Exhibit 10.46(1)
Final
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the "Agreement"),
effective as of the 1st day of March, 2007, between Immtech Pharmaceuticals,
Inc., a Delaware corporation (the "Company"), and Xx. Xxxx X. Xxxxxx, an
individual residing in Montclair, New Jersey (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to continue to employ the Executive as
President and Chief Executive Officer of the Company upon the terms and
conditions set forth herein; and
WHEREAS, Executive is willing to continue such employment upon the
terms and conditions set forth herein;
NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties agree as follows:
Section 1. Duties. The Company agrees that Executive shall be
employed by the Company during the Term (as defined below) as President and
Chief Executive Officer of the Company. Executive shall perform such duties and
shall have such responsibilities consistent with the Bylaws of the Company, the
Company's polices for senior executive officers and customary for the duties and
position of his office, in each instance subject to the direction of the Board
of Directors. Executive agrees to be so employed and shall devote his best
efforts to advance the interests of the Company.
Section 2. Term. Subject to Sections 4, 5 and 6 hereof, the term of
the Executive's employment hereunder (the "Term") shall be for a period
commencing on January 30, 2006 (the "Effective Date") to March 31, 2007, and
thereafter shall automatically renew for successive one year periods unless
notice of non-renewal is given by either party not less than 30 days prior to
each successive anniversary date of this Agreement while Executive is employed.
Section 3. Compensation.
(a) Base Salary. During the Term, beginning on April 1, 2007,
Executive shall be paid at a per annum rate of $375,000 ("Base Salary"). The
Base Salary shall be payable by the Company to Executive in accordance with the
Company's regular payroll practices for senior management.
(b) Stock Options. Executive shall be eligible for stock option
grants ("Options") under the Company's 2000 Stock Incentive Plan or any
successor thereto (collectively, the "Incentive Plan") as determined by
Executive and the Compensation Committee (the "Committee") of the Company's
Board of Directors or the Committee and the
other independent directors of the Company (as directed by the Board of
Directors). All such Options shall be evidenced by stock option agreements and
shall contain the following terms: (i) the exercise price shall equal the fair
market value of the underlying shares of the Company's common stock on the grant
date, (ii) the term shall be ten years, (iii) the Option shall be subject to
settlement on a net share basis (to enable Executive to make a cashless exercise
and payment of minimum statutory tax liabilities), (iv) the Option shall be an
incentive stock option to the extent possible, and (v) the Option shall remain
exercisable for the full term, whether or not Executive remains employed with
the Company.
(c) Bonuses. Executive shall be eligible to receive an annual
performance bonus in cash of up to 60% of the Base Salary for each year of
employment hereunder, beginning with the fiscal year ending March 31, 2008. Any
such bonus shall be determined in the sole discretion of the Committee or the
Committee and the other independent directors of the Company (as directed by the
Board of Directors) based on certain milestones determined in the sole
discretion of the Committee or the Committee and the other independent directors
of the Company (as directed by the Board of Directors). Any bonus due Executive
under this Section 3(c) shall be payable by the Company to Executive within 120
days after end of the Company's applicable fiscal year.
(d) Vacation, Sick Leave and Holidays. During the Term, Executive
shall be entitled to 20 days paid vacation on an annual basis, and shall be
entitled to sick leave and holidays at full pay (beginning on April 1, 2007) in
accordance with the Company's policies established and in effect from time to
time.
(e) Welfare Benefits. During the Term, Executive shall be entitled
to participate in all insurance, retirement, employee benefits, pension and
profit-sharing plans and other fringe benefit programs established by the
Company, including health insurance (collectively, "Welfare Benefits").
(f) Reimbursement of Expenses. During the Term, Executive shall be
reimbursed for all items of travel and entertainment and miscellaneous expenses
reasonably incurred by him on behalf of the Company. Executive shall, as a
condition of such reimbursement, provide sufficient documentation in such detail
as will allow Company to deduct such expenses. Reimbursement of expenses not
claimed within sixty (60) days after incurred shall be deemed waived, and all
reimbursement payments for a particular calendar year shall be paid within two
and one half months after the end thereof.
