FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
EXHIBIT
10.11
FIRST
AMENDMENT
TO
THIS
FIRST AMENDMENT (the “First Amendment”) to the EMPLOYMENT AGREEMENT (the
“Agreement”), is made in Hingham, Massachusetts as of the 1st
day of
January, 2006, 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 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 2(c) shall be amended to read in its entirety as
follows:
Place
of Performance.
Employee shall be based at the Company’s offices in Hingham, Massachusetts
and/or at the Employee’s office at the Employee’s personal residence within
reasonable access to the Company’s offices in Hingham, Massachusetts, and the
Employee shall not be required to relocate to any other location.
2. As
of the
date hereof, Section 3(a) shall be amended to read in its entirety as
follows:
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 any amount
of deferred and accrued salary hereunder at an annual percentage rate of ten
percent (10%).
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3. As
of the
date hereof, Section 3(c) shall be amended to read in its entirety as
follows:
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.
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.
4. As
of the
date hereof, Section 4 shall be amended to read in its entirety as
follows:
(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 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. If Employee’s employment is terminated by reason of Employee’s retirement
or voluntary resignation (only without Good Reason as defined in Section 4(f)
herein), 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)
and
4(f) of this Agreement shall apply.
(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 (i) conviction of any crime (whether or not
involving the Company) constituting a felony in the jurisdiction involved;
(ii) engaging in any substantiated act involving moral turpitude; (iii)
engaging in any act which, in each case, subjects, or if generally known would
subject, the Company to public ridicule or embarrassment; (iv) gross neglect
or
misconduct in the performance of Employee’s duties hereunder; (v) willful
failure or refusal to perform such duties as may reasonably be delegated to
Employee; or (vi) material breach of any provision of this Agreement by
Employee; provided, however, that with respect to clauses (iv), (v) or (vi),
Employee shall have received written notice from the Company setting forth
the
alleged act or failure to act constituting “Cause” hereunder, and Employee shall
not have cured such act or refusal to act within 10 business days of his actual
receipt of notice.
(c) Disability.
If, as
a result of Employee’s 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
“Disability”. In that event, the Company shall pay to Employee the Base Salary
through such date of termination and, in lieu of any further compensation and
benefits for the balance of the Term, severance pay equal to the Base Salary
that Employee would have otherwise received during the period beginning on
such
date of termination and ending twelve (12) months from the effective date of
such termination, which severance pay shall be paid commencing with such date
of
termination at the times and in the amounts such Base Salary would have been
paid. 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. 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.
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(d) Termination
By Company For Any Other 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, then the Company shall pay to Employee the Base Salary through such
date of termination and, in lieu of any further compensation and benefits for
the balance of the Term, severance pay equal to the Base Salary that Employee
would have otherwise received during the period beginning on such date of
termination and ending twelve (12) months from the effective date of such
termination, which severance pay shall be paid commencing with such date of
termination at the times and in the amounts such Base Salary would have been
paid. 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. Notwithstanding anything to the contrary contained herein, in the
event that Employee shall breach Section 5 or 6 of this Agreement, in addition
to any other remedies the Company may have in the event Employee breaches this
Agreement, the Company’s obligation pursuant to this Section 4(d) to continue
such salary shall cease and Employee’s rights thereto shall terminate and shall
be forfeited.
(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 through the date of termination of Employee’s employment
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.
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(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.
5. As
of
the date hereof, Section 8(r) shall be added to read as
follows:
(r)
Legal
Fees and Expenses.
If any
contest or dispute shall arise between the Company and the Employee regarding
any provision of this Agreement, the Company shall reimburse the Employee for
all legal fees and expenses 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. The Employee
shall return to the Company any such reimbursement the Employee receives from
the Company hereunder as soon as practicable following the resolution of such
contest or dispute (whether or not appealed), but only if the Company prevails
to a substantial extent with respect to the Company’s claims brought and pursued
in connection with such contest or dispute.
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IN
WITNESS WHEREOF, the Company has caused this First 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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/s/
Xxxxxxx X. Xxxxx
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/s/
Xxxxxxxx X. Xxxxx
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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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