AMENDMENT NO.1 TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.6B
This
Amendment No. 1 to Amended and Restated Employment Agreement
is made as of this ___ 26th___ day
of December, 2006 (this “Amendment”), between AVALON PHARMACEUTICALS, INC., a Delaware corporation
(“Company”) and XXXXXXX X. XXXXXX, PH.D. (“Executive”).
Company and Executive are each sometimes referred to as a “Party,” and are sometimes referred
to together as the “Parties.”
Background:
The Parties entered into an Amended and Restated Employment Agreement on April 21, 2005 (the
“Employment Agreement”).
In consideration of Executive’s continued employment with Company, the Parties want to amend
the Employment Agreement on the terms and conditions set forth in this Amendment.
Now, therefore, in consideration of the foregoing, the Parties agree as follows:
1. Capitalized terms used in this Amendment without definition, shall have the meanings give
those terms in the Employment Agreement.
2. Paragraph (c) of Section 3 of the Employment Agreement is amended to read in its entirety
as follows:
“You will be eligible to receive an annual cash bonus targeted at 50% of your base
salary based upon the achievement of individual and/or Company performance criteria
as may be established by the Board of Directors for each fiscal year, subject to the
discretion of the Board of Directors.”
3. Paragraph (e) of Section 3 of the Employment Agreement is amended to read in its entirety
as follows:
“Upon termination for any reason, the Company shall pay you within two weeks of such
termination, your current base salary earned through the termination date, plus
accrued vacation, if any, and other benefits or payments, if any, to which you are
entitled as provided in accordance with the terms and conditions of such benefit
plan. In the event you are terminated by the Company without “Cause” (as hereinafter
defined) or if you terminate your employment with the Company for “Good Reason” (as
hereinafter defined), the Company shall (i) immediately vest all options and shares
granted to you under the Company’s stock option plans that
have not vested as of the date of your termination; (ii) pay you a lump sum
severance payment equal to eighteen months of your base salary as in effect at the
time of termination; (iii) provided such termination without Cause or for Good
Reason is within eighteen months after a Change in Control (as hereinafter defined),
pay you a lump sum severance payment equal to the product of (A) eighteen months of
your base salary as in effect at the time of termination and (B) the average bonus
award percentage applicable to you during the three years preceding the year in
which termination of your employment takes place; (iv) provide you with outplacement
services; (v) provide and pay the Company’s portion of your life insurance for a
period of eighteen months following such termination; (vi) at the discretion of the
Compensation Committee as may be approved by the Board, pay you a bonus payable in
the Committee’s discretion either in bi-weekly installments commencing in the month
following the end of the calendar year of the year of your termination, or in a lump
sum, based upon the bonus it might have paid to you, if any, at the conclusion of
the calendar year of the year of your termination, prorated to the date of your
termination, and adjusted to reflect whether goals set by the Board of Directors
were satisfied (provided that no such bonus shall be paid under this clause (vi) if
you are entitled to payment of a bonus under clause (iii) above); and (vii)
reimburse you for premiums you pay for health care insurance under the Consolidated
Omnibus Budget Reconciliation Act (“COBRA”), for the same level of coverage that you
maintain at the time of your termination, for a period up to eighteen months
following termination, provided you elect COBRA coverage. The Company’s
reimbursement obligation will end immediately if you become eligible to obtain
health care insurance from any other employer during the payment period. You shall
not be required to mitigate damages by seeking employment elsewhere. If you are
terminated with Cause, the Company shall pay you only your current base salary
earned through the termination date, plus accrued vacation, if any, to which you are
entitled as provided in accordance with the terms and conditions of such benefit
plan. The Company shall not be obligated to continue any such payments to you under
this Section 3(e) in the event you materially breach the terms under the
Confidentiality Agreement attached hereto. Notwithstanding any termination of your
employment, you shall continue to be bound by the provisions of the Confidentiality
Agreement. In addition, upon a Change in Control (as hereinafter defined) the
Company shall immediately vest all shares granted to you under the Company’s stock
option plans that have not vested as of the date of such Change in Control.”
4. Paragraph (g) of Section 3 of the Employment Agreement is amended to read in its entirety
as follows:
“Termination of your employment by you shall constitute termination for “Good
Reason” if such termination occurs (a) within eighteen months of a “Change in
Control” (as hereinafter defined) (b) within three months of a material diminution
in your responsibilities as Chief Executive Officer (provided that such diminution
is not in connection with the termination of your employment for Cause), (c)
within three months of no longer reporting to the Board of Directors of the
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Company,
(d) within three months of your principal work location changing to be more than 50
miles from your current residence, or (e) in the event you should die while an
employee of the Company. The Company shall notify you, within 10 days of receipt of
your notice of intent to terminate your employment for Good Reason, if the Company
disagrees with your intent to terminate under this paragraph 3(g).”
5. Except as set forth in this Amendment, the terms and conditions of the Employment Agreement
shall remain in full force and effect.
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IN WITNESS WHEREOF, the Parties have executed this Amendment to Amended and Restated
Employment Agreement as of the date first set forth above.
| AVALON PHARMACEUTICALS, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | ||||
| Title: | General Counsel and Vice President of Operations | |||
| EXECUTIVE: |
||||
| /s/ Xxxxxxx X. Xxxxxx | ||||
| Xxxxxxx X. Xxxxxx | ||||
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