(g) Severance. Upon termination of Executive's employment hereunder
by the Company without Cause (as defined below), including non-renewal of the
Agreement by the Company, or by Executive for Good Reason (as defined below
(other than pursuant to Section 4 or 5 below), the Company will pay or provide
to the Executive (the following, collectively, "Severance"): (1) salary, at the
greater of (i) $375,000 and (ii) Executive's Base Salary rate in effect on the
date of termination, equal to six months, payable in accordance with normal
payroll practices applicable to the Company's senior executives, (2) Welfare
Benefits and insurance in which Executive was a participant or which covered
Executive on the date of termination (less any amounts Executive is paying
immediately prior to such termination to participate in such Welfare Benefits or
insurance) for the twelve month period following any such termination (or,
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at the Company's option, the Company may provide to Executive after-tax payments
to purchase equivalent benefits), (3) a cash bonus, on the date on which such
bonus would otherwise be due under Section 3(c) hereof, equivalent to the cash
bonus amount to which Executive would have been entitled had he continued
working until the end of the then current Term and (4) immediate vesting of all
outstanding options then held by Executive, and the right to exercise such
options for the remainder of their respective terms. The Severance shall be the
sole payment and shall satisfy all obligations of the Company and its affiliates
to Executive in the event of any such termination of Executive's employment and
shall be contingent on Executive's execution of the Company's standard release
and waiver agreement. To the extent the value of the Severance paid to Executive
under clauses (1) through (4) of this Agreement is equal to or less than
Executive's annualized Base Salary as of the date of his termination, the
Severance is being paid to Executive in consideration for Executive's
non-competition covenant set forth in Section 13 hereof.
(h) Insurance. During the Term, subject to insurability of
Executive, the Company shall provide Executive with disability insurance in an
amount not less than $375,000 or Executive's Base Salary then in effect that
would have been payable pursuant to the terms of this Agreement.
Section 4. Death or Total Disability of Executive.
(a) Death. In the event of the death of Executive during the Term,
this Agreement shall terminate effective as of the date of the Executive's death
and the Company shall have no further obligations or liability hereunder, except
the Company shall pay or provide to the Executive's estate (i) twelve months of
the Executive's then current Base Salary or $375,000 if not then receiving a
Base Salary (payable in accordance with the Company's normal payroll practices
for senior management) and a pro rata share of the cash bonus under Section 3(c)
for the period up to the date of termination, (ii) all amounts due pursuant to
the Welfare Benefits and insurance in which Executive was a participant or
covered and (iii) immediate vesting of all options then held by Executive and
the right to exercise the options through the remainder of their respective
terms.
(b) Total Disability. In the event of the Total Disability (as
hereinafter defined) of Executive for a period of 120 consecutive days during
the Term, the Company shall have the right to terminate Executive's employment
hereunder by giving Executive ten (10) days' written notice thereof, and upon
expiration of such ten (10) day period, the Company shall have no further
obligations or liability under this Agreement, except the Company shall pay or
provide to Executive (i) twelve months of Executive's then current Base Salary
or $375,000 if not then receiving a Base Salary (payable, to the extent
available, from the proceeds of the disability insurance described in Section
3(h) hereof, and when salary payments are made to other Company senior
executives during the applicable term following Executive's Total Disability)
and a pro rata share of the cash bonus under Section 3(c) for the period up to
Executive's date of Total Disability, (ii) Welfare Benefits and/or insurance in
which Executive is a participant or which covered Executive on the date of Total
Disability (without deduction for any amounts Executive was paying immediately
prior to such determination to participate in said Welfare Benefits or
insurance) for the twelve month period following the date of determination of
Total Disability (or, at the Company's option, the Company may provide to
Executive after-
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tax payments to purchase equivalent benefits) and (iii) immediate vesting of all
options then held by Executive and the right to exercise such options for the
remainder of their respective terms.
The term "Total Disability", when used herein, shall mean a mental
or physical condition which, based upon competent medical evidence, renders the
Executive unable or incompetent to carry out substantially all of the material
job responsibilities he held or tasks to which he was assigned, to be determined
in the sole discretion of the Company's Board of Directors.
