UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 24, 2020
LANNETT COMPANY, INC.
(Exact name of registrant as specified in its charter)
Commission file no. 001-31298
State of Delaware | 23-0787699 |
(State of Incorporation) | (I.R.S. Employer I.D. No.) |
9000 State Road
Philadelphia, PA 19136
(215) 333-9000
(Address of principal executive offices and telephone number)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, $0.001 par value | LCI | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this Chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Compensatory Arrangement
On August 24, 2020, Lannett Company, Inc. (the “Company”) entered into addendums or amendments to the existing employment agreements (the “Addendums”) with the following executive officers, Timothy C. Crew, Chief Executive Officer; John Kozlowski, Vice President of Finance and Chief Financial Officer; Maureen Cavanaugh, Senior Vice President and Chief Commercial Operations Officer; Samuel H. Israel, Chief Legal Officer and General Counsel; John Abt, Vice President and Chief Quality and Operations Officer; and Robert Ehlinger, Vice President and Chief Information Officer (the “Executives”).
The Addendums amend the existing employment agreements, as a result of a policy implemented by the Board of Directors of the Company (the “Board”), to provide that if the Company is required to issue a material financial restatement as a result of fraud or other misconduct, the Board may, in its discretion, seek to recoup any excess performance-based short-term or long-term incentive compensation awarded during the three-year period following the originally filed financial statement(s). The recoupment provision applies to any Executive who is found to have participated in or knew or should have known about such fraud or misconduct and took no action to prevent it. In determining the amount of any excess performance-based incentives, the Board will compare the award received based on the original financial statement(s) against the amount that would have been earned based on the restated financial results. Prior to the Addendums, the Company maintained a clawback policy under the Sarbanes-Oxley Act, with incentive awards for the Chief Executive Officer and Chief Financial Officer subject to recoupment in the event of a material financial restatement triggered by fraud or misconduct.
The Addendums also amend the existing employment agreements to provide that in connection with a change in control of the Company, any outstanding unvested Company stock options awarded to the Executives prior to the change of control will be deemed fully vested, any outstanding unvested restricted stock or unvested TSRs awarded to the Executives prior to the change in control will be deemed fully vested if the realization of the performance goals have been determined and that the restrictions applicable to any outstanding restricted stock or TSR awards for which the number of shares has not been established because the realization of the performance goals has not yet been determined shall be treated in accordance with the applicable provisions of the Company’s Long Term Incentive Plans regarding a change in control of the Company.
The Addendums for all Executives other than Mr. Crew further amend the existing employment agreements to clarify that upon a termination of employment by the Company without cause or by the Executive for Good Reason, the Executive shall be entitled to receive a pro-rated annual cash bonus for the then current fiscal year based on a calculation for all categories that comprise the bonus at a “target” level.
The description of the Addendums contained herein does not purport to be complete and is qualified in its entirety by reference to the full text of the Addendums, which are filed as Exhibits 10.64, 10.65, 10.66, 10.67, 10.68 and 10.69 hereto, and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
LANNETT COMPANY
By: | /s/ Samuel H. Israel | |
Chief Legal Officer and General Counsel | ||
Date: August 28, 2020 |
Exhibit 10.64
THIRD ADDENDUM
to
Employment Agreement
of
Timothy Crew
This Third Addendum (the “Third Amendment”) to the Employment Agreement of Timothy Crew, is entered into as of this 24th day of August 2020, between Lannett Company, Inc. (the “Company”) and Timothy Crew (“Mr. Crew”) (together, the Company and Mr. Crew shall be known as the “Parties”).
