
2,319
195
2,514
(983
)
(3,502
)
(4,485
)
(67,950
)
(67,950
)
$
55,620
$
8,863
$
29,937
$
94,420
990
2,636
3,626
$
56,610
$
8,863
$
32,573
$
98,046
As of
As of
December 31,
December 31,
2006
2005
$
33,898
$
33,898
2,052
2,052
$
35,950
$
35,950
As of December 31, 2006
Gross Carrying
Accumulated
Net Carrying
Amount
Amortization
Amount
$
13,232
$
(5,381
)
$
7,851
5,721
(2,108
)
3,613
2,110
(1,542
)
568
2,005
(586
)
1,419
2,203
(1,441
)
762
$
25,271
$
(11,058
)
$
14,213
54
As of December 31, 2005
Gross Carrying
Accumulated
Net Carrying
Amount
Amortization
Amount
$
12,326
$
(4,257
)
$
8,069
5,264
(1,676
)
3,588
2,110
(1,152
)
958
2,005
(401
)
1,604
1,974
(960
)
1,014
$
23,679
$
(8,446
)
$
15,233
$
1,953
$
1,861
$
1,463
$
1,253
$
1,253
December 31,
2006
2005
$
48,186
$
41,150
22,107
21,588
21,364
15,852
2,944
2,490
$
94,601
$
81,080
December 31,
2006
2005
$
6,865
$
6,718
144,730
122,967
318,572
277,314
14,575
12,833
35,951
29,857
520,693
449,689
(293,669
)
(247,905
)
$
227,024
$
201,784
Years Ended December 31,
2006
2005
$
24,706
$
19,559
6,011
8,978
5,166
630
4,967
4,293
24,038
16,908
$
64,888
$
50,368
Years Ended December 31,
2006
2005
2004
$
(29,406
)
$
(98,203
)
$
(60,058
)
46,882
41,385
49,440
$
17,476
$
(56,818
)
$
(10,618
)
56
Years Ended December 31,
2006
2005
2004
$
680
$
(2,424
)
$
(116
)
659
348
16,625
13,914
13,328
$
17,189
$
12,149
$
13,676
$
337
$
17,238
$
(6
)
(17
)
1,195
(2,968
)
954
1,532
14,264
937
$
18,721
$
26,413
$
14,613
Years Ended December 31,
2006
2005
2004
$
6,116
$
(19,886
)
$
(3,716
)
321
423
208
(1,241
)
(4,150
)
(3,021
)
12,147
39,979
21,142
(2,368
)
337
16,926
1,257
(2,960
)
(216
)
(1,551
)
$
18,721
$
26,413
$
14,613
57
December 31,
2006
2005
$
2,377
$
1,349
454
493
6,874
5,213
4,010
3,169
13,715
10,224
(12,758
)
(10,039
)
$
957
$
185
$
559
$
$
559
$
$
39,957
$
31,698
1,359
1,166
30,660
33,223
6,257
6,629
7,851
5,790
2,920
2,764
4,022
5,629
4,054
4,155
8,687
2,775
13,858
16,755
3,597
3,438
123,222
114,022
(113,898
)
(107,666
)
$
9,324
$
6,356
$
12,867
$
8,026
8,067
6,986
17,263
16,926
1,346
1,394
$
39,543
$
33,332
$
30,219
$
26,976
*
In addition to the effect of the domestic and foreign valuation
allowances reflected in the current effective tax rate, the
valuation allowance has changed due to agreed tax audit
adjustments for prior year deferred tax amounts and currency
translation adjustments.
58
59
December 31,
2006
2005
$
158,600
$
81,943
100,000
4,675
6,056
596
291
163,871
188,290
1,500
1,471
$
162,371
$
186,819
60
$
1,500
1,674
1,823
158,874
$
163,871
61
2006
2005
Notional
Fair
Notional
Fair
Amounts
Value
Amounts
Value
$
14,255
$
292
$
16,741
$
(166
)
62
63
Options Outstanding
Options Exercisable
Weighted Average
Weighted
Remaining
Average
Authorized
Number of
Option Price
Contractual
Exercise
Number of
Exercise
for Issuance
Shares
per Share
Life (yrs)
Price
Shares
Price
300,000
14,000
$ 26.67
4.31
$
26.67
14,000
$
26.67
3,000,000
126,000
17.31 25.16
2.81
20.95
125,250
20.94
169,148
26.00 37.07
3.36
30.71
169,148
30.71
257,434
40.50 43.63
3.56
43.12
257,434
43.12
1,180,000
296,985
18.75 27.56
2.37
22.57
252,400
22.78
137,839
34.75 43.63
3.55
41.50
137,839
41.50
500,000
195,775
20.28 21.71
5.93
21.03
103,900
20.72
149,000
34.75 46.85
3.65
43.68
149,000
43.68
750,000
182,130
18.68 25.88
1.55
24.69
162,055
25.10
422,112
29.75 42.87
3.97
33.54
422,112
33.54
8,582
46.85
4.57
46.85
8,582
46.85
500,000
224,038
18.68 25.56
4.74
20.37
144,371
19.81
1,500,000
580,350
18.15 21.90
3.86
21.80
580,350
21.80
7,730,000
2,763,393
$
17.31 $46.85
$
28.46
2,526,441
$
29.12
Weighted Average
Number of
Options
Shares
Exercise Price
Exercisable
3,702,865
$
28.62
1,867,331
1,029,350
22.08
(353,951
)
17.48
(428,407
)
35.76
3,949,857
27.07
1,787,967
653,033
20.07
(292,538
)
13.32
(296,705
)
31.45
4,013,647
26.60
4,013,647
249,367
21.39
(1,069,876
)
19.91
(429,745
)
28.26
2,763,393
28.46
$
29.12
2,526,441
64
Weighted-
Number of
Average Grant-
Shares
Date Fair Value
249,367
$
21.39
(12,415
)
$
21.39
236,952
$
21.39
Weighted-
Number of
Average Grant-
Shares
Date Fair Value
69,756
$
24.30
153,838
21.52
(30,306
)
24.64
(27,420
)
22.11
165,868
$
22.02
65
2006
2005
$
58,451
$
53,253
2,571
2,751
3,448
3,166
(562
)
1,393
(2,391
)
(2,112
)
$
61,517
$
58,451
2006
2005
$
38,437
$
34,887
3,381
3,861
3,334
1,801
(2,391
)
(2,112
)
$
42,761
$
38,437
(18,756
)
(20,014
)
476
14,272
(9,442
)
(18,756
)
(14,708
)
902
$
(17,854
)
$
(14,708
)
2006
$
12,922
430
$
13,352
66
2006
2005
6.00%
5.75%
5.00%
5.00%
2006
2005
2004
$
2,571
$
2,751
$
2,395
3,448
3,166
3,010
(3,041
)
(2,939
)
(2,768
)
46
46
46
448
466
592
$
3,472
$
3,490
$
3,275
Pension
Benefits
$
395
46
$
441
2006
2005
2004
5.75%
5.75%
6.00%
8.00%
8.50%
8.50%
5.00%
5.00%
4.50%
67
Pension
Benefits
$
2,270
$
2,391
$
2,526
$
2,658
$
2,846
$
17,965
Percentage of Plan
Target
Assets
Allocation
2006
2005
