SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit
10.19
SECOND
AMENDMENT
TO
THIS
SECOND AMENDMENT (the “Second Amendment”) to the EMPLOYMENT AGREEMENT (the
“Agreement”), is made in Hingham, Massachusetts as of the 1st
day of
January 2007, between Pathogenics, Inc. a Delaware corporation having its
executive offices and principal place of business at 00 Xxxxx Xxxxxx, Xxxxx
000,
Xxxxxxx, XX 00000 (the “Company”), and Xxxxxxxx X. Xxxxx, an individual
currently residing at 0000 Xxxxxx Xxxxx, Xxxx, XX 00000
(“Employee”).
WHEREAS,
the Parties hereto entered into the Agreement dated March 15, 2005;
WHEREAS,
the Parties hereto entered into a First Amendment dated January 1, 2006 to
the
Agreement;
WHEREAS,
the Parties hereto desire to amend certain aspects of the
Agreement;
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants and agreements hereinafter
set forth, the Company and Executive agree as follows:
1. As
of the
date hereof, Section 1 shall be amended to read in its entirety as
follows:
Term.
The term
of this Agreement commenced on February 18, 2005 and shall continue from January
1, 2007, for a period of forty-eight (48) consecutive months or until the date
Employee’s employment is terminated in accordance with the terms hereof (the
“Term”).
2. As
of the
date hereof, Section 2 shall be amended to read in its entirety as
follows:
(a) Employment
by the Company.
Employee
agrees to be employed by the Company during the Term upon the terms and subject
to the conditions set forth in this Agreement. Employee shall serve as the
President and CEO of the Company.
(b) Performance
of Duties.
Employee
shall have the title of President and CEO of the Company, and shall report
to
the Board of Directors of the Company.
(c) Place
of Performance.
Employee
shall be based at the Company’s offices located at the Employee’s discretion
and/or at the Employee’s office at the Employee’s personal residence, and the
Employee shall not be required to relocate to any other location.
| 3. |
As
of the date hereof, Section 3(a) shall be amended to read in its
entirety
as follows:
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Base
Salary.
The
Company agrees to pay to Employee a base salary (“Base Salary”) at the annual
rate of $200,000, payable in equal installments consistent with the Company’s
payroll practices. The Company agrees to annually increase the Base Salary
at a
rate of ten percent (10%) above the rate for the preceding year. Notwithstanding
the forgoing, the Employee may choose to defer and accrue a portion of the
Base
Salary. The salary deferral and accrual shall end and Company will pay the
Employee in full the deferred and accrued salary amount hereunder upon the
earlier of either the Employee’s own determination, the termination of
employment of the Employee under the terms of this Agreement, or the expiration
of the Term of this Agreement. The Employee shall receive interest on a monthly
basis on any amount of deferred and accrued salary hereunder at an annual
percentage rate of twelve percent (12%).
| 4. |
As
of the date hereof, Section 3(c) shall be amended to read in its
entirety
as follows:
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Benefits
and Perquisites.
Employee
shall be entitled to participate in, to the extent Employee is otherwise
eligible under the terms thereof, the benefit plans and programs, and receive
the benefits and perquisites, generally provided to the Company’s employees,
including without limitation family medical insurance and life insurance.
Employee shall be entitled to six weeks of vacation per year, increasing
annually at a rate of one week above the preceding year. Vacation not taken
during the applicable fiscal year shall be accrued and carried over to the
next
fiscal year, and thereafter until it is either used by the Employee or paid
for
by the Company. Employee shall be entitled to reimbursement for the full-time
use of an automobile, including all insurance, maintenance and operating
expenses.
| 5. |
As
of the date hereof, Section 4 shall be amended to read in its entirety
as
follows:
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(a)
Termination.
The
Company may terminate Employee’s employment for Cause (as defined below) or for
any breach of this Agreement, in which case the provisions of Section 4(b)
of
this Agreement shall apply. The Company may also terminate Employee’s employment
in the event of Employee’s Death or Disability (as defined below), in which case
the provisions of Section 4(c) of this Agreement shall apply. The Company may
also terminate the Employee’s employment for any other reason by written notice
to Employee, in which case the provisions of Section 4(d) of this Agreement
shall apply. The Employee may terminate the Employee’s employment by reason of
Employee’s retirement or voluntary resignation (only without Good Reason as
defined in Section 4(f) herein), in which case the provisions of Section 4(b)
of
this Agreement shall apply. The Employee may also terminate the Employee’s
employment for any Good Reason by written notice to the Company, in which case
the provisions of Sections 4(d) of this Agreement shall apply.
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(b)
Termination
for Cause; Termination by Reason of Retirement or Voluntary Resignation (without
Good Reason).
In the
event that Employee’s employment hereunder is terminated during the Term (x) by
the Company for Cause (as defined below), (y) by reason of Employee’s retirement
or (z) by reason of Employee’s voluntary resignation (only without Good Reason
as defined in Section 4(f) herein), then the Company shall pay to Employee
only
the Base Salary through such date of termination. For purposes of this
Agreement, “Cause” shall mean conviction of a felony that results in material
and demonstrable damage to the business or reputation of the Company.
