Exhibit 10.16
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment (the "Amendment"), effective as of October 20, 2003 (the
"Effective Date"), to the employment agreement executed on April 12, 2002 (the
"Employment Agreement") by and between Eyetech Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), and Xxxxxxx X. Xxxxxx, M.D., 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 twelve (12) 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 twelve (12)
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 Amendment, "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 Boston,
Massachusetts, 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 fifteen (15) months of his then Base
Salary, less applicable state and federal
withholdings; (ii) Executive's unvested Equity
Rights, as defined below, shall become vested and
exercisable as set forth in Section 1.3(b); and (iii)
for a period of fifteen (15) 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
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this Section 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 any 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
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Company (a "Business Combination"), unless,
immediately 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 to 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, as
defined below, shall become vested and immediately
exercisable; and
(b) If Executive's employment terminates as a result of the
circumstances
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outlined in Section 1.2(c), and provided that Executive
executes an effective general release as required by Section
1.2(c), 100% of the Executive's unvested Equity Rights, as
defined below, shall then become vested and immediately
exercisable.
(c) For purposes of this Agreement, the term "Equity Rights" shall
mean only those equity rights, including but not limited to,
stock options, which are granted to the Executive on or after
the Effective Date. Accordingly, equity rights which have
previously been granted to the Executive are unaffected by
this Amendment.
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
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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
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 written above.
EYETECH PHARMACEUTICALS, INC.
By: /s/ XXXXX XXXXXXXXXX
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Name: Xxxxx Xxxxxxxxxx
Title: CFO
EXECUTIVE
/s/ XXXXXXX X. XXXXXX
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Name: Xxxxxxx X. Xxxxxx, M.D.
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