AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
THIS AMENDED AND
RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is made and
entered into as of December 31, 2008 by and between ALSERES
PHARMACEUTICALS, INC., a Delaware corporation (the
“Company”), and Peter G. Savas
(“Executive”). This Agreement amends, restates and
supersedes, in its entirety, the Employment Agreement dated
March 31, 2006 and effective as of January 1, 2006 (the
“Effective Date”) previously in effect between the
parties hereto.
The Company hereby
employs Executive and Executive hereby accepts employment upon the
terms and conditions set forth below.
2.1 Term .
The term of this Agreement shall commence on the Effective Date,
and shall continue for one (1) year from the Effective Date
(the “Original Employment Term”), on the terms and
conditions set forth below, unless sooner terminated as provided in
Section 5.
2.2
Extension . Following the expiration of the Original
Employment Term and provided that this Agreement has not been
terminated pursuant to Section 5, and every year thereafter,
the Agreement shall be automatically renewed for an additional
12 month period (the “Extension Period”),
effective on each anniversary date of the Effective Date, unless
either party notifies the other party in writing not less than
90 days prior to the expiration of the Original Employment
Term or any subsequent 12 month period.
3.1 Base
Compensation . For the services to be rendered by Executive
under this Agreement, Executive shall be entitled to receive
initial annual base compensation (“Base Compensation”)
of $400,000, payable in substantially equal twice-monthly
installments. Thereafter, the Base Compensation shall be reviewed
and adjusted annually as determined by the Compensation Committee
(the “Compensation Committee”) of the Board of
Directors (the “Board”) of the Company, or if there is
no Compensation Committee, then by the Board provided, however, in
no event may the Base Compensation be adjusted below the initial
annual Base Compensation set forth in this Section 3.1.
3.2 Bonus
Compensation . The Compensation Committee shall review
Executive’s performance at least annually during each year of
the Original Employment Term and during any periods of automatic
extension of this Agreement pursuant to Section 2.2 and cause
the Company to award Executive a cash bonus targeted at 25% of the
Executive’s Base Compensation which the Compensation
Committee shall reasonably determine as fairly compensating and
rewarding Executive for services rendered to the Company and/or as
an incentive for continued service to the Company. The amount of
such cash bonus shall be determined in the sole and absolute
discretion of the Compensation Committee, and shall be
dependent on,
among other things, the achievement of certain performance levels
by the Company, including, without limitation, growth in funds from
operations, and Executive’s performance and contribution to
increasing the funds from operations. Such bonus shall be paid to
Executive no later than March 15 th of
the calendar year following the calendar year in which the bonus is
earned.
(a)
Medical Insurance . The Company shall provide to Executive
and Executive’s spouse and children, at its sole cost, such
health, dental and optical insurance as the Company may from time
to time make available to its other executive employees.
(b)
Life and Disability Insurance . The Company shall provide
Executive such disability and life insurance as the Company in its
sole discretion may from time to time make available to its other
executive employees.
(c)
Pension Plans, Etc . Executive shall be entitled to
participate in all pension, 401(k) and other employee plans and
benefits established by the Company on at least the same terms as
the Company’s other executive employees.
3.4
Vacation . Executive shall be entitled to four
(4) vacation weeks (20 business days) in each calendar year,
subject to and on a basis consistent with Company policy. In
addition, Executive shall be entitled to all Company holidays and
other paid time off in accordance with Company policy.
4.1
Position . Executive shall serve as Chief Executive Officer.
The Company agrees that the duties that may be assigned Executive
shall be the usual and customary duties of the Chief Executive
Officer. Executive shall have such executive power and authority as
shall reasonably be required to enable Executive to discharge the
duties of such offices. At the Company’s request, Executive
may, at Executive’s discretion, serve the Company and its
respective subsidiaries in other offices and capacities in addition
to the foregoing, but shall not be required to do so. In the event
the Company and Executive mutually agree that Executive shall
terminate Executive’s service in any one or more of the
aforementioned capacities, or Executive’s service in one or
more of the aforementioned capacities is terminated,
Executive’s compensation, as specified in this Agreement,
shall not be diminished or reduced in any manner.
4.2 Devotion of
Time and Effort . Executive shall use Executive’s good
faith best efforts and judgment in performing Executive’s
duties as required hereunder and to act in the best interests of
the Company. Executive shall devote substantially all of his
business time and attention to the performance of services of the
Company in his capacity as an officer thereof and as may reasonably
be requested by the Board.
