AMENDMENT NUMBER 1 TO EMPLOYMENT AGREEMENT
AMENDMENT
NUMBER 1 TO EMPLOYMENT AGREEMENT
AMENDMENT
NUMBER 1 TO EMPLOYMENT AGREEMENT
(“Amendment No. 1”), dated as of June 30, 2006 by and between DOV
PHARMACEUTICAL, INC., a Delaware corporation (the “Company”) and XXXXXXX XXXXXX
(the “Executive”).
WITNESSETH:
WHEREAS,
the
Company and Executive entered into an Employment Agreement dated as of August
3,
2004 (the “Employment Agreement”);
WHEREAS,
the
Company and the Executive both desire to modify certain provisions of the
Employment Agreement;
WHEREAS,
capitalized terms not otherwise defined herein shall have the meaning ascribed
thereto in the Employment Agreement.
NOW,
THEREFORE,
the
parties mutually agree as follows:
1. Section
1.01 “Term” of the Employment Agreement shall be deleted from the Employment
Agreement and replaced with the following provision:
Section
1.01. Term.
The
initial term of this Employment
Agreement shall commence on expiration of the Executive’s previous employment
contract (August 21, 2004), and, unless sooner terminated pursuant to Article
III hereof, shall terminate on June 30, 2008 (the “Initial Employment Period”).
Unless sooner terminated pursuant to Article III, the parties may by written
agreement renew this Agreement for one year (each such one-year period
hereinafter referred to as a “Renewal Period”; the Initial Employment Period and
all Renewal Periods hereinafter (if any) referred to as the “Employment
Period”).
2.
Section
1.02 “Position” of the Employment Agreement shall be deleted from the Employment
Agreement and replaced with the following provision:
Section
1.02. Position.
The Company shall employ the Executive and the Executive shall serve as
President and Chief Financial Officer of the Company during the Employment
Period.
3. Paragraph
(a) of Section 1.03 “Duties” shall be deleted from the Employment Agreement and
replaced with the following provision:
Section
1.03. Duties.
(a) Subject
to the responsibility vested in the Board of Directors of the Company (the
“Board”) under the General Corporation Law of the State of Delaware, the
Executive shall have such responsibility and authority as are customarily
possessed and exercisable by the President and Chief Financial Officer of a
corporation. The Executive shall also perform such other executive and
administrative duties (not inconsistent with the position of President and
Chief
Financial Officer) as the Executive may reasonably be expected to be capable
of
performing on behalf of the Company and any subsidiaries and affiliates of
the
Company as may from time to time be authorized or directed by the
Board.
4. Paragraph
(b) of Section 2.03 “Other Benefits” shall be deleted from the Employment
Agreement and replaced with the following provision:
(b) The
Executive shall be eligible to participate further in the Company’s stock option
program. The terms of existing options held by the Executive shall be governed
by the existing stock option agreement(s) with the Company, and the terms of
any
additional options (including the 100,000 options and 350,000 options referred
to below) shall be governed by the Company’s standard stock option agreement in
use at the time of grant, which will incorporate the terms established by the
Company’s stock option plan as the same may be amended from time to time;
provided, however, that except to the extent provided below with respect to
the
100,000 options referred to below, the Executive’s options to the extent not
vested shall vest upon a termination of employment pursuant to Section 3.01(d),
Section 3.03(a) or Section 3.04 but be exercisable during the post-employment
period for 90 days from the date of termination.
