Exhibit 10.46
EMPLOYMENT
AGREEMENT
This Employment Agreement (the
“Agreement”), effective as of the 20th day of December,
2006, between Immtech Pharmaceuticals, Inc., a Delaware corporation
(the “Company”), and Mr. Eric L. Sorkin, an
individual residing in Montclair, New Jersey (the
“Executive”).
W
I T
N E S S
E T H
:
WHEREAS, the Company desires to
continue to employ the Executive as President and Chief Executive
Officer of the Company upon the terms and conditions set forth
herein; and
WHEREAS, Executive is willing to
continue such employment upon the terms and conditions set forth
herein;
NOW THEREFORE, in consideration of
the mutual covenants and agreements contained herein, the parties
agree as follows:
Section
1.
Duties . The Company agrees that Executive shall be employed
by the Company during the Term (as defined below) as President and
Chief Executive Officer of the Company. Executive shall perform
such duties and shall have such responsibilities consistent with
the Bylaws of the Company, the Company’s polices for senior
executive officers and customary for the duties and position of his
office, in each instance subject to the direction of the Board of
Directors. Executive agrees to be so employed and shall devote his
best efforts to advance the interests of the Company.
Section
2.
Term . Subject to Sections 4, 5 and 6 hereof, the term of
the Executive’s employment hereunder (the “Term”)
shall be for a period commencing on January 30, 2006 (the
“Effective Date”) to March 31, 2007, and thereafter
shall automatically renew for successive one year periods unless
notice of non-renewal is given by either party not less than 30
days prior to each successive anniversary date of this Agreement
while Executive is employed.
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Section 3.
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Compensation
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(a)
Base Salary . During the Term, beginning on April 1, 2007,
Executive shall be paid at a per annum rate of $375,000
(“Base Salary”). The Base Salary shall be payable by
the Company to Executive in accordance with the Company’s
regular payroll practices for senior management.
(b)
Stock Options . In lieu of a cash salary for
Executive’s services as President and Chief Executive Officer
from the Effective Date through March 31, 2007, Executive shall
receive a stock option (the “Option”) to purchase up to
an aggregate of 325,000 shares of the Company’s common stock,
to be granted under the Company’s 2000 Stock
Final
Incentive Plan or any successor
thereto (collectively, the “Incentive Plan”). The
Option shall be evidenced by a stock option agreement and shall
contain the following terms: (i) the exercise price shall equal the
fair market value of the underlying shares of the Company’s
common stock on the grant date, (ii) the term shall be ten years,
(iii) the Option shall be subject to settlement on a net share
basis (to enable Executive to make a cashless exercise and payment
of minimum statutory tax liabilities), (iv) the Option shall be an
incentive stock option to the extent possible, and (v) the Option
shall remain exercisable for the full term, whether or not
Executive remains employed with the Company. In addition, the
Option shall vest as follows:
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(i)
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175,000 shares on the date of
grant;
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(ii)
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75,000 shares on January 1, 2007;
and
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(iii)
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75,000 shares on March 31,
2007.
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(c)
Bonuses . (i) Executive shall be eligible to receive an
annual performance bonus in cash of up to 60% of the Base Salary
for each year of employment hereunder, beginning with the fiscal
year ending March 31, 2008. Any such bonus shall be determined in
the sole discretion of the Compensation Committee (the
“Committee”) of the Company’s Board of Directors
or.the Committee and the other independent directors of the Company
(as directed by the Board of Directors) based on certain milestones
determined in the sole discretion of the Committee or the Committee
and the other independent directors of the Company (as directed by
the Board of Directors).
(ii) The
Executive shall be eligible for a stock option bonus (the
“Performance Option”) of up to 150,000 shares, to be
granted under the Incentive Plan on terms and conditions set forth
in Exhibit A attached hereto, for each fiscal year, based on
certain milestones determined in the sole discretion of the
Committee or the Committee and the other independent directors of
the Company (as directed by the Board of Directors).