RECITALS
WHEREAS, Mr. Crew entered into an Employment Agreement with the Company as of January 1, 2018 (“Employment Agreement”) and a First Addendum as of March 28, 2018;
WHEREAS, the Parties entered into a Second Addendum to the Restated Employment Agreement (“Addendum”) effective as of July 1, 2018, wherein the Parties clarified that Section 10 of the Employment Agreement, which contains a confidentiality provision, shall not preclude Executive from voluntarily disclosing confidential information to governmental officials or participating in investigations into suspected violations of law without first notifying or obtaining the consent of the Company;
WHEREAS, the Parties wish to amend further the Employment Agreement to provide the Board the authority to seek reimbursement of incentive compensation paid to Executive in certain instances as more fully set forth herein, in the event the Company is required to restate its financial statements as a result of fraud or misconduct (the “Claw Back Provision”);
WHEREAS, in consideration for Executive agreeing to the inclusion of a Claw Back Provision in the Employment Agreement, the Company agrees to revise and clarify Executive’s rights under paragraph 9(c) of the Employment Agreement in the event of a Change in Control of Company;
NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the Parties agree as follows:
1. | Capitalized Terms. All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Employment Agreement. |
2. | Claw Back Provision. Executive agrees that, should the Company be required to prepare and issue a material accounting restatement caused by fraud or other misconduct in connection with any financial reporting requirement under the securities laws, and should Executive be found to have participated in or knew or should have known about such fraud or misconduct and took no action to prevent it, the Board may, in its discretion, seek reimbursement of the difference in the amount of any cash based incentive and performance equity awarded to Executive during the three year period following the first public issuance or filing of the financial document in question and the amount, if any, of cash based incentive pay or performance equity Executive would have received if such incentive pay or equity based compensation were awarded under the restated financial statement. |
3. | Paragraph 9(c) is deleted in its entirety and replaced with the following: |
If Executive is notified that he is being terminated by Company without Cause, or resigns for Good Reason, in connection with or within twenty four (24) months following a Change in Control of Company, Executive will be entitled, in addition to the Standard Entitlements payable in accordance with Section 9(a), the benefits set forth in Section 9(b)(i), (ii) and (iii). In connection with any Change in Control of Company, any outstanding unvested Company stock options, restricted stock and TSRs awarded to Executive prior to the Change in Control shall be treated in accordance with the applicable provision of the Company’s Long Term Incentive Plan regarding a Change in Control of Company and any stock options, restricted stock and TSRs awarded subsequent to the Change in Control shall be treated in accordance with Section 9(b). For the purpose of this Section 9(c), a written notice that Executive’s employment term is not extended pursuant to Section 2 within the twenty-four (24) month period following a Change in Control of Company shall be deemed to be a termination without Cause, unless Executive and Company execute a new employment agreement effective as of the date on which Agreement would otherwise have renewed. The term “Change in Control of Company” shall mean the occurrence of a “change in ownership of the Company,” a “change in effective control of the Company,” or “a change in ownership of a substantial portion of the Company’s assets, each within the meaning of Section 409A and Treasury Regulation Section 1.409A-3(i)(5).
4. | Miscellaneous. Except as set forth herein, all of the terms of the Employment Agreement and the First Addendum and Second Addendum remain in full force and effect. To the extent that there are inconsistencies between this Third Addendum and the First Addendum, Second Addendum and/or Employment Agreement, the provisions of this Third Addendum shall control and shall supersede the applicable provisions of the First Addendum, Second Addendum and/or Employment Agreement. |
5. | Counterparts. This Third Addendum may be executed in Counterparts, which together shall constitute one Agreement. |
IN WITNESS WHEREOF, each of the Parties hereby executes this Third Addendum to the Employment Agreement as of the date first written above.
LANNETT COMPANY, INC. | |||
By: | /s/ Patrick Lepore | /s/ Timothy Crew | |
Patrick LePore, | Timothy Crew | ||
Chairman of Board of Directors |
Exhibit 10.65
THIRD AMENDMENT
to
Restated Employment Agreement
of
John Kozlowski
This Third Amendment (the “Third Amendment”) to the Restated Employment Agreement of John Kozlowski, is entered into as of this 24th day of August 2020, between Lannett Company, Inc. (the “Company”) and John Kozlowski (“Mr. Kozlowski”) (together, the Company and Mr. Kozlowski shall be known as the “Parties”).