4.3 Other
Activities . Executive may engage in other activities for
Executive’s own account while employed hereunder, including,
without limitation, charitable, community and other business
activities, provided that such other activities do not materially
interfere with the performance of Executive’s duties
hereunder.
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4.4 Business
Expenses . The Company shall promptly, but in no event later
than ten business days after submission of a claim of expenditure,
reimburse Executive for all reasonable business expenses including,
without limitation, business seminar fees, professional association
dues, bar dues and reasonable entertainment expenses incurred by
Executive in connection with the business of the Company, upon
presentation to the Company of written receipts for such expenses.
Such reimbursement shall also include, but not be limited to,
reimbursement for all reasonable travel expenses, including all
airfare, hotel and rental car expenses incurred by Executive in
traveling in connection with the business of the
Company.
4.5
Company’s Obligations . The Company shall provide
Executive with any and all necessary or appropriate current
financial information and access to current information and records
regarding all material transactions involving the Company,
including but not limited to acquisition of assets, personnel
contracts, dispositions of assets, service agreements and
registration statements or other state or federal filings or
disclosures, reasonably necessary for Executive to carry out
Executive’s duties and responsibilities hereunder. In
addition, the Company agrees to provide Executive, as a condition
to Executive’s services hereunder, such staff, equipment and
office space as is reasonably necessary for Executive to perform
Executive’s duties hereunder.
5.1 Release of
Claims . The receipt of any severance payments provided for
under this Agreement or otherwise upon Executive’s
termination of employment (the “Separation Date”) shall
be dependent upon Executive’s delivery and non-revocation of
an effective general release of claims (the “General
Release”) in a form satisfactory to the Company. The General
Release must be delivered to the Company and any applicable
non-revocation period must have expired within 30 days after
the Separation Date. The severance payments shall commence on the
30 th
day after Separation Date (the
“Payment Commencement Date”), provided that if the
General Release has been executed and not revoked within
30 days of the Separation Date, such payments may commence on
such earlier date, unless the Payment Commencement Date occurs in
the calendar year following the year of the Separation Date, in
which case the severance payments shall be paid or commence no
earlier than January 1 of such subsequent calendar year.
5.2 By Company
Without Cause . The Company may terminate this Agreement
without “Cause” (as hereinafter defined) at any time
following the Effective Date, provided that the Company first
deliver to Executive the Company’s written election to
terminate this Agreement at least 90 days prior to the
Separation Date.
(a)
Amount . In the event the Company terminates
Executive’s services hereunder without Cause pursuant to
Section 5.2 or Executive terminates his employment hereunder
pursuant to Section 5.6, Executive shall continue to render
services to the Company pursuant to this Agreement until the
Separation Date and shall continue to receive compensation, as
provided hereunder, through the Separation Date. In addition to
other compensation payable to Executive for services rendered
through the Separation Date and subject to Sections 5.1 and
9.7, the Company shall pay Executive severance in an amount equal
to (i) Executive’s highest
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monthly Base
Compensation paid hereunder during the preceding 12 month
period, multiplied by 12, plus (ii) one times the average annual
bonus (excluding any bonus payment deemed by the Compensation
Committee in its sole discretion to be a “Special
Bonus”) received by the Executive during the preceding
twenty-four month period (the sum of (i) and (ii) shall
be referred to as the “Severance Amount”). The
Severance Amount shall be paid in equal installments in accordance
with the Company’s regular payroll practices over a period of
12 months following the Payment Commencement Date or such
earlier date permitted by Section 5.1. of this
Agreement.
(b)
Benefits . In the event Executive’s employment
hereunder is terminated by the Company without Cause pursuant to
Section 5.2 or by the Company with Cause on account of
Executive’s Disability (as defined in Section 5.4(d)
hereof), or Executive terminates his employment hereunder pursuant
to Section 5.6, then the Company shall continue to pay for and
provide to Executive and Executive’s spouse and children, as
applicable, all of the benefits described in Section 3.3(a)
for a period of one year commencing on the Separation Date (the
“Severance Benefits”).
(c)
Acceleration of Vesting . In the event Executive’s
employment hereunder is terminated by the Company without Cause
pursuant to Section 5.2 or Executive terminates his employment
hereunder pursuant to Section 5.6, then the vesting of
(i) the unvested portion of any stock option to purchase
Company common stock granted to Executive (“Stock
Options”) and (ii) any shares of Company common stock
granted to Executive which is subject to forfeiture
(“Restricted Stock”), shall be accelerated and shall
become fully vested and immediately exercisable and all Stock
Options shall be exercisable through the earlier of the expiration
date of the option provided for in the option grant agreement
(without regard to the Separation Date) (the “Final Exercise
Date”), 24 months following the Separation Date or
10 years from the original grant date and, with respect to
Restricted Stock, shall cease to be subject to forfeiture.
