AMENDMENT NUMBER 1 TO EMPLOYMENT AGREEMENT
AMENDMENT
NUMBER 1 TO EMPLOYMENT AGREEMENT
AMENDMENT
NUMBER 1 TO EMPLOYMENT AGREEMENT
(“Amendment No. 1”), dated as of June 30, 2006 by and between DOV
PHARMACEUTICAL, INC., a Delaware corporation (the “Company”) and XXXXXX XXXXX
(the “Executive”).
WITNESSETH:
WHEREAS,
the
Company and Executive entered into an Employment Agreement dated as of September
10, 2003 (the “Employment Agreement”);
WHEREAS,
the
Company and the Executive both desire to modify certain provisions of the
Employment Agreement;
WHEREAS,
capitalized terms not otherwise defined herein shall have the meaning ascribed
thereto in the Employment Agreement.
NOW,
THEREFORE,
the
parties mutually agree as follows:
1. Section
1.01 “Term” of the Employment Agreement shall be deleted from the Employment
Agreement and replaced with the following provision:
Section
1.01. Term.
The
initial term of this Employment
Agreement shall commence on the date the Executive commences consulting work
for
the Company, which shall be no later than September 10, 2003, and unless
sooner
terminated pursuant to Article III hereof, shall terminate on March 31, 2007
(the “Initial Employment Period”). Unless sooner terminated pursuant to Article
III, the parties may by written agreement renew this Agreement for one year
(each such one-year period hereinafter referred to as a “Renewal Period”; the
Initial Employment Period and all Renewal Periods hereinafter (if any) referred
to as the “Period”).
2.
Paragraph (b) of Section 1.03 “Duties” shall be deleted from the Employment
Agreement and replaced with the following provision:
(b)
During the Period once full-time duty commences, the Executive shall perform
faithfully the duties covered by Section 1.03(a) to the best of his ability
and
devote his full business time and attention to the Company's business and
not
engage in any other business activities except with the approval of the Board
provided that he may subject to Section 4.01 invest in companies not requiring
his services and may subject to Section 1.03(a) devote reasonable time to
charitable and civic affairs. Notwithstanding the foregoing, (i) from October
1,
2006 until January 1, 2007 (the “First Reduction Period”), the Executive shall
only be required to work an amount of hours equal to 70% of the hours
customarily worked by similarly situated executives at the Company and shall
work from the Company’s Somerset offices 4 days every two weeks (with the
remaining time spent working from home), and (ii) from January 1, 2007 until
March 31, 2007 (the “Second Reduction Period”), the Executive shall only be
required to work an amount of hours equal to 50% of the hours customarily
worked
by similarly situated executives at the Company and shall work from the
Company’s Somerset offices 3 days every two weeks (with the remaining time spent
working from home).
3.
Section
2.01 “Basic Compensation” shall be deleted from the Employment Agreement and
replaced with the following provision:
Section
2.01. Basic
Compensation. As
compensation for the Executive's services hereunder, once full-time duty
commences, the Company shall pay to the Executive an annual salary of $300,000
(as adjusted, "Basic Compensation"), payable in bi-weekly or monthly
installments. As a consultant pending full-time duty, the Executive shall
be
paid $1,000 per day. The Basic Compensation may be increased in the discretion
of the Board and the parties acknowledge that the Executive receives as of
the
date of this Amendment No. 1 Basic Compensation in the annual amount of
$345,000. Notwithstanding the foregoing, (i) commencing on the first day
of the
First Reduction Period, the amount of Executive’s Basic Compensation paid to the
Executive immediately prior to the First Reduction Period shall be reduced
by
30% and (ii) commencing on the first day of the Second Reduction Period,
the
Executive’s Basic Compensation paid to the Executive immediately prior to the
First Reduction Period shall be reduced by 50%.
4. Paragraph
(b) of Section 2.03 “Other Benefits” shall be deleted from the Employment
Agreement and replaced with the following provision:
(b) The
Executive shall be eligible to participate in the Company’s stock option
program. On September 10, 2003, the Executive received options to purchase
285,000 shares of the Company's common stock at a strike price equal to the
closing price thereof on the grant date, with half of the options vesting
after
18 months of full-time employment and the remainder vesting ratably quarterly
over the subsequent 18 months of full-time employment. The other terms of
such
options shall be governed by the Company's standard stock option agreement
in
use at the time of grant, which will incorporate the terms established by
the
Company’s stock option plan as the same may be amended from time to time;
provided, however, that the Executive's options to the extent not vested
shall
vest upon a termination of employment pursuant to Section 3.01(d), Section
3.03(a) or Section 3.04 but be exercisable for 90 days following the date
of
termination.
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On
June
30, 2006, the Executive shall be granted options to purchase 75,000 shares
of
the Company’s stock at an exercise determined by the closing price on the grant
date. Such options shall vest in full on March 31, 2007. The other terms
of such
options shall be governed by the Company’s standard stock option agreement in
use at the time of grant, which will incorporate the terms established by
the
Company’s stock option plan as the same may be amended from time to time;
provided, however, that such options to the extent not vested shall vest
upon a
termination of employment pursuant to Section 3.01(d), Section 3.03(a) or
Section 3.04 but be exercisable for 90 days following the date of termination.