RECITALS
WHEREAS, Mr. Kozlowski entered into a Restated Employment Agreement with the Company as of October 26, 2017 (“Employment Agreement”);
WHEREAS, the Parties entered into two separate amendments to the Employment Agreement based on changes in Mr. Kozlowski’s job titles and duties;
WHEREAS, the Parties entered into an Addendum to the Employment Agreement effective as of July 1, 2018, wherein the Parties clarified that Section 10 of the Employment Agreement, which contains a confidentiality provision, shall not preclude Executive from voluntarily disclosing confidential information to governmental officials or participating in investigations into suspected violations of law without first notifying or obtaining the consent of the Company;
WHEREAS, the Parties wish to amend further the Employment Agreement to provide the Board the authority to seek reimbursement of incentive compensation paid to Executive in certain instances as more fully set forth herein, in the event the Company is required to restate its financial statements as a result of fraud or misconduct (the “Claw Back Provision”);
WHEREAS, in consideration for Executive agreeing to the inclusion of a Claw Back Provision in the Employment Agreement, the Company agrees to revise and clarify Executive’s rights under paragraph 9(c) of the Employment Agreement in the event of a Change in Control of Company;
NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the Parties agree as follows:
1. | Capitalized Terms. All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Employment Agreement. |
2. | Claw Back Provision. Executive agrees that, should the Company be required to prepare and issue a material accounting restatement caused by fraud or other misconduct in connection with any financial reporting requirement under the securities laws, and should Executive be found to have participated in or knew or should have known about such fraud or misconduct and took no action to prevent it, the Board may, in its discretion, seek reimbursement of the difference in the amount of any cash based incentive and performance equity awarded to Executive during the three year period following the first public issuance or filing of the financial document in question and the amount, if any, of cash based incentive pay or performance equity Executive would have received if such incentive pay or equity based compensation were awarded under the restated financial statement. |
3. | Paragraph 9(b)(iii) is deleted in its entirety and replaced with the following: |
(iii) a pro-rated annual cash bonus for the then current fiscal year based on a calculation for all categories that comprise the bonus at a “target” level.
4. | Paragraph 9(c) is deleted in its entirety and replaced with the following: |
If Executive is notified that he is being terminated by Company without Cause, or resigns for Good Reason, in connection with or within eighteen (18) months following a Change in Control of Company, Executive will be entitled, in addition to the Standard Entitlements payable in accordance with Section 9(a), the benefits set forth in Section 9(b)(i), (ii) and (iii). In connection with any Change in Control of Company, any outstanding unvested Company stock options, restricted stock and TSRs awarded to Executive prior to the Change in Control shall be treated in accordance with the applicable provision of the Company’s Long Term Incentive Plan regarding a Change in Control of Company and any stock options, restricted stock and TSRs awarded subsequent to the Change in Control shall be treated in accordance with Section 9(b). For the purpose of this Section 9(c), a written notice that Executive’s employment term is not extended pursuant to Section 2 within the eighteen (18) month period following a Change in Control of Company shall be deemed to be a termination without Cause, unless Executive and Company execute a new employment agreement effective as of the date on which Agreement would otherwise have renewed. The term “Change in Control of Company” shall mean the occurrence of a “change in ownership of the Company,” a “change in effective control of the Company,” or “a change in ownership of a substantial portion of the Company’s assets, each within the meaning of Section 409A and Treasury Regulation Section 1.409A-3(i)(5).
5. | Miscellaneous. Except as set forth herein, all of the terms of the Employment Agreement, the First Amendment, Second Amendment and the Addendum remain in full force and effect. To the extent that there are inconsistencies between this Third Amendment and the First Amendment, Second Amendment and Addendum and/or Employment Agreement, the provisions of this Third Amendment shall control and shall supersede the applicable provisions of the First Addendum and/or Employment Agreement. |
6. | Counterparts. This Third Amendment may be executed in Counterparts, which together shall constitute one Agreement. |
IN WITNESS WHEREOF, each of the Parties hereby executes this Third Amendment to the Employment Agreement as of the date first written above.
LANNETT COMPANY, INC. | |||
By: | /s/ Timothy Crew | /s/ John Kozlowski | |
Timothy Crew, | John Kozlowski | ||
Chief Executive Officer |
Exhibit 10.66
SECOND ADDENDUM
to
Employment Agreement
of
Maureen Cavanaugh
This Second Addendum (the “Second Addendum”) to the Employment Agreement of Maureen Cavanaugh is entered into as of this 24th day of August 2020, between Lannett Company, Inc. (the “Company”) and Maureen Cavanaugh (“Ms. Cavanaugh”) (together, the Company and Ms. Cavanaugh shall be known as the “Parties”).