30
%-70%
45.8
%
49.9
%
0
%-20%
11.7
%
11.2
%
20
%-60%
35.6
%
36.9
%
N/A
6.9
%
2.0
%
100.0
%
100.0
%
2006
2005
$
8,030
$
7,422
193
224
463
434
394
280
(264
)
(330
)
8,816
8,030
(8,816
)
(8,030
)
20
199
1,747
(1,649
)
$
(8,816
)
$
(7,713
)
68
2006
$
2,098
16
98
$
2,212
2006
2005
5.75
%
5.75
%
5.00
%
5.00
%
2006
2005
2004
$
193
$
224
$
215
463
434
440
4
4
4
143
140
159
$
803
$
802
$
818
SERP
Benefits
$
66
4
98
$
168
2006
2005
2004
5.75
%
5.75
%
6.00
%
5.00
%
5.00
%
5.00
%
69
SERP
Benefits
$
480
$
598
$
612
$
617
$
616
$
2,956
2006
2005
$
13,243
$
13,810
721
606
578
607
176
873
(312
)
(252
)
2,156
(2,401
)
$
16,562
$
13,243
$
583
$
488
24
9
377
126
58
44
(38
)
(10
)
87
(74
)
$
1,091
$
583
$
(15,472
)
$
(12,663
)
2,796
(80
)
(35
)
(1,646
)
(63
)
$
(15,472
)
$
(11,691
)
70
2006
$
2,944
(75
)
$
2,869
2006
2005
4.00
%-4.50%
4.50
%-5.00%
2.70
%-3.25%
3.00
%-3.50%
2006
2005
2004
$
721
$
606
$
520
578
607
621
(88
)
(67
)
(52
)
(35
)
(35
)
(35
)
(6
)
(6
)
(6
)
73
49
36
$
1,243
$
1,154
$
1,084
Pension
Benefits
$
170
(7
)
$
163
2006
2005
2004
4.50% 5.00%
4.50% 5.00%
4.50% 5.26%
4.25%
4.50%
4.50%
3.00% 3.50%
3.00% 3.50%
3.00% 3.50%
71
Pension
$
389
$
473
$
522
$
581
$
621
$
4,244
Percentage of Plan Assets
2006
2005
100.0
%
100.0
%
72
2006
2005
$
1,872
$
2,655
60
60
109
154
63
(181
)
(766
)
(51
)
(128
)
(180
)
$
1,795
$
1,872
(1,343
)
1,046
$
1,795
$
1,575
(29
)
$
1,795
$
1,546
2006
$
1,077
(890
)
$
187
Years Ended December 31,
2006
2005
2004
$
60
$
60
$
53
109
154
154
85
118
119
(155
)
(152
)
(151
)
$
99
$
180
$
175
73
Other
Postretirement
Benefits
$
65
(155
)
$
(90
)
Benefit
Obligation
Net Cost
2006
2005
2006
2005
2004
6.00
%
5.75
%
5.75
%
5.75
%
6.00
%
Other Postretirement
$
77
$
84
$
86
$
91
$
97
$
568
74
2006
2005
2004
$
163,119
$
149,498
$
136,108
52,477
41,698
43,270
236,659
223,565
216,528
$
452,255
$
414,761
$
395,906
2006
2005
2004
$
80,394
$
75,810
$
70,657
82,725
73,688
65,451
$
163,119
$
149,498
$
136,108
$
52,477
$
41,698
$
43,270
$
52,477
$
41,698
$
43,270
$
176,407
$
162,710
$
158,894
29,786
30,578
25,815
30,466
30,277
31,815
$
236,659
$
223,565
$
216,524
75
2006
2005
2004
$
84,350
$
77,908
$
74,930
3,236
(3,811
)
4,880
83,763
86,028
84,276
$
171,349
$
160,125
$
164,086
2006
2005
2004
$
27,196
$
25,670
$
26,386
(6,062
)
(97,245
)
(53,813
)
49,157
50,512
50,352
(37,444
)
(25,922
)
(24,092
)
$
32,847
$
(46,985
)
$
(1,167
)
$
9,504
$
12,392
$
10,601
4,066
5,536
9,167
28,946
18,103
14,515
68
1,156
1,119
$
42,584
$
37,187
$
35,402
$
6,613
$
6,066
$
5,514
3,705
4,840
4,239
18,223
18,750
22,425
766
1,179
1,234
$
29,307
$
30,835
$
33,412
$
1,861
$
1,295
$
1,455
259
903
431
39
39
35
$
2,159
$
2,237
$
1,921
2006
2005
$
240,032
$
231,965
56,097
58,652
286,437
249,299
23,810
24,068
48,488
$
606,376
$
612,472
Domestic
Foreign
Total
$
230,486
$
221,769
$
452,255
111,360
115,664
227,024
$
217,250
$
197,511
$
414,761
112,500
89,284
201,784
$
199,889
$
196,017
$
395,906
124,595
104,175
228,770
2006
2005
2004
$
222,058
$
196,970
$
205,749
202,261
191,155
164,228
17,963
17,958
17,493
9,973
8,678
8,436
$
452,255
$
414,761
$
395,906
$
4,968
4,392
4,080
2,925
4,412
$
20,777
$
10,708
1,724
1,349
999
999
$
15,779
78
79
Litigation
and Other Matters
Mylan
Laboratories
80
Vitamin
B-3
Sale of
Rutherford Chemicals
81
Class Action
Matter
82
Securities
and Exchange Commission
Baltimore
Litigation
Other
83
Years Ended December 31,
2006
2005
2004
$
30,942
$
37,225
$
43,209
$
(5,383
)
$
(29,819
)
$
(1,791
)
(23,244
)
$
(28,627
)
$
(29,819
)
$
(1,791
)
84
December 31,
2005
$
590
5,141
12,536
646
27,635
1,939
48,487
6,231
7,921
$
14,152
$
34,335
December 31,
2006
$
79,535
202,296
281,831
33,401
8,101
41,502
$
240,329
85
1st
2nd
3rd
4th
Quarter(1)
Quarter(2)
Quarter(3)
Quarter(4)
$
109,264
$
114,114
$
104,442
$
124,435
109,574
115,080
105,339
125,481
42,946
42,040
39,430
46,933
(1,867
)
1,527
(1,466
)
561
(1,177
)
976
(4,304
)
(25,367
)
(1,405
)
976
(4,304
)
(25,367
)
(0.07
)
0.06
(0.05
)
0.02
(0.05
)
0.04
(0.16
)
(0.94
)
(0.07
)
0.06
(0.05
)
0.02
(0.05
)
0.04
(0.16
)
(0.93
)
26,661
26,741
26,752
27,108
26,661
26,791
26,752
27,252
1st
2nd
3rd
4th
Quarter
Quarter(5)
Quarter(6)
Quarter(7)
$
100,006
$
105,963
$
97,599
$
111,193
101,568
106,601
97,956
112,345
42,398
39,833
37,339
40,555
4,719
8,041
1,568
(97,559
)
4,090
7,080
(48
)
(121,580
)
0.18
0.30
0.06
(3.66
)
0.16
0.27
(0.00
)
(4.56
)
0.18
0.30
0.06
(3.66
)
0.15
0.27
(0.00
)
(4.56
)
26,346
26,402
26,418
26,654
26,630
26,510
26,418
26,654
(1)
Loss from continuing operations include pre-tax charges of
$1,020 within administrative expenses for the costs related to
the evaluation of strategic alternatives to enhance shareholder
value, $1,445 within research and development expenses due to
the acquisition of Cutanogen and $5,272 within interest expense
due to the pre-payment of a portion of the Companys
long-term debt.
