-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, InWDO5oiHFVEeSdjjAbDy/ZOPXqBY7lJOMWP5r0AuXYW/eC3TOklgt/mYhcqDukC r0VnXcdyAGbxclo1Kaw5SQ== 0000950116-02-000888.txt : 20020430 0000950116-02-000888.hdr.sgml : 20020430 ACCESSION NUMBER: 0000950116-02-000888 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20020329 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEOSE TECHNOLOGIES INC CENTRAL INDEX KEY: 0000877902 STANDARD INDUSTRIAL CLASSIFICATION: MEDICINAL CHEMICALS & BOTANICAL PRODUCTS [2833] IRS NUMBER: 133549286 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-27718 FILM NUMBER: 02627231 BUSINESS ADDRESS: STREET 1: 102 WITMER RD CITY: HORSHAM STATE: PA ZIP: 19044 BUSINESS PHONE: 2154415890 MAIL ADDRESS: STREET 1: 102 WITMER ROAD CITY: HORSHAM STATE: PA ZIP: 19044 FORMER COMPANY: FORMER CONFORMED NAME: NEOSE PHARMACEUTICALS INC DATE OF NAME CHANGE: 19950817 8-K/A 1 eight-k_a.txt 8-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): March 29, 2002 Neose Technologies, Inc. (Exact name of issuer as specified in charter) DELAWARE 0-27718 13-3549286 - ----------------------------- ------------- ----------------- (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation or file Identification Organization) number) Number) 102 Witmer Road, Horsham, Pennsylvania 19044 (Address of principal executive offices) (215) 315-9000 (Registrant's telephone number, including area code) Item 5 - Other Events. This Current Report on Form 8-K/A amends the Registrant's Current Report on Form 8-K and filed with the Securites and Exchange Commission on April 4, 2002 to correct errors in the exhibits attached hereto. Item 7 - Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits
Exhibit No. Description ----------- ------------ 10.1 Employment Agreement with C. Boyd Clarke dated March 29, 2002 10.2 Non-Qualified Stock Option Agreement with C. Boyd Clarke dated March 29, 2002 10.3 Separation and Consulting Agreement with Stephen A. Roth dated March 29, 2002
Signatures Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. NEOSE TECHNOLOGIES, INC. Date: April 29, 2002 By: /s/ C. Boyd Clarke ----------------------- C. Boyd Clarke President and Chief Executive Officer Index to Exhibits
Exhibit No. Description ---------- ------------ 10.1 Employment Agreement with C. Boyd Clarke dated March 29, 2002 10.2 Non-Qualified Stock Option Agreement with C. Boyd Clarke dated March 29, 2002 10.3 Separation and Consulting Agreement with Stephen A. Roth dated March 29, 2002
EX-10 3 ex10-1.txt EXHIBIT 10-1 Exhibit 10.1 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement"), is made on this 29th day of March, 2002 (the "Commencement Date"), by and between NEOSE TECHNOLOGIES, INC. (the "Company") and C. BOYD CLARKE (the "Executive"). WHEREAS, the Company recognizes that the Executive can contribute to the growth and success of the Company and desires to employ the Executive on the terms and conditions set forth in this Agreement; WHEREAS, the Executive has been appointed by the Company's Board of Directors (the "Board") to serve as the President and Chief Executive Officer of the Company, and has been nominated by the Board to serve as a director of the Company; and WHEREAS, the Executive desires to be so employed by the Company. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and promises contained herein, and intending to be bound hereby, the parties agree as follows: 1. Employment. 1.1. Term. The Company agrees to employ the Executive in accordance with the terms of this Agreement and the Executive agrees to accept such employment, effective on the Commencement Date and continuing until terminated pursuant to Section 4 hereof (the "Term"). 1.2. Positions. During the Term, Executive will serve as President and Chief Executive Officer of the Company, reporting directly to the Board. Assuming the Executive is elected to the Board, the Board agrees to nominate the Executive for reelection at each annual meeting of the Company's shareholders occurring during the Term and at which the Executive's term as a director is scheduled to expire. Effective upon (and subject to) the Executive's election to the Board, the Board has selected the Executive to serve as member of the Board's Nominating Committee for all periods during the Term in which the Executive serves as a member of the Board. 1.3. Duties. The Executive will perform such duties and functions as are customarily performed by the president and chief executive officer of an enterprise the size and nature of the Company, including the duties and functions from time to time assigned to him by the Board. Without limiting the generality of the foregoing, the Executive will be responsible for all aspects of the Company's performance, including strategy, research and development, business development, sales and marketing, operations, manufacturing, technology development and licensing, corporate development, information management, finance, legal, patent, regulatory, human resources, investor relations and corporate communications. 1.4. Place of Performance. The Executive shall perform his services hereunder at the principal executive offices of the Company, which are currently located in Horsham, Pennsylvania; provided, however, that the Executive will be required to travel from time to time for business purposes. 1.5. Time Devoted to Employment. The Executive will devote his best efforts and substantially all of his business time and services to the performance of his duties under this Agreement. Notwithstanding the foregoing, the Executive may engage in charitable, community service and industry association activities, and, with the approval of the Board (which approval will not be unreasonably withheld), may serve as a member of boards of directors of other companies or organizations, which in the judgment of the Board, will not present any conflict of interest with the Company, so long as those activities do not interfere with the performance of his duties under this Agreement. 2. Compensation, Benefits and Expense Reimbursements. 2.1. Base Salary. The Executive shall receive an initial annual salary of $450,000 (the "Base Salary"), paid semi-monthly or otherwise in accordance with the Company's customary payroll practices, as in effect from time to time. Future salary reviews will be undertaken by the Board of Directors annually. 2.2. Bonus. The Executive will be eligible to receive an annual bonus (the "Annual Bonus") for each completed calendar year during the Term. The target amount of the Annual Bonus is 75% of the Base Salary for the applicable calendar year. The specific goals and objectives that must be met to receive the target bonus will be established by mutual agreement by the Board and the Executive within 90 days following the commencement of each calendar year during the Term, except that the goals and objectives for the 2002 calendar year will be established at the June, 2002 meeting of the Board. The Company will endeavor to pay the Annual Bonus, if any, by the end of the first quarter of the calendar year following the calendar year to which the Annual Bonus relates. 2.3. Equity Incentive. The Board has authorized the grant to the Executive of options to purchase 500,000 shares of the Company's common stock (the "Stock Option") effective as of the Commencement Date with a per share exercise price equal to the fair market value of a share of common stock on the Commencement Date, contingent on the commencement of the Executive's employment with the Company on that date. The Stock Option is intended to be an incentive stock option, to the extent permitted under Section 422(d) of the Internal Revenue Code (the "Code") and to that extent will be granted under the Company's 1995 Stock Option/Stock Issuance Plan (the "Plan"). To the extent the Stock Option is a non-qualified stock option, it will not be granted under the Plan. The Stock Option will become vested and first exercisable with respect to 125,000 shares on the first anniversary of the Commencement Date, and will become vested and exercisable with respect to an additional 2.0833% of the shares subject thereto on the last day of each of the 36 months following that first anniversary, contingent on the continued employment of the Executive by the Company on the applicable vesting date, such that the entire option will be fully vested and exercisable on the fourth anniversary of the Commencement Date (if the Executive then remains employed by the Company). The Stock Option will be subject to the terms of separate award agreements, which agreements are attached to this agreements as Exhibits I and II. The Executive will be eligible to receive additional grants in accordance with the Company's executive incentive options program, at the discretion of the Board or a committee of the Board. -2- 2.4. Expenses. The Executive will be entitled to reimbursement by the Company for all expenses reasonably incurred by him in connection with the performance of his duties, including, without limitation, travel and entertainment expenses reasonably related to the business of the Company, in accordance with the policies and procedures established from time to time by the Company. 2.5. Other Benefits. The Executive will be entitled to participate in any benefit plans, policies or arrangements sponsored or maintained by the Company from time to time for its senior executive officers (which benefits, as of this date, include the right to participate in the Company's 401(k), employee stock purchase, medical, and dental plans, and coverage under the Company's group life and disability insurance policies). Notwithstanding the foregoing, the Executive's eligibility for and participation in any of the Company's employee benefit plans, policies or arrangements will be subject to the terms and conditions of such plans, policies or arrangements. Moreover, subject to the terms and conditions of such plans, policies or arrangements, the Company may amend, modify or terminate such plans, policies or arrangements at any time for any reason. In addition, the cost of the Executive's annual physical examination shall be borne by the Company, to the extent not covered by the Company's medical plan. 2.6. Vacations. In addition to holidays observed by the Company, the Executive shall be entitled to four (4) weeks paid vacation time during each year of employment consistent with Company policies, as in effect from time to time. 3. Relocation. 3.1. Generally. The Executive agrees to relocate to the greater Philadelphia, Pennsylvania metropolitan area within six months of the Commencement Date. The Company will pay or reimburse the Executive for reasonable costs of (i) travel expenses for the Executive and his spouse associated with house-hunting in Pennsylvania, (ii) temporary housing in Pennsylvania prior to the Executive's relocation, (iii) realtor fees incurred in connection with the sale of the Executive's home in California (up to a maximum of $180,000), (iv) moving household goods, furnishings and other personal property from California to Pennsylvania, (v) transportation costs of the Executive's family members in connection with their relocation to Pennsylvania, and (vi) title insurance premiums, transfer taxes, recording fees and escrow fees incurred in connection with the Executive's purchase of a home in Pennsylvania. In addition, the Company will pay to the Executive $25,000 in order to defray miscellaneous expenses associated with relocation. In addition, the Company will also reimburse Executive for income and employment taxes payable by Executive with respect to the payments or reimbursements described in this Section 3.1, based on the Executive's actual federal, state and local marginal tax rates for the year in which those payments or reimbursements are made. -3- 3.2. Notwithstanding the foregoing, if the Executive resigns his employment with the Company other than for Good Reason (as defined below) prior to the second anniversary of the Commencement Date, the Executive will be required to repay to the Company an amount equal to the product of: 3.2.1. the amounts paid or reimbursed by the Company in accordance with the second and third sentences of Section 3.1, multiplied by 3.2.2. a fraction, the numerator of which will be 24 minus the number of complete calendar months that the Executive was employed by the Company, and the denominator of which will be 24. 4. Termination. 4.1. In General. The Company may terminate the Executive's employment at any time. The Executive may terminate his employment at any time; provided that before the Executive may voluntarily terminate his employment with the Company other than for Good Reason, he must provide 90 days prior written notice (or such shorter notice as is acceptable to the Company) to the Company. Upon any termination of the Executive's employment with the Company for any reason: (i) the Executive (unless otherwise requested by the Board) concurrently will resign any officer or director positions he holds with the Company, its subsidiaries or affiliates, and (ii) the Company will pay to the Executive all accrued but unpaid Base Salary through the date of termination, and (iii) except as explicitly provided in this Sections 4, 6 or 7, or otherwise pursuant to COBRA, all compensation and benefits will cease and the Company will have no further liability or obligation to the Executive. The foregoing will not be construed to limit the Executive's right to payment or reimbursement for claims incurred prior to the date of such termination under any insurance contract funding an employee benefit plan, policy or arrangement of the Company in accordance with the terms of such insurance contract. 4.2. Termination without Cause or for Good Reason. 