EXHIBIT 10.4
AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (this "AMENDMENT") made this
27th day of May, 2004 by and between XXXXXX DRUG CO., INC., a New York
corporation (the "CORPORATION"), with offices at 000 X. Xxxxx Xxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxxx 00000 and XXXXXX X. XXXXXXX, residing at 000 Xxxxx Xxxx
Xxxxxx, Xxxxx, Xxxxxxxxxxxx 00000 (the "EMPLOYEE").
R E C I T A L S
A. The Corporation and the Employee executed an employment agreement
dated as of August 26, 2003 (the " EMPLOYMENT AGREEMENT").
B. Pursuant to Section 5(b) of the Employment Agreement, the
Corporation committed to issue to the Employee a stock option
exercisable for up to 5,500,000 shares of the Corporation's common
stock, $.01 par value per share (the "ORIGINAL OPTION COMMITMENT").
C. The Corporation and the Employee now desire to amend the Employment
Agreement as provided herein.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
herein contained, the parties agree as follows:
1. Section 5(b) of the Employment Agreement is hereby deleted in its
entirety and the following is inserted in its place:
"(b) Stock Options. The Company hereby agrees to issue and deliver a
stock option grant to the Employee to purchase 8,750,000 shares of
the Corporation's common stock, $.01 par value per share (the
"OPTION") at an exercise price of $0.13 per share. The shares
subject to the Option shall vest and be exercisable as follows: (i)
2,750,000 Option shares on June 30, 2004; and (ii) the balance at
the rate of 250,000 Option shares on the last day of each calendar
month (the first monthly vesting period to be satisfied on July 31,
2004) until fully vested. The Option shall have a ten (10) year
term, subject to earlier termination as set forth in Section 7, upon
the termination of the Employee's employment with the Corporation
and shall be evidenced by the Non-Qualified Stock Option Agreement
in the form of Exhibit A hereto. The Employee and the Corporation
agree that the Option will be issued pursuant to the Corporation's
1998 Stock Option Plan, as amended as described below, and the
Option shares shall be promptly and duly registered under a
registration statement on Form S-8 filed with the Securities and
Exchange Commission. The Employee will also be eligible in the
future to receive annual option or stock grants based on performance
or on achievement of milestones as determined by the Board of
Directors or the Compensation Committee.
Notwithstanding the foregoing and anything to the contrary
contained in this Amendment, the Employee hereby agrees that the
grant of the Option and the issuance of the Option shares are
contingent upon approval by the shareholders of the Corporation at
the next meeting of shareholders of amendments to the Corporation's
1998 Stock Option Plan (i) to increase the number of shares
available for grants of options and stock under the 1998 Stock
Option Plan, (ii) to permit the grant of non-qualified stock options
(including the Option) having an exercise price per share less than
the fair market value of the common stock of the Corporation on the
date of issuance, and (iii) to provide for a limit of 8,750,000
option awards that may be granted to one individual in any calendar
year. The Corporation hereby agrees to recommend such matter to the
shareholders and to use its commercially reasonable best efforts to
hold such meeting as soon as reasonably practicable, but in any
event by October 31, 2004. Following receipt of such shareholder
approval, the Corporation shall promptly (i) confirm in writing that
the contingency described in this paragraph has been satisfied and
the Option is effective, (ii) issue a replacement Option Agreement,
omitting Section 6 thereof relating to such contingency, and (iii)
confirm in writing that the Option shares have been duly registered
in accordance with this Section 5(b)."
2. The Corporation and the Employee agree that effective as of the date of
this Amendment, the Original Option Commitment shall terminate and be of no
further legal force or effect.
3. Section 6 of the Employment Agreement is hereby deleted in its entirety
and the following is inserted in its place:
"6. Vacation. The Employee shall be entitled to four (4) weeks of
vacation during each year of the Term, to be taken at a time or
times mutually agreed upon by the Employee and the Corporation. The
Employee may carry over to the following year any unused vacation
from the immediately preceding year; provided, however, that not
more than four (4) weeks of such vacation time may be carried over
to the year immediately following the year in which such vacation
was to be taken, unless otherwise required by applicable law.
Without limiting the foregoing, the Corporation agrees that Employee
may carry over all of his unused 2003 vacation time into 2004."
4. Section 7.5(vi) of the Employment Agreement is hereby deleted in its
entirety and the following is inserted in its place:
"(vi) the failure of the shareholders of the Corporation, by
October 31, 2004, to approve those amendments to the Corporation's
1998 Stock Option Plan described in Section 5(b) above or, after
such approval, the failure by the Corporation to comply with the
other provisions of Section 5(b);"
5. Notwithstanding anything to the contrary contained in the Employment
Agreement or the Option, the Employee agrees that the Corporation's sale of
substantially all of its assets used in the operation of its former Congers, New
York facilities does not constitute a "Change of Control" as such term is
defined in the Employment Agreement.
6. The Corporation shall reimburse the Employee for the reasonable legal
fees and expenses incurred by the Employee for review and negotiation of this
Amendment on or before thirty (30) days following the date of execution of this
Amendment.
7. Except as expressly amended by this Amendment, the Employment Agreement
remains in full force and effect. Capitalized terms used herein shall have the
same meaning as in the Employment Agreement unless otherwise defined herein.
This Amendment shall be governed and construed and enforced in accordance with
the local laws of the State of New York applicable to agreements made and to be
performed entirely in New York.
8. This Amendment may be executed in one or more facsimile or original
counterparts, each of which shall be deemed an original, but all of which taken
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
ATTEST: XXXXXX DRUG CO., INC.
___________________ By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Xxxxx X. Xxxxxxx,
Senior Vice President and
Chief Financial Officer
WITNESS: EMPLOYEE
By: /s/ Xxxxxx X. Xxxxxxx
__________________ -----------------------------
Xxxxxx X. Xxxxxxx