Section 5. Discharge for Cause. The Company may terminate
Executive's employment hereunder for the following reasons (each of which shall
constitute "Cause"); (a) habitual intoxication; (b) drug addiction; (c)
conviction of Executive of a felony (d) a unanimous vote of non-confidence by
the Board of Directors (excluding executive), or (e) a material breach by
Executive of any term or provision of this Agreement or any Company policies
applicable to Executive, which Executive fails to cure within 30 days after
receipt of written notice from the Company advising Executive, in reasonable
detail, of the breach. In the event that the Company shall discharge the
Executive pursuant to this Section 5, the Company shall have no further
obligations or liability under this Agreement, except the Company shall pay to
Executive the portion, if any, of Executive's Base Salary earned through the
date employment terminates.
Section 6. Discharge Without Cause; Good Reason. The Company may
terminate Executive's employment hereunder, for any or no reason, at any time
upon at least thirty (30) days' prior written notice to Executive. Executive may
resign upon thirty days' notice for "Good Reason" which shall be deemed a
termination without Cause if not cured within said 30 day notice period. In the
event of a discharge by the Company without Cause or resignation by Executive
for Good Reason (provided that Executive's resignation occurs within six months
of the event constituting Good Reason, Executive shall be entitled to receive
the applicable Severance provided for in Section 3 hereof. In the event of a
Change in Control Event, whether or not Executive terminates his employment
hereunder, all outstanding stock options then held by Executive shall be
immediately and fully vested. "Good Reason" means (i) breach by the Company of
any of the material terms and conditions of this Agreement or any Company
policies applicable to Executive, (ii) relocating Executive, without his prior
consent, outside of the Chicago, IL or New York, NY metropolitan areas, (iii)
assignment of duties that are significantly different, whether diminution or
promotion, without Executive's consent, (iv) any reduction of Base Pay, Welfare
Benefits or Bonus unless applied uniformly to all Company executives, or (v) a
Change in Control Event. A "Change in Control Event" shall mean any of the
following: (i) any person or entity (except for a current stockholder) or
"group" (as contemplated by Section 13(d)(3) of the Securities Exchange Act of
1934) becomes the beneficial owner of greater than 50% of the then outstanding
voting power of the Company; (ii) a merger or consolidation with another entity
where the voting securities of the Company outstanding immediately before the
transaction constitute less than a majority of the voting power of the voting
securities of the Company or the surviving entity outstanding immediately after
the transaction; (iii) the sale or disposition of all or substantially all of
the Company's assets; or (iv) the stockholders of the Company approve a plan or
proposal for liquidation or dissolution of the Company.
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Section 7. Supersedes Other Agreements; Entire Agreement. This
Agreement supersedes and is in lieu of any and all other employment arrangements
between Executive and the Company. This Agreement constitutes the entire
agreement of the parties hereto and supersedes all prior contracts or agreements
with respect to the subject matter herein, whether oral or written.
Section 8. Amendments. Any Amendment to this Agreement, excluding
any extension or renewal of the Term, shall be made in writing and signed by the
parties hereto.
Section 9. Enforceability. If any provision of this Agreement shall
be held invalid or unenforceable, in whole or in part, then such provision shall
be deemed to be modified or restricted to the extent and in the manner necessary
to render the same valid and enforceable, or shall be deemed excised from this
Agreement as the case may require, and this Agreement shall be construed and
enforced to the maximum extent permitted by law, as if such provision had been
originally incorporated herein as so modified or restricted, or as if such
provision had not been originally incorporated herein, as the case may be.
Section 10. Governing Law. The validity and effect of this Agreement
shall be governed exclusively by the laws of the State of New York, excluding
the "conflicts of laws" rules of that state.
Section 11. Assignment. This Agreement and the obligations created
hereunder may not be assigned by the Company without the prior written consent
of Executive. This Agreement and the obligations created hereunder may not be
assigned by the Executive.
Section 12. Notices. All notices required or permitted to be given
hereunder shall be in writing and shall be deemed to have been given when
personally delivered or mailed, by certified or registered mail, return receipt
requested, addressed to the intended recipient as follows:
If to Executive:
Xxxx X. Xxxxxx
c/o Immtech Pharmaceuticals, Inc.
Xxx Xxxxx Xxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to the Company:
Immtech Pharmaceuticals, Inc.
000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Secretary
Any party may from time to time change its address for the purposes
of notices to that party by a similar notice specifying a new address, but no
such change shall be deemed to have been given until it is actually received by
the party sought to be charged with its contents.