4.2.1. If the Executive's employment by the Company ceases due to a termination by the Company without Cause or a resignation by the Executive for Good Reason, then, in addition to the payments and benefits provided for in Section 4.1 above and subject to Section 8 below: (a) the Company will pay to the Executive on the date of such termination a cash amount equal to the sum of (i) one year of the Executive's Base Salary as in effect on such date, and (ii) the target Annual Bonus amount applicable for the calendar year in which the termination occurs, (b) to the extent not previously paid, the Company will pay to the Executive any Annual Bonus payable with respect to a calendar year that ended prior to that termination, and (c) all outstanding stock options then held by the Executive (including the Stock Option) will immediately become vested and exercisable with respect to that number of additional shares of the Company's common stock with respect to which such stock options would have become vested and exercisable had the Executive remained continuously employed by the Company for an additional 12 months following his termination of employment and will remain exercisable for 12 months following the Executive's termination of employment; provided that if the Company's obligation to make the payments provided for in this Section 4.2.1 arises due to a termination of the Executive's employment due to his death or Disability (as defined below), the cash payments described in clauses (a) and (b) of this Section 4.2.1 will be offset by the amount of benefits paid to the Executive (or his representative(s), heirs, estate or beneficiaries) pursuant to the life insurance or long-term disability plans, policies or arrangements of the Company by virtue of his death or that Disability (including, for this purpose, only that portion of such life insurance or disability benefits funded by the Company or by premium payments made by the Company). -4- 4.2.2. For purposes of this Agreement, the Executive's employment will be deemed to have been terminated without "Cause" if his employment is terminated as a result of his death or Disability or is terminated by the Company other than as a result of fraud, embezzlement, or any other illegal act committed intentionally by the Executive in connection with the commencement of his employment or the performance of his duties as an officer or director of the Company. For purposes of this Agreement, "Disability" means the Executive's inability, by reason of any physical or mental impairment, to substantially perform his regular duties as contemplated by this Agreement, as determined by the Board in its sole discretion (after affording the Executive the opportunity to present his case), which inability is reasonably contemplated to continue for at least one year from its commencement and at least 90 days from the date of such determination. 4.2.3. For purposes of this Agreement, "Good Reason" means, without the Executive's prior written consent, any of the following: (a) a change in the Executive's title (not including the election of the Executive as Chairman of the Board); (b) a reduction in the Executive's authority, duties or responsibilities, or the assignment to the Executive of duties that are inconsistent, in a material respect, with Executive's position; (c) the relocation of the Company's headquarters more than 15 miles from Horsham, Pennsylvania, unless such move reduces Executive's commuting time; (d) a reduction in the Base Salary or in the target amount, expressed as a percentage of Base Salary, of the Annual Bonus; (e) the Company's failure to pay or make available any material payment or benefit due under this Agreement or any other material breach by the Company of this Agreement; or (f) the Board's failure to elect the Executive as the Chairman of the Board of the Company by the close of business on March 29, 2003. However, the foregoing events or conditions will constitute Good Reason only if the Executive provides the Company with written objection to the event or condition within 60 days following the occurrence thereof, the Company does not reverse or otherwise cure the event or condition within 30 days of receiving that written objection and the Executive resigns his employment within 90 days following the expiration of that cure period. -5- 5. Restrictive Covenants. As consideration for all of the payments to be made to the Executive pursuant to Sections 2, 4 and 6 of this Agreement, as well as for any equity incentive awards that the Executive may receive from the Company, the Executive agrees to be bound by the provisions of this Section 5 (the "Restrictive Covenants"). These Restrictive Covenants will apply without regard to whether any termination of the Executive's employment is initiated by the Company or the Executive, and without regard to the reason for that termination. 5.1. Covenant Not To Compete. The Executive covenants that, during the period beginning on the Commencement Date and ending on the first anniversary of the termination of the Executive's employment with the Company for any reason (the "Restricted Period"), he will not (except in his capacity as an employee or director of the Company) do any of the following, directly or indirectly, anywhere in the world: 5.1.1. engage or participate in any business competitive with the Business (as defined below); 5.1.2. become interested in (as owner, stockholder, lender, partner, co-venturer, director, officer, employee, agent or consultant) any person, firm, corporation, association or other entity engaged in any business competitive with the Business. Notwithstanding the foregoing, the Executive may hold up to 4.9% of the outstanding securities of any class of any publicly-traded securities of any company; 5.1.3. engage in any business, or solicit or call on any customer, supplier, licensor, licensee, contractor, agent, representative, advisor, strategic partner, distributor or other person with whom the Company shall have dealt or any prospective customer, supplier, licensor, licensee, contractor, agent, representative, advisor, strategic partner, distributor or other person that the Company shall have identified and solicited at any time during the Executive's employment by the Company for a purpose competitive with the Business; 5.1.4. influence or attempt to influence any employee, consultant, customer, supplier, licensor, licensee, contractor, agent, representative, advisor, strategic partner, distributor or other person to terminate or modify any written or oral agreement, arrangement or course of dealing with the Company; or 5.1.5. solicit for employment or employ or retain (or arrange to have any other person or entity employ or retain) any person who has been employed or retained by the Company within the 12 months preceding the termination of the Executive's employment with the Company for any reason. 5.2. Confidentiality. The Executive recognizes and acknowledges that the Proprietary Information (as defined below) is a valuable, special and unique asset of the business of the Company. As a result, both during the Term and thereafter, the Executive will not, without the prior written consent of the Company, for any reason either directly or indirectly divulge to any third-party or use for his own benefit, or for any purpose other than the exclusive benefit of the Company, any Proprietary Information; provided, however, that the Executive may during the Term disclose Proprietary Information to third parties as may be necessary or appropriate to the effective and efficient discharge of his duties as an employee hereunder (provided that the third party recipient has -6- signed the Company's then-approved confidentiality or similar agreement) or as such disclosures may be required by law. If the Executive or any of his representatives becomes legally compelled to disclose any of the Proprietary Information, the Executive will provide the Company with prompt written notice so that the Company may seek a protective order or other appropriate remedy. The non-disclosure and non-use obligations with respect to Proprietary Information set forth in this Section 5.2 shall not apply to any information that is in or becomes part of the public domain through no improper act on the part of the Executive. 5.3. Property of the Company. 5.3.1. Proprietary Information. All right, title and interest in and to Proprietary Information will be and remain the sole and exclusive property of the Company. The Executive will not remove from the Company's offices or premises any documents, records, notebooks, files, correspondence, reports, memoranda or similar materials of or containing Proprietary Information, or other materials or property of any kind belonging to the Company unless necessary or appropriate in the performance of his duties to the Company. If the Executive removes such materials or property in the performance of his duties, the Executive will return such materials or property to their proper files or places of safekeeping as promptly as possible after the removal has served its specific purpose. The Executive will not make, retain, remove and/or distribute any copies of any such materials or property, or divulge to any third person the nature of and/or contents of such materials or property or any other oral or written information to which he may have access or become familiar in the course of his employment, except to the extent necessary in the performance of his duties. Upon termination of the Executive's employment with the Company, he will leave with the Company or promptly return to the Company all originals and copies of such materials or property then in his possession. 5.3.2. Intellectual Property. The Executive agrees that all the Intellectual Property (as defined below) will be considered "works made for hire" as that term is defined in Section 101 of the Copyright Act (17 U.S.C. ss. 101) and that all right, title and interest in such Intellectual Property will be the sole and exclusive property of the Company. To the extent that any of the Intellectual Property may not by law be considered a work made for hire, or to the extent that, notwithstanding the foregoing, the Executive retains any interest in the Intellectual Property, the Executive hereby irrevocably assigns and transfers to the Company any and all right, title, or interest that the Executive may now or in the future have in the Intellectual Property under patent, copyright, trade secret, trademark or other law, in perpetuity or for the longest period otherwise permitted by law, without the necessity of further consideration. The Company will be entitled to obtain and hold in its own name all copyrights, patents, trade secrets, trademarks and other similar registrations with respect to such Intellectual Property. The Executive further agrees to execute any and all documents and provide any further cooperation or assistance reasonably required by the Company to perfect, maintain or otherwise protect its rights in the Intellectual Property. If the Company is unable after reasonable efforts to secure the Executive's signature, cooperation or assistance in accordance with the preceding sentence, whether because of the Executive's incapacity or any other reason whatsoever, the Executive hereby designates and appoints the Company or its designee as the Executive's agent and attorney-in-fact, to act on his behalf, to execute and file documents and to do all other lawfully permitted acts necessary or desirable to perfect, maintain or otherwise protect the Company's rights in the Intellectual Property. The Executive acknowledges and agrees that such appointment is coupled with an interest and is therefore irrevocable. -7- 5.4. Definitions. For purposes of this Agreement, the following terms have the meanings defined below: 5.4.1. "Business" means research, development, manufacture, supply, marketing, licensing, use and sale of biologic, pharmaceutical and therapeutic materials and products and related process technology including, without limitation, research, development, manufacture, supply, marketing, licensing, use and sale of products and technology directed to (a) the enzymatic synthesis of complex carbohydrates for use in food, cosmetic, therapeutic, consumer and industrial applications, (b) enzymatic synthesis or modification of the carbohydrate portion of proteins or lipids, and (c) carbohydrate-based therapeutics. 5.4.2. "Intellectual Property" means (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents and patent applications claiming such inventions, (b) all trademarks, service marks, trade dress, logos, trade names, fictitious names, brand names, brand marks and corporate names, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (c) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith, (d) all mask works and all applications, registrations, and renewals in connection therewith, (e) all trade secrets (including research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, methodologies, technical data, designs, drawings and specifications), (f) all computer software (including data, source and object codes and related documentation), (g) all other proprietary rights, (h) all copies and tangible embodiments thereof (in whatever form or medium), or similar intangible personal property which have been or are developed or created in whole or in part by the Executive (i) at any time and at any place while the Executive is employed by Company and which, in the case of any or all of the foregoing, are related to and used in connection with the business of the Company, or (ii) as a result of tasks assigned to the Executive by the Company. 5.4.3. "Proprietary Information" means any and all information of the Company or of any subsidiary or affiliate of the Company. Such Proprietary Information shall include, but shall not be limited to, the following items and information relating to the following items: (a) all intellectual property and proprietary rights of the Company (including without limitation Intellectual Property) (b) computer codes or instructions (including source and object code listings, program logic algorithms, subroutines, modules or other subparts of computer programs and related documentation, including program notation), computer processing systems and techniques, all computer inputs and outputs (regardless of the media on which stored or located), hardware and software configurations, designs, architecture and interfaces, (c) business research, studies, procedures and costs, (d) financial data, (e) distribution methods, (f) marketing data, methods, plans and efforts, (g) the identities of actual and prospective customers, contractors and suppliers, (h) the terms of contracts and agreements with customers, contractors and suppliers, (i) the needs and requirements of, and the Company's course of dealing with, actual or prospective customers, contractors and suppliers, (j) personnel information, (k) customer and vendor credit information, and (l) any information received from third parties subject to obligations of non-disclosure or non-use. Failure by the Company to mark any of the Proprietary Information as confidential or proprietary shall not affect its status as Proprietary Information under the terms of this Agreement. -8- 5.5. Acknowledgements. The Executive acknowledges that the Restrictive Covenants are reasonable and necessary to protect the legitimate interests of the Company and its affiliates and that the duration and geographic scope of the Restrictive Covenants are reasonable given the nature of this Agreement and the position the Executive will hold within the Company. The Executive further acknowledges that the Restrictive Covenants are included herein in order to induce the Company to employ the Executive pursuant to this Agreement and that the Company would not have entered into this Agreement or otherwise employed the Executive in the absence of the Restrictive Covenants. 