86
(2)
Income from continuing operations include pre-tax charges of
$1,337 within administrative expenses for the costs related to
the evaluation of strategic alternatives to enhance shareholder
value and $92 within research and development expenses due to
the acquisition of Cutanogen.
(3)
Loss from continuing operations include pre-tax charges of
$1,734 within administrative expenses for the costs related to
the evaluation of strategic alternatives to enhance shareholder
value, $127 within research and development expenses due to the
acquisition of Cutanogen and tax expense of $1,696 related to
prior years returns included in the provision for income taxes.
Discontinued operations include a goodwill impairment charge of
$2,092.
(4)
Income from continuing operations include pre-tax charges of
$4,516 within administrative expenses for the costs related to
the evaluation of strategic alternatives to enhance shareholder
value, $127 within research and development expenses due to the
acquisition of Cutanogen and $1,475 for the write-down of an
investment in equity securities. Discontinued operations include
the loss on sale of the Cork and Landen businesses of $23,244
and $200 related to a Rutherford Chemicals environmental reserve.
(5)
Income from continuing operations include a tax benefit due to a
favorable Swedish court decision of $3,329.
(6)
Income from continuing operations include pre-tax charges for an
increase in an environmental reserve of $1,300 recorded in
operating expenses.
(7)
Loss from continuing operations include pre-tax charges for
goodwill impairment of $67,950 and long-lived asset impairment
charge of $14,433 in the Biopharma segment. Results also include
pre-tax charges for executive severance of $4,223 and an
increase in valuation allowances against domestic deferred tax
assets totaling $16,926 within the provision for income taxes.
Discontinued operations include goodwill impairment of $8,435
and long-lived asset impairment charge of $16,359 and a tax
benefit related to the long-lived asset impairment of $1,673.
(8)
Earnings per share calculations for each of the quarters are
based on the weighted average number of shares outstanding for
each period, as such, the sum of the quarters may not
necessarily equal the earnings per share amount for the year.
87
Item 9
Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure
Item 9A
Controls
and Procedures
Pertain to the maintenance of records, that in reasonable
detail, accurately and fairly represent the transactions and
dispositions of the assets of the Company,
Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and
that receipts and expenditures are being made only in accordance
with authorizations of management and the Board of Directors of
the Company, and
Provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the
Companys assets that could have a material effect on the
financial statements.
88
Strengthened procedures whereby the current income tax payable
account and deferred income tax asset and liability accounts are
reconciled on a regular and timely basis.
Increased level of review and discussion of significant tax
matters and supporting documentation with senior finance
management.
Hired additional permanent personnel in the tax department.
Identified interim personnel to augment existing corporate tax
staff to ensure there are adequate resources to reconcile all
tax-related accounts for each reporting period.
Item 9B
Other
Information
89
69
Chairman of the Board of
Directors, President and Chief Executive Officer
48
Executive Vice President,
Strategy & Corporate Development
53
Vice President, Information
Technology
45
Assistant General Counsel and
Assistant Corporate Secretary
42
Vice President, Financial Planning
and Treasurer
49
Executive Vice President, Chief
Operating Officer & President, Pharmaceutical Products
and Services
45
Vice President, Human Resources
62
President, Profarmaco Milano
41
Vice President & Chief
Financial Officer
48
Vice President, Internal Audit
67
Senior Vice President,
Law & Environment, General Counsel and Corporate
Secretary
*
Executive Officer
90
91
Item 12
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.
92
Item 15
Exhibits
and Financial Statement Schedules
Page Number
(in this report)
39
41
42
43
44
45
86
Page Number
(in this report)
94
93
Column A
|
Column B | Column C |
Column D
|
Column E
|
||||||||||||||||
Additions | ||||||||||||||||||||
Charged/
|
Charged/
|
|||||||||||||||||||
Balance
|
(Credited) to
|
(Credited) to
|
Balance
|
|||||||||||||||||
Beginning
|
Cost and
|
Other
|
End of
|
|||||||||||||||||
Description
|
of Year | Expenses | Accounts | Deductions | Year | |||||||||||||||
Year ended December 31, 2006:
|
||||||||||||||||||||
Doubtful trade receivables and
returns and allowances
|
$ | 2,761 | $ | 963 | $ | 173 | $ | 1,078 | $ | 2,819 | ||||||||||
Deferred tax valuation allowance
|
117,705 | 12,147 | (3,196 | ) | | 126,656 | ||||||||||||||
Year ended December 31, 2005:
|
||||||||||||||||||||
Doubtful trade receivables and
returns and allowances
|
$ | 2,301 | $ | 872 | $ | (45 | ) | $ | 367 | $ | 2,761 | |||||||||
Deferred tax valuation allowance
|
76,589 | 39,979 | 1,137 | | 117,705 | |||||||||||||||
Year ended December 31, 2004:
|
||||||||||||||||||||
Doubtful trade receivables and
returns and allowances
|
$ | 3,253 | $ | (369 | ) | $ | 91 | $ | 674 | $ | 2,301 | |||||||||
Deferred tax valuation allowance
|
51,631 | 21,142 | 3,816 | | 76,589 |
94
By
Chairman of the Board of Directors
President and Chief Executive Officer
)
Vice President and Chief Financial
Officer
(Principal Financial Officer
and Accounting Officer)
)
Director
)
Director
)
Director
)
Director
)
Director
) March 15, 2007
Director
)
Director
)
Director
)
95
Director
)
Attorney-in-Fact
)
96
3
.1
Restated Certificate of
Incorporation of registrant, as amended.(W).
3
.2
By Laws of registrant.(X).
4
.1
Form of Certificate for shares of
Common Stock of registrant.(A) Exhibit 4(a).
10
.1
Purchase Agreement dated
July 11, 1986, as amended, between the registrant and ASAG,
Inc.(A) Exhibit 10(r).
10
.2
Asset Purchase Agreement dated as
of June 5, 1989 between Whittaker Corporation and the
registrant.(B) Exhibit 10(a).
10
.3
Asset Purchase Agreement dated as
of July 1, 1991 between Solvay Animal Health, Inc. and the
registrant.(C).
10
.4
Asset Purchase Agreement dated as
of March 31, 1992 between Hexcel Corporation and the
registrant.(E).
10
.5
Stock Purchase Agreement dated as
of September 15, 1994 between Akzo Nobel AB, Akzo Nobel NV
and the registrant, for the purchase of Nobel Chemicals AB.(H).
10
.6
Stock Purchase Agreement dated as
of September 15, 1994 between Akzo Nobel AB, Akzo Nobel and
the registrant, for the purchase of Profarmaco Nobel, S.r.l.(H).
10
.7
Stock purchase agreement dated as
of October 3, 1997 between BioWhittaker and the
registrant.(M).
10
.8
Asset purchase agreement dated as
of August 7, 2003 between Rutherford Acquisition
Corporation and Cambrex Corporation and The Sellers listed in
the asset Purchase agreement.(O).
10
.9
Credit Agreement dated as of
October 7, 2005 between Cambrex Corporation, the subsidiary
borrowers party hereto, the subsidiary guarantors party hereto,
the lenders party hereto and JP Morgan Chase Bank, N.A., as
Administrative Agent.(T).
