Exhibit 10.4
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
with Xxxx X. Xxxxxxx
This AMENDMENT No. 1 (the "Amendment"), effective as of January 1, 2002, by and
between CytRx Corporation, a Delaware corporation (the "Company"), and Xxxx X.
Xxxxxxx ("Xx. Xxxxxxx"), amends that certain Amended and Restated Employment
Agreement, dated as of September 1, 1999, by and between the Company and Xx.
Xxxxxxx (the "Employment Agreement").
In consideration of the mutual promises and covenants herein contained, the
parties hereto agree as follows:
1. The caption of Section 3 of the Employment Agreement is hereby renamed
"Compensation" and new subsections 3(c), 3(d) and 3(e) of the Employment
Agreement are hereby added, to read as follows:
"(c) Success Bonus. If either of the following two events shall occur prior to
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the termination of this Agreement for any reason: (i) the execution by the
Company of a definitive agreement for a transaction that, if consummated, would
constitute a Change of Control under Section 2(c) of that certain Amended and
Restated Change in Control Employment Agreement, dated as of September 1, 1999,
as amended, by and between the Company and Xx. Xxxxxxx (the "Change in Control
Agreement"); or (ii) the execution by the Company of a FLOCOR license agreement
for sickle cell disease (each such event being referred to as a "Milestone
Event"), the Company shall pay to Xx. Xxxxxxx a success bonus equal to $435,150
(the "Success Bonus"). The Success Bonus shall be paid in a lump sum in cash as
soon as practicable after the occurrence of the applicable Milestone Event. The
Success Bonus is subject to forfeiture as provided in Section 3(e) below.
(d) Change in Control Payment. If, prior to the termination of this Agreement
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for any reason, the stockholders of the Company approve a transaction that, if
consummated, would constitute a Change of Control under Section 2(c) of the
Change in Control Agreement, or if a Change of Control (as defined in the Change
in Control Agreement) is consummated during such period regardless of
stockholder approval, the Company shall pay to Xx. Xxxxxxx, or his estate, in a
lump sum in cash as soon as practicable after the occurrence of such event the
higher of (i) $870,300, or (ii) the amount equal to two (2) times the sum of (A)
Xx. Xxxxxxx'x annual salary as in effect immediately prior to the occurrence of
such event, plus (B) the amount of Xx. Xxxxxxx'x highest annual bonus for the
last three full fiscal years prior to the occurrence of such event (such higher
amount being referred to herein as the "Change in Control Payment"); provided,
however, that the Change in Control Payment shall be reduced by the amount, if
any, of the Success Bonus previously paid to Xx. Xxxxxxx under Section 3(c) of
this Agreement. The Change in Control Payment is subject to forfeiture as
provided in Section 3(e) below.
(e) Forfeiture of Benefits. Notwithstanding any provision of this Agreement to
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the contrary, Xx. Xxxxxxx shall forfeit his right to receive, or, to the extent
such amounts have previously been paid to him, shall repay in full to the
Company with interest at 8% per annum
within thirty (30) days of a final determination of his liability therefor as
set forth below, the Success Bonus (as defined in Section 3(c) above) and the
Change in Control Payment (as defined in Section 3(d) above) if at any time
during the period of two years after the termination of his employment (the
"Restricted Period") he violates the restrictions on competition set forth in
Section 10 hereof. Any determination of whether Xx. Xxxxxxx has violated such
non-competition restrictions shall be made by arbitration in Atlanta, Georgia
under the Rules of Commercial Arbitration (the "Rules") of the American
Arbitration Association, which Rules are deemed to be incorporated by reference
herein."
2. A new subsections 7(d) of the Employment Agreement is hereby added, to read
as follows:
"(d) Reduction of Severance Benefits. Notwithstanding any provision of this
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Agreement to the contrary, any rights Xx. Xxxxxxx may have under this Section 7
to a continuation of salary after his termination of employment shall be
reduced (but not below zero) by the amount, if any, he receives of the Success
Bonus (as defined in Section 3(c) above) and/or the Change in Control Payment
(as defined in Section 3(d) above)."
3. As amended hereby, the Employment Agreement shall be and remain in full force
and effect.
IN WITNESS WHEREOF, Xx. Xxxxxxx has hereunto set his hand and, pursuant to the
authorization from its Board of Directors, the Company has caused this
Agreement to be executed in its name on its behalf by its undersigned officer
thereunto, duly authorized, all as of the day and year first above written.
/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
Attest: CYTRX CORPORATION:
/s/ Xxxx X. Xxxxxxxx /s/ Xxxxxxx X. Xxxxx
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Corporate Secretary By: Xxxxxxx X. Xxxxx
(CORPORATE SEAL) Title: Vice President, Human Resources
/s/ Xxxxxxx X. XxXxxx, Xx.
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By: Xxxxxxx X. XxXxxx, Xx.
Title: Chairman, CytRx Compensation Committee
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