5.6. Remedies and Enforcement Upon Breach. 5.6.1. Specific Enforcement. The Executive acknowledges that any breach by him, willfully or otherwise, of the Restrictive Covenants will cause continuing and irreparable injury to the Company for which monetary damages would not be an adequate remedy. The Executive shall not, in any action or proceeding to enforce any of the provisions of this Agreement, assert the claim or defense that such an adequate remedy at law exists. In the event of any such breach by the Executive, the Company shall have the right to enforce the Restrictive Covenants by seeking injunctive or other relief in any court, without any requirement that a bond or other security be posted, and this Agreement shall not in any way limit remedies of law or in equity otherwise available to the Company. 5.6.2. Judicial Modification. If any court determines that any of the Restrictive Covenants, or any part thereof, is unenforceable because of the duration or geographical scope of such provision, such court shall have the power to modify such provision and, in its modified form, such provision shall then be enforceable. 5.6.3. Accounting. If the Executive breaches any of the Restrictive Covenants, the Company will have the right and remedy to require the Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits derived or received by the Executive as the result of such breach. This right and remedy will be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity. 5.6.4. Enforceability. If any court holds the Restrictive Covenants unenforceable by reason of their breadth or scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the right of the Company to the relief provided above in the courts of any other jurisdiction within the geographic scope of such Restrictive Covenants. -9- 5.6.5. Disclosure of Restrictive Covenants. The Executive agrees to disclose the existence and terms of the Restrictive Covenants to any employer that the Executive may work for during the Restricted Period. 5.6.6. Extension of Restricted Period. If the Executive breaches Section 5.1 in any respect, the restrictions contained in that section will be extended for a period equal to the period that the Executive was in breach. 6. Change in Control. ------------------ 6.1. Certain Terminations Following a Change in Control. If the Executive's employment with the Company ceases within eighteen months following a Change in Control (as defined below) as a result of a termination by the Company without Cause or a resignation by the Executive for Good Reason, then: 6.1.1. the Restricted Period will be extended by one year; 6.1.2. subject to Section 8 and in lieu of the payments and benefits provided for in Section 4.2, (a) the Company will pay to the Executive on the date of such termination a cash amount equal to the sum of (i) two years of the Executive's Base Salary as in effect on such date, and (ii) two times the target Annual Bonus amount applicable for the calendar year in which the termination occurs, (b) to the extent not previously paid, the Company will pay to the Executive any Annual Bonus payable with respect to a calendar year that ended prior to that termination, (c) all outstanding stock options then held by Executive (including the Stock Option) will then become fully vested and immediately exercisable and will remain exercisable for 12 months following Executive's termination of employment, and (d) the Company will pay to the Executive the additional amount, if any, payable pursuant to Section 7 below. 6.2. Definitions. For purposes of this Agreement, the term "Change in Control" means a change in ownership or control of the Company effected through any of the following transactions: 6.2.1. the direct or indirect acquisition by any person or related group of persons (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities possessing more than 50% of the total combined voting power of the Company's outstanding securities; 6.2.2. a change in the composition of the Board over a period of 36 months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (a) have been board members continuously since the beginning of such period, or (b) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (a) who were still in office at the time such election or nomination was approved by the Board; -10- 6.2.3. the consummation of any consolidation, share exchange or merger of the Company (a) in which the stockholders of the Company immediately prior to such transaction do not own at least a majority of the voting power of the entity which survives/results from that transaction, or (b) in which a shareholder of the Company who does not own a majority of the voting stock of the Company immediately prior to such transaction, owns a majority of the Company's voting stock immediately after such transaction; or 6.2.4. the liquidation or dissolution of the Company or any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company, including stock held in subsidiary corporations or interests held in subsidiary ventures. 7. Parachute Payments. ------------------- 7.1. Generally. All amounts payable to the Executive under this Agreement will be made without regard to whether the deductibility of such payments (considered together with any other entitlements or payments otherwise paid or due to the Executive) would be limited or precluded by Section 280G of the Code and without regard to whether such payments would subject the Executive to the excise tax levied on certain "excess parachute payments" under Section 4999 of the Code (the "Parachute Excise Tax"). 7.2. Gross-Up. If all or any portion of the payments or other benefits provided under any section of this Agreement, either alone or together with any other payments and benefits which the Executive receives or is entitled to receive from the Company or its affiliates (whether paid or payable or distributed or distributable) pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (the "Payment") would result in the imposition of a Parachute Excise Tax, the Executive will be entitled to an additional payment (the "Gross-up Payment") in an amount such that the net amount of the Payment and the Gross-up Payment retained by the Executive after the calculation and deduction of all excise taxes (including any interest or penalties imposed with respect to such taxes) on the Payment and all federal, state and local income tax, employment tax and excise tax (including any interest or penalties imposed with respect to such taxes) on the Gross-up Payment provided for in this Section 7.2, and taking into account any lost or reduced tax deductions on account of the Gross-up Payment, shall be equal to the Payment. 7.3. Measurements and Adjustments. The determination of the amount of the payments and benefits paid and payable to the Executive and whether and to what extent payments under Section 7.2 are required to be made will be made at the Company's expense by an independent auditor selected by mutual agreement of the Company and the Executive, which auditor shall provide Executive and the Company with detailed supporting calculations with respect to its determination within fifteen (15) business days of the receipt of notice -11- from the Executive or the Company that the Executive has received or will receive a payment that is potentially subject to the Parachute Excise Tax. For the purposes of determining whether any payments will be subject to the Parachute Excise Tax and the amount of such Parachute Excise Tax, such payments will be treated as "parachute payments" within the meaning of section 280G of the code, and all "parachute payments" in excess of the "base amount" (as defined under section 280G(b)(3) of the code) shall be treated as subject to the Parachute Excise tax, unless and except to the extent that in the opinion of the accountants such payments (in whole or in part) either do not constitute "parachute payments" or represent reasonable compensation for services actually rendered (within the meaning of section 280G(b)(4) of the code) in excess of the "base amount," or such "parachute payments" are otherwise not subject to such Parachute Excise Tax. For purposes of determining the amount of the Gross-up Payment, if any, the Executive shall be deemed to pay federal income taxes at the highest applicable marginal rate of federal income taxation for the calendar year in which the gross-up payment is to be made and to pay any applicable state and local income taxes at the highest applicable marginal rate of taxation for the calendar year in which the gross-up payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from the deduction of such state or local taxes if paid in such year (determined without regard to limitations on deductions based upon the amount of the Executive's adjusted gross income); and to have otherwise allowable deductions for federal, state and local income tax purposes at least equal to those disallowed because of the inclusion of the gross-up payment in the Executive adjusted gross income. Any Gross-up Payment shall be paid by the Company at the time the Executive is entitled to receive the Payment. Any determination by the auditor shall be binding upon the Company and the Executive. 7.4. In the event of any underpayment or overpayment to the Executive (determined after the application of Section 7.2), the amount of such underpayment or overpayment will be, as promptly as practicable, paid by the Company to the Executive or refunded by the Executive to the Company, as the case may be, with interest at the applicable federal rate specified in Section 7872(f)(2) of the Code. 8. Timing of Payments Following Termination. Notwithstanding any provision of this Agreement, the payments and benefits described in Sections 4.2, 6 and 7 are conditioned on the Executive's execution and delivery to the Company of a release substantially identical to that attached hereto as Exhibit III in a manner consistent with the requirements of the Older Workers Benefit Protection Act (the "Mutual Release"). The amounts described in Sections 4.2.1 and 6.1.2 will be paid in a lump sum, on the eighth day following the Executive's execution and delivery of the Mutual Release (provided that the Mutual Release has not been revoked by the Executive). The Company covenants that if the Executive executes the Mutual Release, the Company will also execute the Mutual Release. 9. Miscellaneous. 9.1. No Liability of Officers and Directors for Severance Upon Insolvency. Notwithstanding any other provision of the Agreement and intending to be bound by this provision, the Executive hereby (a) waives any right to claim payment of amounts owed to him, now or in the future, pursuant to this Agreement from directors or officers of the Company if the Company becomes insolvent, and (b) fully and forever releases and discharges the Company's officers and directors from any and all claims, demands, liens, actions, suits, causes of action or judgments arising out of any present or future claim for such amounts. -12- 9.2. Legal Fees. The Company shall pay the reasonable attorneys' fees and related expenses and disbursements incurred by the Executive in connection with the negotiation and preparation of this Agreement (including the term sheet relating thereto) up to a maximum of $10,000. 9.3. Other Agreements. The Executive represents and warrants to the Company that there are no restrictions, agreements or understandings whatsoever to which he is a party that would prevent or make unlawful his execution of this Agreement, that would be inconsistent or in conflict with this Agreement or Executive's obligations hereunder, or that would otherwise prevent, limit or impair the performance by Executive of his duties under this Agreement. 9.4. Successors and Assigns. The Company may assign this Agreement to any successor to all or substantially all of its assets and business by means of liquidation, dissolution, merger, consolidation, transfer of assets, or otherwise. The duties of the Executive hereunder are personal to the Executive and may not be assigned by him. 9.5. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania without regard to the principles of conflicts of laws. 9.6. Enforcement. Any legal proceeding arising out of or relating to this Agreement will be instituted in the United States District Court for the Eastern District of Pennsylvania, or if that court does not have or will not accept jurisdiction, in any court of general jurisdiction in the Commonwealth of Pennsylvania, and the Executive and the Company hereby consent to the personal and exclusive jurisdiction of such court(s) and hereby waive any objection(s) that they may have to personal jurisdiction, the laying of venue of any such proceeding and any claim or defense of inconvenient forum. 9.7. Waivers; Separability. The waiver by either party hereto of any right hereunder or any failure to perform or breach by the other party hereto shall not be deemed a waiver of any other right hereunder or any other failure or breach by the other party hereto, whether of the same or a similar nature or otherwise. No waiver shall be deemed to have occurred unless set forth in a writing executed by or on behalf of the waiving party. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived. If any provision of this Agreement shall be declared to be invalid or unenforceable, in whole or in part, such invalidity or unenforceability shall not affect the remaining provisions hereof which shall remain in full force and effect. -13- 9.8. Notices. All notices and communications that are required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when delivered personally or upon mailing by registered or certified mail, postage prepaid, return receipt requested, as follows: If to the Company, to: Neose Technologies, Inc. 102 Witmer Road Horsham PA 19044 Attn: General Counsel Fax: 215-441-5896 With a copy to: Pepper Hamilton LLP 3000 Two Logan Square 18th & Arch Streets Philadelphia, PA 19103 Attn: Barry M. Abelson, Esquire Fax: 215-981-4750 If to Executive, to: C. Boyd Clarke 265 Cheswold Lane Haverford, PA 19041 With a copy to: Joseph Yaffe, Esquire Latham & Watkins 135 Commonwealth Drive Menlo Park, California 94025 Fax: 650-463-2600 or to such other address as may be specified in a notice given by one party to the other party hereunder. 