10
.13
Retention and Enhanced Severance
Program.(Y).
10
.14
2007 Retention Program.(AA).
10
.15
James A. Mack Compensation
Agreement, as amended.(Y)(Z).
10
.16
1994 Stock Option Plan.(G).
10
.17
1996 Performance Stock Option
Plan.(L).
10
.18
1998 Performance Stock Option
Plan.(N).
10
.19
2000 Employee Performance Stock
Option Plan.(N).
10
.20
Form of Employment Agreement
(amended and restated) between the registrant and its executive
officers named in the Revised Schedule of Parties
thereto.(BB Exhibit 10.20) (as amended (CC)
Exhibit 10.20.1).
10
.21
Revised Schedule of Parties to
Employment Agreement (Exhibit 10.20 hereto).(J).
10
.22
Cambrex Corporation Savings
Plan.(F).
10
.23
Cambrex Corporation Supplemental
Retirement Plan.(I).
10
.24
Deferred Compensation Plan of
Cambrex Corporation (as amended and restated as of March 1,
2001).(BB).
10
.25
Employment Agreement dated
February 6, 2007 between the registrant and Gregory P.
Sargen.(J).
10
.26
Consulting Agreement dated
December 15, 1994 between the registrant and Arthur I.
Mendolia.(I).
10
.27
Consulting Agreement dated
December 15, 1994 between the registrant and Cyril C.
Baldwin, Jr.(I).
10
.28
Consulting Agreement dated
January 26, 1995 between the registrant and James A.
Mack.(I).
10
.29
Additional Retirement Payment
Agreement dated December 15, 1994 between the registrant
and Arthur I. Mendolia.(I).
97
10
.30
Additional Retirement Payment
Agreement dated December 15, 1994 between the registrant
and Cyril C. Baldwin, Jr.(I).
10
.31
Additional Retirement Payment
Agreement between the registrant and James A. Mack.(I).
10
.32
Employment Agreement dated
February 6, 2007 between the registrant and Paolo
Russolo.(J).
10
.33
2001 Performance Stock Option
Plan.(P).
10
.34
2003 Performance Stock Option
Plan.(P).
10
.35
2004 Performance Incentive
Plan.(Q).
10
.36
Directors Common Stock Fee
Payment Plan.(Q).
10
.37
Directors Compensation
Arrangements.(S).
10
.38
2004 Incentive Plan.(U).
10
.39
Separation and General Release
Agreement.(V).
10
.40
Registration Rights Agreement
dated as of June 6, 1985 between the registrant and the
purchasers of its Class D Convertible Preferred stock and
9% Convertible Subordinated Notes due 1997.(A)
Exhibit 10(m).
10
.41
Administrative Consent Order dated
September 16, 1985 of the New Jersey Department of
Environmental Protection to Cosan Chemical
Corporation.(A) Exhibit 10(q).
10
.42
Registration Rights Agreement
dated as of June 5, 2006 between the registrant and
American Stock Transfer and Trust Company.(K).
10
.43
Share Purchase Agreement between
Cambrex AB and International Chemical Investors II S.A.(CC).
10
.44
Consulting Agreement dated
November 10, 2006 between registrant and Gary L.
Mossman.(DD).
10
.45
Mr. Thomas Bird Bonus
Arrangement.(HH).
10
.46
Stock Purchase Agreement dated
October 23, 2006 between Lonza America Inc., Lonza
Bioproducts AG, Lonza Sales AG, Lonza Group Limited and Cambrex
Corporation and Subsidiaries(GG Exhibit 10.1).
10
.47
Agreement to Lift Sales
Restrictions on Certain Vested Options.(EE).
10
.48
Agreement to Accelerate Vesting of
Certain Options.(FF).
10
.50
Manufacturing Agreement dated as
of July 1, 1991 between the registrant and A.L.
Laboratories, Inc.(D).
21
Subsidiaries of registrant.(J).
23
Consent of PricewaterhouseCoopers
LLP to the incorporation by reference of its report herein in
Registration Statement Nos.
333-57404,
333-22017,
33-21374,
33-37791,
33-81780,
33-81782,
333-113612,
333-113613,
333-129473
and
333-136529
on
Form S-8
of the registrant.(J).
24
Powers of Attorney to sign this
report.(J).
31
.1
CEO Certification pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.(J).
31
.2
CFO Certification pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.(J).
32
.1
CEO Certification pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.(R).
32
.2
CFO Certification pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.(R).
98
(A)
Incorporated by reference to the
indicated Exhibit to registrants Registration Statement on
Form S-1
(Registration
No. 33-16419).
(B)
Incorporated by reference to
registrants Annual Report on
Form 8-K
dated June 5, 1989.
(C)
Incorporated by reference to
registrants Current Report on
Form 8-K
dated July 1, 1991.
(D)
Incorporated by reference to the
registrants Annual Report on
Form 10-K
for 1991.
(E)
Incorporated by reference to the
registrants Current Report on
Form 8-K
dated April 10, 1992 and Amendment No. 1 to its
Current Report.
(F)
Incorporated by reference to
registrants Registration Statement on
Form S-8
(Registration
No. 33-81780)
dated July 20, 1994.
(G)
Incorporated by reference to
registrants Registration Statement on
Form S-8
(Registration
No. 33-81782)
dated July 20, 1994.
(H)
Incorporated by reference to
registrants Registration Statement on
Form 8-K
dated October 27, 1994.
(I)
Incorporated by reference to the
registrants Annual Report on
Form 10-K
for 1994.
(J)
Filed herewith.
(K)
Incorporated by reference to the
registrants Registration Statement on
Form 8-A
dated May 25, 2006.
(L)
Incorporated by reference to
registrants Registration Statement on
Form S-8
(Registration
No. 333-22017)
dated February 19, 1997.
(M)
Incorporated by reference to the
registrants Current Report on
Form 8-K
dated October 8, 1997.
(N)
Incorporated by reference to
registrants Registration Statement on
Form S-8
(Registration
No. 333-57404)
dated March 22, 2001.
(O)
Incorporated by reference to the
registrants Current Report on
Form 8-K
dated November 10, 2003.
(P)
Incorporated by reference to
registrants Registration Statement on
Form S-8
(Registration
No. 333-113612)
dated March 15, 2004.
(Q)
Incorporated by reference to
registrants Registration Statement on
Form S-8
(Registration
No. 333-113613)
dated March 15, 2004.
(R)
Furnished herewith.
(S)
Incorporated by reference to the
registrants Current Report on
Form 8-K
dated June 6, 2005.
(T)
Incorporated by reference to the
registrants Current Report on
Form 8-K
filed October 13, 2005.
(U)
Incorporated by reference to
registrants Registration Statement on
Form S-8
(Registration
No. 333-129473)
dated November 4, 2005.
(V)
Incorporated by reference to the
registrants Current Report on
Form 8-K
dated January 4, 2006.
(W)
Incorporated by reference to
registrants Annual Report on
Form 10-K
dated March 31, 2005.
(X)
Incorporated by reference to
registrants Quarterly Report on
Form 10-Q
filed August 4, 2005.
(Y)
Incorporated by reference to
Item 1.01 registrants Current Report on
Form 8-K
dated February 7, 2006.
(Z)
Incorporated by reference to
Item 5.02(e)(1) to registrants Current Report on
Form 8-K
dated February 9, 2007.