Notwithstanding the forgoing, the Company shall also pay the Employee in full
any deferred and accrued salary owed under Section 3(a) of this Agreement,
and
any accrued and unused vacation pay owed under Section 3(c) of this
Agreement.
(c)
Death
or Disability.
If, as a
result of Employee’s death or incapacity due to physical or mental illness,
Employee shall have been absent from Employee’s duties hereunder on a full time
basis for one hundred eighty (180) days within any three hundred sixty-five
(365) day period, the Company may terminate Employee’s employment hereunder for
“Death or Disability.” In that event, the Company shall pay to Employee or the
estate of the Employee the Base Salary, compensation and benefits for the
balance of the Term, and Severance Pay equal to twelve (12) months of the Base
Salary on such date of termination (“Severance Pay”), which Severance Pay shall
be paid in full within thirty (30) days of such date of termination.
Notwithstanding the forgoing, the Company shall also pay the Employee or the
estate of the Employee in full any deferred and accrued salary owed under
Section 3(a) of this Agreement, and any accrued and unused vacation pay owed
under Section 3(c) of this Agreement. During any period that Employee fails
to
perform Employee’s duties hereunder as a result of incapacity due to physical or
mental illness (a “Disability Period”), Employee shall continue to receive the
compensation and benefits provided by Section 3 of this Agreement until
Employee’s employment hereunder is terminated; provided,
however,
that the
amount of compensation and benefits received by Employee during the Disability
Period shall be reduced by the aggregate amounts, if any, payable to Employee
under disability benefit plans and programs of the Company or under the Social
Security disability insurance program.
(d)
Termination
By Company For Any Other Reason; Termination by Employee for Good
Reason.
In the
event that Employee’s employment hereunder is terminated by the Company during
the Term for any reason other than as provided in Section 4(b) of this Agreement
or by the Employee for Good Reason as provided in Section 4(f) of this
Agreement, then the Company shall pay to Employee the Base Salary, compensation
and benefits for the balance of the Term, and Severance Pay equal to twelve
(12)
months of the Base Salary on such date of termination, which Severance Pay
shall
be paid in full within thirty (30) days of such date of termination.
Notwithstanding the forgoing, the Company shall also pay the Employee in full
any deferred and accrued salary owed under Section 3(a) of this Agreement,
and
any accrued and unused vacation pay owed under Section 3(c) of this Agreement.
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(e)
No
Further Liability; Release.
Payment
made and performance by the Company in accordance with this Section 4 shall
operate to fully discharge and release the Company and its directors, officers,
employees, subsidiaries, affiliates, stockholders, successors, assigns, agents
and representatives from any further obligation or liability with respect to
Employee’s employment and termination of employment. Other than paying
Employee’s Base Salary, compensation and benefits for the balance of the Term
and making any severance payment pursuant to and in accordance with this Section
4 (as applicable), the Company and its directors, officers, employees,
subsidiaries, affiliates, stockholders, successors, assigns, agents and
representatives shall have no further obligation or liability to Employee or
any
other person under this Agreement. The Company shall have the right to condition
the payment of any severance pursuant to this Section 4 upon the delivery by
Employee to the Company of a release in form and substance satisfactory to
the
Company of any and all claims Employee may have against the Company and its
directors, officers, employees, subsidiaries, affiliates, stockholders,
successors, assigns, agents and representatives arising out of or related to
Employee’s employment by the Company and the termination of such
employment.
(f)
Termination
by Employee for Good Reason.
The
Employee may terminate his employment for “Good Reason” after giving the Company
detailed written notice thereof, if the Company shall have failed to cure the
event or circumstance constituting “Good Reason” within ten (10) business days
after receiving such notice. Good Reason shall mean the occurrence of any of
the
following without the written consent of the Employee:
(i) the
assignment to the Employee of duties inconsistent with this Agreement or a
change in his title or authority;
(ii) any
failure by the Company to comply with Section 3 hereof in any material
way;
(iii) the
requirement of the Employee to relocate to locations other than those provided
in Section 2(c) hereof;
(iv) the
failure of the Company to comply with and satisfy Section 7(a) of this
Agreement; or
(v) any
material breach by the Company.
The
Employee’s continued employment shall not constitute consent to, or a waiver of
rights with respect to, any act or failure to act constituting Good Reason
hereunder.
| 6. |
As
of the date hereof, Section 8(r) shall be amended to read in its
entirety
as follows:
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(r)
Legal
Fees and Expenses.
If any
contest or dispute shall arise between the Company and the Employee regarding
the Employee’s interpretation of or determinations under this Agreement, or any
actual, threatened or contemplated litigation or legal, administrative or other
proceeding involving any provision of this Agreement, the Company shall pay
the
Employee for all legal fees, court costs, fees of experts and other costs
expenses when reasonably incurred by the Employee in connection with such
contest or dispute. Such reimbursement shall be made as soon as practicable
following their submission to the Company to the extent the Company receives
reasonable written evidence of such fees and expenses.
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IN
WITNESS
WHEREOF, the Company has caused this Second Amendment to be duly executed on
its
behalf by an officer thereunto duly authorized and Executive has duly executed
this Agreement, all as of the date and year first written above.
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EMPLOYEE:
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Xxxxxxxx
X. Xxxxx, Esq.
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Xxxxxxxx
X. Xxxxx, Esq.
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President
& CEO
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