RECITALS
WHEREAS, Ms. Cavanaugh entered into an Employment Agreement with the Company as of May 7, 2018 (“Employment Agreement”);
WHEREAS, the Parties entered into an Addendum to Employment Agreement of Maureen Cavanaugh (“First Addendum”) effective as of July 1, 2018, wherein the Parties clarified that Section 10 of the Employment Agreement, which contains a confidentiality provision, shall not preclude Executive from voluntarily disclosing confidential information to governmental officials or participating in investigations into suspected violations of law without first notifying or obtaining the consent of the Company;
WHEREAS, the Parties wish to amend the Employment Agreement to provide the Board the authority to seek reimbursement of incentive compensation paid to Executive in certain instances as more fully set forth herein, in the event the Company is required to restate its financial statements as a result of fraud or misconduct (the “Claw Back Provision”);
WHEREAS, in consideration for Executive agreeing to the inclusion of a Claw Back Provision in the Employment Agreement, the Company agrees to revise and clarify Executive’s rights under paragraph 9(c) of the Employment Agreement in the event of a Change in Control of Company;
NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the Parties agree as follows:
1. | Capitalized Terms. All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Employment Agreement. |
2. | Claw Back Provision. Executive agrees that, should the Company be required to prepare and issue a material accounting restatement caused by fraud or other misconduct in connection with any financial reporting requirement under the securities laws, and should Executive be found to have participated in or knew or should have known about such fraud or misconduct and took no action to prevent it, the Board may, in its discretion, seek reimbursement of the difference in the amount of any cash based incentive and performance equity awarded to Executive during the three year period following the first public issuance or filing of the financial document in question and the amount, if any, of cash based incentive pay or performance equity Executive would have received if such incentive pay or equity based compensation were awarded under the restated financial statement. |
3. | Paragraph 9(b)(iii) is deleted in its entirety and replaced with the following: |
(iii) a pro-rated annual cash bonus for the then current fiscal year based on a calculation for all categories that comprise the bonus at a “target” level.
4. | Paragraph 9(c) is deleted in its entirety and replaced with the following: |
If Executive is notified that she is being terminated by Company without Cause, or resigns for Good Reason, in connection with or within eighteen (18) months following a Change in Control of Company, Executive will be entitled, in addition to the Standard Entitlements payable in accordance with Section 9(a), the benefits set forth in Section 9(b)(i), (ii) and (iii). In connection with any Change in Control of Company, any outstanding unvested Company stock options, restricted stock and TSRs awarded to Executive prior to the Change in Control shall be treated in accordance with the applicable provision of the Company’s Long Term Incentive Plan regarding a Change in Control of Company and any stock options, restricted stock and TSRs awarded subsequent to the Change in Control shall be treated in accordance with Section 9(b). Executive shall also be entitled to the following additional amounts: (i) the then current base salary under Section 4 for a period of 18 months (i.e., a total of up to 36 months of base salary) (the “Additional Salary”), and (ii) insurance coverage provided to her equal to such coverage provided to her on the date of termination at no cost or, if ineligible for continued coverage under Company policies, reimbursement of the cost of comparable coverage for an additional period of 18 months (i.e., a total of up to 36 months of insurance coverage (the “Additional Insurance Coverage”). Notwithstanding the above, the time period for the purpose of calculating the amount of Additional Salary and Additional Insurance Coverage shall be reduced a total of one month for each month up to 18 months in which Executive remains employed following a Change in Control of Company. (By way of example, only, if Executive is terminated pursuant to this paragraph 9(c) within the first month of employment following a Change in Control of Company, the time period for calculating the total amount of Additional Salary and Additional Insurance Coverage shall be 18 months; if Executive is terminated pursuant to this paragraph 9(c) within the second month following a Change in Control of Company, the time period for calculating the total amount of Additional Salary and Additional Insurance Coverage shall be 17 months, etc.). For the purpose of Section 9(c) and Section 9(d) below, a written notice that Executive’s employment term is not extended pursuant to Section 2 within the 18-month period following a Change in Control of Company shall be deemed to be a termination without Cause, unless Executive and Company execute a new employment agreement effective as of the date on which Agreement would otherwise have renewed. The term “Change in Control of Company” shall mean the occurrence of a “change in ownership of the Company,” a “change in effective control of the Company.,” or “a change in ownership of a substantial portion of the Company’s assets,: each within the meaning of Section 409A and Treasury Regulation Section 1.409A-3(i)(5).