(AA)
Incorporated by reference to
Item 5.02(e) to registrants Current Report on
Form 8-K
dated December 22, 2006.
(BB)
Incorporated by reference to
registrants Annual Report on
Form 10-K
for year end 2005 filed on May 26, 2006.
(CC)
Incorporated by reference to
registrants Quarterly Report on
Form 10-Q
for the period ending September 30, 2006.
(DD)
Incorporated by reference to
registrants Current Report on
Form 8-K
dated November 15, 2006.
(EE)
Incorporated by reference to
registrants Current Report on
Form 8-K
dated November 7, 2006.
(FF)
Incorporated by reference to
registrants Current Report on
Form 8-K
dated June 7, 2005.
(GG)
Incorporated by reference to
registrants Current Report on
Form 8-K
filed October 24, 2006.
(HH)
Incorporated by reference to
registrants Current Report on
Form 8-K
filed November 1, 2006.
99
.
.
.
CAMBREX CORPORATION
ANNUAL REPORT ON FORM 10-K
EXHIBIT 10.21
REVISED SCHEDULE OF PARTIES
NAME TITLE DATE OF AGREEMENT --------------- ---------------------------------------- ------------------ Peter E. Thauer Senior Vice President, Law and Environment, 02/06/06 General Counsel and Corporate Secretary Steven M. Klosk Executive Vice President, Chief Operating 02/06/06 Officer Luke M. Beshar Executive Vice President, Strategy 02/06/06 & Corporate Development |
EXHIBIT 10.25
EMPLOYMENT AGREEMENT
THIS AGREEMENT made by and between CAMBREX CORPORATION, a Delaware corporation (the "Company"), and Gregory P. Sargen, (the "Employee"), as of the 6th day of February, 2007.
WHEREAS, the Employee presently is a key management employee of the Company, namely its Vice President & Chief Financial 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.
(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 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) the sale or disposition by the Company of all or substantially all of the assets of the Company; or
(e) 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 second anniversary of such date; provided, however, that if a Change of Control actually occurs but 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 such Change of Control but within twelve (12) months after
(a) 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;
(b) 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
(c) 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.
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") (pursuant to any regular incentive bonus plan maintained by the Company) in cash, restricted stock, restricted stock units or other forms of remuneration on
the same basis as with respect to the fiscal year immediately preceding the fiscal year in which the Effective Date occurs.
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;
(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.
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 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 through the Date of Termination,
and the denominator of which is three hundred sixty-five (365) and (iii) any
compensation previously deferred by the Employee (together with accrued interest
thereon, if any) and not yet paid by the Company and any accrued vacation pay
not yet paid by the Company (such amounts specified in clauses (i), (ii) and
(iii) are hereinafter referred to as "Accrued Obligations"). All such Accrued
Obligations shall be paid to the Employee's estate or beneficiary, as
applicable, in a lump sum in cash within thirty (30) days of the Date of
Termination. Anything in this Agreement to the contrary notwithstanding, the
Employee's family shall be entitled to receive benefits at least equal to the
most favorable benefits provided by the Company and any of its subsidiaries
under such plans, programs, practices and policies
relating to family death benefits, if any, in accordance with the most favorable plans, programs, practices and policies of the company and its subsidiaries in effect at any time during the ninety-day period immediately preceding the Effective Date or, if more favorable to the Employee and/or the Employee's family, as in effect on the date of the Employee's death with respect to other key employees of the Company and its subsidiaries and their families.
(b) Disability. If the Employee's employment is terminated by reason of the Employee's Disability, this Agreement shall terminate without further obligations to the Employee; other than those obligations accrued or earned and vested (if applicable) by the Employee as of the Date of Termination, including for this purpose, all Accrued Obligations. All such Accrued Obligations shall be paid to the Employee in a lump sum in cash within thirty (30) days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, the Employee shall be entitled after the Disability Effective Date to receive disability and other benefits at least equal to the most favorable of those provided by the Company and its subsidiaries to disabled employees and/or their families in accordance with such plans, programs, practices and policies of the Company and its subsidiaries in effect at any time during the ninety-day period immediately preceding the Effective Date or, if more favorable to the Employee and/or the Employee's family, as in effect at any time thereafter with respect to other key employees of the Company and its subsidiaries and their families.
(c) Cause; Other than for Good Reason. If the Employee's employment shall be terminated for Cause, this Agreement shall terminate without further obligations to the Employee other than the obligation to pay to the Employee the Highest Base Salary through the Date of Termination plus the amount of any compensation previously deferred by the Employee (together with accrued interest thereon, if any). If the Employee terminates employment other than for Good Reason, this Agreement shall terminate without further obligations to the Employee, other than those obligations accrued or earned and vested (if applicable) by the Employee through the Date of Termination, including for this purpose, all Accrued Obligations. All such Accrued Obligations shall be paid to the Employee in a lump sum in cash within thirty (30) days of the Date of Termination.
(d) Good Reason; Other than for Cause or Disability. If, during the Employment Period, the Company shall terminate the Employee's employment other than for Cause, Disability, or death or if the Employee shall terminate his employment for Good Reason:
(i) the Company shall pay to the Employee in a lump sum in cash within thirty (30) days after the Date of Termination the aggregate of the following amounts:
A. to the extent not theretofore paid, the Employee's Highest Base Salary through the Date of Termination; and
B. the product of (x) the highest Annual Bonus earned by the
Employee during the two fiscal years immediately preceding the Date of
Termination, or, if higher, the Employee's Target Bonus after the date of this
Agreement until an Annual Bonus has actually been earned and (y) a fraction, the
numerator of which is the number of days in the current fiscal year through the
Date of Termination and the denominator of which is three hundred sixty-five
(365); and
C. the product of (x) a fraction, the numerator of which is twenty-four (24) minus the number of whole months the Employee has been employed by the Company following the first anniversary of the Effective Date and the denominator of which is twelve (12) and (y) the annualized Highest Base Salary; and
D. the product of (x) fraction, the numerator of which is twenty-four (24) minus the number of whole months the Employee has been employed by the Company following the first anniversary of the Effective Date and the denominator of which is twelve (12) and (y) the highest Annual Bonus earned by the Employee during two fiscal years immediately preceding the Date of Termination, provided that Employee's Annual Bonus under this Section after the date of this Agreement shall be his Target Bonus until an Annual Bonus has actually been earned; and
E. in the case of compensation previously deferred by the Employee, all amounts previously deferred (together with accrued interest thereon, if any) and not yet paid by the Company, and any accrued vacation pay not yet paid by the Company; and
F. for the remainder of the Employment Period, or such longer period as any plan, program, practice or policy may provide, the Company shall continue benefits to the Employee and/or the Employee's family at least equal to those which would have been provided to them as if the Employee's employment had not been terminated, in accordance with the most favorable employee benefit plans of the Company and its subsidiaries (including health insurance and life insurance) during the ninety-day period immediately preceding the Effective Date or, if more favorable to the Employee, as in effect at any time thereafter with respect to other key employees and their families; and
(iii) all outstanding equity awards shall immediately vest and, as applicable, become exercisable; and
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Employee's continuing or future participation in any benefit, bonus, incentive or other plans, programs, policies or practices, provided by the Company or any of its subsidiaries and for which the Employee may qualify, nor shall anything herein limit or otherwise affect such rights as the Employee may have under any stock option or other agreements with the Company or any of its subsidiaries. Amounts which are vested benefits or which the Employee is otherwise entitled to receive under any plan, policy, practice or program of the Company or any of its subsidiaries at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program provided, however, that in the event the terms of any such plan, policy, practice or program concerning the payment of benefits thereunder shall conflict with any provision of this Agreement, the terms of this Agreement shall take precedence but only if and to the extent the payment would not adversely affect the tax exempt status (if applicable) of any such plan, policy, practice or program and only if the Employee agrees in writing that such payment shall be in lieu of any corresponding payment from such plan, policy, practice or program.
