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Exhibit 10.26
August 23, 1999
Xx. Xxxxx X. Xxxxxxxx
Vice President Agriculture
Demegen, Inc.
00000 Xxxxxxx Xx.
Xxxxxxx, XX 00000
Dear Xxx:
Enclosed is the summary and calculations relating to your Compensation Release
Agreement dated September 17, 1997 and Employment Agreement dated August 1,
1998.
Please review and sign one copy of this letter and return to me if you are in
agreement with the structure and payment terms.
I will have Xxxx Xxxxxxxxxx advise you separately concerning your ability to
trade your Demegen stock as you transcend from being an officer of the
corporation.
If you have any questions, please do not hesitate to call me.
Sincerely,
/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
Chief Financial Officer
Agree to the Attached Summary and Schedule:
/s/ Xxxxx X. Xxxxxxxx 8/27/99
--------------------------------
Xxxxx X. Xxxxxxxx
Cc: XX Xxxxxxx
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DEMEGEN, INC.
PAYMENT OF XXXXX XXXXXXXX'X DEFERRED COMPENSATION
Amounts owing to Xxxxx Xxxxxxxx:
Per Compensation Release Agreement dated 9/17/97:
$3,500 per month for 48 months beginning 30 days after employee is no longer a
full time employee of Demegen Employee has option to convert any unpaid amounts
into restricted shares of Demegen stock @ $1 per share Payments will begin
3/6/00, after severance payments of $10,000 made 1/6/00 and 2/6/00
Per Employment Agreement dated 8/1/98:
Term - 8/1/98 - 8/31/00
Base Compensation - $60,000 per year
Deferred Compensation - $5,000 per month from the date of the agreement until
the date of termination. Payable 30 days after last payment under
Compensation Release Agreement in equal monthly installments of $3,500 per
month until paid in full. Deferred compensation will accrue interest @ 6% per
annum on unpaid balance.
Demegen has option to pre-pay unpaid portion of deferred compensation in whole
or part any time after August 31, 2000
Termination without cause upon 120 days written notice, employee then to receive
salary ($10,000 per month) for two months after date of termination, along
with his Deferred Compensation and Sick Leave benefits.
Termination date 12/6/99 therefore $2,000 for month of December 1999 paid first
week of January 2000
Health Benefits paid through 12/31/99
All other expenses paid through 11/30/99
Xx. Xxxxxxxx has options to purchase 200,000 shares of Demegen common stock @
$0.875 per share. The option expires 10/2/01
Xx.Xxxxxxxx shall receive a cash payment of $25,000 on January 15 of the year
following the fiscal year in which Demegen shall have received an aggregate
of at least $3,000,000 in the form of license and/or royalty fees. Xx.
Xxxxxxxx has right to convert any or all of payment into Restricted Shares of
Demegen stock @ $1 per share.
Xx. Xxxxxxxx has 2 weeks of remaining vacation which he will take before 12/6/99
Analysis:
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Begin receiving $3,500 per month in accordance with Compensation Release
Agreement 3/6/00 Last payment under Compensation Release agreement will be
2/6/04
Begin receiving Deferred Compensation @ $3,500 per month 3/6/04
Last payment under Deferred Compensation agreement will be 8/6/07
Calculation of Deferred Compensation:
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Accrued 16 months of deferred compensation @ $5,000 per month plus interest or
$80,000 (8/1/98 - 11/30/99)
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Calculation of Deferred Compensation:
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Plus $24,000 for period 10/97 to 5/98 at $3,500 per month
Accrued 16 months of deferred compensation @ $3,500 per month (8/1/98 -
11/30/99)
Accrue interest on deferred interest from first deferral
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