AMENDMENT TO KEY EMPLOYEE AGREEMENT
Exhibit 10.8
AMENDMENT TO
KEY EMPLOYEE AGREEMENT
KEY EMPLOYEE AGREEMENT
This Amendment, effective as of December ___, 2008 (“Effective Date”), is entered into by and
between Xxxxxx Pharmaceuticals, Inc., a corporation organized under the laws of the State of Nevada
(the “Company”), and [ ] (the “Executive”). This Amendment amends that certain Key
Employee Agreement entered into by and between the Company and Executive dated effective as of
[ ], as amended (the “Agreement”). This Amendment to the Agreement, together with the
Agreement, constitutes the entire Agreement as amended through the Effective Date.
1. Definition of Good Reason. Effective as of Effective Date, Section 6.5(a) of the
Agreement is hereby amended in its entirety to read as follows:
(a) Definition of “Good Reason.” For purposes of this Agreement, “Good Reason” shall mean any
one of the following events which occurs on or after the Effective Date: (i) after a Change of
Control (as defined in Section 7.1), any material reduction of the Executive’s then existing annual
base salary, except to the extent the annual base salary of all other executive officers at levels
similar to Executive is similarly reduced (provided such reduction does not exceed fifteen percent
(15%) of Executive’s then existing annual base salary); (ii) after a Change of Control, any
material reduction in the package of benefits and incentives, taken as a whole, provided to the
Executive (except that employee contributions may be raised to the extent of any cost increases
imposed by third parties) or any action by the Company which would materially and adversely affect
the Executive’s participation or reduce the Executive’s benefits under any such plans, except to
the extent that such benefits and incentives of all other executive officers at levels similar to
Executive are similarly reduced; (iii) after a Change of Control, any material diminution of the
Executive’s duties and responsibilities, taken as a whole, excluding for this purpose an isolated,
insubstantial or inadvertent action not taken in bad faith which is remedied by the Company
immediately after notice thereof is given by the Executive; (iv) after a Change of Control, a
requirement that the Executive materially relocate to a work site that would increase the
Executive’s one-way commute distance by more than thirty-five (35) miles from his then principal
residence, unless the Executive accepts such relocation opportunity; (v) any material breach by the
Company of its obligations under this Agreement; or (vi) any failure by the Company to obtain the
assumption of this Agreement by any successor or assign of the Company; provided, however, that the
Executive may not resign his employment for Good Reason unless: (A) the Executive has provided the
Company with at least 30 days prior written notice of the Executive’s intent to resign for Good
Reason (which notice must be provided within 60 days following the occurrence of the event(s)
purported to constitute Good Reason); and (B) the Company has not remedied the alleged violation(s)
within 30-days following its receipt of the written notice of intent to resign for Good Reason.
2. Release. Effective as of Effective Date, Section 9 of the Agreement is hereby
amended in its entirety to read as follows:
9. Release. In exchange for the severance compensation and benefits
provided under this Agreement to which Executive would not otherwise be entitled, Executive shall
enter into and execute a release substantially in the form attached hereto as Exhibit B, as may be
revised and updated as determined to be appropriate by the Company (the “Release”). Unless the
Release is executed by Executive following termination of employment, delivered to the Company
within fifty (50) days following the Executive’s termination of employment, and not subsequently
revoked, the Company shall not be required to provide any severance benefits pursuant to this
Agreement, any vesting of acceleration of Executive’s Awards as provided in this Agreement shall
not apply, and Executive’s Awards in such event shall vest or, in the case of stock options, be
exercisable following the date of Executive’s termination only to the extent provided under their
original terms in accordance with the applicable plan and Award agreements.
3. Section 409A. Effective as of Effective Date, Effective as of Effective Date, the
Agreement is hereby amended to incorporate a new Section therein to read in its entirety as
follows:
Notwithstanding anything contained in this Agreement to the contrary, to the maximum extent
permitted by applicable law, severance amounts payable pursuant to this Agreement shall be made in
reliance upon Treas. Reg. Section 1.409A-1(b)(9) (Separation Pay Plans) or Treas. Reg. Section
1.409A-1(b)(4) (Short-Term Deferrals). For this purpose each installment payment to which you are
entitled under the severance pay provisions of this Agreement shall be considered a separate and
distinct payment. In addition, (i) Subject to Section 9 of this Agreement, all severance payments
payable pursuant this Agreement shall commence within sixty (60) days after the Executive’s
Separation from Service, (ii) no amount deemed deferred compensation subject to Section 409A shall
be payable pursuant to the severance pay provisions of this Agreement unless your termination of
employment constitutes a Separation from Service, and (ii) if you are deemed at the time of your
separation from service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of
the Code, then to the extent delayed commencement of any portion of the termination benefits to
which you are entitled under this Agreement is required in order to avoid a prohibited distribution
under Section 409A(a)(2)(B)(i) of the Code, such portion of your termination benefits shall not be
provided to you prior to the earlier of (A) the expiration of the six-month period measured from
the date of your Separation from Service with the Company or (B) the date of your death. Upon the
earlier of such dates, all payments deferred pursuant to this paragraph shall be paid in a lump sum
to you, and any remaining payments due under this Agreement shall be paid as otherwise provided
herein. For purposes of this Agreement, Separation from Service shall mean a “separation from
service” within the meaning of Treasury Regulation Section 1.409A-1(h). The determination of
whether you are a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of
the time of your separation from service shall be made by the Company in accordance with the terms
of Section 409A of the Code and applicable guidance thereunder (including without limitation Treas.
Reg. Section 1.409A-1(i) and any successor provision thereto). The payment of any reimbursement of
any expense under this Agreement (including without limitation, any Gross-Up Payments pursuant to
Section 7.3 of this Agreement) shall be made no later than December 31 of the year following the
year in which the expense was incurred. The amount of expenses reimbursed in one year shall not
affect the amount eligible for reimbursement in any subsequent year. The payment of any bonus
earned pursuant to this Agreement shall be made no later than two and one-half months following the
end of the fiscal year in which such bonus was earned.
2. No Other Changes. Except as provided in this Amendment, the Agreement shall remain
in full force and effect.
IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its duly
authorized officer and the Executive has executed this Amendment as of the Effective Date.
| XXXXXX PHARMACEUTICALS, INC. | EXECUTIVE | |||||||||
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Its: |
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Date:
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