8. Full Settlement. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Employee or others. In no event shall the
Employee be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Employee under any of the provisions
of this Agreement. The Company agrees to pay, to the full extent permitted by
law, all legal fees and expenses which the Employee may reasonably incur as a
result of any contest (regardless of the outcome thereof) by the Company or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Employee about the amount of any payment pursuant to
Section 9 of this Agreement), plus in each case interest at the applicable
Federal rate provided for in Section 7872(f)(2) of the Internal Revenue Code of
1986, as amended (the "Code").
9. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a "payment"), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Employee shall be entitled to receive an additional payment (a "Gross-Up Payment") in the amount such that after payment by the Employee of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed upon the Gross-Up Payment, the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether a Gross-Up Payment
is required and the amount of such Gross-Up Payment, shall be made by the
Company's regular outside independent public accounting firm (the "Accounting
Firm") which shall provide detailed supporting calculations both to the Company
and the Employee within fifteen (15) business days of the Date of Termination,
if applicable, or such earlier time as is requested by the Company. The initial
Gross-Up Payment, if any, as determined pursuant to this Section 9(b), shall be
paid to the Employee within five (5) days of the receipt of the Accounting
Firm's determination. If the Accounting Firm determines that no Excise Tax is
payable by the Employee, it shall furnish the Employee with an opinion that he
has substantial authority under Section 6661 of the Code not to report any
Excise Tax on his federal income tax return. Any determination by the Accounting
Firm shall be binding upon the Company and the Employee. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and the Employee thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Employee.
(c) The Employee shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten (10) business days after the later of either
(i) the date the Employee has actual knowledge of such claim, or (ii) ten (10)
days after the Internal Revenue Service issues to the Employee either a written
report proposing imposition of the Excise Tax or a statutory Notice of
Deficiency with respect thereto, and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Employee shall not pay such claim prior to the expiration of the thirty-day
period following the date on which it gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to such
claim is due). If the Company notifies the Employee in writing prior to the
expiration of such period that it desires to contest such claim, the Employee
shall:
(i) give the Company any information reasonably requested by the Company relating to such claim,
(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim,
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Employee harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limitation of the foregoing provisions of this Section 9(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Employee to request or accede to a request for an extension of the statute of limitations with respect only to the tax claimed, or pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Employee agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Employee to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Employee, on an interest-free basis and shall indemnify and hold the Employee harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect hereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statue of limitations requested or acceded to by the Employee at the Company's request and relating to payment of taxes for the taxable year of the Employee with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest
shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Employee shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Employee of an amount
advanced by the Company pursuant to Section 9(c), the Employee becomes entitled
to receive any refund with respect to such claim, the Employee shall (subject to
the Company's complying with the requirements of Section 9(c)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Employee of an amount advanced by the Company pursuant to Section 9(c), a
determination is made that the Employee shall not be entitled to any refund with
respect to such claim and the Company does not notify the Employee in writing of
its intent to contest such denial of refund prior to the expiration of thirty
(30) days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.
(e) In the event that any state or municipality or subdivision thereof shall subject any Payment to any special tax which shall be in addition to the generally applicable income tax imposed by such state, municipality, or subdivision with respect to receipt of such Payment, the foregoing provisions of this Section 9 shall apply, mutatis mutandis, with respect to such special tax.
10. Non-competition. As a condition to receiving any benefits pursuant to this Agreement, the Employee agrees that during his period of employment and through the first anniversary of his Date of Termination, the Employee shall not engage in or become associated with any Competitive Activity. For purposes of this Section 10, a "Competitive Activity" shall mean any business or other endeavor that engages in any country in which the Company or its Affiliates have business operations in a business that directly or indirectly competes with all or any substantial part of any of the business in which the Company or its Affiliates is engaged at the time of the Employee's Date of Termination. The Employee shall be considered to have become "engaged" or "associated" with a Competitive Activity if he becomes involved as an owner, employee, officer, director, independent contractor, agent, partner, advisor, lender, or in any other capacity calling for the rendition of the Employee's personal services, either alone or with any individual, partnership, corporation or other organization that is engaged in a Competitive Activity and his involvement relates in any respect to the Competitive Activity of such entity; provided, however, that the Employee shall not be prohibited from owning less than two percent of any publicly traded corporation, whether or not such corporation is in competition with the Company. If, at any time, the provisions of this Section 10 shall be determined to be invalid or unenforceable, by reason of being vague or unreasonable as to area, duration or scope of activity, this Section 10 shall be considered divisible and shall become and be immediately amended to only such area, duration and scope of activity as shall be determined to be reasonable and enforceable by the court or other body having jurisdiction over the matter; and the Employee agrees
that this Section 10 as so amended shall be valid and binding as though any invalid or unenforceable provision had not been included herein.
11. Confidential Information. The Employee shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its subsidiaries, and their respective businesses, which shall have been obtained by the Employee during the Employee's employment by the Company or any of its subsidiaries and which shall not be or become public knowledge (other than by acts by the Employee or his representatives in violation of this Agreement). After termination of the Employee's employment with the Company, the Employee shall not, without the prior written consent of the Company, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. In no event shall an asserted violation of the provisions of this Section 10 constitute a basis for deferring or withholding any amounts otherwise payable to the Employee under this Agreement.
12. Successors.
(a) This Agreement is personal to the Employee and without the prior written consent of the Company shall not be assignable by the Employee otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Employee's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.
(c) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.
13. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof an shall have no force or effect.
(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Employee:
Mr. Gregory P. Sargen
If to the Company:
Cambrex Corporation
One Meadowlands Plaza
East Rutherford, N.J. 07073
Attention: General Counsel
or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(d) The Company may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(e) The Employee's failure to insist upon strict compliance with any provision hereof shall not be deemed to be a waiver of such provision or any other provision thereof.
(f) This Agreement contains the entire understanding of the Company and the Employee with respect to the subject matter hereof. This agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.
(g) The Employee and the Company acknowledge that the employment of the Employee by the Company or any of its subsidiaries prior to the Effective Date is "at will", and, prior to the Effective Date, may be terminated by either the Employee or the employer at any time. Upon a termination of the Employee's employment or upon the Employee's ceasing to be an officer of the Company, in each case, prior to the Effective Date, there shall be no further rights under this Agreement.