On
August
3, 2004, the Executive was granted options to purchase 100,000 shares of the
Company’s common stock at an exercise price determined by the closing price on
August 3, 2004, vesting half in 18 months of full time employment and the
balance vesting ratably quarterly over the subsequent 18 months of full time
employment. The other terms of such options shall be governed by the Company’s
stock option agreement in use at the time of grant, which will incorporate
the
terms established by the Company’s stock option plan as the same may be amended
from time to time; provided, however, that with respect to these 100,000
options, such options to the extent not vested shall accelerate and vest fully
upon a termination of employment pursuant to Sections 3.01(d) and 3.03(a) and
accelerate and vest ratably upon a termination pursuant to Section 3.04 in
accordance with the following sentence. 25,000 options to the extent not vested
shall accelerate and vest upon a termination pursuant to Section 3.04 during
the
first year after the date of grant, 62,500 options to the extent not vested
shall accelerate and vest upon such a termination during the second year after
the date of grant, and 100,000 options to the extent not vested shall accelerate
and vest upon such a termination during the third year after the date of grant.
The period of exercisability of such options during the Executive’s
post-employment period shall be 90 days from the date of
termination.
2
On
June
30, 2006, the Executive shall be granted options to purchase 350,000 shares
of
the Company’s stock at an exercise price determined by the closing price on the
grant date. Such options shall vest ratably annually over four years. The other
terms of such options shall be governed by the Company’s standard stock option
agreement in use at the time of grant, which will incorporate the terms
established by the Company’s stock option plan as the same may be amended from
time to time; provided, however, that such options to the extent not vested
shall vest upon a termination of employment pursuant to Section 3.01(d), Section
3.03(a) or Section 3.04 but be exercisable during the post-employment period
for
90 days from the date of termination.
5.
Paragraph
(d) of Section 2.03 “Other Benefits” shall be deleted from the Employment
Agreement and replaced with the following provision:
(d)
The
Executive shall be entitled to six weeks of paid vacation in each calendar
year.
The Executive shall also be entitled to the same standard paid holidays given
by
the Company to senior executives generally, all as determined from time to
time
by the Board or appropriate committee thereof. Vacation time shall cumulate
and
carry forward from year to year provided that the Executive shall not be
entitled to more than ten weeks of vacation in any one year without the
permission of the Compensation Committee.
3
6.
Paragraph
(d) of Section 3.01 “Termination of Employment by Company” shall be deleted from
the Employment Agreement and replaced with the following provision:
(d)
In
the case of termination of the Executive by the Company other than pursuant
to
Section 3.01(a) or Section 3.02, the Company shall be obligated to pay the
Executive and the Executive shall be entitled to receive, in complete and total
satisfaction of the obligations of the Company hereunder, an amount equal to
the
greater of (i) Basic Compensation for the period commencing on the date of
such
termination and ending June 30, 2008, and (ii) Basic Compensation for the period
commencing on the date of such termination and ending on the date that is twelve
(12) months thereafter. Basic Compensation shall be paid at the intervals set
forth in Article II.
7. Section
3.03 “Termination of Employment by the Executive” shall be deleted from the
Employment Agreement and replaced with the following provision:
Section
3.03. Termination
of Employment by the Executive. (a) If during the Employment Period there should
occur any of the following events (each of the following being an event giving
the Executive the right to resign for “Good Reason”): (i) a change in the title
and/or responsibilities of the Executive, such that the Executive is no longer
functionally the President and Chief Financial Officer of the Company and no
longer has such responsibilities and authorities as are customarily exercisable
by the President and Chief Financial Officer of a corporation, (ii) a failure
by
the Company to provide the Executive with Basic Compensation, Incentive
Compensation (if applicable) or Benefits, other than a failure that is not
in
bad faith and is remedied by the Company within 15 days after receipt of notice
thereof given by the Executive, or (iii) a breach by the Company of a material
term of this Agreement that is not remedied by the Company within 15 days of
notice thereof by the Executive, the Executive may elect to terminate her
employment by notice to the Company (subject to Article IV hereof). If the
Executive exercises such election, the Employment Period shall terminate
effective upon the later to occur of (x) receipt of such notice by the Company
and (y) expiration of the 15-day period referred to in Section 3.03(a)(ii)
or
(iii).
