Exhibit 10.11
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment (the "Amendment"), effective as of August 25, 2003 (the
"Effective Date"), to the employment agreement executed on April 12, 2000 (the
"Employment Agreement") by and between Eyetech Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), and Xxxxx Xxxxx, an individual (the "Executive").
WITNESSETH:
WHEREAS, the Company and the Executive entered into the Employment
Agreement; and
WHEREAS, the Company and the Executive desire to amend the Employment
Agreement to reflect changes which the parties hereby agree to in connection
with the Company's continued employment of the Executive;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. Amendments - The Employment Agreement shall be amended to include the
following provisions.
1.1 Term. This Agreement will remain in force and effect throughout the
term of the Executive's employment with the Company. Executive's
employment with the Company may be terminated by either the Company
or the Executive at any time subject only to the severance
provisions contained in section 1.2 hereof.
1.2 Termination and Severance. The Severance payments provided in this
Amendment shall be the sole payments and benefits for which the
Executive shall be eligible at the conclusion of his employment with
the Company for any reason and shall supersede any and all prior
agreements or arrangements for post-termination benefits.
(a) In the event Executive's employment terminates as a result of
a voluntary termination by Executive for Good Reason, or a
termination by the Company without Cause, upon execution of an
effective general release of all claims against the Company,
its employees, officers, directors and agents, in a form
reasonably acceptable to the Company: (i) Executive shall
receive eighteen (18) monthly payments each equal in amount to
one-twelfth (1/12th) of Executive's then base salary, less
applicable state and federal withholdings; and (ii) for a
period of eighteen (18) months (or until comparable benefits
coverage becomes available to Executive, if sooner), the
Company shall reimburse Executive (or pay him directly, at the
Company's option) the costs associated with the continuation
of Executive's and his dependents' medical and dental benefits
under the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ("COBRA") as in effect immediately prior to
Executive's termination of
employment.
(b) For purposes of this Agreement, "Good Reason" means that any
of the following are undertaken without Executive's express
written consent: (i) the assignment to Executive of any duties
or responsibilities which result in any material diminution or
adverse change of Executive's position, status or
circumstances of employment; (ii) the taking of any action by
the Company which would adversely affect Executive's
participation in, or reduce Executive's benefits under, the
Company's benefit plans (including equity benefits) as of the
time this Amendment is executed; (iii) a relocation of
Executive's principal office to a location more than
thirty-five (35) miles from Manhattan, New York, except for
required travel by Executive on the Company's business; or
(iv) any failure by the Company to obtain the assumption of
the Employment Agreement by any successor or assign of the
Company. For purposes of this Amendment, "Cause" means: (V) an
intentional action or intentional failure to act by Executive
which was performed in bad faith and to the material detriment
of the Company; (W) Executive intentionally refuses or
intentionally fails to act in accordance with any lawful and
proper direction or order of the Board; (X) Executive
willfully and habitually neglects the duties of his
employment; or (Z) Executive is convicted of a felony crime
involving moral turpitude; provided, however, that in the
event that any of the foregoing events under clauses (V), (W),
(X) or (Y) above is capable of being cured, the Company shall
provide written notice to Executive describing the nature of
such event and Executive shall thereafter have ten (10)
business days to cure such event.
(c) In the event Executive's employment terminates as a result of
termination of Executive by the Company or its successor
without Cause, or by the Executive voluntarily for Good
Reason, within the three (3) months before or twelve (12)
months following a Change in Control Event, upon execution of
an effective general release of all claims against the
Company, its employees, officers, directors and agents, in a
form reasonably acceptable to the Company: (i) Executive shall
receive, within fifteen (15) days of such termination, one
lump sum payment equivalent to twenty-four (24) months of his
then Base Salary, less applicable state and federal
withholdings; (ii) Executive's unvested equity rights shall
become vested and exercisable as set forth in Section 1.3(b);
and (iii) for a period of eighteen (18) months (or until
comparable benefits coverage becomes available to Executive,
if sooner), the Company shall reimburse Executive (or pay him
directly at the Company's option) the costs associated with
the continuation of Executive's and his dependents' medical
and dental benefits under COBRA as in effect immediately prior
to Executive's termination of employment. For purposes of this
paragraph, Executive's "Base Salary" shall be the greater of
the amount in effect either immediately prior to the Change in
Control Event or the termination date of Executive's
employment. The benefits provided under this Section
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1.2(c) shall be in lieu of any benefits the Executive would
have otherwise been entitled to pursuant to Section 1.2(a) of
this Agreement.