14. Section 409A. Notwithstanding anything in this Agreement to the contrary, to the extent the Employee would otherwise be entitled to a payment during the six months beginning on the Date of Termination that would be subject to the additional tax imposed under Section 409A of the Code, (i) the payment will not be made to the Employee and instead will be made, at the election of the Company, either to a trust in compliance with Rev. Proc. 92-64 or an escrow account established to fund such payments (provided that such funds shall be at all times subject to the creditors of the Company and its affiliates) and (ii) the payment, together with interest thereon at the rate of "prime" plus 1%, will be paid to the Employee on the earlier of the six-month anniversary of Date of Termination or the Employee's death or disability (within the meaning of Section 409A of the Code). Similarly, to the extent the Employee would otherwise be entitled to any benefit (other than a cash payment) during the six months beginning on the Date of Termination that would be subject to the additional tax under Section 409A of the Code, the benefit will be delayed and will
begin being provided (together, if applicable, with an adjustment to compensate the Employee for the delay, with such adjustment to be determined in the Company's reasonable good faith discretion) on the earlier of the six-month anniversary of the Date of Termination or the Employee's death or disability (within the meaning of Section 409A of the Code). The Company will establish the trust or escrow account, as applicable, no later than ten days following the Employee's Date of Termination. It is the intention of the parties that the payments and benefits to which the Employee could become entitled in connection with termination of employment under this Agreement comply with Section 409A of the Code. In the event that the parties determine that any such benefit or right does not so comply, they will negotiate reasonably and in good faith to amend the terms of this Agreement such that it complies (in a manner that attempts to minimize the economic impact of such amendment on the Employee and the Company).
IN WITNESS WHEREOF, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, and the Employee has hereunto set his hand, all as of the day and year first above written.
CAMBREX CORPORATION
By: ______________________________
James A. Mack, Chairman,
President & Chief Executive Officer
EXHIBIT 10.32
EMPLOYMENT AGREEMENT
THIS AGREEMENT made by and between CAMBREX CORPORATION, a Delaware corporation (the "Company"), and Paolo Russolo, (the "Employee"), as of the 6th day of February, 2007.
WHEREAS, the Employee presently is a key management employee of a subsidiary of the Company, namely the President of the Cambrex Profarmaco Business Unit; 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.
(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 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) the sale or disposition by the Company of all or substantially all of the assets of the Company; or
(e) 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 second anniversary of such date; provided, however, that if a Change of Control actually occurs but 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 such Change of Control but within twelve (12) months after
(a) 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;
(b) 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
(c) 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.
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, restricted stock, restricted stock units or other forms of remuneration on the same basis as with respect to the fiscal year immediately preceding the fiscal year in which the Effective Date occurs.
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;
(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.
(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 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 through the Date of Termination,
and the denominator of which is three hundred sixty-five (365) and (iii) any
compensation previously deferred by the Employee (together with accrued interest
thereon, if any) and not yet paid by the Company and any accrued vacation pay
not yet paid by the Company (such amounts specified in clauses (i), (ii) and
(iii) are hereinafter referred to as "Accrued Obligations"). All such Accrued
Obligations shall be paid to the Employee's estate or beneficiary, as
applicable, in a lump sum in cash within thirty (30) days of the Date of
Termination. Anything in this Agreement to the contrary notwithstanding, the
Employee's family shall be entitled to receive benefits at least equal to the
most favorable benefits provided by the Company and any of its subsidiaries
under such plans, programs, practices and policies relating to family death
benefits, if any, in accordance with the most favorable plans, programs,
practices and policies of the company and its subsidiaries in effect at any time
during the ninety-day period immediately preceding the Effective Date or, if
more favorable to the
Employee and/or the Employee's family, as in effect on the date of the Employee's death with respect to other key employees of the Company and its subsidiaries and their families.
(b) Disability. If the Employee's employment is terminated by reason of the Employee's Disability, this Agreement shall terminate without further obligations to the Employee; other than those obligations accrued or earned and vested (if applicable) by the Employee as of the Date of Termination, including for this purpose, all Accrued Obligations. All such Accrued Obligations shall be paid to the Employee in a lump sum in cash within thirty (30) days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, the Employee shall be entitled after the Disability Effective Date to receive disability and other benefits at least equal to the most favorable of those provided by the Company and its subsidiaries to disabled employees and/or their families in accordance with such plans, programs, practices and policies of the Company and its subsidiaries in effect at any time during the ninety-day period immediately preceding the Effective Date or, if more favorable to the Employee and/or the Employee's family, as in effect at any time thereafter with respect to other key employees of the Company and its subsidiaries and their families.
(c) Cause; Other than for Good Reason. If the Employee's employment shall be terminated for Cause, this Agreement shall terminate without further obligations to the Employee other than the obligation to pay to the Employee the Highest Base Salary through the Date of Termination plus the amount of any compensation previously deferred by the Employee (together with accrued interest thereon, if any). If the Employee terminates employment other than for Good Reason, this Agreement shall terminate without further obligations to the Employee, other than those obligations accrued or earned and vested (if applicable) by the Employee through the Date of Termination, including for this purpose, all Accrued Obligations. All such Accrued Obligations shall be paid to the Employee in a lump sum in cash within thirty (30) days of the Date of Termination.
(d) Good Reason; Other than for Cause or Disability. If, during the Employment Period, the Company shall terminate the Employee's employment other than for Cause, Disability, or death or if the Employee shall terminate his employment for Good Reason:
(i) the Company shall pay to the Employee in a lump sum in cash within thirty (30) days after the Date of Termination the aggregate of the following amounts:
A. to the extent not theretofore paid, the Employee's Highest Base Salary through the Date of Termination; and
B. the product of (x) the highest Annual Bonus earned by the Employee during the two fiscal years immediately preceding the Date of Termination and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination and the denominator of which is three hundred sixty-five (365); and
C. the product of (x) a fraction, the numerator of which is twenty-four (24) minus the number of whole months the Employee has been employed by the Company following the first anniversary of the Effective Date and the denominator of which is twelve (12) and (y) the annualized Highest Base Salary; and
D. the product of (x) fraction, the numerator of which is twenty-four (24) minus the number of whole months the Employee has been employed by the Company following the first anniversary of the Effective Date and the denominator of which is twelve (12) and (y) the highest Annual Bonus earned by the Employee during two fiscal years immediately preceding the Date of Termination, provided that Employee's Annual Bonus under this Section shall be his Target Bonus until an Annual Bonus has actually been earned; and
E. any accrued vacation pay not yet paid by the Company; and
F. all outstanding equity awards shall immediately vest and, as applicable, become exercisable.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Employee's continuing or future participation in any benefit, bonus, incentive or other plans, programs, policies or practices, provided by the Company or any of its subsidiaries and for which the Employee may qualify, nor shall anything herein limit or otherwise affect such rights as the Employee may have under any stock option or other agreements with the Company or any of its subsidiaries. Amounts which are vested benefits or which the Employee is otherwise entitled to receive under any plan, policy, practice or program of the Company or any of its subsidiaries at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program provided, however, that in the event the terms of any such plan, policy, practice or program concerning the payment of benefits thereunder shall conflict with any provision of this Agreement, the terms of this Agreement shall take precedence but only if and to the extent the payment would not adversely affect the tax exempt status (if applicable) of any such plan, policy, practice or program and only if the Employee agrees in writing that such payment shall be in lieu of any corresponding payment from such plan, policy, practice or program.
8. Full Settlement. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Employee or others. In no event shall the Employee be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Employee under any of the provisions of this Agreement. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Employee may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Employee about the amount of any payment pursuant to Section 9 of this Agreement), plus in each case interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Internal Revenue Code of 1986, as amended (the "Code").
