IXION BIOTECHNOLOGY, INC.
DEFERRED COMPENSATION PLAN AGREEMENT
THIS AGREEMENT made this 1st day of June, 1994 by and between Ixion
Biotechnology, Inc. (the "Company") and Xxxxx X. Xxxx ("Xxxx"):
WITNESSETH:
WHEREAS, Xxxx occupies a position of key significance with the Company
and the Company desires to encourage Xxxx to remain with the Company, to make
and to continue to make contributions to the Company's growth;
WHEREAS, by consent dated January 3, 1994, the Company's Board of
Directors adopted a Deferred Compensation Plan for officers, key employees,
and key consultants of the Company (the "Plan"), permitting Xxxx to defer
receipt of all or a portion of his compensation to be paid in the future in
accordance with the terms and conditions herein set forth.
NOW, THEREFORE, the parties agree as follows:
1. Payment of Compensation.
Beginning June 1, 1994, and thereafter for all future calendar years
until Xxxx provides the Company with written notice to discontinue or reduce
the deferral of future compensation hereunder, 100% of each installment of
Xxxx'x compensation (including annual or long term incentive compensation, if
any) shall be deferred and credited in accordance with Section 2 below. (The
beginning date in the preceding sentence shall be the first business day of a
future calendar year, unless Xxxx executes this Agreement within thirty days
of becoming eligible for the Plan, in which event the beginning date may be
the first day of any future month.) Any remaining portion of Xxxx'x
compensation shall be paid currently in accordance with the Company's normal
payroll procedures. Xxxx'x regular stipulated rate of pay from the Company,
if any, shall not be affected by the deferral provided for herein and,
therefore, none of the Company's non-qualified welfare plans, if any, the
benefits of which are a function of the regular stipulated rate of pay, shall
be affected by such deferral.
2. Xxxx'x Account: Credits and Interest.
(a) An unfunded deferred compensation account (the "Account") will
be established for Xxxx. The only obligation of the Company with respect to
the Account is to make the payments provided for under this Agreement when
they become payable, and that any amount credited to such Account will be
solely for record-keeping purposes and shall not be considered to be held in
trust or in escrow or in any way vested in Xxxx.
(b) The Company will credit to the Account an amount equal to the
percent of compensation specified in Section 1.
(c) (i) Until payments under this Agreement begin, the Company
will also credit additional amounts to the Account. The Board of Directors
will establish an annual interest rate which shall remain in effect until
changed by the Board at the beginning of each year. The initial rate shall be
8%.
(ii) After payments under this Agreement begin, the Company
will also credit additional amounts to the Account. Such additional amounts
shall be equal to the amount of interest set forth in Subsection 2(c)(i)
above, unless greater additional amounts are otherwise ordered by the Board of
Directors.
3. Payments from Deferred Compensation Account.
(a) The amount in Xxxx'x Account will be paid out as indicated
below provided, in all cases, the Company has sufficient cash to be able
prudently to make such payments.
(i) In the event of Xxxx'x termination of employment by death,
payment to the beneficiary will commence on the first day of the calendar
month following the 90th day after Xxxx'x death, provided that the Company has
been provided with the necessary documents.
(ii) In the event of Xxxx'x termination of employment, other than
by death, disability or retirement: [Initial one.]
on the first day of the calendar month following
the 90th day after Xxxx'x termination of employment; or
on the first day of the calendar month following
the month in which Xxxx attained 65 years of age.
