Exhibit No. 10.4
AMENDMENT TO EMPLOYMENT AGREEMENT
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This Agreement (the "Agreement"), made as of this 1st day of March,
1995, is entered into by and between MedChem Products, Inc., a Massachusetts
corporation with its principal place of business at 232 West Cummings Park,
Woburn, Massachusetts 01801 (the "Company"), and Edward J. Quilty, residing at
620 Grindan Drive, Yardley, PA 19067 ("Quilty").
The Company and Quilty are parties to an Employment Agreement dated
July 13, 1994 (the "Employment Agreement"). The Company and Quilty desire to
make certain amendments to the Employment Agreement. In consideration of these
premises, the mutual covenants and promises contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are acknowledged,
the parties hereto agree as follows:
1. The Employment Agreement is hereby amended by deleting Section 10
in its entirety and inserting in lieu thereof the following:
"10. Stock Options.
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(a) Concurrently herewith, the Company shall grant to Quilty an
option (the "First Option") to purchase 200,000 shares of its Common
Stock under its 1993 Stock Option Plan (at an exercise price equal to
the closing sale price for the Common Stock on the New York Stock
Exchange for July 13, 1994), which option shall vest ratably over four
years with the initial 25% of the shares covered by such option
vesting on July 13, 1995 and the remaining 75% vesting ratably on July
13 of the succeeding three years, with the final 25% vesting on July
13, 1998. In addition, the Company will grant Quilty an option (the
"Second Option") to purchase an additional 200,000 shares on August 1,
1994 under the Company's newly-adopted 1994 Stock Option Plan (which
is subject to approval by the Company's stockholders) (at an exercise
price equal to the closing sale price for the Common Stock on the New
York Stock Exchange on August 1, 1994), which option shall vest
ratably over seven years (subject to acceleration of such seven-year
vesting upon the attainment of milestones to be determined by the
Company's Board of Directors on or before 120 days from the date
hereof).
(b) In the event that the employment of Quilty is terminated
pursuant to Sections 7, 8 or 9(b) only, the exercisability of the
First Option shall be accelerated by one year so that such First
Option shall be exercisable to purchase the number of shares of Common
Stock Quilty would otherwise have been able to purchase if Quilty's
employment was terminated on the first anniversary of the date on
which it was actually terminated; provided, however, that if, after
such acceleration, Quilty is still not vested in, and entitled to
purchase, an aggregate of 200,000 shares pursuant to the First Option
and the Second Option (but excluding from such calculation of 200,000
shares any shares as to which vesting was accelerated due to the
attainment of milestones determined by the Company's Board of
Directors, as set forth above in this Section 10 (the "Accelerated
Shares")), then, in such event, the vesting under the First Option
will be further accelerated such that it shall be exercisable, in the
aggregate, for that number of shares of Common Stock as is equal to
the difference between 200,000 and the number of shares of Common
Stock exercisable under the Second Option as of the date of
termination (excluding any Accelerated Shares). The vesting under the
Second Option shall not be accelerated in connection with any such
termination of employment.
(c) Notwithstanding the foregoing, in the event a Change in
Control (as defined below) of the Company occurs during the Employment
Term, all options to purchase capital stock of the Company previously
granted to Quilty pursuant to any stock option plan or other employee
benefit arrangement of the Company shall immediately vest and become
fully exercisable in accordance with their terms. A "Change in
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Control" of the Company shall occur or be deemed to have occurred only
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if any of the following events occurs: (i) any "person," as such term
is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (other than the Company, any
trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any corporation owned directly or
indirectly by the stockholders of the Company in substantially the
same proportion as their ownership of stock of the Company) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing 40% or more of the combined voting power of the Company's
then outstanding
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securities; (ii) individuals who, as of the date hereof, constitute
the Board (as of the date hereof, the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board, provided that
any person becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's stockholders,
was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board (other than an election or nomination
of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election
of the directors of the Company, as such terms are used in Rule 14a-11
of Regulation 14A under the Exchange Act) shall be, for purposes of
this Agreement, considered as though such person were a member of the
Incumbent Board; or (iii) the stockholders of the Company approve a
merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 80% of the
combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
"person" (as hereinabove defined) acquires more than 50% of the
combined voting power of the Company's then outstanding securities; or
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets."
2. This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the Commonwealth of Massachusetts, without giving
effect to conflict of laws provisions.
3. This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings, whether written
or oral, relating to the amendment or modification of the Employment Agreement.
4. In all respects other than as specifically provided in this
Agreement, the Employment Agreement is hereby ratified and affirmed.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
MEDCHEM PRODUCTS, INC.
By: /s/ James F. Marten
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Title: Chairman
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/s/ Edward J. Quilty
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Edward J. Quilty
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