REVISED AND RESTATED SECOND AMENDMENT
TO EMPLOYMENT AGREEMENT
This Revised and Restated Second Amendment to the Employment Agreement
(the "Amendment") by and between Electropharmacology, Inc. (the "Company") and
Xxxx Xxx, Ph.D. (the "Executive"), entered into on November 11, 1996, as amended
by Board of Director's resolution on June 24, 1997 and further amended on
January 1, 1998 ("Second Amendment") (the "Employment Agreement") is made and
entered into as of this 21st day of April 1998;
WHEREAS, the Company and the Executive desire to revise and restate the
Second Amendment to the Employment Agreement in order to correct certain
scrivener errors in said Amendment so that the Second Amendment correctly
reflects the parties' actual agreement with respect to the grant date, the
vesting of certain option grants and the payment of certain sums to Executive
upon a Change in Control (as defined hereinafter):
NOW THEREFORE, in consideration of the covenants set forth herein, the
parties hereto agree that the Second Amendment shall be revised and restated as
follows:
1. Paragraph 4(b) Compensation shall be replaced in its entirety as
follows:
For the period commending on January 1, 1998 and ending December 31,
1999, the Executive's base salary shall be reduced by one third (33
1/3%) (the portion of the salary to be so reduced is hereinafter
referred to as the "Foregone Salary"), so that effective January 1,
1998, the Executive's base salary shall be deemed to be $127,308 on an
annualized basis. Each January lst thereafter, for the calendar year
then commencing, the Executive's base salary, on an annualized basis,
shall be not less than two thirds the product of $190,962 per year
multiplied by the percentage obtained by dividing (i) the Consumer
Price Index for All Urban Consumers -- U.S. City Average (1982-84 =
100) (or, if publication of that index is terminated, any substantially
equivalent successor thereto) for the month of July in the fiscal year
of the Company immediately preceding such January 1st, as published by
the Bureau of Labor Statistics of the United States Department of
Labor; by (ii) said Consumer Price Index for the month of July 1998
provided that the Consumer Price Index adjustment shall in no case be
greater than 6% or less than 3% in any year. The Executive's base
salary may be increased from time to time by the Board, but in no event
shall the Executive's base salary for any calendar year be less than
the annualized base salary for 1998 plus the then applicable Consumer
Price Index adjustment provided by the preceding sentence. During the
term of the Agreement, Executive's salary shall be reviewed at least
annually by the Board to determine whether an increase beyond the
Executive's is warranted and appropriate. Except as set forth in this
Section 4, such compensation shall be payable at the times and in the
manner consistent with the Company's general policies regarding
compensation of executive employees, but in no event less frequently
than bi-monthly.
In lieu of the Foregone Salary (for 1998, $63,654), on January 3, 1998
and each January 3rd thereafter, the Company shall grant to the
Executive an option to purchase that number of shares of the Company's
common stock equal to the Foregone Salary divided by the last reported
closing sales price of the Company's common stock for the day prior to
the date of such grant (the "Grant Date Market Value") as reported in
the OTC Bulletin Board. Each such option shall be exercisable with
respect to 50% of the shares covered thereby on January 3, 1998, or
such later year as applicable, and with respect to the
1
remaining 50% of the shares covered thereby on July 3, 1998 or such
later year as applicable. The exercise price of the options shall be
the Grant Date Market Value. Notwithstanding the foregoing, in the
event the Executive's employment hereunder is terminated by the Company
other than for Cause (as defined herein) or by the Executive by
Permitted Resignation (as defined herein) prior to the end of the term
of this Agreement, such options shall immediately vest and become
exercisable in accordance with Section 11(c) hereof. If the Executive
is terminated for Cause (as defined herein) all stock options, whether
or not vested, shall immediately terminate without any payment made
therefor. If the Executive resigns (other than by Permitted
Resignation), all unvested stock options shall immediately terminate
without any payment therefor. Upon the Employee's death or disability
(as defined herein), all unvested stock options that are to vest on the
next vesting date of this subparagraph shall immediately vest and
become exercisable and all other unvested stock options shall
immediately terminate without any payment made therefor. In the event
of a Change of Control of the Company as defined in the Company's 1993
Stock Option Plan, as amended, the stock options granted under this
subparagraph shall become immediately exercisable in full and the
Executive will receive a cash payment equal to the aggregate exercise
price of such options in order to enable Executive to exercise said
options.
2. Paragraph 5. Executive Benefits, subparagraph (c) is replaced in its
entirety as follows:
In lieu of the automobile allowance in the amount of $500 originally
provided for in the Agreement, effective February 1, 1998, the Company
will grant to the Executive an option to purchase that number of shares
of the Company's common stock equal to $6,000 divided by the Grant Date
Market Value on February 1, 1998. Each such option shall be exercisable
immediately on and after the date of grant, with an exercise price of
the Grant Date Market Value.
3. To the extent not superseded herein, all other provisions of the
Employment Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this agreement as of the
day and year first above written.
_____/s/Arup Sen____________________
Xxxx Xxx
ELECTROPHARMACOLOGY, INC.
By:____/s/Xxxxx Saloff______________
Name:__David Saloff _______________
Title:___Executive VP_______________
2