(b) Cash payment shall be in the form of monthly installments, as
nearly equal as may be practicable, but with appropriate adjustment for
changes required under Subsection (c)(ii) of Section 2, over a period of years
to be selected by Consultant or in a single sum. A change in either the
elected form of payment or the number of years for installment payments may be
made at any time prior to the calendar year during which the initial benefit
becomes payable. Xxxx, in the same manner as his may make beneficiary
designations, may elect that payments coming due at or after his death shall
be either in one sum or in installments. Any payment coming due during Xxxx'x
lifetime shall be payable to Xxxx. Any payment coming due at or after Xxxx'x
death shall be paid when due to the beneficiary designated by Xxxx. The
beneficiary designated by Xxxx must be his spouse, child or children,
grandchild or grandchildren, sibling or siblings, Xxxx'x executors or
administrators, or a trust established by the instrument probated as Xxxx'x
Will. If no such designation is in effect at the time any payment becomes
due, it shall be paid to Xxxx'x executors or administrators. Beneficiary
designations and changes thereof may be made during Xxxx'x lifetime by Xxxx by
written notice filed with the Company. Such designation and any subsequent
change shall take effect as of the date the notice was signed, upon recording
and acceptance by the Company, subject to any payment made by the Company or
action taken by it before receipt of the notice.
(c) In the event of Consultant's termination of employment either
by death or without cause, at the election of Xxxx or Xxxx'x executors or
administrators, made on or before the 90th day following the date of
termination, Consultant may convert all or a portion of the amounts in the
Account into common stock of the Company at a price per share not greater than
the lowest price per share (adjusted for stock splits, stock dividends, the
issuance of convertible securities, warrants or options, or other dilution),
at which shares of the Company's common stock have been issued (or agreed to
be issued) at any time in the 365 days preceding the date of termination.
Notice of the election must be in writing and must specify the amount of such
Account to be so converted. The common stock shall be issued as of the date
of the notice, upon recording by the Company.
(d) A termination shall be deemed without cause if, without
Consultant's written consent, any of the following events occur:
(i) Xxxx is assigned any duties inconsistent with his status in
the position held immediately prior to such assignment, or has the nature or
status of his responsibilities altered in a substantially adverse way;
(ii) The Company reduces Xxxx'x annual base salary in effect
as of the date of this Agreement, or as the same may be increased from time to
time;
(iii) The Company's offices where Xxxx is working are moved
to a location more than 50 miles from the location of such offices;
(iv) The Company fails to pay any portion of current
compensation, or fails to pay any portion of an installment of deferred
compensation under any deferred compensation program of the Company within 30
days of the date such compensation is due;
(v) The Company fails to continue in effect any compensation
plan in which Xxxx is participating which is material to such Consultant's
total compensation;
(vi) The Company fails to continue to provide Xxxx with
benefits substantially similar to those, if any, previously enjoyed under any
of the Company's pension, saving, health, or other welfare or benefit plans;
(vii) The Company takes any other action which directly or
indirectly materially reduces any of the benefits referred to above, or
reduces any fringe benefits enjoyed by Xxxx (including, without limitation,
days of paid vacation); or
(ix) The Company materially breaches any employment agreement
with Xxxx.
4. Benefits May Not be Assigned or Attached.
No benefit hereunder may be assigned, anticipated or hypothecated and, to
the extent permitted by law, no sum payable under this Agreement shall be
subject to legal process or attachment for payment of any claim payee
hereunder.
5. No Obligations to Continue Employment.
Subject to the provisions of Section 3(d) above, nothing contained in
this Agreement shall in any way otherwise obligate the Company to retain Xxxx
in its employment for any period of time, nor in any way otherwise affect the
Company's right to change at any time Xxxx'x compensation, the method or
conditions for payment thereof, or any other aspect of Xxxx'x employment.
6. Duration of Agreement.
This Agreement shall remain effective and continue in force until such
time as it may be amended or terminated by the parties hereto.
7. Election of Payment .
If Xxxx has not elected to convert his Account into common stock of the
Company, such Account shall be paid as follows: [Initial one.]
(a) Single sum.
(b) Monthly Installments over (5 or 10 years)
IN WITNESS WHEREOF the parties hereto have duly executed this Agreement
as of the day and year first above written.
Ixion Biotechnology, Inc. Xxxxx X. Xxxx, Ph.D.
By:
Designation of Benficiary
