AMENDED EMPLOYMENT AGREEMENT
AGREEMENT made as of the 15th day of October, 1997 by and between
Sheffield Pharmaceuticals, Inc., a Delaware corporation with its principal
offices at 000 Xxxxx Xxxxxxxxx Xxxx, Xx Xxxxx, Xxxxxxxx 00000-0000 (the
"Company"), and Xxxxxx Xxxxxxxx residing at 000 Xxxx Xxxxxx, Xxxxxxxxxx, Xxx
Xxxxxx 00000 (the "Employee").
RECITALS
WHEREAS, the Company entered into an employment agreement dated as of
September 7, 1995 with the Employee relating to the employment of the Employee
as Vice President and Chief Financial Officer of the Company, which employment
agreement was amended by amendment dated September 22, 1996 (such employment
agreement, as so amended, being the Employment Agreement"); and
WHEREAS, the Company and the Employee have agreed upon the terms of the
Employee's resignation as an officer and an employee of the Company and desire
to evidence such terms in this Agreement Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto agree that the terms of the
Employment Agreement are hereby supplemented as follows:
1. RESIGNATION. The Employee agrees to resign as an officer of the
Company and its subsidiaries upon the request of the Chairman or the Chief
Executive Officer of the Company (the "CEO") (which request shall not be made
before October 31, 1997). The Company agrees to enter into amended and restated
option agreement on October 15, 1997 amending the option letter agreement dated
September 7, 1995 between the Company and the Employee (relating to the grant of
an option to purchase 100,000 shares of the Company's common stock) providing
for an extension of the expiration date of such option to March 31, 2002.
2. SEVERANCE. The Company shall pay the Employee severance payments
totaling $65,000 in six equal installments of $10,833.33 commencing with the
first installment to be paid on November 15, 1997 and with each subsequent
installment to be paid bi-monthly thereafter on the dates when the Company's
regular payroll payments are paid. Such severance payments become payable by the
Company upon Employee's resignation as an officer of the Company and its
subsidiaries on or after October 31, 1997. The severance payable to the Employee
under this paragraph shall be in lieu of any severance payment otherwise payable
under Section 11(b) of the Employment Agreement).
3. EMPLOYMENT AFTER RESIGNATION. (a) The Employee agrees to continue to
serve as an employee of the Company until November 15, 1997 devoting his full
working day to Company matters assigned to him by the CEO or the Company's new
Chief Financial Officer (the "New CFO"). It is understood that the Employee's
principal duties during this period shall be to (i) prepare the Company's report
on Form 10-Q for the quarter ended September 30, 1997 under the supervision of
the New CFO and (ii) familiarize the New CFO with the Company's financial
reporting and accounting practices and the Company's files. Subject to the
following sentence, the Employee shall perform his duties either from an office
in New York City provided to the Employee by the Company or from his home in New
Jersey, as determined by the CEO. It is understood that the Employee may be
required to travel to the Company's offices in St.
Louis, Missouri, to perform his duties hereunder.
(b) The Employee agrees to resign as an employee of the Company on
November 15, 1997. The Employee agrees to serve as a consultant to the Company
from November 15, 1997 to and including December 31, 1997. The Employee agrees
to devote up to 2/3 of his working day to Company matters assigned to him by the
CEO or the CFO during this period.
4. COMPENSATION. (a) As compensation for his services to be provided to
the Company pursuant to Section 3(a) above, the Company shall, on November 15,
1997, forgive $12,800 of the principal amount payable to the Company by the
Employee under the Amended and Restated $42,800 Promissory Note of the Employee
payable to the Company dated July 31, 1997 (the "Note").
(b) As compensation for his consulting services to be provided to the
Company pursuant to Section 2(b) above, on December 31, 1997, the Company shall
forgive an additional $10,000 of the principal amount of the Note and shall
agree to an amendment and restatement of the Note to provide for (i) the
principal reductions referred to in this Section 3, (ii) the repayment of the
principal amount of the Note in installments of $2,500 each, plus accrued and
unpaid interest, on a quarterly basis commencing December 31, 1997, with the
final installment being due September 30, 1999, and (iii) a mandatory prepayment
of the Note in the event that the Employee sells any of the Company's common
stock held by him on the date hereof.
(c) The compensation payable to the Employee under this paragraph shall
constitute the only compensation payable under the Employment Agreement in
respect of services to be provided by the Employee after October 15, 1997 and
shall be payable in lieu of any other compensation (including any severance
payment otherwise payable under Section 11(b) of the Employment Agreement) that
would otherwise be payable by the Company pursuant to the Employment Agreement
after such date.
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5. BENEFITS. The Employee shall continue to receive all benefits under
Section 5 of the Employment Agreement (but only to the extent the Employee is
receiving such benefits as of the date hereof) through November 15, 1997, at
which time all such benefits shall terminate except as provided in this Section.
The Company shall continue to maintain Employee's benefits under the Company's
existing health and medical plans and pay the related insurance premiums
currently paid by the Company for the Employee's coverage through January 31,
1998. Thereafter, the Employee shall have the option to continue such health
insurance coverage at his own expense under applicable "COBRA" regulations.
6. RELEASE. The Employee hereby releases and discharges the Company and
all of its directors, officers, employees, agents, subsidiaries and affiliates
and its successors and assigns from any and all claims, actions, suits, debts,
accounts, contracts, agreements, damages, judgments and demands whatsoever, in
law or equity, that the Employee ever had, now has or hereafter can, shall or
may, have for, upon, or by reason of any matter, cause or thing whatsoever from
the beginning of the world to the date of this Agreement. Notwithstanding the
foregoing, this release shall not apply to any rights that the Employee has
under this Agreement Amendment. This release is irrevocable and may not be
changed orally.
7. MISCELLANEOUS. The Company shall provide the Employee with a fax
machine to be used at the Employee's home. The Company shall permit Employee to
retain ownership of such fax machine after his resignation in accordance with
Section 2(a) above. This Agreement Amendment shall constitute a supplement and
amendment to the Employment Agreement. To the extent that the Employment
Agreement and this Agreement Amendment shall conflict in any respect, the terms
of this Agreement Amendment shall be deemed the governing terms.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
Amendment to be duly executed as of the day and year first above written.
SHEFFIELD PHARMACEUTICALS, INC.
By:
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Xxxxx X. Xxxxxxxx, CEO
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Xxxxxx Xxxxxxxx
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