Notwithstanding the preceding sentence, in the case of any Stock
Options that were outstanding as of March 31, 2006, the
extension of the exercise period provided for in the preceding
sentence shall not extend the period during which such Stock
Options may be exercised beyond the date that is the later of the
fifteenth day of the third month following the date, or
December 31 of the calendar year in which, the Stock Option
would otherwise have expired if the exercise period had not been
extended based on the terms of such options at the original grant
date.
5.4 By the
Company For Cause . The Company may terminate Executive for
Cause at any time, upon written notice to Executive. For purposes
of this Agreement, “Cause” shall mean:
(a) Executive’s
conviction for commission of a felony;
(b) Executive’s
willful commission of any act of theft, embezzlement or
misappropriation against the Company;
(c) Executive’s
willful and continued failure to substantially perform
Executive’s duties hereunder (other than such failure
resulting from Executive’s incapacity due to physical or
mental illness), which failure is not remedied within a reasonable
time after written demand for substantial performance is delivered
by the Company which specifically identifies
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the manner in
which the Company believes that Executive has not substantially
performed Executive’s duties; or
(d) Executive’s
death or Disability (as hereinafter defined).
In the event
Executive is terminated for Cause pursuant to this
Section 5.4, Executive shall, within 30 days following
the Separation Date, have the right to receive Executive’s
compensation as otherwise provided under this Agreement through the
Separation Date. Executive shall have no further right to receive
compensation or other consideration from the Company or have any
other remedy whatsoever against the Company as a result of this
Agreement or the termination of Executive pursuant to this
Section 5.4, except as otherwise specifically set forth herein
with respect to a termination due to Executive’s
Disability.
In the event
Executive is terminated by reason of Executive’s Disability,
the Company shall pay Executive or his estate the Severance Amount
in equal installments in accordance with the Company’s
regular payroll practices over a period of 12 months following
the Payment Commencement Date or such earlier date permitted by
Section 5.1 of this Agreement. Said payment shall be in
addition to any life insurance or disability insurance payments to
which Executive or his or her estate is otherwise entitled and any
other compensation earned by Executive hereunder. For purposes of
this Agreement, the term “Disability” shall mean death
or (a) that the Executive is unable to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expect to
result in death or can be expected to last for a continuous period
of not less than 12 months, (b) that the Executive is, by
reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving
income replacement benefits for a period of not less than
3 months under an accident and health plan covering employees
of the Company, or (c) that the Executive has been determined
to be totally disabled by the Social Security
Administration.
5.5
Executive’s Voluntary Termination . Executive may, at
any time, terminate this Agreement upon written notice delivered to
the Company at least 90 days prior to the Separation Date. In
the event of such voluntary termination of this Agreement by
Executive: (i) Executive shall have the right to receive
Executive’s compensation as provided hereunder through the
Separation Date; and (ii) the Company on the one hand, and
Executive, on the other hand, shall not have any further right or
remedy against one another except as provided in Sections 6, 7
and 8 hereof which shall remain in full force and
effect.
5.6 Change in
Control . Executive may terminate his employment for
“Good Reason” (as hereinafter defined) at any time
within one year after a “Change in Control” (as
hereinafter defined) of the Company. In the event Executive
terminates his employment for Good Reason within one year after a
Change in Control pursuant to this Section 5.6, then subject
to Section 5.1 of this Agreement, (i) Executive shall
continue to render services pursuant hereto and shall continue to
receive compensation, as provided hereunder, through the Separation
Date, (ii) the Company shall pay Executive the Severance
Amount in equal installments in accordance with the Company’s
normal payroll practice over a period of 12 months following
the Payment Commencement Date or such earlier date permitted by
Section 5.1 of this Agreement and (iii) following such
termination, the Company shall provide the Severance Benefits as
required by
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Section 5.3(b). For purposes of this
Agreement, a “Change in Control” shall mean the
occurrence of any of the following events:
(a) an
acquisition of any voting securities of the Company (the
“Voting Securities”) by any “person” (as
the term “person” is used for purposes of Section 13(d)
or Section 14(d) of the Securities Exchange Act of 1934, as amended
(the “1934 Act”)) immediately after which such person
has “beneficial ownership” (within the meaning of
Rule 13d-3 promulgated under the 1934 Act) of 45% or more of
the combined voting power of the Company’s then outstanding
Voting Securities; or
(b) approval
by the stockholders of the Company of:
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