AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
Exhibit
10.8
AMENDMENT
NO. 1 TO EMPLOYMENT AGREEMENT
This
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (this "Amendment")
is
entered into as of November 19, 2008 and shall be effective as of October 1,
2008, by and between Manhattan Pharmaceuticals, Inc. (the "Company")
and
Xxxxxxx X. XxXxxxxxxx (the "Executive").
WITNESSETH
THAT:
WHEREAS,
the
Company and the Executive entered into that certain Employment Agreement, dated
as of July 7, 2006 (the "Agreement”);
WHEREAS,
the
Company proposes to offer and sell (the “Offering”)
up to
$2,500,000 of units (each a “Unit”
and
collectively, the “Units”)
consisting of (i) a senior secured note in the principal amount of $5,000 (each
a “Note”
and
collectively, the “Notes”)
and
(ii) a warrant to purchase up to a number of shares of the Company’s common
stock, $.001 par value per share, determined by dividing 300% of the principal
amount of the Note by $.09, the exercise price per share of the
warrant;
WHEREAS,
if
$2,500,000 of Units are sold (the “Maximum
Amount”),
[l]
(the “Placement
Agent”)
has
the option to sell an additional $1,000,000 of Units (the “Overallotment
Amount”)
as
part of the Offering;
WHEREAS,
the
Company may hold a closing at any time after subscriptions for at least
$1,000,000 of Units have been received and accepted and other conditions to
the
closing have been satisfied (the “First
Closing”);
WHEREAS,
after
the
First Closing the Company may sell up to the Maximum Amount (or any
Overallotment Amount, if applicable) until December 31, 2008 or, upon mutual
agreement of the Company and the Placement Agent, January 31, 2009 (the
“Expiration
Date”);
provided that the final closing (the “Final
Closing”)
shall
occur no later than 10 business days after the Expiration Date; and
WHEREAS,
in
connection with Offering, the Executive has determined that it is in the best
interest of the Company to temporarily reduce his salary effective as of October
1, 2008 in accordance with the terms of this Amendment until such time as the
Company shall have received at least $2,500,000 of gross proceeds from the
sale
of the Units or other sales of securities (including any warrant exercise)
or
from other revenue received by the Company in the operation of its business
or
any combination of the foregoing (collectively, the “Qualified
Payments”).
NOW
THEREFORE,
for and
in consideration of the foregoing, the Company and the Executive hereby agree
as
follows:
1. Section
4(a)
of the
Agreement is hereby amended and restated in its entirety to read as
follows:
“(a) Base
Salary.
(i) During
the Term, the Company shall pay the Executive a salary (the “Base
Salary”)
which
shall initially be equal to $300,000 per year. Effective as of October 1, 2008,
the Base Salary payable to the Executive shall be decreased to $200,000 per
year
(the “First
Tier Amount”).
Upon
consummation of the Final Closing (as defined in Amendment No. 1 to this
Agreement, dated November 19, 2008 (“Amendment
No. 1”)),
the
Base Salary of the Executive shall be adjusted as follows: (i) in the event
that
the Company sells at least $1,500,000 but less than $2,000,000 of Units in
the
Offering (as defined in Amendment No. 1), the Base Salary shall be increased
to
$240,000 per year (the “Second
Tier Amount”),
(ii)
in the event that the Company sells at least $2,000,000 but less than $2,500,000
of Units in the Offering, the Base Salary shall be increased to $270,000 per
year (the “Third
Tier Amount”)
and
(iii) in the event that the Company sells $2,500,000 of Units or more Units
in
the Offering, the Base Salary shall be increased to $300,000 (the “Fourth
Tier Amount”,
and
each of the of the First Tier Amount, Second Tier Amount, Third Tier Amount
or
Fourth Tier Amount, a “Tier
Amount”),
in
each case, retroactively effective on and as of October 1, 2008; provided,
however,
that to
the extent the Base Salary shall be increased above the First Tier Amount
following the Final Closing (as defined in Amendment No. 1), the Executive
shall
receive a lump sum payment equal to the difference between the amount received
during the entire pay period following October 1, 2008 based upon a Base Salary
of $200,000 and the applicable Tier Amount determined following the Final
Closing in the next payroll payment made to the Executive.
(ii) In
the
event that the aggregate principal amount of Notes sold in the Offering is
equal
to or greater than $1,000,000 but less than $2,500,000, then following the
Final
Closing the Executive’s Base Salary shall be adjusted to the next applicable
Tier Amount for every additional $500,000 received by the Company following
the
Final Closing (other than from the sale of the Units) up to the Fourth Tier
Amount. Any increase pursuant to this Section
4(a)(ii)
shall be
effective as of the date the Company receives additional Qualified Payments
which result in the aggregate amount received by the Company (other than from
the sale of the Notes) being at least equal to $500,000, $1,000,000 or
$1,500,000, as the case may be.
(iii) Payments
to the Executive of his Base Salary shall be made in accordance with the
Company’s normal payroll practices.
(iv) The
Base
Salary will be reviewed by the Board no less frequently then annually and except
as otherwise provided herein may be increased (but not decreased).”
-2-
2. This
Amendment may be executed in counterparts, each of which shall constitute an
original, but both of which together shall constitute one and the same
instrument. Signatures
delivered by facsimile shall have the same effect as original
signatures. This
Amendment shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York, without giving effect to its principles
of conflicts of laws.
3. Except
as
specifically amended hereby, the Agreement remains otherwise unmodified and
in
full force an effect, and is hereby ratified by the Company and the Executive.
This Amendment may not be amended except in accordance with Section
10(e)
of the
Agreement.
[Signature
page follows]
-3-
IN
WITNESS WHEREOF, the parties have signed this Amendment to Employment Agreement
as of the day and year set forth above.
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MANHATTAN
PHARMACEUTICALS, INC.
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By:
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/s/
Xxxxxxx Xxxx
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Name:
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Xxxxxxx
Xxxx
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Title:
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Chief
Executive Officer
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/s/
Xxxxxxx X. XxXxxxxxxx
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Xxxxxxx
X. XxXxxxxxxx
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