5. | Paragraph 9(d) is deleted in its entirety and replaced with the following: |
Executive also shall be deemed to have been terminated by the Company without Cause, and shall be entitled, in addition to the Standard Entitlements payable in accordance Section 9(a), to the additional benefits set forth in Section 9(b)(i), (ii) and (iii), and the additional Severance Pay payable in accordance with Section 9(c), if a majority of the Company’s Abbreviated New Drug Applications (the “ANDAs”) are sold, other than for restructuring the Company’s intellectual property within its discretion through or to a controlled entity, and the Company or the new organization owning the ANDAs terminates Executive’s employment without Cause, or Executive resigns for Good Reason, in connection with such sale, or within eighteen (18) months of such sale. ). In event of such sale, any outstanding unvested Company stock options, restricted stock and TSRs awarded to Executive prior to the Change in Control shall be treated in accordance with the applicable provision of the Company’s Long Term Incentive Plan regarding a Change in Control of Company and any stock options, restricted stock and TSRs awarded subsequent to the Change in Control shall be treated in accordance with Section 9(b). In the event of such a sale of the ANDAs, the Company shall obtain a covenant of the new organization that if the new organization terminates the Executive’s employment without Cause, or the Executive resigns for Good Reason from the new organization, the Company and the new organization shall have the joint and several obligation to pay the Severance Pay delineated in the Section 9. The agreement of sale will make clear that the parties (i.e., the Company and the new organization intend that Executive is a third party beneficiary of this obligation.
6. | Miscellaneous. Except as set forth herein, all of the terms of the Employment Agreement and First Addendum remain in full force and effect. To the extent that there are inconsistencies between this Second Addendum and the First Addendum and/or Employment Agreement, the provisions of this Second Addendum shall control and shall supersede the applicable provisions of the First Addendum and/or Employment Agreement. |
7. | Counterparts. This Second Addendum may be executed in Counterparts, which together shall constitute one Agreement. |
IN WITNESS WHEREOF, each of the Parties hereby executes this Second Addendum to the Employment Agreement as of the date first written above.
LANNETT COMPANY, INC. | |||
By: | /s/ Timothy Crew | /s/ Maureen Cavanaugh | |
Timothy Crew | Maureen Cavanaugh | ||
Chief Executive Officer |
Exhibit 10.67
SECOND ADDENDUM
to
Employment Agreement
of
Samuel H. Israel
This Second Addendum (the “Second Addendum”) to the Employment Agreement of Samuel H. Israel, is entered into as of this 24th day of August 2020, between Lannett Company, Inc. (the “Company”) and Samuel H. Israel (“Mr. Israel”) (together, the Company and Mr. Israel shall be known as the “Parties”).
RECITALS
WHEREAS, Mr. Israel entered into an Employment Agreement with the Company as of July 15, 2017 (“Employment Agreement”);
WHEREAS, the Parties entered into an Addendum to the Employment Agreement (“First Addendum”) effective as of July 1, 2018, wherein the Parties clarified that Section 10 of the Employment Agreement, which contains a confidentiality provision, shall not preclude Executive from voluntarily disclosing confidential information to governmental officials or participating in investigations into suspected violations of law without first notifying or obtaining the consent of the Company;
WHEREAS, the Parties wish to amend further the Employment Agreement to provide the Board the authority to seek reimbursement of incentive compensation paid to Executive in certain instances as more fully set forth herein, in the event the Company is required to restate its financial statements as a result of fraud or misconduct (the “Claw Back Provision”);
WHEREAS, in consideration for Executive agreeing to the inclusion of a Claw Back Provision in the Employment Agreement, the Company agrees to revise and clarify Executive’s rights under paragraph 9(c) of the Employment Agreement in the event of a Change in Control of Company;
NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the Parties agree as follows:
1. | Capitalized Terms. All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Employment Agreement. |
2. | Claw Back Provision. Executive agrees that, should the Company be required to prepare and issue a material accounting restatement caused by fraud or other misconduct in connection with any financial reporting requirement under the securities laws, and should Executive be found to have participated in or knew or should have known about such fraud or misconduct and took no action to prevent it, the Board may, in its discretion, seek reimbursement of the difference in the amount of any cash based incentive and performance equity awarded to Executive during the three year period following the first public issuance or filing of the financial document in question and the amount, if any, of cash based incentive pay or performance equity Executive would have received if such incentive pay or equity based compensation were awarded under the restated financial statement. |
3. | Paragraph 9(b)(iii) is deleted in its entirety and replaced with the following: |
(iii) a pro-rated annual cash bonus for the then current fiscal year based on a calculation for all categories that comprise the bonus at a “target” level.