Section 13. Covenant Not to Compete. Executive agrees that he will
not, either directly or indirectly, at any time during his employment with the
Company, compete or interfere, or setup to compete or interfere, or aid others
to so compete or interfere or set up to compete or interfere with the Company in
the conduct or transaction of any business or enterprise in which the Company
(i) is presently engaged, or (ii) is planning to become engaged and has made
significant monetary investment in order to be engaged, or (iii) is engaged at
any time during Executive's employment by the Company.
Executive further agrees that, upon any termination of his
employment with the Company, he will not, for a period of twelve (12) months
from the date of termination (the "Restriction Period"), within any geographic
markets where the Company is then active, directly or indirectly compete with
the Company by engaging in a competitive business, as an owner, partner,
officer, director, associate, employee, consultant, salesperson or stockholder
or aid others, directly or indirectly, in competing with the Company. For the
purposes of this Agreement, competition and/or engaging in a competitive
business shall include, but shall not be limited to, any disclosure of
confidential, proprietary, promotional or marketing information, trade secrets,
names of the Company's employees or research consultants, names of suppliers,
names of customers or any other information acquired prior to termination of
employment which is not already in the public domain.
Executive expressly agrees that, upon a breach or violation of the
provisions of this section, the Company shall be entitled, in addition to all
other remedies available to it, to appropriate injunctive relief, without bond,
in any court of competent jurisdiction.
Section 14. Confidentiality and Non-Disclosure. Executive covenants
and agrees:
(a) Not to use, publish or otherwise disclose, except in the course
of his duties as Executive of the Company, any confidential, proprietary,
patentable or copyrightable information or materials generated by or disclosed
to him in the course of his duties as an employee of the Company, except for
data which:
(i) Is or through no fault of the Executive comes into
the public domain;
(ii) After the time of disclosure to Executive, is
published or becomes a part of the public domain through no fault of
Executive; or
(iii) Was in the possession of Executive prior to the
time of disclosure by the Company, which can be demonstrated by
Executive's written records or other competent evidence.
(b) Not to disclose or utilize, other than in connection with the
performance of his duties as an employee of the Company, any information that
Executive is under a duty not to disclose.
(c) Upon termination of his employment with the Company, to promptly
return to the Company all written and other information, data and materials
which are secret or
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confidential in nature of which relate to patentable, copyrightable or
proprietary information relating to the business of the Company.
Section 15. Waiver. No claim or right arising out of a breach or
default under this Agreement can be discharged in whole or in part by a waiver
of that claim or right unless the waiver is supported by consideration and is in
writing and executed by the aggrieved party hereto or its or his duly authorized
agent. A waiver by any party hereto of a breach of default by the other party
hereto of any provision of this Agreement shall not be deemed a waiver of any
prior or subsequent compliance herewith, and such provision shall remain in full
force and effect.
Section 16. Taxes and Code Section 409A Over-ride. Executive is
solely responsible for the payment of any tax liability (including any taxes and
penalties arising under Section 409A of the Code) that may result from any
payments or benefits that he receives pursuant to this Agreement. The Company
shall not have any obligation to pay, mitigate, or protect Executive from any
such tax liabilities. Nevertheless, if the Company reasonably determines that
Executive's receipt of payments or benefits pursuant to Section 5 above would
cause him to incur liability for additional tax under Section 409A of the Code,
then the Company may in its discretion suspend such payments or benefits until
the end of the six-month period following termination of Executive's employment
(the "409A Suspension Period"). As soon as reasonably practical after the end of
the 409A Suspension Period, the Company will make a lump sum payment to me, in
cash, in an amount equal to any payments and benefits that the Company does not
make during the 409A Suspension Period. Thereafter, Executive will receive any
remaining payments and benefits due pursuant to Section 5 in accordance with the
terms of that Section (as if there had not been any suspension beforehand).
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IN WITNESS WHEREOF, this Employment Agreement has been executed by
the Company, by a duly authorized member of the Board of Directors, and by the
Executive on the date first above written.
IMMTECH PHARMACEUTICALS, INC.
By:/s/ Xxxx X. Xxxxx
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Chief Financial Officer
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
