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Exhibit 10.29
July 10, 1996
Xxxx X. Xxxxx, Ph.D.
000 Xxxxxxxx Xxxxx Xxxx
Xxxxxx Xxxxx, XX 00000
Dear Xxxx:
This letter will confirm certain matters related to your employment by Alteon
Inc. (the "Company") and shall constitute an amendment to your employment
agreement with the Company dated July 13, 1993 (the "Employment Agreement") and
certain other agreements you have with the Company as set forth below.
Your Term of Employment, as defined in Paragraph 1 of your Employment Agreement,
shall be extended through and including July 13, 1998.
Your Salary will be $262,500 per annum and you will be eligible to receive a
bonus, pursuant to the terms of Paragraph 3 of your Employment Agreement, in an
amount of up to $50,000 for each the Company's fiscal years ending December 31,
1996 and December 31, 1997.
On July 20, 1993, you executed a promissory note in favor of the Company in the
amount of $200,000 (the "Note") and a mortgage to secure payment of the Note
(the "Mortgage"). We agree that the Note and Mortgage are amended as follows:
(i) except as set forth below, interest on the Note will stop accruing as of
July 13, 1998, and (ii) the principal amount of the Note plus the amount of
interest accrued through and including July 13, 1998 shall be paid in three
equal installments on the following dates: July 13, 1998, July 13, 1999 and July
13, 2000, and (iii) in the event any of the three installment payments are not
made when due, interest shall accrue on such unpaid amount at a rate of one
percent (1%) per month until such payment is made. You recognize that you may
realize additional taxable income due to the imputed interest rules under the
Internal Revenue Code of 1986 for those tax years when payments on the Note are
deferred without the accrual of interest.
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Paragraph 19 of your Employment Agreement ("Notices") is amended to reflect your
current address as 000 Xxxxxxxx Xxxxx Xxxx, Xxxxxx Xxxxx, XX 00000 and the
current address of the Company as 000 Xxxxxxxx Xxxxx, Xxxxxx, XX 00000.
Subject to your acceptance of this letter, the Company shall award you options
to purchase 33,004 shares of the Company's common stock at an exercise price of
$11.375 (the fair market value of Alteon stock on May 2, 1996 when the
Compensation Committee of the Board approved this award). The options will be
subject to the terms and conditions of the Company's 1987 Stock Option Plan and
the Company's standard Incentive/Non-Qualified Stock Option Grant Agreement to
be executed after action of the Compensation Committee ("New Grant Agreement").
In addition, pursuant to your stock option grant agreements with the Company
dated May 14, 1993 and March 22, 1994, (the "Prior Grant Agreements") the
Company granted you options to purchase 300,000 and 67,000 shares, respectively,
of the Company's common stock. Under the Prior Grant Agreements, 167,000 shares
are subject to accelerated vesting upon the accomplishment of certain
performance related milestones. We agree that the Prior Grant Agreements are
hereby amended to reflect the following amendment and restatement of the
performance related milestones so that the 167,000 milestone related options
under the Prior Grant Agreements and the 33,004 options under the New Grant
Agreement (i.e., a total of 200,004 options) shall vest at a rate of 1/6 (or
options to purchase 33,334 shares) upon the accomplishment by you and the
Company of each of the following performance related milestones:
- submission of an IND by the Company to the Food and Drug Administration (the
"FDA") for a second generation A.G.E.-formation inhibitor;
- receipt by the Company of approval from the FDA for the initiation of Phase
I clinical trials on an A.G.E. cross-link breaker or a Glucose Lowering
Agent;
- receipt by the Company of approval from the FDA for the initiation of Phase
II clinical trials on a first Pimagedine (iNOS) indication;
- the day following any six month period beginning on or after July 16, 1996
during which the average of the daily closing prices of the Company's common
stock as reported on the Nasdaq National Market is at least 50% higher than
such price as reported on July 15, 1996;
- the submission by the Company of an NDA on Pimagedine for diabetic
complications (overt nephropathy), provided the NDA is submitted no later
than six months after the date on which all clinical centers have submitted
final data to the Company; and
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- the identification by the Company of a new Chief Scientific Officer on or
before March 1, 1998, provided that you have assisted the Company in
implementing such search.
As each milestone is accomplished, options shall vest in the following order of
priority: first, under the earlier Prior Grant Agreement, second, under the
later Prior Grant Agreement and, last, under the New Grant Agreement.
Notwithstanding the foregoing, all 200,004 milestone related options shall also
vest on a date 10 years after their respective grant dates, provided you are
then employed by the Company as set forth in the Grant Agreements.
Paragraph 21 of your Employment Agreement ("General") is amended to include your
July 12, 1993 Letter Agreement with the Company, the Note, the Mortgage, the
Prior Grant Agreements, the New Grant Agreement, and this letter as part of the
"entire agreement," with respect to the subject matter of your employment by the
Company under these agreements. Except as modified by this letter, the terms of
all the foregoing enumerated agreements shall remain in full force and effect.
If the foregoing is acceptable to you, please indicate your agreement by signing
and returning the enclosed copy of this letter.
Sincerely,
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Chairman and
Chief Executive Officer
ACCEPTED AND AGREED:
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, Ph.D.