4. | Paragraph 9(c) is deleted in its entirety and replaced with the following: |
If Executive is notified that he is being terminated by Company without Cause, or resigns for Good Reason, in connection with or within eighteen (18) months following a Change in Control of Company, Executive will be entitled, in addition to the Standard Entitlements payable in accordance with Section 9(a), the benefits set forth in Section 9(b)(i), (ii) and (iii). In connection with any Change in Control of Company, any outstanding unvested Company stock options, restricted stock and TSRs awarded to Executive prior to the Change in Control shall be treated in accordance with the applicable provision of the Company’s Long Term Incentive Plan regarding a Change in Control of Company and any stock options, restricted stock and TSRs awarded subsequent to the Change in Control shall be treated in accordance with Section 9(b). For the purpose of this Section 9(c), a written notice that Executive’s employment term is not extended pursuant to Section 2 within the eighteen (18) month period following a Change in Control of Company shall be deemed to be a termination without Cause, unless Executive and Company execute a new employment agreement effective as of the date on which Agreement would otherwise have renewed. The term “Change in Control of Company” shall mean the occurrence of a “change in ownership of the Company,” a “change in effective control of the Company,” or “a change in ownership of a substantial portion of the Company’s assets, each within the meaning of Section 409A and Treasury Regulation Section 1.409A-3(i)(5).
5. | Paragraph 9(d) is deleted in its entirety and replaced with the following: |
Executive also shall be deemed to have been terminated by the Company without Cause, and shall be entitled, in addition to the Standard Entitlements payable in accordance Section 9(a), to the additional benefits set forth in Section 9(b)(i), (ii) and (iii), if a majority of the Company’s Abbreviated New Drug Applications (the “ANDAs”) are sold, other than for restructuring the Company’s intellectual property within its discretion through or to a controlled entity, and the Company or the new organization owning the ANDAs terminates Executive’s employment without Cause, or Executive resigns for Good Reason, in connection with such sale, or within eighteen (18) months of such sale. In connection with any sale, any outstanding unvested Company stock options, restricted stock and TSRs awarded to Executive prior to the Change in Control shall be treated in accordance with the applicable provision of the Company’s Long Term Incentive Plan regarding a Change in Control of Company and any stock options, restricted stock and TSRs awarded subsequent to the Change in Control shall be treated in accordance with Section 9(b).
6. | Miscellaneous. Except as set forth herein, all of the terms of the Employment Agreement and the First Addendum remain in full force and effect. To the extent that there are inconsistencies between this Second Addendum and the First Addendum and/or Employment Agreement, the provisions of this Second Addendum shall control and shall supersede the applicable provisions of the First Addendum and/or Employment Agreement. |
7. | Counterparts. This Second Addendum may be executed in Counterparts, which together shall constitute one Agreement. |
IN WITNESS WHEREOF, each of the Parties hereby executes this Second Addendum to the Employment Agreement as of the date first written above.
LANNETT COMPANY, INC. | |||
By: | /s/ Timothy Crew | /s/ Samuel H. Israel | |
Timothy Crew, | Samuel H. Israel | ||
Chief Executive Officer |
Exhibit 10.68
SECOND ADDENDUM
to
Employment Agreement
of
John Abt
This Second Addendum (the “Second Addendum”) to the Employment Agreement of John Abt is entered into as of this 24th day of August 2020, between Lannett Company, Inc. (the “Company”) and John Abt (“Mr. Abt”) (together, the Company and Mr. Abt shall be known as the “Parties”).
