ex10-46_1.htm


     

    
      


       

      EXHIBIT
10.46(1)

       

      AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

       

      This
Amended and Restated Employment Agreement (the “Agreement”), effective as of the
12 day of March, 2008, 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.

       

      Section
3.  Compensation.

       

      (a) Base
Salary.  During the Term, beginning on April 1, 2008, Executive
shall be paid at a per annum rate of $250,000 (“Base Salary”) for a one-year
period ending March 31, 2009. Beginning on April 1, 2009, 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.  Executive shall be eligible for stock option grants
(“Options”) under the Company’s 2007 Stock Incentive Plan or any successor
thereto (collectively, the “Incentive Plan”) as determined by Executive and 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).  All such Options shall be evidenced by stock


       

      
        
           

        

        
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      option
agreements 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.

       

      (c) Bonuses.  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 Committee 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).  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 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 

       

      
        
           

        

        
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      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.

       

      Section
4.   Death or Total Disability of
Executive.

       

      (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 right to exercise the
options through the remainder of their respective terms.

       

      (b)  Total
Disability.  In the event of the Total Disability (as
hereinafter defined) of Executive for a period of 120 consecutive days during
the Term, the Company shall have the right to terminate Executive’s employment
hereunder by giving Executive ten (10) days’ written notice thereof, and upon
expiration of such ten (10) day period, the Company shall have no further
obligations or liability under this Agreement, except the Company shall pay or
provide to Executive (i) twelve months of Executive’s then current Base
Salary or $375,000 if not then receiving a Base Salary (payable, to the extent
available, from the proceeds of the disability insurance described in Section
3(h) hereof, and when salary payments are made to other Company senior
executives during the applicable term following Executive’s Total Disability)
and a pro rata share of
the cash bonus under Section 3(c) for the period up to Executive’s date of Total
Disability, (ii) Welfare Benefits and/or insurance in which Executive is a
participant or which covered Executive on the date of Total Disability (without
deduction for any amounts Executive was paying immediately prior to such
determination to participate in said Welfare Benefits or insurance) for the
twelve month period following the date of determination of Total Disability (or,
at the Company’s option, the Company may provide to Executive after tax-payments
to purchase equivalent benefits) and (iii) immediate vesting of all options then
held by Executive and the right to exercise such options for the remainder of
their respective terms.

       

      
        
           

        

        
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      The term
“Total Disability”, when used herein, shall mean a mental or physical condition
which, based upon competent medical evidence, renders the Executive unable or
incompetent to carry out substantially all of the material job responsibilities
he held or tasks to which he was assigned, to be determined in the sole
discretion of the Company’s Board of Directors.

       

      Section
5.  Discharge for
Cause.  The Company may terminate Executive’s employment
hereunder for the following reasons (each of which shall constitute “Cause”);
(a) habitual intoxication; (b) drug addiction; (c) conviction of Executive of a
felony (d) a unanimous vote of non-confidence by the Board of Directors
(excluding executive), or (e) a material breach by Executive of any term or
provision of this Agreement or any Company policies applicable to Executive,
which Executive fails to cure within 30 days after receipt of written notice
from the Company advising Executive, in reasonable detail, of the
breach.  In the event that the Company shall discharge the Executive
pursuant to this Section 5, the Company shall have no further obligations or
liability under this Agreement, except the Company shall pay to Executive the
portion, if any, of Executive’s Base Salary earned through the date employment
terminates.

       