9.9. Entire Agreement; Amendments. This Agreement and the attached exhibits contain the entire agreement and understanding of the parties hereto relating to the subject matter hereof, and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every nature relating to the subject matter. This Agreement may not be changed or modified, except by an Agreement in writing signed by each of the parties hereto. 9.10. Withholding. The Company will withhold from any payments due to Executive hereunder, all taxes, FICA or other amounts required to be withheld pursuant to any applicable law. -14- 9.11. Headings Descriptive. The headings of sections and paragraphs of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. 9.12. Counterparts. This Agreement may be executed in multiple counterparts, each of which will be deemed to be an original, but all of which together will constitute but one and the same instrument. [This space left blank intentionally; signature page follows.] -15- IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first above written. NEOSE TECHNOLOGIES, INC. By: /s/ Stephen A. Roth Ph.D. ----------------------------- Title: Chairman ----------------------------- C. BOYD CLARKE /s/ C. Boyd Clarke ------------------------------- -16- Exhibit III MUTUAL RELEASE AND NON-DISPARAGEMENT AGREEMENT THIS MUTUAL RELEASE AND NON-DISPARAGEMENT AGREEMENT (this "Mutual Release") is made as of the ___ day of _______, _____ by and between C. BOYD CLARKE ("Executive") and NEOSE TECHNOLOGIES, INC. (the "Company"). WHEREAS, Executive's employment as an executive of the Company has terminated; and WHEREAS, pursuant to Section[s] 4[[,] [and] 6 [and 7]] of the Employment Agreement by and between the Company and Executive dated March 29, 2002 (the "Employment Agreement"), the Company has agreed to pay Executive certain amounts and to provide him with certain rights and benefits, subject to the execution of this Mutual Release. NOW THEREFORE, in consideration of these premises and the mutual promises contained herein, and intending to be legally bound hereby, the parties agree as follows: SECTION 1. Consideration. Executive acknowledges that: (i) the payments, rights and benefits set forth in Section[s] 4[[,] [and] 6 [and 7]] of the Employment Agreement constitute full settlement of all his rights under the Employment Agreement, (ii) he has no entitlement under any other severance or similar arrangement maintained by the Company, and (iii) except as otherwise provided specifically in this Mutual Release, the Company does not and will not have any other liability or obligation to Executive. Executive further acknowledges that, in the absence of his execution of this Mutual Release, the benefits and payments specified in Section[s] 4[[,] [and] 6 [and 7]] of the Employment Agreement would not otherwise be due to Executive. SECTION 2. Mutual Release and Covenant Not to Sue. 2.1. The Company (including for purposes of this Section 2.1, its parents, affiliates and subsidiaries) hereby fully and forever releases and discharges Executive (and his heirs, executors and administrators), and Executive hereby fully and forever releases and discharges Company (including all predecessors and successors, assigns, officers, directors, trustees, employees, agents and attorneys, past and present) from any and all claims, demands, liens, agreements, contracts, covenants, actions, suits, causes of action, obligations, controversies, debts, costs, expenses, damages, judgments, orders and liabilities, of whatever kind or nature, direct or indirect, in law, equity or otherwise, whether known or unknown, arising through the date of this Mutual Release, out of Executive's employment by the Company or the termination thereof, including, but not limited to, any claims for relief or causes of action under the Age Discrimination in Employment Act, 29 U.S.C. ss. 621 et seq., or any other federal, state or local statute, ordinance or regulation regarding discrimination in employment and any claims, demands or actions based upon alleged wrongful or retaliatory discharge or breach of contract under any state or federal law. 2.2. Executive expressly represents that he has not filed a lawsuit or initiated any other administrative proceeding against the Company (including for purposes of this Section 2.2, its parents, affiliates and subsidiaries) and that he has not assigned any claim against the Company or any affiliate to any other person or entity. The Company expressly represents that it has not filed a lawsuit or initiated any other administrative proceeding against Executive and that it has not assigned any claim against Executive to any other person or entity. Both Executive and the Company further promise not to initiate a lawsuit or to bring any other claim against the other arising out of or in any way related to Executive's employment by the Company or the termination of that employment. This Mutual Release will not prevent Executive from filing a charge with the Equal Employment Opportunity Commission (or similar state agency) or participating in any investigation conducted by the Equal Employment Opportunity Commission (or similar state agency); provided, however, that any claims by Executive for personal relief in connection with such a charge or investigation (such as reinstatement or monetary damages) would be barred. 2.3. The foregoing will not be deemed to release the Executive or the Company from (a) claims solely to enforce this Mutual Release, (b) claims solely to enforce Sections 4, 5, 6, 7 or 9 of the Employment Agreement, or (c) claims solely to enforce the terms of any equity incentive award agreement between Executive and the Company, or (d) claims for indemnification under the Company's By-Laws, under any indemnification agreement between the Company and Executive or under any similar agreement. SECTION 3. Restrictive Covenants. Executive acknowledges that restrictive covenants contained in Section 5 of the Employment Agreement will survive the termination of his employment. Executive affirms that those restrictive covenants are reasonable and necessary to protect the legitimate interests of the Company, that he received adequate consideration in exchange for agreeing to those restrictions and that he will abide by those restrictions. SECTION 4. Non-Disparagement. The Company (meaning, solely for this purpose, the Company's directors and executive officers and other individuals authorized to make official communications on the Company's behalf) will not disparage Executive or Executive's performance or otherwise take any action which could reasonably be expected to adversely affect Executive's personal or professional reputation. Similarly, Executive will not disparage the Company or any of its directors, officers, agents or employees or otherwise take any action which could reasonably be expected to adversely affect the reputation of the Company or the personal or professional reputation of any of the Company's directors, officers, agents or employees. SECTION 5. Cooperation. Executive further agrees that, subject to reimbursement of his reasonable expenses, he or she will cooperate fully with the Company and its counsel with respect to any matter (including litigation, investigations, or governmental proceedings) which relates to matters with which Executive was involved during his employment with the Company. Executive shall render such cooperation in a timely manner on reasonable notice from the Company. SECTION 6. Rescission Right. Executive expressly acknowledges and recites that (a) he has read and understands the terms of this Mutual Release in its entirety, (b) he has entered into this Mutual Release knowingly and voluntarily, without any duress or coercion; (c) he has been advised orally and is hereby advised in writing to consult with an attorney with respect to this Mutual Release before signing it; (d) he was provided twenty-one (21) calendar days after receipt of the Mutual Release to consider its terms before signing it; and (e) he or she is provided seven (7) calendar days from the date of signing to terminate and revoke this Mutual Release, in which case this Mutual Release shall be unenforceable, null and void. Executive may revoke this Mutual Release during those seven (7) days by providing written notice of revocation to the Company. -2- SECTION 7. Challenge. If Executive violates or challenges the enforceability of any provisions of the Restrictive Covenants or this Mutual Release, no further payments, rights or benefits under Section[s] [4.2[[,] [and] 6 [and 7]] of the Employment Agreement will be due to Executive. SECTION 8. Miscellaneous. 8.1 No Admission of Liability. This Mutual Release is not to be construed as an admission of any violation of any federal, state or local statute, ordinance or regulation or of any duty owed by the Company to Executive. There have been no such violations, and the Company specifically denies any such violations. 8.2 No Reinstatement. Executive agrees that he or she will not apply for reinstatement with the Company or seek in any way to be reinstated, re-employed or hired by the Company in the future. 8.3 Successors and Assigns. This Mutual Release shall inure to the benefit of and be binding upon the Company and Executive and their respective successors, executors, administrators and heirs. Executive not may make any assignment of this Mutual Release or any interest herein, by operation of law or otherwise. The Company may assign this Mutual Release to any successor to all or substantially all of its assets and business by means of liquidation, dissolution, merger, consolidation, transfer of assets, or otherwise. 8.4 Severability. Whenever possible, each provision of this Mutual Release will be interpreted in such manner as to be effective and valid under applicable law. However, if any provision of this Mutual Release is held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provision, and this Mutual Release will be reformed, construed and enforced as though the invalid, illegal or unenforceable provision had never been herein contained. 8.5 Entire Agreement; Amendments. Except as otherwise provided herein, this Mutual Release contains the entire agreement and understanding of the parties hereto relating to the subject matter hereof, and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every nature relating subject matter hereof. This Mutual Release may not be changed or modified, except by an Agreement in writing signed by each of the parties hereto. 8.6 Governing Law. This Mutual Release shall be governed by, and enforced in accordance with, the laws of the Commonwealth of Pennsylvania without regard to the application of the principles of conflicts of laws. 8.7 Counterparts and Facsimiles. This Mutual Release may be executed, including execution by facsimile signature, in multiple counterparts, each of which shall be deemed an original, and all of which together shall be deemed to be one and the same instrument. [This space left blank intentionally; signature page follows.] -3- IN WITNESS WHEREOF, the Company has caused this Mutual Release to be executed by its duly authorized officer, and Executive has executed this Mutual Release, in each case as of the date first above written. NEOSE TECHNOLOGIES, INC. By: ---------------------------------- Name & Title: ----------------------- C. BOYD CLARKE ------------------------------------- -4- EX-10 4 ex10-2.txt EXHIBIT 10-2 Exhibit 10.2 NEOSE TECHNOLOGIES, INC. NON-QUALIFIED STOCK OPTION GRANT This STOCK OPTION AGREEMENT (this "Agreement") evidences the grant as of March 29, 2002 (the "Date of Grant"), by Neose Technologies, Inc. (the "Company") of a non-qualified stock option to C. Boyd Clarke (the "Grantee"), an employee of the Company. RECITALS The Board of Directors of the Company (the "Board") has approved the award of this option to purchase shares of common stock of the Company to the Grantee as an inducement to commence employment with the Company and to promote the best interests of the Company and its stockholders. The Board, or any committee appointed thereby, will administer the Plan. References in this Agreement to the Committee shall be deemed to include the Board. NOW, THEREFORE, the parties to this Agreement, intending to be legally bound hereby, agree as follows: 1. Definitions. Capitalized terms not otherwise defined herein used herein will have the meanings provided below: a. "Change in Control" means a change in ownership or control of the Company effected through any of the following transactions: (i) the direct or indirect acquisition by any person or related group of persons (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than 50% of the total combined voting power of the Company's outstanding securities; (ii) a change in the composition of the Board over a period of 36 months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (i) have been board members continuously since the beginning of such period, or (ii) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (i) who were still in office at the time such election or nomination was approved by the Board; (iii) the consummation of any consolidation, share exchange or merger of the Company (i) in which the stockholders of the Company immediately prior to such transaction do not own at least a majority of the voting power of the entity which survives/results from that transaction, or (ii) in which a shareholder of the Company who does not own a majority of the voting stock of the Company immediately prior to such transaction, owns a majority of the Company's voting stock immediately after such transaction; or (iv) the liquidation or dissolution of the Company or any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company, including stock held in subsidiary corporations or interests held in subsidiary ventures. b. "Code" means the Internal Revenue Code of 1986, as amended. c. "Committee" means the compensation committee of the Board, or if no compensation committee then exists, then the Board. d. "Common Stock" means shares of the Company's common stock. e. "Employee" means an individual who performs services while in the employ of the