RECITALS
WHEREAS, Mr. Abt entered into an Employment Agreement with the Company as of March 30, 2015 (“Employment Agreement”);
WHEREAS, the Parties entered into an Addendum to Employment Agreement of John Abt (“First Addendum”) effective as of July 1, 2018, wherein the Parties clarified that Section 10 of the Employment Agreement, which contains a confidentiality provision, shall not preclude Executive from voluntarily disclosing confidential information to governmental officials or participating in investigations into suspected violations of law without first notifying or obtaining the consent of the Company;
WHEREAS, the Parties wish to amend the Employment Agreement to provide the Board the authority to seek reimbursement of incentive compensation paid to Executive in certain instances as more fully set forth herein, in the event the Company is required to restate its financial statements as a result of fraud or misconduct (the “Claw Back Provision”);
WHEREAS, in consideration for Executive agreeing to the inclusion of a Claw Back Provision in the Employment Agreement, the Company agrees to revise and clarify Executive’s rights under paragraph 9(c) of the Employment Agreement in the event of a Change in Control of Company;
NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the Parties agree as follows:
1. | Capitalized Terms. All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Employment Agreement. |
2. | Claw Back Provision. Executive agrees that, should the Company be required to prepare and issue a material accounting restatement caused by fraud or other misconduct in connection with any financial reporting requirement under the securities laws, and should Executive be found to have participated in or knew or should have known about such fraud or misconduct and took no action to prevent it, the Board may, in its discretion, seek reimbursement of the difference in the amount of any cash based incentive and performance equity awarded to Executive during the three year period following the first public issuance or filing of the financial document in question and the amount, if any, of cash based incentive pay or performance equity Executive would have received if such incentive pay or equity based compensation were awarded under the restated financial statement. |
3. | Paragraph 9(b)(iii) is deleted in its entirety and replaced with the following: |
(iii) a pro-rated annual cash bonus for the then current fiscal year based on a calculation for all categories that comprise the bonus at a “target” level.
4. | Paragraph 9(c) is deleted in its entirety and replaced with the following: |
If Executive is notified that he is being terminated by Company without Cause, or resigns for Good Reason, in connection with or within eighteen (18) months following a Change in Control of Company, Executive will be entitled, in addition to the Standard Entitlements payable in accordance with Section 9(a), the benefits set forth in Section 9(b)(i), (ii) and (iii). In connection with any Change in Control of Company, any outstanding unvested Company stock options, restricted stock and TSRs awarded to Executive prior to the Change in Control shall be treated in accordance with the applicable provision of the Company’s Long Term Incentive Plan regarding a Change in Control of Company and any stock options, restricted stock and TSRs awarded subsequent to the Change in Control shall be treated in accordance with Section 9(b). For the purpose of this Section 9(c), a written notice that Executive’s employment term is not extended pursuant to Section 2 within the 18-month period following a Change in Control of Company shall be deemed to be a termination without Cause, unless Executive and Company execute a new employment agreement effective as of the date on which Agreement would otherwise have renewed. The term “Change in Control of Company” shall mean the occurrence of a “change in ownership of the Company,” a “change in effective control of the Company,” or “a change in ownership of a substantial portion of the Company’s assets, each within the meaning of Section 409A and Treasury Regulation Section 1.409A-3(i)(5).
5. | Miscellaneous. Except as set forth herein, all of the terms of the Employment Agreement and First Addendum remain in full force and effect. To the extent that there are inconsistencies between this Second Addendum and the First Addendum and/or Employment Agreement, the provisions of this Second Addendum shall control and shall supersede the applicable provisions of the First Addendum and/or Employment Agreement. |
6. | Counterparts. This Second Addendum may be executed in Counterparts, which together shall constitute one Agreement. |
IN WITNESS WHEREOF, each of the Parties hereby executes this Second Addendum to the Employment Agreement as of the date first written above.
LANNETT COMPANY, INC. | |||
By: | /s/ Timothy Crew | /s/ John Abt | |
Timothy Crew | John Abt | ||
Chief Executive Officer |
Exhibit 10.69
SECOND ADDENDUM
to
Amended and Restated Employment Agreement
of
Robert Ehlinger
This Second Addendum (the “Second Addendum”) to the Amended and Restated Employment Agreement of Robert Ehlinger is entered into as of this 24th day of August 2020, between Lannett Company, Inc. (the “Company”) and Robert Ehlinger (“Mr. Ehlinger”) (together, the Company and Mr. Ehlinger shall be known as the “Parties”).