(d) For purposes of this Amendment, a "Change in Control Event"
shall mean:
(i) The acquisition by an individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) (a "Person") of beneficial ownership
of any capital stock of the Company if, after such
acquisition, such Person beneficially owns (within the
meaning of Rule 13d-3 promulgated under the Exchange
Act) 50% or more of either (x) the then-outstanding
shares of common stock of the Company (the "Outstanding
Company Common Stock") or (y) the combined voting power
of the then-outstanding securities of the Company
entitled to vote generally in the election of directors
(the "Outstanding Company Voting Securities"); provided
however, that for purposes of this subsection (i), the
following acquisitions shall not constitute a Change in
Control Event: (A) any acquisition directly from the
Company (excluding an acquisition pursuant to the
exercise, conversion or exchange of any security
exercisable for, convertible into or exchangeable for
common stock or voting securities of the Company, unless
the Person exercising, converting or exchanging such
security acquired such security directly from the
Company or an underwriter or agent of the Company), (B)
any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (C) any
acquisition by an corporation pursuant to a Business
Combination (as defined below) which complies with
clauses (x) and (y) of subsection (iii) of this
definition; or
(ii) Such time as the Continuing Directors (as defined below)
do not constitute a majority of the Board (or, if
applicable, the Board of Directors of a successor
corporation to the Company), where the term "Continuing
Director" means at any date a member of the Board (x)
who was a member of the Board on the date of the initial
adoption of this Amendment by the Board or (y) who was
nominated or elected subsequent to such date by at least
a majority of the directors who were Continuing
Directors at the time of such nomination or election or
whose election to the Board was recommended or endorsed
by at least a majority of the directors who were
Continuing Directors at the time of such nomination or
election; or
(iii) The consummation of a merger, consolidation,
reorganization, recapitalization or share exchange
involving the Company or a sale or other disposition of
all or substantially all of the assets of the Company
(a "Business Combination"), unless, immediately
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following such Business Combination, each of the
following two conditions is satisfied: (x) all or
substantially all of the individuals and entities who
were the beneficial owners of the Outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50%
of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding securities
entitled to vote generally in the election of directors,
respectively, of the resulting or acquiring corporation
or other form of entity in such Business Combination
(which shall include, without limitation, a corporation
which as a result of such transaction owns the Company
or substantially all of the Company's assets either
directly or through one or more subsidiaries) (such
resulting or acquiring corporation or entity is referred
to herein as the "Acquiring Corporation") in
substantially the same proportions as their ownership of
the Outstanding Company Common Stock and Outstanding
Company Voting Securities, respectively, immediately
prior to such Business Combination and (y) no Person
(excluding the Acquiring Corporation or any employee
benefit plan (or related trust) maintained or sponsored
by the Company or by the Acquiring Corporation)
beneficially owns, directly or indirectly, 30% or more
of the then-outstanding shares of common stock of the
Acquiring Corporation, or of the combined voting power
of the then-outstanding securities of such corporation
entitled to vote generally in the election of directors
(except of the extent that such ownership existed prior
to the Business Combination).
(iv) Notwithstanding the foregoing, a Change in Control Event
will not be deemed to have occurred in the case of a
Management Buy Out. A "Management Buy Out" is any event
which would otherwise be deemed a "Change in Control
Event", in which the Executive, directly or indirectly
(as a beneficial owner) acquires equity securities,
including any securities convertible into or
exchangeable for equity securities, of the Company or
the Acquiring Corporation in connection with any Change
in Control Event.
