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EXHIBIT 10.29
FIRST AMENDMENT TO
AGREEMENT CONCERNING TERMINATION OF EMPLOYMENT
OF XXXX XXXXXXXX
This First Amendment, effective December 14, 1999, is between
Genetronics Biomedical Ltd., a company incorporated in British Columbia, and
Genetronics, Inc., a California corporation having its principal place of
business at 00000 Xxxxxxxx Xxxxxx Xxxx, Xxx Xxxxx, XX 00000 (collectively,
"Genetronics") and Xxxx Xxxxxxxx, having an address at 0000 Xxxxxxx Xxxxx, #0,
Xxx Xxxxx, XX 00000 ("Xx. Xxxxxxxx").
I. BACKGROUND
1.1 Genetronics and Xx. Xxxxxxxx entered into an Agreement Concerning
Termination of Employment of Xxxx Xxxxxxxx, effective December 14, 1999, that
set forth terms and conditions of Xx. Xxxxxxxx'x separation from Genetronics
("Termination Agreement").
1.2 Section 3 of the Termination Agreement sets forth, in part (b), the
agreement of the Company to grant Xx. Xxxxxxxx a option to purchase 26,700
shares of the common stock of the Company ("New Option").
1.3 The Compensation Committee of the Company granted the New Option pursuant to
a resolution passed at its meeting of November 12, 1999, however, the New Option
agreement has not been entered into by the parties as of May 22, 2000.
1.4 On the Effective Date, the Company and Xx. Xxxxxxxx believed that, as an
individual deemed to hold more than 10% of the issued and outstanding shares of
the Company, any stock option grant made by the Company to Xx. Xxxxxxxx was
subject to 26 USC Sec. 422(d) of the IRS Code. That Section of the IRS Code
specifies that any Incentive Stock Option ("ISO") to purchase stock in a company
that is granted to a holder of more than 10% of the issued and outstanding
shares in the company must (i) have an Exercise Price that is at least 110% of
the fair market value at the time of grant and (ii) have a term that is no
longer than five years from the date of grant. Accordingly, the Exercise Price
of the New Option was stated to be US$3.23 per share ("Exercise Price"), which
is 110% of the fair market value of Company common shares on the AMEX at market
close on November 11, 1999. The term of the New Option was stated to be five
years ("Term").
1.5 However, Section 26 USC Sec. 422(d) of the IRS Code applies only to ISO
grants, which cannot be granted to non-employees. Because Xx. Xxxxxxxx was not
an employee of Genetronics on the date the New Option was granted, the New
Option is a non-qualified, or non-ISO, option. Accordingly, Section 26 USC Sec.
422(d) of the IRS Code does not apply.
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First Amendment to Termination Page 2 of 3
1.6 Therefore, one purpose of this First Amendment is to amend Section 3 of the
Termination Agreement to state an Exercise Price equal to the fair market value
of common shares of the Company at the time of grant and a Term of ten years.
These changes are beneficial to Xx. Xxxxxxxx, as they result in a lower Exercise
Price and a longer Term.
1.7 A second purpose of this First Amendment is to amend Section 10 of the
Termination Agreement to reflect the parties' agreement, set forth in Exhibit I,
attached hereto, that Genetronics will make the quarterly match (less applicable
withholding) that it would have made to Xx. Xxxxxxxx'x 401(k) account had she
remained an employee through September 7, 2000 in cash rather than in Company
stock.
1.8 Accordingly, the parties agree to this First Amendment as follows:
II. AMENDMENT
2.1 Section 3 of the Termination Agreement is deleted in its entirety and
replaced with:
3. SEVERANCE PAY. The Company agrees to make severance payments to
Xx. Xxxxxxxx in the form of: (a) continuation of her base salary
in effect on the Separation Date for a period of twelve (12)
months from the Separation Date (the "Severance Period") and (b) a
grant of an option to purchase 26,700 shares of the common stock
of the Company ("New Option") at a price per share equal to the
fair market value of the Company's common stock on the date that
is the last trading day before the date of grant. The term of the
New Options shall be ten years from the date of grant. The New
Options will vest on September 6,2000, which is the last day of
the Severance Period, and will be exercisable for the duration of
the term of the New Options. However, in the event the Company is
acquired by, or merged with, another entity prior to the vesting
of the New Options, the New Options will vest upon the completion
of the merger or acquisition. The New Options shall be governed
pursuant to the terms and conditions of the Genetronics
Biomedical, Ltd. 1997 Stock Option Plan, as amended. The twelve
months of severance payments will be paid on the Company's
ordinary payroll dates and will be subject to standard payroll
deductions and withholdings.
2.2 Section 10 of the Termination Agreement is deleted in its entirety and
replaced with:
10. 401(k). The Company agrees that, as part of this Agreement and in
consideration thereof, the Company will purchase for Xx. Xxxxxxxx the same
number of shares of common stock of the Company that she would have received
through the Company's 401(k) plan had she remained an employee through
September 7, 2000 ("401(k) Shares"). Such stock shall be purchased for her
quarterly as it is
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First Amendment to Termination Page 3 of 3
for employees who participate in the Company's 401(K) plan. Pursuant to a
letter agreement between the parties, dated January 8, 2000, and attached
hereto as Exhibit I, in lieu of purchasing 401(k) Shares for Xx. Xxxxxxxx
each quarter, the Company will make a quarterly cash payment to Xx.
Xxxxxxxx that is equivalent to the number of 401(k) Shares, less
applicable withholding amounts, that otherwise would have been due Xx.
Xxxxxxxx that quarter.
2.3 Other than expressly stated herein, no other term or provision of the
Termination Agreement is amended by this First Amendment.
Agreement to the foregoing is acknowledged by the signatures below:
XXXX X. XXXXXXXX
/s/ Xxxx X. Xxxxxxxx
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Date: May 22, 2000
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GENETRONICS, INC. GENETRONICS BIOMEDICAL LTD.
/s/ Xxxxxx Xxxx /s/ Xxxxxx Xxxx
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Date: May 24, 2000 Date: May 24, 2000
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