FIRST AMENDMENT TO
RETIREMENT AND CONSULTING AGREEMENT
This First Amendment to Retirement and Consulting Agreement
( Amendment ) is made as of September 30, 1997, by and between
XXXXXXXXXX LABORATORIES, INC., a Texas corporation ( Xxxxxxxxxx ),
and XXXXX X. XXXXX, M.D., Ph.D. ( Xxxxx ) for the purpose of amending
the Retirement and Consulting Agreement dated August 14, 1997 (the
Consulting Agreement ) between Xxxxxxxxxx and Xxxxx in the following
respects:
1. Amendment to Section 1(c). Section 1(c) of the Consulting
Agreement is hereby amended to read in its entirety as follows:
(c) Stock Options. Effective as of the Retirement Date,
and subject to the receipt by Xxxxx of the New Options provided
for in Section 4(d) of this Agreement,
(i) Xxxxx shall surrender to Xxxxxxxxxx the stock
option granted to him by Xxxxxxxxxx on January 16, 1995
(the First Old Option ), to the extent of all 20,000
shares of Xxxxxxxxxx s Common Stock covered by such option
on the Retirement Date;
(ii) The stock options granted to Xxxxx by Xxxxxxxxxx
on August 17, 1995, June 12, 1996 and May 22, 1997
(collectively, the Other Old Options ) shall be deemed to
h a v e been surrendered by Xxxxx to Xxxxxxxxxx for
cancellation to the extent of all shares of Xxxxxxxxxx s
Common Stock for which such options are outstanding and not
exercisable on the Retirement Date (10,000 shares in the
case of the August 17, 1995 option, a total of 7,500 shares
in the case of the two June 12, 1996 options, and 15,000
shares in the case of the May 22, 1997 option); and
(iii) To the extent that the Other Old Options are
outstanding and exercisable on the Retirement Date (10,000
shares in the case of the August 17, 1995 option and a
total of 7,500 shares in the case of the two June 12, 1996
o p t ions), such options shall remain outstanding in
accordance with and subject to the applicable provisions of
Xxxxxxxxxx s 1995 Stock Option Plan, as amended (the
Option Plan ), and the terms of the applicable agreements
evidencing the Other Old Options (collectively, the Other
Old Option Agreements ), including but not limited to the
provisions of Section 4.03 (iv) and (v) of the Option Plan
and Section 2(c) of the Other Old Option Agreements
relating to the effect of Xxxxx s retirement.
Notwithstanding any contrary indication in this Agreement
or in the Other Old Option Agreements, and in accordance
with the last sentence of Section 2(c) of the Other Old
Option Agreements, Xxxxx hereby acknowledges and agrees
that, to the extent any of the Other Old Options are
exercised more than three months after the Retirement Date,
and unless he dies within such three-month period, the
options so exercised will constitute nonqualified stock
options, i.e., stock options that do not qualify as
incentive stock options under Section 422 of the Internal
Revenue Code of 1986, as amended, with the resulting
federal income tax consequences.
2. Amendment to Section 4(d). Section 4(d) of the Consulting
Agreement is hereby amended to read in its entirety as follows:
(d) Stock Options. In consideration of Xxxxx s agreement
to all of the terms and conditions of this Agreement, and
also in consideration of and subject to Xxxxx s surrender to
Xxxxxxxxxx as of the Retirement Date of the First Old Option
and the deemed surrender of the unexercisable portions of
the Other Old Options then outstanding, Xxxxxxxxxx shall
grant to Xxxxx, effective as of October 1, 1997 and pursuant
to the Option Plan, the following new nonqualified stock
options (collectively, the New Options ):
(i) An option to purchase 10,000 shares of
Xxxxxxxxxx s Common Stock at a price of $12.50 per
share, which option shall be exercisable in whole at
any time or in part from time to time on and after
October 1, 1997, and shall be evidenced by an agreement
having the terms set forth in the form of Nonqualified
Stock Option Agreement attached to and made a part of
this Agreement as Exhibit A; and
(ii) An option to purchase 42,500 shares of
Xxxxxxxxxx s Common Stock at a price per share equal to
the closing sales price per share of Xxxxxxxxxx s
Common Stock on the Nasdaq National Market on October
1, 1997, which option shall become exercisable with
respect to 10,625 shares beginning on October 1, 1998,
and with respect to an additional 10,625 shares
beginning on October 1 of each of the years 1999
through 2001, and shall be evidenced by an agreement
having the terms set forth in the form of Nonqualified
Stock Option Agreement attached to and made a part of
this Agreement as Exhibit B.
3. C e r t ain References. All references to this
Agreement, and all references such as hereby, herein,
hereinafter, hereof, hereto and hereunder, contained in
the Consulting Agreement or in this Amendment shall be deemed to
refer to the Consulting Agreement as amended by this Amendment.
4. R a tification of Consulting Agreement as Amended.
Xxxxxxxxxx and Xxxxx hereby ratify and confirm the Consulting
Agreement as amended by this Amendment and agree that, except as
amended by this Amendment, the Consulting Agreement shall remain
in full force and effect as originally written.
IN WITNESS WHEREOF, Xxxxxxxxxx and Xxxxx have executed this
Amendment as of the date first set forth above.
XXXXXXXXXX LABORATORIES, INC.
By:
Xxxxxxx X. Xxxxxx, Ph.D., X.Xx.
President and Chief Executive Officer
XXXXX X. XXXXX, M.D., Ph.D.
