EXHIBIT 10.2
___________ ___, 19__
Xxxxxx X. Xxxxx, Ph.D.
0000 Xx. Xxxx Xxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Re: Side letter regarding employment agreement
Dear Sir:
Reference is hereby made to (a) that certain Employment Agreement (the
"Employment Agreement"), dated as of May 1, 1998, by and between TheraTech,
Inc., a Delaware corporation ("Employer"), and Xxxxxx X. Xxxxx ("Employee"), and
(b) that certain Agreement and Plan of Merger (the "Merger Agreement"), dated as
of October 23, 1998, by and among Employer, Xxxxxx Pharmaceuticals, Inc., a
Nevada corporation ("Xxxxxx"), and Jazz Merger Corp., a Delaware corporation
("Xxxxxx Sub"), pursuant to which Employer will merge with and into Xxxxxx Sub
(the "Merger"), with Employer surviving the Merger.
WHEREAS, as a condition to the willingness of Xxxxxx to enter into the
Merger Agreement, Xxxxxx has required that Employee agree, and in order to
induce Xxxxxx to enter into the Merger Agreement, Employee has agreed, to enter
into this side letter which shall clarify and amend certain provisions of the
Employment Agreement ("Amendment"); and
WHEREAS, all capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Employment Agreement; and
NOW THEREFORE, BE IT RESOLVED, THAT, in consideration of the foregoing, and
the consummation of the Merger by Xxxxxx, and for other good and valuable
consideration, the receipt and sufficiency of which Employee hereby
acknowledges, Employee, Employer and Xxxxxx agree as follows:
1. Status of Employment Agreement. Except as specifically set forth
herein, the Employment Agreement and each of the appendices attached thereto
shall remain in full force and effect and shall not be waived, modified,
superseded or otherwise affected by this Amendment. This Amendment is not to be
construed as a release, waiver or modification of any of the terms, conditions,
representations, warranties, covenants, rights or remedies set forth in the
Employment Agreement, except as specifically set forth herein.
2. Amendments to the Employment Agreement.
2.1 Section 1.1 of the Employment Agreement. The first sentence of
Section 1.1 of the Employment Agreement is hereby deleted in its entirety and
replaced with the following:
"Employer hereby agrees to employ Employee as the Chairman, Chief Executive
Officer and President of Employer, with such duties as are assigned to him
by the Chief Executive Officer ("CEO") of Xxxxxx Pharmaceuticals, Inc.
("Xxxxxx"), the parent of Employer. Employee shall also hold the title of
Senior Vice President of Xxxxxx."
2.2 CEO. Employee acknowledges that he reports solely to the CEO. As a
result, the Employment Agreement is hereby amended so that
references to the term "Board" contained in the Employment Agreement
are deemed to refer to the "CEO."
2.3 Xxxxxx. Employee agrees to work to maximize the profitability and
business of Xxxxxx and its subsidiaries (including, without
limitation, the profitability and business of Employer) and agrees
to perform such duties from time to time as are requested by the
CEO, notwithstanding any inconsistent terms contained
in the Employment Agreement. In performing his duties under the
Employment Agreement, Employee agrees to comply with all written
policies and procedures of Xxxxxx.
2.4 Section 3.1 of the Employment Agreement. The first sentence of
Section 3.1 of the Employment Agreement is hereby deleted in its
entirety and replaced with the following sentence:
"During the term of this Agreement, Employer shall pay to Employee for
services which Employee may render to Employer the annual salary set forth
on Appendix A attached hereto, which may be increased by the Board of
Directors of Employer in its sole discretion."
2.5 Section 3.3 of the Employment Agreement. Section 3.3 of the
Employment Agreement is hereby deleted in its entirety and replaced with the
following:
"Employee's Base Salary, Bonus, and Benefits are set forth in Appendix "A"
to this Agreement."
2.6 Appendix A of the Employment Agreement. Section C of Appendix A of
the Employment Agreement is hereby deleted in its entirety and replaced with the
following:
"C. Options. Upon consummation of the Merger, Employee shall receive
eighty thousand (80,000) options to purchase common stock, $0.0033 par
value per share, of Xxxxxx ("Xxxxxx Common"). On each of the first, second
and third year anniversaries of the Merger, Employee shall receive ten
thousand (10,000) options to purchase Xxxxxx Common so long as Employee is
an employee of Xxxxxx or one of its majority-owned subsidiaries upon the
date of grant. Employee may receive additional option grants as determined
in the sole discretion of Xxxxxx'x Board of Directors. All options will be
granted pursuant to the terms of Xxxxxx'x then existing employee stock
option plan. Options will be granted at the fair market value of the
underlying shares upon the date of grant. Such options shall vest over a
five year period, with the first twenty percent (20%) vesting on the
anniversary date of the grant and 20% on each anniversary thereafter."
3. Severance Benefits. Pursuant to Section 6.4 of the Employment
Agreement, Employee hereby waives his right to the severance benefits listed in
Appendix B of the Employment Agreement as a result of the Merger, but otherwise
retains his rights to severance under this Agreement, in connection with the
occurrence of other events that happen after the date hereof.
4. Merger. This Amendment shall be null and void ab initio in the event
the Merger is not consummated on or before March 31, 1999.
Please acknowledge your agreement by signing and returning the enclosed
duplicate of this letter.
Very truly yours,
THERATECH, INC.
By:________________________________
Name:_______________________________
Title:___________________________________
XXXXXX PHARMACEUTICALS, INC.
By:________________________________
Name:_______________________________
Title:_________________________
Agreed and Acknowledged:
Xxxxxx X. Xxxxx, Ph.D.
_________________________
Date:_____________________