1.3 Treatment of Equity Upon Change in Control Event. Upon a Change in Control
Event, as defined in Section 1.2(d):
(a) 50% of all of the Executive's unvested equity rights shall become
vested and immediately exercisable; and
(b) If Executive's employment terminates as result of the circumstances
outlined in Section 1.2(c), and provided that Executive executes an
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effective general release as required by Section 1.2(c), 100% of the
Executive's unvested equity rights shall then become vested and
immediately exercisable.
1.4 Golden Parachute Taxes. Notwithstanding anything contained in this
Amendment to the contrary, to the extent that payments and benefits
provided under this Amendment to Executive and benefits provided to, or
for the benefit of, Executive under any other Company plan or agreement
(such payments or benefits are collectively referred to as the "Payments")
would be subject to the excise tax (the "Excise Tax") imposed under
Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), the Payments shall be reduced (but not below zero) to the extent
necessary so that no Payment to be made or benefit to be provided to the
Executive shall be subject to the Excise Tax, but only if, by reason of
such reduction, the net after-tax benefit received by Executive shall
exceed the net after-tax benefit received by him if no such reduction was
made. For purposes of this Section 1.4, "net after-tax benefit" shall mean
(a) the Payments which Executive receives or is then entitled to receive
from the Company that would constitute "parachute payments" within the
meaning of Section 280G of the Code, less (b) the amount of all federal,
state and local income taxes payable with respect to the foregoing
calculated at the maximum marginal income tax rate for each year in which
the foregoing shall be paid Executive (based on the rate in effect for
such year as set forth in the Code as in effect at the time of the first
payment of the foregoing), less (c) the amount of excise taxes imposed
with respect to the payments and benefits described in (a) above by
Section 4999 of the Code. The foregoing determination will be made by a
nationally recognized accounting firm (the "Accounting Firm") selected by
the Company (which may be, but will not be required to be, the Company's
independent auditors). The Company will direct the Accounting Firm to
submit its determination and detailed supporting calculations to both the
Executive and the Company within fifteen (15) days after the date of
termination of his employment. If the Accounting Firm determines that such
reduction is required by this Section 1.4, the Executive, in his sole and
absolute discretion, may determine which Payments shall be reduced to the
extent necessary so that no portion thereof shall be subject to the excise
tax imposed by Section 4999 of the Code, and the Company shall pay such
reduced amount to him. The fees and expenses of the Accounting Firm for
its services in connection with the determinations and calculations
contemplated by this Section 1.4 will be borne by the Company.
1.5 No Duty to Seek Employment. Executive and the Company acknowledge and
agree that nothing contained in this Amendment shall be construed as
requiring Executive to seek or accept alternative or replacement
employment in the event of his termination of employment by the Company
for any reason, and no payment or benefit payable hereunder shall be
conditioned on Executive's seeking or accepting such alternative or
replacement employment.
2. Reference to and Effect on the Employment Agreement
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2.1 On and after the date hereof, each reference to "this Agreement,"
"hereunder," "hereof," "herein," or words of like import shall mean
and be a reference to the Employment Agreement as amended hereby. No
reference to this Amendment need be made in any instrument or
document at any time referring to the Employment Agreement. A
reference to the Employment Agreement in any such instrument or
document shall be deemed to be a reference to the Employment
Agreement as amended hereby.
2.2 Except as amended and/or superseded by this Amendment, the
provisions of the Employment Agreement shall remain in full force
and effect.
3. Governing Law
The Employment Agreement shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to principles
of conflicts of laws.
4. Counterparts
This Amendment may be executed in two counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
date first above written.
EYETECH PHARMACEUTICALS, INC.
By: /s/ XXXXXXX XXXXXXXXXX
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Name: Xxxxxxx Xxxxxxxxxx
Title: Senior Vice-President/General Counsel
EXECUTIVE
/s/ XXXXX X. XXXXX
-----------------------------
Name:
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