      Section
6.  Discharge Without Cause;
Good Reason.  The Company may terminate Executive’s employment
hereunder, for any or no reason, at any time upon at least thirty (30) days’
prior written notice to Executive.  Executive may resign upon thirty
days’ notice for “Good Reason” which shall be deemed a termination without Cause
if not cured within said 30 day notice period.  In the event of a
discharge by the Company without Cause or resignation by Executive for Good
Reason (provided that Executive’s resignation occurs within six months of the
event constituting Good Reason, Executive shall be entitled to receive the
applicable Severance provided for in Section 3 hereof.  In the event
of a Change in Control Event, whether or not Executive terminates his employment
hereunder, all outstanding stock options then held by Executive shall be
immediately and fully vested.  “Good Reason” means (i) breach by the
Company of any of the material terms and conditions of this Agreement or any
Company policies applicable to Executive, (ii) relocating Executive, without his
prior consent, outside of the Chicago, IL or New York, NY metropolitan areas,
(iii) assignment of duties that are significantly different, whether diminution
or promotion, without Executive’s consent, (iv) any reduction of Base Pay,
Welfare Benefits or Bonus unless applied uniformly to all Company executives, or
(v) a Change in Control Event.  A “Change in Control Event” shall mean
any of the following: (i) any person or entity (except for a current
stockholder) or “group” (as contemplated by Section 13(d)(3) of the Securities
Exchange Act of 1934) becomes the beneficial owner of greater than 50% of the
then outstanding voting power of the Company; (ii) a merger or consolidation
with another entity where the voting securities of the Company outstanding
immediately before the transaction constitute less than a majority of the voting
power of the voting securities of the Company or the surviving entity
outstanding immediately after the transaction; (iii) the sale or disposition of
all or substantially all of the Company’s assets; or (iv) the stockholders of
the Company approve a plan or proposal for liquidation or dissolution of the
Company.

       

      Section
7.  Supersedes Other Agreements;
Entire Agreement.  This Agreement supersedes and is in lieu of
any and all other employment arrangements between Executive and the
Company.  This Agreement constitutes the entire agreement of the
parties hereto and supersedes all prior contracts or agreements with respect to
the subject matter herein, whether oral or written.

       

      
        
           

        

        
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      Section
8.  Amendments.  Any
Amendment to this Agreement, excluding any extension or renewal of the Term,
shall be made in writing and signed by the parties hereto.

       

      Section
9.  Enforceability.  If
any provision of this Agreement shall be held invalid or unenforceable, in whole
or in part, then such provision shall be deemed to be modified or restricted to
the extent and in the manner necessary to render the same valid and enforceable,
or shall be deemed excised from this Agreement as the case may require, and this
Agreement shall be construed and enforced to the maximum extent permitted by
law, as if such provision had been originally incorporated herein as so modified
or restricted, or as if such provision had not been originally incorporated
herein, as the case may be.

       

      Section
10.  Governing
Law.  The validity and effect of this Agreement shall be
governed exclusively by the laws of the State of New York, excluding the
“conflicts of laws” rules of that state.

       

      Section
11.  Assignment.  This
Agreement and the obligations created hereunder may not be assigned by the
Company without the prior written consent of Executive.  This
Agreement and the obligations created hereunder may not be assigned by the
Executive.

       

      Section
12.  Notices.  All
notices required or permitted to be given hereunder shall be in writing and
shall be deemed to have been given when personally delivered or mailed, by
certified or registered mail, return receipt requested, addressed to the
intended recipient as follows:

       

      If to
Executive:

       

      Eric L.
Sorkin

      c/o
Immtech Pharmaceuticals, Inc.

      One North
End Avenue

      New York,
New York 10282

       

      If to the
Company:

       

      Immtech
Pharmaceuticals, Inc.

      150
Fairway Drive, Suite 150

      Vernon
Hills, Illinois 60061

      Attention:  Secretary

       

      Any party
may from time to time change its address for the purposes of notices to that
party by a similar notice specifying a new address, but no such change shall be
deemed to have been given until it is actually received by the party sought to
be charged with its contents.

       

      Section
13.  Covenant Not to
Compete.  Executive agrees that he will not, either directly or
indirectly, at any time during his employment with the Company, compete or
interfere, or setup to compete or interfere, or aid others to so compete or
interfere or set up to compete or interfere with the Company in the conduct or
transaction of any business or enterprise in which the Company (i) is presently
engaged, or (ii) is planning to become engaged and has made significant monetary
investment in order to be engaged, or (iii) is engaged at any time during
Executive’s employment by the Company.

