EXHIBIT 10.28
TO: Xxxxxxx X. Xxxx
FROM: Xxxxxx X. Xxxxxx
DATE: December 13, 2001
SUBJECT: FIRST AMENDMENT TO EMPLOYMENT OFFER LETTER
We hereby agree that your Employment Offer Letter, dated December
23, 1998 and comprised of the Offer Letter, the Terms & Conditions Agreement,
and the Inventions and Non-Disclosure Agreement (collectively the "Offer
Letter"), be and hereby is amended effective December 13, 2001, as provided
for herein. Except as specifically modified herein, the terms of the Offer
Letter, and all other agreements, exhibits and other instruments related
thereto or to your employment with Variagenics, Inc. (including any of its
successors or assigns, the "Company") shall remain in full force and effect.
This first amendment to your Employment Agreement shall be referred to herein
as the "Amendment."
Effective December 13, 2001, your Employment Agreement is amended as
follows:
1. Paragraph 2 of the Terms & Conditions section of the Offer Letter is
revised by adding the following at the end thereto:
"Notwithstanding the foregoing, if your employment with the Company
is terminated by the Company at any time without "cause," you shall,
upon execution of a general release of claims with respect to the
Company, its officers, directors, employees and agents, receive
six (6) months of salary continuation at your then current base
salary, payable in accordance with the Company's customary payroll
practices. `Base salary' for these purposes is base compensation
paid to you without regard to payment of any bonuses or other forms
of compensation."
2. The Terms & Conditions section of the Offer Letter is further revised
by adding the following as a new Paragraph 10 to the end thereof:
"10. Vesting on a Change in Control.
(a) Upon the effective date of a Change in Control, 50% of the then
outstanding unvested options to purchase shares of common stock of
the Company held by you as of such date (whether granted to you
prior to or after execution of this Amendment) shall be
immediately vested and shall be otherwise exercisable in
accordance with the terms of the stock option agreement pursuant
to which they were granted. The remaining 50% of the then
outstanding unvested options shall vest monthly in six equal
installments beginning with the first day of the month following
the effective date of the Change in Control; provided that, all
then remaining outstanding unvested options shall immediately 100%
vest if you are terminated by the Company without Cause after the
effective date of the Change in Control but prior to the end of
the six month period following such Change in Control.
(b) CHANGE IN CONTROL DEFINED. A `Change in Control' shall be deemed
to have occurred if (i) there is a sale or transfer of all or
substantially all of the assets of the Company in one or a series
of transactions; (ii) any `person,' as such term is used in
Section 13(d) of the Securities Exchange Act of 1934, as amended
(or any successor provision) (the `Exchange Act'), together with
all `affiliates' and `associates' (as such terms are defined in
Rule 12b-2 under the Exchange Act or any successor provision) of
such person, shall become the `beneficial owner' or `beneficial
owners' (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act or any successor provision), directly or indirectly, of
securities of the Company representing in the aggregate thirty
percent (30%) or more of either (1) the then outstanding shares of
common stock of the Company or (2) the combined voting power of
all then outstanding securities of the Company having the right
under ordinary circumstances to vote in an election of the Board
of Directors of the Company (hereafter referred to as an
`Acquisition'); PROVIDED, that, notwithstanding the foregoing, an
Acquisition shall not be deemed to have occurred for purposes of
this clause (ii) solely as the result of an acquisition of
securities by the Company which, by reducing the number of shares
of common stock or other voting securities outstanding, increases
(x) the proportionate number of shares of common stock
beneficially owned by any person to thirty percent (30%) or more
of the common stock then outstanding or (y) the proportionate
voting power represented by the voting securities beneficially
owned by any person to thirty percent (30%) or more of the
combined voting power of all then outstanding voting securities;
or (iii) there is a merger or consolidation between the Company
and an entity other than a subsidiary of the Company in which the
Company is not the continuing or surviving corporation and
pursuant to which the holders of the Company's voting stock
immediately prior to such merger or consolidation would not be the
holders immediately after such merger or consolidation of at least
50% of the voting stock of the continuing or surviving
corporation.
(c) All agreements between you and the Company governing the grant to
you of stock options shall be and hereby are amended to the extent
necessary to effectuate the provisions of this Agreement. You
acknowledge that the acceleration of Incentive Stock Options
("ISOs") granted pursuant to section 422 of the Internal Revenue
Code (the "Code") may cause certain of those options to fail to
satisfy section 422(d) of the Code, which may result in less
favorable individual tax treatment on such option. You understand
and acknowledge such result and agree to the conversion, as
necessary, of ISOs to non-qualified stock options as a
precondition to the acceleration of the option grant described
herein. ISOs with the least difference between exercise price and
fair market value on the date of the conversion shall be converted
to non-qualified options first. In all other respects all such
agreements between you and the Company shall remain in full force
and effect, and shall be administered in accordance with their
terms.
(d) Notwithstanding anything provided herein, if you are considered to
be a `disqualified individual' (as defined in Section 280G of the
Code), and the acceleration of vesting of options together with
any other payments which you have a right to receive from the
Company (or its affiliates and subsidiaries) in the event of a
Change in Control
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(collectively the "Severance Compensation"), would constitute a
"parachute payment" (as defined in Section 280G(b)(2) of the Code),
the Severance Compensation shall be reduced. The reduction shall
be in an amount so that the present value of the total amount
received by you from the Company will be one dollar ($1.00) less
than three (3) times the Base Amount (as defined in Section 280G
of the Code) so that no portion of the amounts received by you
shall be subject to the excise tax imposed by Section 4999 of the
Code (excise tax).
The determination as to whether any reduction in Severance
Compensation is necessary and the amount of any such reduction
shall be made by the Company's independent public accountants (the
"Accounting Firm") which shall provide detailed supporting
calculations both to the Company and to you within fifteen (15)
business days of the date payment is made. Any such determination
by the Accounting Firm shall be conclusive and binding upon you
and the Company. You shall determine which part of the Severance
Compensation shall be eliminated or reduced consistent with the
requirements of this section and you will notify the Company
promptly in writing; PROVIDED, that if you do not make such a
determination within ten (10) business days of the receipt of the
calculations made by the Accounting Firm, the Company shall
determine which part of the Severance Compensation shall be
eliminated or reduced consistent with the requirements of this
section and shall notify you promptly in writing of such election.
If through error or otherwise you should receive payments under
this Agreement, together with other payments you have the right to
receive from the Company, in excess of one dollar ($1.00) less
than three times your Base Amount, you shall immediately repay the
excess to the Company upon notification that an overpayment has
been made."
It is understood and agreed that this Amendment shall constitute a
binding agreement upon execution by both parties, and represents (along with
the Offer Letter) the entire agreement and understanding between us with
respect to the subject matter contained herein. If the terms of this
Amendment are acceptable to you, please sign where indicated below. This
Amendment is executed as an instrument under seal as of the date indicated
below.
VARIAGENICS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Acknowledged and Agreed:
/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
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