Company or one or more of its Parents or Subsidiary, subject to the control and direction of the employer entity not only as to the work to be performed but also as to the manner and method of performance. f. "Employment Agreement" means the employment agreement by and between the Grantee and the Company, dated March 29, 2002. g. "Exercise Date" means the date on which the Company shall have written notice of exercise of the Option. h. "1934 Act" means the Securities Exchange Act of 1934, as amended. i. "Option" means the non-qualified stock option to purchase Shares granted to the Grantee by this Agreement. j. "Parent" means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, provided each such corporation in the unbroken chain (other than the Company) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes or stock in one of the other corporations in such chain. k. "Service" means the performance of services on a periodic basis for the Company (or any Parent or Subsidiary) in the capacity of an Employee, a non-employee member of the board of directors or an independent consultant. l. "Share" means a share of Common Stock. m. "Subsidiary" means each corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, provided each such corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 2 2. Grant of Option. a. Subject to the terms and conditions set forth in this Agreement, the Company hereby grants to the Grantee a non-qualified stock option to purchase 487,520 shares at an exercise price of $32.05 per Share. The Option shall become exercisable according to Paragraph 3 below. b. The Option is designated as a non-qualified stock option and is not intended to qualify as an incentive stock option as defined in section 422 of the Code. 3. Exercisability of Option. Subject to Paragraph 6, the Option will become vested in installments as and on the dates set forth in the schedule attached hereto as Exhibit A, so long as the Grantee is employed by the Company as of the applicable date; provided, however that: a. if the Grantee's employment with the Company is terminated by the Company without Cause or by the Grantee for Good Reason (both as determined in accordance with the Employment Agreement) other than as described below in Subparagraph b of this Paragraph 3, then, subject to the Grantee's execution of the mutual release described in Section 8 of the Employment Agreement, the Option will become fully vested and immediately exercisable with respect to that number of additional shares with respect to which the Option would have become vested and exercisable had the Grantee remained continuously employed by the Company for an additional twelve (12) months following his termination of employment; and b. if the Grantee's employment with the Company is terminated by the Company without Cause or by the Grantee for Good Reason (both as determined in accordance with the Employment Agreement) in the eighteen (18) months following a Change in Control, then, subject to the Grantee's execution of the mutual release described in Section 8 of the Employment Agreement, the Option will become fully vested and immediately exercisable with respect to 100% of the shares subject to the Option. 4. Term of Option; Termination of Service. a. The Option shall have a term of ten years from the Date of Grant and will terminate at the expiration of that period unless it is terminated at an earlier date pursuant to the provisions of this Agreement. b. Upon termination of the Grantee's employment, the term of the Option will be reduced as follows: (i) Should the Grantee terminate Service with the Company other than for Good Reason (as determined in accordance with the Employment Agreement), then the period during which the Option is to remain exercisable shall be limited to the three (3)-month period following the date the Grantee ceases such Service. (ii) Should the Grantee's Service cease by reason of termination by the Company without Cause or by the Grantee for Good Reason, then the period during which the Option is to remain exercisable shall be limited to the twelve (12)-month period following the date of such cessation of Service. Should the Grantee die while holding the Option, then during such limited period of exercisability, the Option may be exercised by the personal representative of the Grantee's estate or by the person or persons to whom the Option is transferred pursuant to the Grantee's will or in accordance with the laws of descent and distribution. 3 (iii) Should the Grantee's Service be terminated for Cause, then the Option shall terminate immediately and cease to be outstanding. During the applicable post-Service exercise period, the Option may be exercised only to the extent the Option is exercisable on the date of the Grantee's cessation of Service, subject to Subparagraphs a and b of Paragraph 3 above. Upon the expiration of the applicable post-Service exercise period or (if earlier) upon the expiration of the Option term, the Option shall terminate and cease to be exercisable. Upon the Grantee's cessation of Service, the Option shall terminate and cease to be outstanding with respect to any Shares for which the Option is not exercisable at that time. Under no circumstances will the Option be exercisable after the expiration date of the Option's term provided in Subparagraph a of this Paragraph 4. 5. Exercise Procedures. a. Subject to the provisions of Paragraphs 3 and 4 above, the Grantee may exercise part or all of the Option by giving the Committee written notice of intent to exercise in the manner provided in Paragraph 17 below, specifying the number of Shares as to which the Option is to be exercised. On the delivery date, the Grantee shall pay the exercise price (i) by cash or check payable to the order of the Company, (ii) in Shares of common stock of the Company held by the Grantee for the requisite period necessary to avoid a charge to the Company's earnings for financial reporting purposes and valued at fair market value on the Exercise Date; or (iii) through a special sale and remittance procedure pursuant to which the Grantee shall concurrently provide irrevocable written instructions to (a) a brokerage firm designated by the Company to effect the immediate sale of the purchased Shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased Shares plus all applicable federal, state and local income and employment taxes required to be withheld by the Company by reason of such purchase and (b) the Company to deliver the certificates for the purchased Shares directly to such brokerage firm in order to complete the sale transaction. b. The obligation of the Company to deliver Shares upon exercise of an Option shall be subject to all applicable laws, rules, and regulations and such approvals by governmental agencies as may be deemed appropriate by the Committee, including such actions as Company counsel shall deem necessary or appropriate to comply with relevant securities laws and regulations. The Company may require that the Grantee (or other person exercising the Option after the Grantee's death or otherwise) represent that he is purchasing Shares for his own account and not with a view to or for sale in connection with any distribution of the Shares, or such other representation as the Committee deems appropriate. The Company's obligation upon the issuance of any Shares or upon the exercise of any Option to deliver Shares of common stock is subject to the satisfaction of all applicable federal, state and local income and employment tax withholding requirements. 4 6. Change in Control. a. In the event of a Change in Control described in Subparagraphs (iii) or (iv) of the definition of Change in Control above (each a "Corporate Transaction"), the vesting and exercisability of the Option will automatically accelerate so that the Option will, immediately prior to the specified effective date for such Corporate Transaction, become fully exercisable with respect to the total number of shares of Common Stock subject to the Option and may be exercised for all or any portion of those Shares as fully-vested Shares; provided, however, that the Option shall not so accelerate if and to the extent: (i) the Option is, in connection with such Corporate Transaction, either to be assumed by the successor corporation or parent thereof or to be replaced with a comparable option to purchase shares of the capital stock of the successor corporation or parent thereof, (ii) the Option is to be replaced with a cash incentive program of the successor corporation which preserves the option spread existing at the time of such Corporate Transaction and provides for subsequent payout in accordance with the same vesting schedule applicable to the Option, or (iii) the Option is to be replaced by another incentive program which the Committee determines is reasonably equivalent in value to the program contemplated by either clause (i) or (ii) above. However, upon the Grantee's cessation of Service by the Company without Cause or by the Grantee for Good Reason (both as determined in accordance with the Employment Agreement) within eighteen (18) months after such Corporate Transaction in which the Option is assumed or replaced pursuant to clause (i), (ii) or (iii) above, each such option under clause (i) will automatically accelerate and become fully vested and exercisable with respect to the total number of shares of stock at the time subject to such option and may be exercised for all or any portion of such shares, the cash incentive program under clause (ii) will become fully vested and the benefits under a clause (iii) replacement program will become fully vested. The option, as so accelerated, will remain exercisable until the earlier of (A) the expiration of the option term or (B) the expiration of the twelve (12)-month period measured from the date of such termination of Service. The determination of option comparability under clause (i) or program comparability under clause (iii) above shall be made by the Committee, and its determination shall be final, binding and conclusive. b. Immediately following the consummation of a Corporate Transaction, the Option will terminate and cease to remain outstanding, except to the extent the Option is assumed by, or is otherwise an obligation of, the successor corporation or its parent company. c. If the Option is not terminated pursuant to Subparagraph b of this Paragraph 6 in connection with a Corporate Transaction, then the Option will be appropriately adjusted, immediately after such Corporate Transaction, to apply and pertain to the number and class of securities which would have been issued to the Grantee in consummation of such Corporate Transaction had he exercised the Option immediately prior to such Corporate Transaction. Appropriate adjustments shall also be made to the exercise price payable per share, provided the aggregate exercise price payable for such securities shall remain the same. 5 d. The Committee shall have the discretionary authority at any time while the Option remains outstanding to provide for the automatic acceleration of the vesting and exercisability of the Option upon the occurrence of a Change in Control. e. If the Option's vesting and exercisability is accelerated in connection with a Change in Control (other than a Corporate Transaction), it will remain fully exercisable until the expiration of the option term or sooner termination in accordance with Paragraph 4. f. The grant of the Option will in no way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 7. Restrictions on Exercise. Only the Grantee (or a person to whom the Grantee transfers the Option pursuant to Paragraph 13) may exercise the Option during the Grantee's lifetime. After the Grantee's death, the Option shall be exercisable (subject to the limitations specified herein) solely by the legal representatives of the Grantee, or by the person who acquires the right to exercise the Option by will or by the laws of descent and distribution (or transfer pursuant to Paragraph 13), to the extent that the Option is exercisable pursuant to this Agreement. 8. Authority of the Committee. The Committee has and will have full power and authority (subject to the express provisions of this Agreement) to establish rules and regulations for the proper administration of the Option and to make such determinations under, and issue such interpretations of, the provisions of this Agreement as it may deem necessary or advisable. Decisions of the Committee are and will be final and binding on all parties who have an interest in the Option. 9. Adjustments. Should any change be made to the Common Stock issuable under this Agreement by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Company's receipt of consideration, then appropriate adjustments will be made by the Committee to the number and/or class of securities and price per share in effect under the Option. Such adjustments to the Option are to be effected in a manner which shall preclude the enlargement or dilution of rights and benefits under such options. The adjustments determined by the Committee will be final, binding and conclusive. 10. Tax Withholding. The Company's obligation to deliver Shares upon the exercise of the Option will be subject to the satisfaction of all applicable Federal, state and local income and employment tax withholding liabilities in connection with the exercise of the Option (the "Taxes"), and the Company will, to the extent permitted by law and to the extent the Taxes are not otherwise satisfied by the Grantee pursuant to this Paragraph 10, have the right to deduct any such Taxes from any payment of any kind otherwise due from the Company to the Grantee. The Grantee may pay cash to the Company, or make other arrangements satisfactory to the Committee, to satisfy all or part of the Taxes. The Committee may, in its discretion and in accordance with the provisions of this Paragraph 10 and such supplemental rules as the Committee may from time to time adopt (including the applicable safe-harbor provisions of Rule 16b-3 of the Securities and Exchange Commission), permit the Grantee to use Shares to satisfy the Taxes. Such right may be provided to any such holder in either or both of the following formats: 6 a. The Grantee may be provided with the election to have the Company withhold, from the Shares otherwise issuable upon the exercise of the Option, a portion of those Shares with an aggregate fair market value equal to the percentage of the applicable Taxes (not to exceed one hundred percent (100%)) designated by the holder. b. The Committee may, in its discretion, permit the Grantee to deliver to the Company, at the time the Option is exercised, one or more Shares previously acquired the Grantee (other than in connection with the Option exercise triggering the Taxes) with an aggregate fair market value equal to the percentage of the Taxes incurred in connection with the Option exercise (not to exceed one hundred percent (100%)) designated by the holder. 