Exhibit 10.14
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment (the "Amendment"), effective as of October 17, 2003 (the
"Effective Date"), to the employment agreement executed on February 1, 2002 (the
"Employment Agreement") by and between Eyetech Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), and Xxxxx Xxxxxxxxxx, 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 Manhattan, New York, 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
-2-
termination date of Executive's employment. The benefits
provided under 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,
-3-
recapitalization or share exchange involving the Company
or a sale or other disposition of all or substantially
all of the assets of the 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,
-4-
shall become vested and immediately exercisable; and
(b) If Executive's employment terminates as a result of the
circumstances 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
-5-
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 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 XXXXX
-------------------------------
Name: Xxxxx Xxxxx
Title: CEO
EXECUTIVE
/s/ XXXXX XXXXXXXXXX
-----------------------------------
Name: Xxxxx Xxxxxxxxxx
-6-
