Exhibit 10.3
SECOND AMENDMENT TO THE
SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Second Amendment to the Second Amended and Restated Employment Agreement
(the “Amendment”) is entered into this 1st day of December, 2011 (the “Effective
Date”), by and between Dr. Allan L. Goldstein (the “Executive”) and RegeneRx
Biopharmaceuticals, Inc, a Delaware corporation (the “Company”).
The Company and the Executive have entered into that certain Second Amended and
Restated Employment Agreement dated as of March 11, 2009, as amended pursuant to
the Amendments to the Second Amended and Restated Employment Agreement (as
amended, the “Employment Agreement”); and
The Company and the Executive desire to amend the Employment Agreement as
provided in this Amendment.
Accordingly, in consideration of the mutual promises and covenants contained
herein, the parties agree to the following:
1. Amendment to Section 6.1. Section 6.1 of the Employment Agreement is hereby
amended and replaced in its entirety as follows:
Commencing on December 1, 2011, Executive’s base salary shall be at a rate of
$2800 per month. Commencing on the Company’s first regular payroll date
following the consummation of an Initial Financing (as defined below),
Executive’s base salary will be increased to 60% of Executive’s base salary in
effect as of November 30, 2011. Commencing on the Company’s first regular
payroll date following the consummation of a Qualified Financing (as defined
below), Executive’s base salary will be increase to 100% of Executive’s base
salary in effect as of November 30, 2011. These payments collectively will be
referred to herein as the “Base Salary.” The Base Salary will be subject to
review and adjustment from time to time by the Company in its sole discretion
and will be payable subject to standard federal and state payroll withholding
requirements in accordance with Company’s standard payroll practices. For
purposes of this Agreement, “Initial Financing” means the Company’s receipt, in
one or more equity financings and/or strategic transactions between December 1,
2011 and December 31, 2011, of aggregate gross proceeds of at least $500,000.
For purposes of this Agreement, “Qualified Financing” means the Company’s
receipt, in one or more equity financings and/or strategic transactions
subsequent to December 1, 2011, of aggregate capital that the Board determines
is sufficient to conduct a Phase 2b or Phase 3 clinical trial of RGN-259.

 

 

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2. Amendment to Section 7.1. Section 7.1 of the Agreement shall be revised to
add the provisions set forth below to the end of the Section:
On December 2, 2011, Executive shall receive an option to purchase that number
of shares of common stock equal to the quotient obtained by dividing: (A) the
difference between the employee’s gross monthly base salary in effect as of
November 30, 2011 and $2800, by (B) the closing trading price of the Company’s
common stock on December 2, 2011. The exercise price of the stock option shall
be equal to the closing trading price of the Company’s common stock on
December 2, 2011. The option, which shall be an incentive stock option for
purposes of section 422 of the Code to the maximum extent permitted, and
otherwise shall be treated as a non-qualified stock option, shall vest in full
on December 31, 2011, provided that Executive has not incurred a Termination of
Service (as defined in the Plan) before December 31, 2011. The specific terms
and conditions of the option shall be as set forth in the Plan and the standard
form of stock option agreement, which the Executive hereby agrees to execute.
3. Amendment to Section 12.1(a). Section 12.1(a) of the Employment Agreement is
hereby amended and replaced in its entirety as follows: “[INTENTIONALLY
DELETED].”
4. Amendment to Section 12.2(a). Commencing on the Effective Date of this
Amendment and continuing until the consummation of a Qualified Financing, the
below sentence shall replace the first sentence of Section 12.2(a) of the
Employment Agreement in its entirety. Upon consummation of a Qualified
Financing, the original language in the first sentence of Section 12.2(a) of the
Employment Agreement shall be restored and the below language shall have no
force and effect.
In the event that Executive voluntarily terminates his employment with the
Company for any reason within 12 months after a Change of Control event, as
defined in Section 12.1, then the Company shall (i) pay to Executive on the
sixtieth (60th) day following Executive’s date of termination an amount equal to
two (2) weeks of the Executive’s base salary in effect on the date of his
termination from employment, less any applicable federal and state taxes and
withholdings, and (ii) to the extent that Executive is eligible for and timely
elects continuation of health benefits for himself and/or his eligible
dependents under the Company’s group health plans pursuant to COBRA or any
analogous state or local law, pay or reimburse Executive for the amount of any
insurance premiums for such continuation coverage for a one-month period after
the Release Effective Date, but these payments shall be limited to the amount of
the premiums being paid by the Company for Executive’s coverage immediately
prior to the date of his termination from employment.
5. Amendment to Section 12.2. A new Section 12.2(c) shall be added to the
Employment Agreement immediately after Section 12.2(b) as follows:
(c) Anything in this Agreement to the contrary notwithstanding, in the event the
Company’s business is discontinued because it is rendered impracticable by
substantial financial losses, lack of funding, legal decisions, administrative
rulings, declaration of war, dissolution, national or local economic depression
or crisis or any reasons beyond the control of the Company, then this Agreement
shall terminate as of the day the Company determines to cease operation with the
same force and effect as if such day of the month were originally set as the
termination date hereof. In the event this Agreement is terminated pursuant to
this Section 12.2(c), Executive will not receive severance payments, or any
other severance compensation or benefit, except that the Company shall pay to
Executive any Accrued Compensation.

 

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6. Amendment to Section 14. Section 14 of the Agreement shall be revised to add
the provisions set forth below to the end of the Section:
It is intended that each installment of payments provided for in this Agreement
is a separate “payment” for purposes of Treasury Regulations
Section 1.409A-2(b)(2)(i). For clarity, it is intended that severance payments
and other payments set forth in this Agreement satisfy, to the greatest extent
possible, the exceptions from the application of Section 409A provided under
Treasury Regulations Sections 1.409A-1(b)(4), and 1.409A-1(b)(9).
Notwithstanding the foregoing, to the extent that the Company determines that
any of the payments or benefits provided under this Agreement constitutes
“deferred compensation” within the meaning of Section 409A that may only be paid
on a qualifying transaction (that is, the payments and benefits are not
otherwise “exempt” under Section 409A), the definition of Change of Control in
this Agreement will apply only to the extent the transaction also meets the
definition used for purposes of Treasury Regulation Section 1.409A-3(a)(5), that
is, as defined under Treasury Regulation Section 1.409A-3(i)(5).
7. The Executive acknowledges that this Amendment constitutes his agreement and
consent to the reduction of his Base Salary, and further agrees that this
Amendment and the reduction of his Base Salary hereunder shall not constitute
Good Reason to terminate his employment within the meaning of the Agreement.
8. Except as herein modified or amended, no other term or provision of the
Employment Agreement is amended or modified in any respect. The Employment
Agreement, and this Amendment, set forth the entire understanding between the
parties with regard to the subject matter hereof and supersedes any prior oral
discussions or written communications and agreements. This Amendment cannot be
modified or amended except in writing signed by the Executive and an authorized
officer of the Company.
In Witness Whereof, the parties have executed this Second Amendment to the
Second Amended and Restated Employment Agreement on the day and year first
written above

     
 
  EXECUTIVE:
 
   
 
   
 
  /s/ Allan L. Goldstein
 
   
 
   
 
   
 
  COMPANY:
 
   
 
  /s/ J.J. Finkelstein
 
   
 
  RegeneRx Biopharmaceuticals, Inc.
 
  By: J.J. Finkelstein
 
  Title: President and CEO

 

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