       

      
        
           

        

        
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      Executive
further agrees that, upon any termination of his employment with the Company, he
will not, for a period of twelve (12) months from the date of termination (the
“Restriction Period”), within any geographic markets where the Company is then
active, directly or indirectly compete with the Company by engaging in a
competitive business, as an owner, partner, officer, director, associate,
employee, consultant, salesperson or stockholder or aid others, directly or
indirectly, in competing with the Company.  For the purposes of this
Agreement, competition and/or engaging in a competitive business shall include,
but shall not be limited to, any disclosure of confidential, proprietary,
promotional or marketing information, trade secrets, names of the Company’s
employees or research consultants, names of suppliers, names of customers or any
other information acquired prior to termination of employment which is not
already in the public domain.

       

      Executive
expressly agrees that, upon a breach or violation of the provisions of this
section, the Company shall be entitled, in addition to all other remedies
available to it, to appropriate injunctive relief, without bond, in any court of
competent jurisdiction.

       

      Section
14.  Confidentiality and
Non-Disclosure.  Executive covenants and agrees:

       

      (a) Not
to use, publish or otherwise disclose, except in the course of his duties as
Executive of the Company, any confidential, proprietary, patentable or
copyrightable information or materials generated by or disclosed to him in the
course of his duties as an employee of the Company, except for data
which:

       

      (i)         Is
or through no fault of the Executive comes into the public domain;

       

      (ii)         After
the time of disclosure to Executive, is published or becomes a part of the
public domain through no fault of Executive; or

       

      (iii)           Was
in the possession of Executive prior to the time of disclosure by the Company,
which can be demonstrated by Executive’s written records or other competent
evidence.

       

      (b) Not
to disclose or utilize, other than in connection with the performance of his
duties as an employee of the Company, any information that Executive is under a
duty not to disclose.

       

      (c) Upon
termination of his employment with the Company, to promptly return to the
Company all written and other information, data and materials which are secret
or confidential in nature of which relate to patentable, copyrightable or
proprietary information relating to the business of the Company.

       

      Section
15.  Waiver.  No
claim or right arising out of a breach or default under this Agreement can be
discharged in whole or in part by a waiver of that claim or right unless the
waiver is supported by consideration and is in writing and executed by the
aggrieved party hereto or its or his duly authorized agent. A waiver by any
party hereto of a breach of default by the other party hereto of any provision
of this Agreement shall not be deemed a waiver of any prior or subsequent
compliance herewith, and such provision shall remain in full force and
effect.

       

      
        
           

        

        
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      Section
16.  Taxes
and Code Section 409A Over-ride.  Executive is solely
responsible for the payment of any tax liability (including any taxes and
penalties arising under Section 409A of the Code) that may result from any
payments or benefits that he receives pursuant to this Agreement.  The
Company shall not have any obligation to pay, mitigate, or protect Executive
from any such tax liabilities.  Nevertheless, if the Company
reasonably determines that Executive’s receipt of payments or benefits pursuant
to Section 5 above would cause him to incur liability for additional tax under
Section 409A of the Code, then the Company may in its discretion suspend such
payments or benefits until the end of the six-month period following termination
of Executive’s employment (the “409A Suspension Period”).  As soon as
reasonably practical after the end of the 409A Suspension Period, the Company
will make a lump sum payment to me, in cash, in an amount equal to any payments
and benefits that the Company does not make during the 409A Suspension
Period.  Thereafter, Executive will receive any remaining payments and
benefits due pursuant to Section 5 in accordance with the terms of that Section
(as if there had not been any suspension beforehand).

       

      
        
           

        

        
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      IN
WITNESS WHEREOF, this Employment Agreement has been executed by the Company, by
a duly authorized member of the Board of Directors, and by the Executive on the
date first above written.

       

      
      

       

      
        	 	      
                IMMTECH
      PHARMACEUTICALS, INC.

              
	 	 	 
	 	 	 
	 	By:	/s/ Gary C.
      Parks 
	 	 	      
                Chief
      Financial Officer

              
	 	 	 
	 	 	 
	 	 	/s/ Eric L.
      Sorkin        
	 	 	      
                Eric
      L. Sorkin

              


      

    

     

     

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