11. No Employment Rights. The grant of the Option shall not confer upon the Grantee any right to be retained by or in the employ of the Company and shall not interfere in any way with the right of the Company to terminate the Grantee's employment or service at any time. The right of the Company to terminate at will the Grantee's employment or service at any time for any reason is specifically reserved. 12. No Stockholder Rights. Neither the Grantee, nor any person entitled to exercise the Grantee's rights in the event of the Grantee's death or otherwise, shall have any of the rights and privileges of a stockholder with respect to the Shares subject to the Option, until certificates for Shares have been issued upon the exercise of the Option. 13. Assignment and Transfers. The rights and interests of the Grantee under this Agreement may not be sold, assigned, encumbered or otherwise transferred except, in the event of the death of the Grantee, by will or by the laws of descent and distribution, or if permitted by the Committee, pursuant to a domestic relations order (as defined under the Code or Treasury Regulations). Notwithstanding the foregoing, the Committee may provide that the Grantee may transfer the Option to family members or other persons or entities according to such terms as the Committee may determine; provided that the Grantee receives no consideration for the transfer of the Option and the transferred Option will continue to be subject to the same terms and conditions as were applicable to the Option immediately before the transfer. The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company and to the Company's Parents, Subsidiaries and affiliates. This Agreement may be assigned by the Company without the Grantee's consent. 14. Use of Proceeds. Any cash proceeds received by the Company from the sale of Shares pursuant to exercise of the Option will be used for general corporate purposes. 15. Regulatory Approvals. The granting of the Option and the issuance of any Shares upon the exercise of the Option will be subject to the Company's procurement of all approvals and permits required by regulatory authorities having jurisdiction over the Option and the Common Stock subject to it. 7 16. Applicable Law. The validity, construction, interpretation and effect of this instrument shall be governed by and determined in accordance with the laws of the Commonwealth of Pennsylvania without regard to the application of the principles of conflicts of laws. 17. Notice. Any notice to the Company provided for in this instrument shall be addressed to the Company in care of Chief Financial Officer at 102 Witmer Road, Horsham, PA 19044, and any notice to the Grantee shall be addressed to such Grantee at the current address shown on the payroll of the Company, or to such other address as the Grantee may designate to the Company in writing. Any notice shall be delivered by hand, sent by telecopy or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service. IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Grantee has executed this Agreement, in each case effective as of the Date of Grant. NEOSE TECHNOLOGIES, INC. By: /s/ Stephen A. Roth, Ph.D. ----------------------------------- Stephen A. Roth, Ph.D., Chairman C. BOYD CLARKE /s/ C. Boyd Clarke -------------------------------------- 8 Vesting Schedule - --------------------------------------------------------------- Number of Shares Becoming Vested and Vesting Date Exercisable - --------------------------------------------------------------- 03/29/03 121,880 - --------------------------------------------------------------- 04/29/03 10,417 - --------------------------------------------------------------- 05/29/03 10,417 - --------------------------------------------------------------- 06/30/03 10,417 - --------------------------------------------------------------- 07/29/03 10,417 - --------------------------------------------------------------- 08/29/03 10,417 - --------------------------------------------------------------- 09/29/03 10,417 - --------------------------------------------------------------- 10/29/03 10,416 - --------------------------------------------------------------- 11/28/03 10,416 - --------------------------------------------------------------- 12/29/03 10,416 - --------------------------------------------------------------- 01/29/04 10,157 - --------------------------------------------------------------- 02/27/04 10,157 - --------------------------------------------------------------- 03/29/04 10,157 - --------------------------------------------------------------- 04/29/04 10,157 - --------------------------------------------------------------- 05/28/04 10,157 - --------------------------------------------------------------- 06/29/04 10,157 - --------------------------------------------------------------- 07/29/04 10,157 - --------------------------------------------------------------- 08/30/04 10,157 - --------------------------------------------------------------- 09/29/04 10,156 - --------------------------------------------------------------- 10/29/04 10,156 - --------------------------------------------------------------- 11/29/04 10,156 - --------------------------------------------------------------- 12/29/04 10,156 - --------------------------------------------------------------- 01/28/05 10,157 - --------------------------------------------------------------- 02/28/05 10,157 - --------------------------------------------------------------- 03/29/05 10,157 - --------------------------------------------------------------- 04/29/05 10,157 - --------------------------------------------------------------- 05/30/05 10,157 - --------------------------------------------------------------- 06/29/05 10,157 - --------------------------------------------------------------- 07/29/05 10,157 - --------------------------------------------------------------- 08/29/05 10,157 - --------------------------------------------------------------- 09/29/05 10,156 - --------------------------------------------------------------- 10/28/05 10,156 - --------------------------------------------------------------- 11/29/05 10,156 - --------------------------------------------------------------- 12/29/05 10,156 - --------------------------------------------------------------- 01/30/06 9,377 - --------------------------------------------------------------- 02/28/06 9,377 - --------------------------------------------------------------- 03/29/06 9,376 - --------------------------------------------------------------- Total Shares: 487,520 =============================================================== A EX-10 5 ex10-3.txt EXHIBIT 10-3 EXHIBIT 10.3 SEPARATION AND CONSULTING AGREEMENT THIS SEPARATION AND CONSULTING AGREEMENT (this "Agreement") is made as of the 29th day of March, 2002 (the "Effective Date") by and between NEOSE TECHNOLOGIES, INC. (the "Company") and STEPHEN A. ROTH, Ph.D. ("Dr. Roth"). WHEREAS, Dr. Roth currently serves as Chief Executive Officer and Chairman of the Board of the Company, a position of substantial authority and responsibility in which he has access to the Company's customers, vendors, trade secrets, proprietary information, and intellectual property; WHEREAS, the parties desire to arrange for the cessation of Dr. Roth's employment with the Company on mutually agreeable terms; WHEREAS, the parties desire Dr. Roth to continue as Chairman of the Board for a period of transition following the termination of his employment with the Company; WHEREAS, the Company desires to retain the services of Dr. Roth as a consultant following the termination of his employment with the Company; and WHEREAS, the Company desires to obtain certain assurances from Dr. Roth that he will not harm the Company's business interests. NOW THEREFORE, in consideration of these premises and intending to be legally bound hereby, the parties agree as follows: SECTION 1. Definitions. To the extent not defined in the preamble of this Agreement, capitalized terms used herein will have the meanings provided below: 1.1. "Board" means the Board of Directors of the Company. 1.2. "Business" means research, development, manufacture, supply, marketing, licensing, use and sale of biologic, pharmaceutical and therapeutic materials and products and related process technology including, without limitation, research, development, manufacture, supply, marketing, licensing, use and sale or products and technology directed to (a) the enzymatic synthesis of complex carbohydrates for use in food, cosmetic, therapeutic, consumer and industrial applications, (b) enzymatic synthesis or modification of the carbohydrate portion of proteins or lipids, and (c) carbohydrate-based therapeutics. 1.3. "Cause" means Dr. Roth's intentional commission of fraud, embezzlement, or any other illegal act in the performance of services to the Company. 1.4. "Code" means the Internal Revenue Code of 1986, as amended. 1.5. "Good Reason" means, without Dr. Roth's prior written consent, any of the following: 1.5.1. the assignment of consulting duties to Dr. Roth outside the scope of Section 4 of this Agreement or requiring Dr. Roth to report to anyone other than the Company's Chief Executive Officer or the Board; or 1.5.2. the failure by the Company to pay any material amount due to Dr. Roth hereunder; provided, however, the foregoing events or conditions will constitute Good Reason only if Dr. Roth provides the Company with written objection to the event or condition within 60 days following the occurrence thereof, the Company does not reverse or otherwise cure the event or condition within 30 days of receiving that written objection, and Dr. Roth terminates his consulting services hereunder within 30 days following the expiration of that cure period. 1.6. "Non-Competition Agreement" means a non-competition agreement, substantially in the form attached hereto as Exhibit I. 1.7. "Restricted Period" means the twelve-month period commencing on the Effective Date. 1.8. "Restrictive Covenants" means the provisions contained in Section 6.1 of this Agreement. 1.9. "Term" means the three year period beginning on the Effective Date and ending on the third anniversary of the Effective Date. SECTION 2. Resignation. Dr. Roth hereby resigns as the Company's Chief Executive Officer and as an employee of the Company, effective as of the Effective Date. SECTION 3. Board Membership. 3.1. Dr. Roth will continue to serve as the Company's Chairman of the Board for the one-year period following the Effective Date. Upon the expiration of that one-year period, Dr. Roth will resign as the Company's Chairman of the Board and will thereafter continue to serve as a member of the Board for so long as (a) he continues to be elected to the Board, and (b) he chooses to serve as a member of the Board. 3.2. In light of the compensation paid to Dr. Roth for his consulting services under this Agreement, he will not be entitled to any separate compensation for his service as a member of the Board for the fiscal year of the Company beginning in 2002. Thereafter, so long as he continues as a member of the Board, he will be entitled to the same compensation as is then paid to the Company's other non-employee directors. SECTION 4. Consulting. 4.1. Scope of Services and Availability. Dr. Roth agrees that during the Term, he will assist in the transition of responsibility to the Company's new Chief Executive Officer and will make himself available to the management of the Company for consultation with respect to strategic planning, corporate development and other matters mutually determined by Dr. Roth and the Company's Chief Executive Officer; provided, however, that: 2 4.1.1. during the first year of the Term, Dr. Roth will not be required to perform such consulting services for more than 50% of his business time without Dr. Roth's prior consent; 4.1.2. during the second and third years of the Term, Dr. Roth will not be required to perform such consulting services for more than 10 hours per month; and 4.1.3. the Company will cooperate with Dr. Roth to schedule the time and place for the performance of such consulting services so as to permit Dr. Roth to fulfill this obligation with minimal interruption of his other personal and professional obligations. 4.2. Character of Services. It is the mutual intent of the parties that during the Term, Dr. Roth will act strictly in a professional consulting capacity as an independent contractor for all purposes, including without limitation, federal, state and local withholding, employment and payroll tax purposes, and in all situations and will not be considered an employee of the Company. During the Term, Dr. Roth will serve the Company faithfully and to the best of his ability and will provide such services and perform such tasks as may be reasonably requested of Dr. Roth in accordance with Section 4.1. 4.3. Reimbursement of Expenses. The Company will pay or promptly reimburse Dr. Roth for reasonable expenses actually incurred by Dr. Roth in connection with the provision of consulting services pursuant to this Section 4. 4.4. Compensation. As compensation for all services to be rendered (including refraining from services) by Dr. Roth hereunder: 4.4.1. the Company will pay to Dr. Roth a monthly retainer of $39,622.59 on the last day of each of the first twelve months of the Term; and 4.4.2. in lieu of coverage pursuant to COBRA (29 U.S.C. ss.ss. 1161 - 1169), Dr. Roth (and, to the extent covered immediately prior to the date of termination, his spouse and dependents) will be deemed to have elected to continue coverage under the Company's group health plan. Such continuation coverage will be provided at no cost beginning on the Effective Date and continuing until the earliest to occur of (a) the expiration of the period for which Dr. Roth would have been eligible for COBRA coverage, (b) Dr. Roth's eligibility for coverage under another employer's group health plan, or (c) the first anniversary of the Effective Date. SECTION 5. Termination. 