5. Paragraph
(d) of Section 2.03 “Other Benefits” shall be deleted from the Employment
Agreement and replaced with the following provision:
(d)
The
Executive shall be entitled to six weeks of paid vacation in each calendar
year
subject to the provisions below. The Executive shall also be entitled to
the
same standard paid holidays given by the Company to senior executives generally,
all as determined from time to time by the Board or appropriate committee
thereof. Vacation time shall cumulate and carry forward from year to year,
provided that the Executive shall not be entitled to more than ten weeks
of
vacation in any one year without the permission of the Compensation Committee
and, provided that the Executive shall coordinate his vacation schedule with
the
Chief Executive Officer and President. On October 1, 2006, the Executive
(i)
shall be paid for all accrued and unused vacation accumulated by the Executive
prior to the date thereof and (ii) shall only be entitled to three weeks
of paid
vacation during the First and Second Reduction Periods.
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6. Paragraph
(e) of Section 2.03 “Other Benefits” shall be deleted from the Employment
Agreement and replaced with the following provision:
(e)
The
Company shall reimburse the Executive for travel or other expenses or
disbursements including, without limitation, expenses relating to the
Executive’s commute to and local lodging in Somerset, NJ, reasonably incurred or
made by him in connection with the Company’s business during the Period upon
reasonable documentation thereof; provided, however, that the Executive’s
reimbursable expenses shall in no event exceed $370 every ten business days.
7. Paragraph
(c) of Section 3.03 “Termination of Employment by the Executive” shall be
deleted from the Employment Agreement and replaced with the following provision:
(c)
If
the Executive terminates this Employment Agreement for any reason other than
those contained in Sections 3.03(a) or 3.04, the rights and obligations of
the
parties hereunder shall terminate immediately (except as otherwise provided
in
Article IV) and the Employment Period shall terminate immediately except
that
the Executive shall be entitled to receive, in complete and total satisfaction
of the obligations of the Company hereunder, his Basic Compensation, Incentive
Compensation and Benefits through the date of such termination.
8.
Section
5.01 “Services as Officer or Director” shall be deleted from the Employment
Agreement and replaced with the following provision:
Section
5.01. Services
as Officer or Director. During the Period, the Executive shall, if elected
or
appointed, serve as a director of the Company and as an officer and director
of
all current and future subsidiaries and affiliates of the Company without
any
additional compensation for such services provided that the Executive shall
be
provided with reasonable and customary directors and officers insurance if
any
such corporation is or becomes publicly held and further provided that the
Company shall cause any such subsidiary and affiliate to save the Executive
harmless from any and all liability arising out of the performance of the
Executive’s duties as director and officer. In the event the Period is
terminated for any reason, the Executive shall immediately resign from all
of
such director and/or officer positions.
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9.
Section
5.04 “Notices” shall be deleted from the Employment Agreement and replaced with
the following provision:
Section
5.04. Notices.
Any notice or request required or permitted to be given under this Employment
Agreement shall be sufficient if in writing and delivered personally or sent
by
registered mail, return receipt requested, to the addresses set forth below
or
to any other address designated by either party by notice similarly given.
Such
notice shall be deemed to have been given upon the personal delivery thereof
or
three days after the date of such mailing thereof, as the case may be.
If
to the Executive, to:
Xxxxxx
Xxxxx
C/O
XXX
Pharmaceutical, Inc.
000
Xxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
If
to the Company, to:
DOV
Pharmaceutical, Inc.
000
Xxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
Attn:
General Counsel
10.
Section
5.9 “Entire Agreement; Amendments” shall be deleted from the Employment
Agreement and replaced with the following provision:
Section
5.9. Entire
Agreement; Amendments. This Agreement, as amended by Amendment No. 1 hereto,
contains the entire understanding of the parties hereto with regard to the
subject matter contained herein, and supersedes all prior agreements or
understandings between the parties hereto or any related parties. This Agreement
may be amended only pursuant to a writing signed by both parties hereto.
11.
The
following shall be added as Section 5.13 of the Employment
Agreement:
Section
5.13. Consultation
Services.
Upon
termination or expiration of the Period and for 12 months thereafter, the
Executive shall be available as a consultant to the Company upon the request
of
the Company and shall provide such Consultation Services for up to a reasonable
amount of time and upon terms to be determined by mutual agreement of the
parties hereto.
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12.
All
other provisions of the Employment Agreement shall remain in full force and
effect.
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IN
WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 as
of the
date first written above.
DOV
PHARMACEUTICAL, INC.
| By: /s/ Xxxxxx Xxxxx | /s/ Xxxxxx Xxxxx | ||
| Name:
Xxxxxx
Xxxxx Title: Chairman of the Board |
Xxxxxx
Xxxxx |