4
(b)
If
the Executive exercises her election to terminate pursuant to Section 3.03(a),
the Company shall be obligated to pay the Executive and the Executive shall
be
entitled to receive, in complete and total satisfaction of the obligations
of
the Company hereunder, an amount equal to the greater of (i) Basic Compensation
for the period commencing on the date of such termination and ending June 30,
2008, and (ii) Basic Compensation for the period commencing on the date of
such
termination and ending on the date that is twelve (12) months thereafter. Basic
Compensation shall be paid at the intervals set forth in Article
II.
(c)
If
the Executive terminates this Employment Agreement for any reason other than
those contained in Sections 3.03(a) or 3.04, the rights and obligations of
the
parties hereunder shall terminate immediately (except as otherwise provided
in
Article IV) and the Employment Period shall terminate immediately except that
the Executive shall be entitled to receive, in complete and total satisfaction
of the obligations of the Company hereunder, her Basic Compensation, Incentive
Compensation and Benefits through the date of such termination.
8.
Section
3.04 “Change of Control” shall be deleted from the Employment Agreement and
replaced with the following provision:
Section
3.04. Change
of
Control. In the event the Executive terminates her employment within six months
following a Change of Control (as defined in Section 3.05), the Company shall
be
obligated to pay the Executive, and the Executive shall be entitled to receive
in complete and total satisfaction of the obligations of the Company hereunder,
an amount equal to the greater of (i) Basic Compensation for the period
commencing on the date of such termination and ending June 30, 2008, and (ii)
Basic Compensation for the period commencing on the date of such termination
and
ending on the date that is twelve (12) months thereafter.
9.
Section
5.01 “Services as Officer or Director” shall be deleted from the Employment
Agreement and replaced with the following provision:
Section
5.01. Services
as Officer or Director. During the Employment Period, the Executive shall,
if
elected or appointed, serve as a director of the Company and as an officer
and
director of all current and future subsidiaries and affiliates of the Company
without any additional compensation for such services provided that the
Executive shall be provided with reasonable and customary directors and officers
insurance if any such corporation is or becomes publicly held and further
provided that the Company shall cause any such subsidiary and affiliate to
save
the Executive harmless from any and all liability arising out of the performance
of the Executive’s duties as director and officer. In the event the Employment
Period is terminated for any reason, the Executive shall immediately resign
from
all of such director and/or officer positions.
5
10.
Section
5.03 “Notices” shall be deleted from the Employment Agreement and replaced with
the following provision:
Section
5.03. Notices.
Any notice or request required or permitted to be given under this Employment
Agreement shall be sufficient if in writing and delivered personally or sent
by
registered mail, return receipt requested, to the addresses set forth below
or
to any other address designated by either party by notice similarly given.
Such
notice shall be deemed to have been given upon the personal delivery thereof
or
three days after the date of such mailing thereof, as the case may be.
If
to the Executive, to:
Xxxxxxx
Xxxxxx
C/O
XXX
Pharmaceutical, Inc.
000
Xxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
If
to the Company, to:
DOV
Pharmaceutical, Inc.
000
Xxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
Attn:
General Counsel
11.
Section
5.9 “Entire Agreement; Amendments” shall be deleted from the Employment
Agreement and replaced with the following provision:
Section
5.9. Entire
Agreement; Amendments. This Agreement, as amended by Amendment No. 1 hereto,
contains the entire understanding of the parties hereto with regard to the
subject matter contained herein, and supersedes all prior agreements or
understandings between the parties hereto or any related parties. This Agreement
may be amended only pursuant to a writing signed by both parties hereto.
6
12.
All
other provisions of the Employment Agreement shall remain in full force and
effect.
[The
remainder of this page has been intentionally left blank.]
7
IN
WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 as of
the
date first written above.
DOV
PHARMACEUTICAL, INC.
| By: /s/ Xxxxxx Xxxxx | /s/ Xxxxxxx Xxxxxx | ||
| Name:
Xxxxxx
Xxxxx Title: Chairman of the Board |
Xxxxxxx
Xxxxxx |