5.1. Without Cause or for Good Reason. If Dr. Roth's retention to provide consulting services hereunder is terminated by the Company without Cause or by Dr. Roth for Good Reason, the Company will pay to Dr. Roth, if not previously paid, all the amounts described in Section 4.4 at the times therein specified (notwithstanding the termination of his retention). 3 5.2. For Cause or Without Good Reason. If Dr. Roth's retention to provide consulting services hereunder is terminated by the Company for Cause or by Dr. Roth without Good Reason, then notwithstanding any other provision of this Agreement, he will not be entitled to any further payments and all his entitlements under this Agreement will cease. SECTION 6. Restrictive Covenants; Remedies. 6.1. Restrictive Covenants. In consideration of the payments and benefits provided under this Agreement, Dr. Roth covenants that, during the Restricted Period, he will not (except in his capacity as a consultant of the Company) do any of the following, directly or indirectly, anywhere in the world: 6.1.1. engage or participate in any business competitive with the Business (as defined below); 6.1.2. become interested in (as owner, stockholder, lender, partner, co-venturer, director, officer, employee, agent or consultant) any person, firm, corporation, association or other entity engaged in any business competitive with the Business. Notwithstanding the foregoing, Dr. Roth may hold up to 4.9% of the outstanding securities of any class of any publicly-traded securities of any company; 6.1.3. engage in any business, or solicit or call on any customer, supplier, licensor, licensee, contractor, agent, representative, advisor, strategic partner, distributor or other person with whom the Company shall have dealt or any prospective customer, supplier, licensor, licensee, contractor, agent, representative, advisor, strategic partner, distributor or other person that the Company shall have identified and solicited at any time during Dr. Roth's employment or retention by the Company for a purpose competitive with the Business; 6.1.4. influence or attempt to influence any employee, consultant, customer, supplier, licensor, licensee, contractor, agent, representative, advisor, strategic partner, distributor or other person to terminate or modify any written or oral agreement, arrangement or course of dealing with the Company; or 6.1.5. solicit for employment or employ or retain (or arrange to have any other person or entity employ or retain) any person who has been employed or retained by the Company within the 12 months preceding the application of this provision to that person. 6.2. Acknowledgements. Dr. Roth acknowledges that the Restrictive Covenants are reasonable and necessary to protect the legitimate interests of the Company and its affiliates and that the duration and geographic scope of the Restrictive Covenants are reasonable given the nature of this Agreement and Dr. Roth's relationship with the Company. Dr. Roth further acknowledges that the Restrictive Covenants are included herein in order to induce the Company to engage Dr. Roth pursuant to this Agreement and that the Company would not have entered into this Agreement or otherwise retained Dr. Roth as a consultant in the absence of the Restrictive Covenants. 4 6.3. Remedies and Enforcement Upon Breach. 6.3.1. Specific Enforcement. Dr. Roth acknowledges that any breach by him, willfully or otherwise, of the Restrictive Covenants will cause continuing and irreparable injury to the Company for which monetary damages would not be an adequate remedy. Dr. Roth will not, in any action or proceeding to enforce any of the provisions of this Section 6, assert the claim or defense that such an adequate remedy at law exists. In the event of any such breach by Dr. Roth, the Company will have the right to enforce the Restrictive Covenants by seeking injunctive or other relief in any court, without any requirement that a bond or other security be posted, and this Section 6.3 will not in any way limit remedies of law or in equity otherwise available to the Company. 6.4. Termination of Payments and Vesting Service. If Dr. Roth breaches Section 6.1 in any respect, then (a) he will not be entitled to any further payments under this Agreement, (b) he will immediately cease to treated as continuing in the service of the Company for purposes of vesting and expiration of his Company stock options, and (c) all of his entitlements under this Agreement will cease. 6.5. Extension of Restricted Period. If Dr. Roth breaches Section 6.1 in any respect, the Restricted Period will be extended for a period equal to the period that Dr. Roth was in breach. 6.6. Accounting. If Dr. Roth breaches any of the Restrictive Covenants, the Company will have the right and remedy to require Dr. Roth to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits derived or received by Dr. Roth as the result of such breach. This right and remedy will be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity. 6.7. Judicial Modification. If any court determines that any of the Restrictive Covenants, or any part thereof, is unenforceable because of the duration or geographical scope of such provision, such court will have the power to modify such provision and, in its modified form, such provision will then be enforceable. 6.8. Enforceability. If any court holds the Restrictive Covenants unenforceable by reason of their breadth or scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the right of the Company to the relief provided above in the courts of any other jurisdiction within the geographic scope of such Restrictive Covenants. 6.9. Disclosure of Restrictive Covenants. Dr. Roth agrees to disclose the existence and terms of the Restrictive Covenants to any entity to whom Dr. Roth provides services during the Restricted Period. SECTION 7. Non-Competition Agreement. At any time before March 29, 2003, Dr. Roth, at his option, may execute the Non-Competition Agreement and become entitled to the consideration therein provided. The Company acknowledges and agrees that this offer to enter into the Non-Competition Agreement will remain open until March 28, 2003 (and, if not accepted by that time, will then terminate). 5 SECTION 8. No Further Liability. Dr. Roth acknowledges that: (a) the payments set forth in Sections 4 and 5 of this Agreement constitute full settlement of all his rights under this Agreement, (b) he has no entitlement under any other employment, severance or similar arrangement maintained by the Company, and (c) except as otherwise provided specifically in the Non-Competition Agreement (if executed by Dr. Roth) or this Agreement, the Company does not and will not have any other liability or obligation to him in respect of his employment by or other service to the Company. SECTION 9. Claims. 9.1. Release. The Company (including for purposes of this Section 9.1, its parents, affiliates and subsidiaries) hereby fully and forever releases and discharges Dr. Roth (and his heirs, executors and administrators), and Dr. Roth hereby fully and forever releases and discharges the Company (including all predecessors and successors, assigns, officers, directors, trustees, employees, agents and attorneys, past and present) from any and all claims, demands, liens, agreements, contracts, covenants, actions, suits, causes of action, obligations, controversies, debts, costs, expenses, damages, judgments, orders and liabilities, of whatever kind or nature, direct or indirect, in law, equity or otherwise, whether known or unknown, arising through the date of this Release, out of Dr. Roth's employment by or service to the Company or the termination thereof, including, but not limited to, any claims for relief or causes of action under the Age Discrimination in Employment Act, 29 U.S.C. ss. 621 et seq., or any other federal, state or local statute, ordinance or regulation regarding discrimination in employment and any claims, demands or actions based upon alleged wrongful or retaliatory discharge or breach of contract under any state or federal law. The foregoing will not be deemed to release Dr. Roth or the Company from (a) claims solely to enforce this Agreement, (b) claims solely to enforce any stock option award agreement between Dr. Roth and the Company, (c) if Dr. Roth executes the Non-Competition Agreement pursuant to Section 7 of this Agreement, claims solely to enforce that agreement, or (d) claims for indemnification under the Company's By-Laws, under any indemnification agreement between the Company and Dr. Roth or under any similar agreement. 9.2. Covenant Not to Sue. Dr. Roth expressly represents that he has not filed a lawsuit or initiated any other administrative proceeding against the Company (including for purposes of this Section 9.2, its parents, affiliates and subsidiaries) and that he has not assigned any claim against the Company to any other person or entity. The Company expressly represents that it has not filed a lawsuit or initiated any other administrative proceeding against Dr. Roth, and that it has not assigned any claim against Dr. Roth to any other person or entity. Both Dr. Roth and the Company further promise not to initiate a lawsuit or to bring any other claim against the other arising out of or in any way related to Dr. Roth's employment by or service to the Company or the termination of that employment or service. Notwithstanding the foregoing, this Section 9.2 will not prevent either Dr. Roth or the Company from filing (a) claims solely to enforce this Agreement, (b) claims solely to enforce any stock option award agreement between Dr. Roth and the Company, or (c) if Dr. Roth executes the Non-Competition Agreement pursuant to Section 7 of this Agreement, claims solely to enforce that agreement. In addition, this Section 9.2 will not prevent Dr. Roth from filing (a) claims for indemnification under the Company's By-Laws, under any indemnification agreement between the Company and Dr. Roth or under any similar agreement, or (b) a charge with the Equal Employment Opportunity Commission (or similar state agency) or participating in any investigation conducted by the Equal Employment Opportunity Commission (or similar state agency); provided, however, that any claims by Dr. Roth for personal relief in connection with such a charge or investigation (such as reinstatement or monetary damages) would be barred. 6 9.3. Claims Against Officers or Directors. In addition, Dr. Roth hereby (a) waives any right to claim payment of amounts owed to him, now or in the future, pursuant to this Agreement from directors or officers of the Company in the event the Company becomes insolvent, and (b) fully and forever releases and discharges the Company's officers and directors from any and all claims, demands, liens, actions, suits, causes of action or judgments arising out of any present or future claim for such amounts. 9.4. Acknowledgement. Dr. Roth acknowledges that, in the absence of the release provided in this Section 9, the Company would not have agreed to make the payments specified in Section 4 of this Agreement. SECTION 10. Rescission Right. Dr. Roth expressly acknowledges and recites that (a) he has read and understands this Agreement in its entirety, (b) he has entered into this Agreement knowingly and voluntarily, without any duress or coercion; (c) he has been advised orally and is hereby advised in writing to consult with an attorney with respect to this Agreement before signing it; (d) he was provided 21 calendar days after receipt of the Agreement to consider its terms before signing it; and (e) he is provided seven calendar days from the date of signing to terminate and revoke this Agreement, in which case this Agreement will be unenforceable, null and void. Dr. Roth may revoke this Agreement during those seven days by providing written notice of revocation to the Company. SECTION 11. Challenge. If Dr. Roth violates or challenges the enforceability of Sections 6, 8 or 9 of this Agreement, no further payments under Sections 4 or 5 of this Agreement will be due to Dr. Roth. SECTION 12. Miscellaneous. 12.1. No Mitigation or Offset. In no event will Dr. Roth be required to mitigate any damages or the amount of any payment provided for under this Agreement by seeking employment or otherwise, nor will any payments or benefits hereunder, be subject to offset. 12.2. Legal Fees. The Company shall pay the reasonable attorneys' fees and related expenses and disbursements incurred by Dr. Roth in connection with the negotiation and preparation of this Agreement (including the Non-Competition Agreement) up to a maximum of $10,000. 12.3. Successors and Assigns. This Agreement will inure to the benefit of and be binding upon the Company and Dr. Roth and their respective successors, executors, administrators, heirs. The Company may assign this Agreement to any successor to all or substantially all of its assets and business by means of liquidation, dissolution, merger, consolidation, transfer of assets, or otherwise. Dr. Roth may not assign his rights or obligations under this Agreement. 7 12.4. Notice. Any notice or communication required or permitted under this Agreement will be made in writing and (a) sent by overnight courier, (b) mailed by certified or registered mail, return receipt requested or (c) sent by telecopier, addressed as follows: If to Dr. Roth: Stephen A. Roth, Ph.D. 1105 Rose Glen Road Gladwyne, PA 19035 with a copy to: Steven L. Gershman, Esq. 407 East Lancaster Avenue Wayne, PA 19087 Fax: 610-971-2660 If to Company: Neose Technologies, Inc. 102 Witmer Road Horsham PA 19044 Attn: General Counsel Fax: 215-441-5896 with a copy to: Pepper Hamilton LLP 3000 Two Logan Square 18th & Arch Streets Philadelphia, PA 19103 Attn: Barry M. Abelson, Esquire Fax: 215-981-4750 or to such other address as either party may from time to time duly specify by notice given to the other party in the manner specified above. 12.5. Entire Agreement; Amendments. This Agreement contains the entire agreement and understanding of the parties hereto relating to the subject matter hereof, and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every nature relating to the subject matter hereof, including the Separation and Consulting Agreement executed by Dr. Roth and the Company on March 29, 2002. This Agreement may not be changed or modified, except by an agreement in writing signed by each of the parties hereto. 12.6. Waiver. Any waiver by either party of any breach of any term or condition in this Agreement will not operate as a waiver of any other breach of such term or condition or of any other term or condition, nor will any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision hereof or constitute or be deemed a waiver or release of any other rights, in law or in equity. 