Exhibit 10.23
EXTENSION AND AMENDMENT
AGREEMENT
AGREEMENT dated as of January 25, 2007 between Callisto
Pharmaceuticals, Inc., a Delaware corporation (the
“Company”) and Gabriele M. Cerrone (the
“Consultant”).
The Company’s Board of
Directors has determined, in light of the importance of the
Consultant’s services to the stability and interests of the
Company and its stockholders, to extend the term of the Consulting
Agreement dated as of December 27, 2004 (the “Consulting
Agremeent”).
NOW, THEREFORE, in consideration of
the premises and the mutual covenants contained in this Agreement,
it is agreed between the Company and the Consultant as
follows:
1.
EXTENSION AND AMENDMENT OF CONSULTING AGREEMENT .
(a)
Extension . The “Initial Term”
defined in Section 1.2 of the Consulting Agreement is hereby
extended to December 31, 2009, unless earlier terminated in
accordance with Section 10 of the Consulting Agreement.
(b)
Compensation . The Company agrees to increase
Consultant’s “Base Compensation” (as defined in
the Consulting Agreement) from $205,000 per year to $275,000 per
year commencing January 1, 2007, payable monthly in approximate
equal installments in advance. In addition, the Consultant
shall be granted an aggregate of 225,000 ten-year non-qualified
stock options pursuant to the Company’s Stock Option Plan
(the “Plan”) at an exercise price per share equal
to the fair market value of the Company’s Common Stock on the
date of execution of this Agreement, as such value is defined in
the Plan. Subject to the provisions of the Plan and Section
10 of the Consulting Agreement, one third of such options shall
vest on December 31, 2007, 2008 and 2009. Once vested, the
options may be exercised until their expiration, notwithstanding
any provision of the Plan which requires exercise following
termination of services in a shorter period. The Company will
include the shares of equity securities of the Company which may be
issued upon the exercise of the options in any registration
statement under the Securities Act of 1933 which includes
securities issuable to any other executive officer of the
Company. In recognition of the services beyond that required
of Consultant during the period from July 1, 2006 to the date of
this Amendment, the Company will set aside and accrue a bonus for
the Consultant of $75,000, payable on March 31, 2007. The
Consultant shall be eligible to earn a cash bonus of up to 22.5% of
Base Compensation for each twelve-month period during the Term
based on meeting performance objectives and bonus criteria to be
mutually identified by Consultant and the Company’s Board of
Directors and any additonal bonuses and option grants as may be
determined by the Compensation Committee of the Company’s
Board in its sole discretion. In the event no performance
criteria has been set, the Consultant shall receive a bonus of not
less than 10% if bonuses are paid to any other of the
Company’s executive officers during or for the year of this
agreement. For purposes of Section 3 and 4 of the Agreement,
the Consultant’s advisory services in connection with the
planning, financing and execution of one or more plans of corporate
reorganization shall not be covered within the scope of services
provided under this Agreement, nor will the compensation under this
Agreement be deemed to cover such services.
1
(c)
Amendment to Section 5 of the Consulting Agreement
.
(i)
Section 5.1 of the Consulting Agreement is hereby amended,
effective immediately to include in reasonable expenses, the cost
associatied with accessing office facilities and administrative
assistance outside of the Company’s principal executive
offices at such times that the Consultant is attending to matters
within the scope of this Agreement.
(ii)
Section 5.2 of the Consulting Agreement is hereby amended,
effective immediately to delete the Section in its entirety and
replace it with the following:
“During the Term, the Company,
at its sole expense, shall provide Consultant with one fully
furnished and equipped executive office, one full-time qualified
and experienced administrative assistant, and such legal and
accounting support services as is deemed appropriate by the
Consultant and approved by the Company’s Chief Executive
Officer. Such services and facilities will not be diminished
without the Consultant’s prior consent.”
(d)
Amendment to Section 10.1(c) of the Consulting Agreement
. Section 10.1(c) of the Consulting Agreement is hereby
amended, effective immediately to add the following
paragraphs:
“(iv)
The severance compensation provided
for in subsection (9)(i) above shall be paid not later than the
tenth day following the Date of Termination; p rovided,
however, that if the amount of such compensation cannot be
finally determined on or before such day, the Company shall pay to
the Consultant on such day an estimate, as determined in good faith
by the Company but subject to the provisions of Section 10.1(a)(v),
of the minimum amount of such compensation and shall pay the
remainder of such compensation (together with interest at the
Federal short-term rate provided in Section 1274(d)(7)(C)(1) of the
Code) as soon as the amount thereof can be determined but in no
event later than the thirtieth day after the Date of Termination.
In the event the amount of the estimated payment exceeds the amount
subsequently determined to have been due, such excess shall
constitute a loan by the Company to the Consultant payable on the
fifth day after demand by the Company (together with interest at
the Federal short-term rate provided in Section 1274(d)(7)(C)(1) of
the Code).
(v)
If the payment of the Total Payments
(as defined below) will be subject to the tax (the “Excise
Tax”) imposed by Section 4999 of the Code, the Company shall
pay the Consultant on or before the tenth day following the Date of
Termination, an additional amount (the “Gross-Up
Payment”) such that the net amount retained by the
Consultant, after deduction of any Excise Tax on Total Payments and
any federal and state and local income tax and Excis