RECITALS
WHEREAS, Mr. Ehlinger entered into an Amended and Restated Employment Agreement with the Company as of December 31, 2012 (“Employment Agreement”);
WHEREAS, the Parties entered into an Addendum to Employment Agreement of Robert Ehlinger (“First Addendum”) effective as of July 1, 2018, wherein the Parties clarified that Section 10 of the Employment Agreement, which contains a confidentiality provision, shall not preclude Executive from voluntarily disclosing confidential information to governmental officials or participating in investigations into suspected violations of law without first notifying or obtaining the consent of the Company;
WHEREAS, the Parties wish to amend the Employment Agreement to provide the Board the authority to seek reimbursement of incentive compensation paid to Executive in certain instances as more fully set forth herein, in the event the Company is required to restate its financial statements as a result of fraud or misconduct (the “Claw Back Provision”);
WHEREAS, in consideration for Executive agreeing to the inclusion of a Claw Back Provision in the Employment Agreement, the Company agrees to revise and clarify Executive’s rights under paragraph 9(c) of the Employment Agreement in the event of a Change in Control of Company;
NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the Parties agree as follows:
1. | Capitalized Terms. All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Employment Agreement. |
2. | Claw Back Provision. Executive agrees that, should the Company be required to prepare and issue a material accounting restatement caused by fraud or other misconduct in connection with any financial reporting requirement under the securities laws, and should Executive be found to have participated in or knew or should have known about such fraud or misconduct and took no action to prevent it, the Board may, in its discretion, seek reimbursement of the difference in the amount of any cash based incentive and performance equity awarded to Executive during the three year period following the first public issuance or filing of the financial document in question and the amount, if any, of cash based incentive pay or performance equity Executive would have received if such incentive pay or equity based compensation were awarded under the restated financial statement. |
3. | Paragraph 9(b)(iii) is deleted in its entirety and replaced with the following: |
(iii) a pro-rated annual cash bonus for the then current fiscal year based on a calculation for all categories that comprise the bonus at a “target” level.
4. | Paragraph 9(c) is deleted in its entirety and replaced with the following: |
If Executive is notified that he is being terminated by Company without Cause, or resigns for Good Reason, in connection with or within twenty four (24) months following a Change in Control of Company, Executive will be entitled, in addition to the Standard Entitlements payable in accordance with Section 9(a), the benefits set forth in Section 9(b)(i), (ii) and (iii). In connection with any Change in Control of Company, any outstanding unvested Company stock options, restricted stock and TSRs awarded to Executive prior to the Change in Control shall be treated in accordance with the applicable provision of the Company’s Long Term Incentive Plan regarding a Change in Control of Company and any stock options, restricted stock and TSRs awarded subsequent to the Change in Control shall be treated in accordance with Section 9(b). For the purpose of this Section 9(c), a written notice that Executive’s employment term is not extended pursuant to Section 2 within the 18-month period following a Change in Control of Company shall be deemed to be a termination without Cause, unless Executive and Company execute a new employment agreement effective as of the date on which Agreement would otherwise have renewed. The term “Change in Control of Company” shall mean the occurrence of a “change in ownership of the Company,” a “change in effective control of the Company,” or “a change in ownership of a substantial portion of the Company’s assets, each within the meaning of Section 409A and Treasury Regulation Section 1.409A-3(i)(5).
5. | Miscellaneous. Except as set forth herein, all of the terms of the Employment Agreement and First Addendum remain in full force and effect. To the extent that there are inconsistencies between this Second Addendum and the First Addendum and/or Employment Agreement, the provisions of this Second Addendum shall control and shall supersede the applicable provisions of the First Addendum and/or Employment Agreement. |
6. | Counterparts. This Second Addendum may be executed in Counterparts, which together shall constitute one Agreement. |
IN WITNESS WHEREOF, each of the Parties hereby executes this Second Addendum to the Employment Agreement as of the date first written above.
LANNETT COMPANY, INC. | |||
By: | /s/ Timothy Crew | /s/ Robert Ehlinger | |
Timothy Crew | Robert Ehlinger | ||
Chief Executive Officer |