8 12.7. Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or the effectiveness or validity of any provision in any other jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein. 12.8. Governing Law. This Agreement will be governed by, and enforced in accordance with, the laws of the Commonwealth of Pennsylvania, without regard to the application of the principles of conflicts of laws. 12.9. Enforcement. Any legal proceeding arising out of or relating to this Agreement will be instituted in the United States District Court for the Eastern District of Pennsylvania, or if that court does not have or will not accept jurisdiction, in any court of general jurisdiction in the Commonwealth of Pennsylvania, and Dr. Roth and the Company hereby consent to the personal and exclusive jurisdiction of such court(s) and hereby waive any objection(s) that they may have to personal jurisdiction, the laying of venue of any such proceeding and any claim or defense of inconvenient forum. 12.10. Section Headings. The section headings in this Agreement are for convenience only; they form no part of this Agreement and will not affect its interpretation. 12.11. Counterparts and Facsimiles. This Agreement may be executed, including execution by facsimile signature, in one or more counterparts, each of which will be deemed an original, and all of which together will be deemed to be one and the same instrument. [this space left blank intentionally; signature page follows.] 9 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and Dr. Roth has executed this Agreement, in each case on the 29th day of March, 2002. NEOSE TECHNOLOGIES, INC. By: /s/ A. Brian Davis ------------------------------------------- Name & Title: A. Brian Davis, Acting Chief Financial Officer --------------------------------- STEPHEN A. ROTH, Ph.D. /s/ Stephen A. Roth, Ph.D. ----------------------------------------------- 10 EXHIBIT I CONFIDENTIALITY, INTELLECTUAL PROPERTY AND NON-COMPETITION AGREEMENT THIS CONFIDENTIALITY, INTELLECTUAL PROPERTY AND NON-COMPETITION AGREEMENT (this "Agreement") is made as of the __th day of [___________], 200__ by and between NEOSE TECHNOLOGIES, INC. (the "Company") and STEPHEN A. ROTH, Ph.D. ("Dr. Roth"). WHEREAS, Dr. Roth has served as a consultant to the Company and as Chief Executive Officer and Chairman of the Board of the Company, positions of substantial authority and responsibility in which he has had access to the Company's customers, vendors, trade secrets, proprietary information, and intellectual property; WHEREAS, the Company desires to obtain certain assurances from Dr. Roth that he will not harm the Company's business interests; NOW THEREFORE, in consideration of these premises and intending to be legally bound hereby, the parties agree as follows: SECTION 1. Definitions. To the extent not defined in the preamble of this Agreement, capitalized terms used herein will have the meanings provided below: 1.1. "Business" means research, development, manufacture, supply, marketing, licensing, use and sale of biologic, pharmaceutical and therapeutic materials and products and related process technology including, without limitation, research, development, manufacture, supply, marketing, licensing, use and sale or products and technology directed to (a) the enzymatic synthesis of complex carbohydrates for use in food, cosmetic, therapeutic, consumer and industrial applications, (b) enzymatic synthesis or modification of the carbohydrate portion of proteins or lipids, and (c) carbohydrate-based therapeutics. 1.2. "Board" means the Board of Directors of the Company. 1.3. "Effective Date" means March 29, 2003. 1.4. "Restricted Period" means the two-year period commencing on the Effective Date. 1.5. "Restrictive Covenants" means the provisions contained in Section 3 of this Agreement. SECTION 2. Consideration. In consideration for the covenants described in Section 3, subject to Section 5.2: 2.1. The Company will pay to Dr. Roth $39,622 on March 31, 2003 and on the last day of each of the first 23 months thereafter; 2.2. Notwithstanding the terms of the Company's equity incentive plans and any stock option award agreement between Dr. Roth and the Company, solely for purposes of the vesting and expiration of the options to purchase shares of the Company's common stock held by Dr. Roth as of the Effective Date, Dr. Roth will be treated as continuing in the service of the Company until the later of (a) the second anniversary of the Effective Date and (b) the end of Dr. Roth's service as a member of the Board; and 2.3. If Dr. Roth [and his spouse and dependents][is/are] still receiving continuation coverage under the Company's group health plan immediately prior to the Effective Date, that coverage will be further continued at no cost to him until the earliest to occur of (a) the expiration of the period for which Dr. Roth would have been eligible for COBRA coverage following his termination of employment with the Company, or (b) Dr. Roth's eligibility for coverage under another employer's group health plan. SECTION 3. Restrictive Covenants. In consideration of all the payments and benefits provided under this Agreement, Dr. Roth covenants that, during the Restricted Period, he will not (except in his capacity as a consultant of the Company) do any of the following, directly or indirectly, anywhere in the world: 3.1. engage or participate in any business competitive with the Business (as defined below); 3.2. become interested in (as owner, stockholder, lender, partner, co-venturer, director, officer, employee, agent or consultant) any person, firm, corporation, association or other entity engaged in any business competitive with the Business. Notwithstanding the foregoing, Dr. Roth may hold up to 4.9% of the outstanding securities of any class of any publicly-traded securities of any company; 3.3. engage in any business, or solicit or call on any customer, supplier, licensor, licensee, contractor, agent, representative, advisor, strategic partner, distributor or other person with whom the Company shall have dealt or any prospective customer, supplier, licensor, licensee, contractor, agent, representative, advisor, strategic partner, distributor or other person that the Company shall have identified and solicited at any time during Dr. Roth's employment or retention by the Company for a purpose competitive with the Business; 3.4. influence or attempt to influence any employee, consultant, customer, supplier, licensor, licensee, contractor, agent, representative, advisor, strategic partner, distributor or other person to terminate or modify any written or oral agreement, arrangement or course of dealing with the Company; or 3.5. solicit for employment or employ or retain (or arrange to have any other person or entity employ or retain) any person who has been employed or retained by the Company within the 12 months preceding the application of this provision to that person. 2 SECTION 4. Acknowledgements. Dr. Roth acknowledges that the Restrictive Covenants are reasonable and necessary to protect the legitimate interests of the Company and its affiliates and that the duration and geographic scope of the Restrictive Covenants are reasonable given the nature of this Agreement and Dr. Roth's relationship with the Company. Dr. Roth further acknowledges that the Restrictive Covenants are included herein in order to induce the Company to make the payments provided for herein and that the Company would not have entered into this Agreement in the absence of the Restrictive Covenants. SECTION 5. Remedies and Enforcement Upon Breach. 5.1. Specific Enforcement. Dr. Roth acknowledges that any breach by him, willfully or otherwise, of the Restrictive Covenants will cause continuing and irreparable injury to the Company for which monetary damages would not be an adequate remedy. Dr. Roth will not, in any action or proceeding to enforce any of the provisions of this Agreement, assert the claim or defense that such an adequate remedy at law exists. In the event of any such breach by Dr. Roth, the Company will have the right to enforce the Restrictive Covenants by seeking injunctive or other relief in any court, without any requirement that a bond or other security be posted, and this Agreement will not in any way limit remedies of law or in equity otherwise available to the Company. 5.2. Termination of Payments and Vesting Service. If Dr. Roth breaches Section 3 in any respect, then (a) he will not be entitled to any further payments under this Agreement, (b) he will immediately cease to treated as continuing in the service of the Company for purposes of vesting and expiration of his Company stock options, and (c) all of his entitlements under this Agreement will cease. 5.3. Extension of Restricted Period. If Dr. Roth breaches Section 3 in any respect, the Restricted Period will be extended for a period equal to the period that Dr. Roth was in breach. 5.4. Accounting. If Dr. Roth breaches any of the Restrictive Covenants, the Company will have the right and remedy to require Dr. Roth to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits derived or received by Dr. Roth as the result of such breach. This right and remedy will be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity. 5.5. Judicial Modification. If any court determines that any of the Restrictive Covenants, or any part thereof, is unenforceable because of the duration or geographical scope of such provision, such court will have the power to modify such provision and, in its modified form, such provision will then be enforceable. 5.6. Enforceability. If any court holds the Restrictive Covenants unenforceable by reason of their breadth or scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the right of the Company to the relief provided above in the courts of any other jurisdiction within the geographic scope of such Restrictive Covenants. 3 5.7. Disclosure of Restrictive Covenants. Dr. Roth agrees to disclose the existence and terms of the Restrictive Covenants to any entity to whom Dr. Roth provides services during the Restricted Period. SECTION 6. Miscellaneous. 6.1. Claims Against Officers or Directors. Dr. Roth hereby (a) waives any right to claim payment of amounts owed to him, now or in the future, pursuant to this Agreement from directors or officers of the Company in the event the Company becomes insolvent, and (b) fully and forever releases and discharges the Company's officers and directors from any and all claims, demands, liens, actions, suits, causes of action or judgments arising out of any present or future claim for such amounts. 6.2. Successors and Assigns. This Agreement will inure to the benefit of and be binding upon the Company and Dr. Roth and their respective successors, executors, administrators, heirs. The Company may assign this Agreement to any successor to all or substantially all of its assets and business by means of liquidation, dissolution, merger, consolidation, transfer of assets, or otherwise. Dr. Roth may not assign his rights or obligations under this Agreement. 6.3. Notice. Any notice or communication required or permitted under this Agreement will be made in writing and (a) sent by overnight courier, (b) mailed by certified or registered mail, return receipt requested or (c) sent by telecopier, addressed as follows: If to Dr. Roth: Stephen A. Roth, Ph.D. 1105 Rose Glen Road Gladwyne, PA 19035 with a copy to: Steven L. Gershman, Esq. 407 East Lancaster Avenue Wayne, PA 19087 Fax: 610-971-2660 If to Company: Neose Technologies, Inc. 102 Witmer Road Horsham PA 19044 Attn: General Counsel Fax: 215-441-5896 4 with a copy to: Pepper Hamilton LLP 3000 Two Logan Square 18th & Arch Streets Philadelphia, PA 19103 Attn: Barry M. Abelson, Esquire Fax: 215-981-4750 or to such other address as either party may from time to time duly specify by notice given to the other party in the manner specified above. 6.4. Entire Agreement; Amendments. This Agreement contains the entire agreement and understanding of the parties hereto relating to the subject matter hereof, and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every nature relating to the subject matter hereof. This Agreement may not be changed or modified, except by an agreement in writing signed by each of the parties hereto. 6.5. Waiver. Any waiver by either party of any breach of any term or condition in this Agreement will not operate as a waiver of any other breach of such term or condition or of any other term or condition, nor will any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision hereof or constitute or be deemed a waiver or release of any other rights, in law or in equity. 6.6. Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or the effectiveness or validity of any provision in any other jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein. 6.7. Governing Law. This Agreement will be governed by, and enforced in accordance with, the laws of the Commonwealth of Pennsylvania, without regard to the application of the principles of conflicts of laws. 6.8. Enforcement. Any legal proceeding arising out of or relating to this Agreement will be instituted in the United States District Court for the Eastern District of Pennsylvania, or if that court does not have or will not accept jurisdiction, in any court of general jurisdiction in the Commonwealth of Pennsylvania, and Dr. Roth and the Company hereby consent to the personal and exclusive jurisdiction of such court(s) and hereby waive any objection(s) that they may have to personal jurisdiction, the laying of venue of any such proceeding and any claim or defense of inconvenient forum. 5 6.9. Section Headings. The section headings in this Agreement are for convenience only; they form no part of this Agreement and will not affect its interpretation. 6.10. Counterparts and Facsimiles. This Agreement may be executed, including execution by facsimile signature, in one or more counterparts, each of which will be deemed an original, and all of which together will be deemed to be one and the same instrument. IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and Dr. Roth has executed this Agreement, in each case as of the date first above written. NEOSE TECHNOLOGIES, INC. By: ------------------------------------------- Name & Title: --------------------------------- STEPHEN A. ROTH, Ph.D. ---------------------------------------------- 6 -----END PRIVACY-ENHANCED MESSAGE-----