(iii) Any bonus due
Executive under this Section 3(c) shall be payable by the Company
to Executive within 120 days after end of the Company’s
applicable fiscal year.
(d)
Vacation, Sick Leave and Holidays . During the Term,
Executive shall be entitled to 20 days paid vacation on an annual
basis, and shall be entitled to sick leave and holidays at full pay
(beginning on April 1, 2007) in accordance with the Company’s
policies established and in effect from time to time.
(e)
Welfare Benefits . During the Term, Executive shall be
entitled to participate in all insurance, retirement, employee
benefits, pension and profit-sharing plans and other fringe benefit
programs established by the Company, including health insurance
(collectively, “Welfare Benefits”).
(f)
Reimbursement of Expenses . During the Term, Executive shall
be reimbursed for all items of travel and entertainment and
miscellaneous expenses reasonably incurred by him on behalf of the
Company. Executive shall, as a condition of such
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LEGAL_US_E #
72281507.1
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Final
reimbursement, provide sufficient
documentation in such detail as will allow Company to deduct such
expenses. Reimbursement of expenses not claimed within sixty (60)
days after incurred shall be deemed waived, and all reimbursement
payments for a particular calendar year shall be paid within two
and one half months after the end thereof.
(g)
Severance . Upon termination of Executive’s employment
hereunder by the Company without Cause (as defined below),
including non-renewal of the Agreement by the Company, or by
Executive for Good Reason (as defined below (other than pursuant to
Section 4 or 5 below), the Company will pay or provide to the
Executive (the following, collectively, “Severance”):
(1) salary, at the greater of (i) $375,000 and (ii)
Executive’s Base Salary rate in effect on the date of
termination, equal to six months, payable in accordance with normal
payroll practices applicable to the Company’s senior
executives, (2) Welfare Benefits and insurance in which
Executive was a participant or which covered Executive on the date
of termination (less any amounts Executive is paying immediately
prior to such termination to participate in such Welfare Benefits
or insurance) for the twelve month period following any such
termination (or, at the Company’s option, the Company may
provide to Executive after-tax payments to purchase equivalent
benefits), (3) a cash bonus, on the date on which such bonus
would otherwise be due under Section 3(c) hereof, equivalent to the
cash bonus amount to which Executive would have been entitled had
he continued working until the end of the then current Term and
(4) immediate vesting of all outstanding options then held by
Executive, and the right to exercise such options for the remainder
of their respective terms. The Severance shall be the sole payment
and shall satisfy all obligations of the Company and its affiliates
to Executive in the event of any such termination of
Executive’s employment and shall be contingent on
Executive’s execution of the Company’s standard release
and waiver agreement. To the extent the value of the Severance paid
to Executive under clauses (1) through (4) of this Agreement is
equal to or less than Executive’s annualized Base Salary as
of the date of his termination, the Severance is being paid to
Executive in consideration for Executive’s non-competition
covenant set forth in Section 13 hereof.
(h)
Insurance . During the Term, subject to insurability of
Executive, the Company shall provide Executive with disability
insurance in an amount not less than $375,000 or Executive’s
Base Salary then in effect that would have been payable pursuant to
the terms of this Agreement.
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Section 4.
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Death or Total Disability of
Executive .
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(a)
Death . In the event of the death of Executive during the
Term, this Agreement shall terminate effective as of the date of
the Executive’s death and the Company shall have no further
obligations or liability hereunder, except the Company shall pay or
provide to the Executive’s estate (i) twelve months of
the Executive’s then current Base Salary or $375,000 if not
then receiving a Base Salary (payable in accordance with the
Company’s normal payroll practices for senior management) and
a pro rata share of the cash bonus under Section 3(c) for
the period up to the date of termination, (ii) all amounts due
pursuant to the Welfare Benefits and insurance in which Executive
was a participant or covered and (iii) immediate vesting of
all options then held by Executive and the
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