9. Non-competition. As a condition to receiving any benefits pursuant to this Agreement, the Employee agrees that during his period of employment and through the first anniversary of his Date of Termination, the Employee shall not engage in or become associated with any Competitive Activity. For purposes of this Section 9, a
"Competitive Activity" shall mean any business or other endeavor that engages in any country in which the Company or its Affiliates have business operations in a business that directly or indirectly competes with all or any substantial part of any of the business in which the Company or its Affiliates is engaged at the time of the Employee's Date of Termination. The Employee shall be considered to have become "engaged" or "associated" with a Competitive Activity if he becomes involved as an owner, employee, officer, director, independent contractor, agent, partner, advisor, lender, or in any other capacity calling for the rendition of the Employee's personal services, either alone or with any individual, partnership, corporation or other organization that is engaged in a Competitive Activity and his involvement relates in any respect to the Competitive Activity of such entity; provided, however, that the Employee shall not be prohibited from owning less than two percent of any publicly traded corporation, whether or not such corporation is in competition with the Company. If, at any time, the provisions of this Section 9 shall be determined to be invalid or unenforceable, by reason of being vague or unreasonable as to area, duration or scope of activity, this Section 9 shall be considered divisible and shall become and be immediately amended to only such area, duration and scope of activity as shall be determined to be reasonable and enforceable by the court or other body having jurisdiction over the matter; and the Employee agrees that this Section 9 as so amended shall be valid and binding as though any invalid or unenforceable provision had not been included herein.
10. Confidential Information. The Employee shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its subsidiaries, and their respective businesses, which shall have been obtained by the Employee during the Employee's employment by the Company or any of its subsidiaries and which shall not be or become public knowledge (other than by acts by the Employee or his representatives in violation of this Agreement). After termination of the Employee's employment with the Company, the Employee shall not, without the prior written consent of the Company, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. In no event shall an asserted violation of the provisions of this Section 10 constitute a basis for deferring or withholding any amounts otherwise payable to the Employee under this Agreement.
11. Successors.
(a) This Agreement is personal to the Employee and without the prior written consent of the Company shall not be assignable by the Employee otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Employee's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.
(c) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.
12. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof an shall have no force or effect.
(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Employee:
Mr. Paolo Russolo
If to the Company:
Cambrex Corporation
One Meadowlands Plaza
East Rutherford, N.J. 07073
Attention: General Counsel
or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(d) The Company may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(e) The Employee's failure to insist upon strict compliance with any provision hereof shall not be deemed to be a waiver of such provision or any other provision thereof.
(f) This Agreement contains the entire understanding of the Company and the Employee with respect to the subject matter hereof. This agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.
(g) The Employee and the Company acknowledge that the employment of the Employee by the Company or any of its subsidiaries prior to the Effective Date is "at will", and, prior to the Effective Date, may be terminated by either the Employee or the employer at any time. Upon a termination of the Employee's employment or upon the Employee's ceasing to be an officer of the Company, in each case, prior to the Effective Date, there shall be no further rights under this Agreement.
IN WITNESS WHEREOF, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, and the Employee has hereunto set his hand, all as of the day and year first above written.
CAMBREX CORPORATION
By: ___________________________________
James A. Mack, Chairman,
President & Chief Executive Officer
.
.
.
CAMBREX CORPORATION
EXHIBIT 21
SUBSIDIARIES OF REGISTRANT
Subsidiary Incorporated in: ------------- ----------------- Cambrex North Brunswick, Inc. Delaware Cambrex Charles City, Inc. Iowa Cambrex Bio Science Walkersville, Inc. Delaware Cambrex Profarmaco Milano S.r.l. Italy Cambrex Karlskoga AB Sweden Cambrex Bio Science Verviers Sprl Belgium Cambrex Bio Science Rockland, Inc. Delaware Cambrex Bio Science Copenhagen ApS Denmark Cambrex Bio Science Nottingham Limited England Cambrex Bio Science Baltimore, Inc. Delaware Cambrex Bio Science Hopkinton, Inc. Delaware Cambrex Bio Science Clermont Ferrand SAS France |
CAMBREX CORPORATION
EXHIBIT 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (File Nos. 333-57404, 333-22017, 33-21374, 33-37791, 33-81780, 33-81782, 333-113612, 333-113613, 333-129473 and 333-136529) of Cambrex Corporation of our report dated March 15, 2007 relating to the financial statements, financial statement schedule, management's assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.
/s/ PRICEWATERHOUSECOOPERS LLP Florham Park, New Jersey March 15, 2007 |
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each officer and director of Cambrex Corporation, a Delaware corporation, whose signature appears below constitutes and appoints James A. Mack and Gregory P. Sargen, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all Annual Reports on Form 10-K which said Cambrex Corporation may be required to file pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 and any and all amendments thereto and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or their substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF each of the undersigned has executed this instrument as of the 15th day of March 2007.
/s/ James A. Mack /s/ Gregory P. Sargen ---------------------------------------- ----------------------------------- James A. Mack Gregory P. Sargen Chairman of the Board of Directors, Vice President and Chief Financial President and Chief Executive Officer Officer (Principal Financial Officer and Accounting Officer) /s/ David R. Bethune /s/ Ilan Kaufthal ---------------------------------------- ----------------------------------- David R. Bethune Ilan Kaufthal Director Director /s/ Rosina B. Dixon /s/ William Korb ---------------------------------------- ----------------------------------- Rosina B. Dixon, M.D. William Korb Director Director /s/ Roy W. Haley /s/ John R. Miller ---------------------------------------- ----------------------------------- Roy W. Haley John R. Miller Director Director /s/ Kathryn Rudie Harrigan /s/ Peter G. Tombros ---------------------------------------- ----------------------------------- Kathryn Rudie Harrigan, PhD Peter G. Tombros Director Director /s/ Leon J. Hendrix, Jr. ---------------------------------------- Leon J. Hendrix, Jr. Director |
EXHIBIT 31.1
CAMBREX CORPORATION
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)
I, James A. Mack, certify that:
1. I have reviewed this annual report on Form 10-K of Cambrex Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a - 15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the periods in which this annual report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: March 15, 2007 /s/ James A. Mack ---------------------------------------- James A. Mack Chairman of the Board of Directors, President and Chief Executive Officer |
EXHIBIT 31.2
CAMBREX CORPORATION
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)
I, Gregory P. Sargen, certify that:
1. I have reviewed this annual report on Form 10-K of Cambrex Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a - 15(f) and 15d-15(f))for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: March 15, 2007 /s/ Gregory P. Sargen ---------------------------------------- Gregory P. Sargen Vice President and Chief Financial Officer |
EXHIBIT 32.1
CAMBREX CORPORATION
CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)
In connection with the Annual Report of Cambrex Corporation (the "Company") on Form 10-K for the period ending December 31, 2006, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, James A. Mack, President and Chief Executive Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 ; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: March 15, 2007 /s/ James A. Mack ---------------------------------------- James. A. Mack Chairman of the Board of Directors, President and Chief Executive Officer |
EXHIBIT 32.2
CAMBREX CORPORATION
CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)
In connection with the Annual Report of Cambrex Corporation (the
"Company") on Form 10-K for the period ending December 31, 2006, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Gregory P. Sargen, Vice President and Chief Financial Officer of the Company,
certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.
Section 1350), that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: March 15, 2007 /s/ Gregory P. Sargen ---------------------------------------- Gregory P. Sargen Vice President and Chief Financial Officer |