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Exhibit 10.1
EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT (the “
Agreement ”)
is made this 1st day of June 2007, by and between
ARNO THERAPEUTICS, INC .,
a Delaware corporation with principal executive offices at 689 5th
Avenue, 14th Floor, New York, NY 10022, (the “
Company ”),
and
SCOTT FIELDS, M.D. ,
residing at 28 Doremus Drive, Towaco, New Jersey, 07082 (the
“
Executive ”).
W I T N E S S E T H:
WHEREAS,
the Company desires to employ the Executive as President and
Chief Medical Officer of the Company; and
WEHERAS,
the Executive desires to serve the Company in such capacity,
upon the terms and subject to the conditions contained in this
Agreement;
NOW,
THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties hereto hereby agree
as follows:
1.
Employment .
The
Company agrees to employ the Executive, and the Executive
agrees to be employed by the Company, upon the terms and
subject to the conditions of this Agreement.
2.
Term .
The
employment of the Executive by the Company as provided in
Section 1 shall commence on June 1, 2007 (the “
Effective Date ”)
and continue for a period of two (2) years from the Effective
Date unless
terminated earlier as
set forth in Sections 9
and
10 below
or by mutual written agreement of the parties hereto (the
“
Term ”).
The Company and the Executive shall meet no less than 120 days
prior to the expiration of the Employment Agreement and discuss the
terms of a proposed renewal of the Employment Agreement In the
event that the Company does not intend to renew this Agreement, the
Company shall provide the Executive with a minimum of 90 days
written notice prior to the expiration of the Term.
3.
Duties; Best Efforts; Place of Performance .
(a)
The
Executive shall serve as President and Chief Medical Officer
of the Company and shall, subject to the direction of the
Board of Directors of the Company, have such powers and
perform such duties as are customarily performed by a
President and Chief Medical Officer including, but not limited
to developing Company clinical strategy for the development of
the Company’s technologies, and managing and overseeing
its implementation. The Executive shall also have such other
powers and duties as may be from time to time directed by the
Board of Directors of the Company, provided that the nature of
the Executive’s powers and duties so prescribed shall
not be inconsistent with the Executive’s position and
duties herein.
(b)
The
Executive shall devote substantially all of his business time,
attention and energies to the business and affairs of the
Company and
shall
use his best efforts to advance the interests of the Company
and shall not during the Term be actively engaged in any other
business activity, whether or not such business activity is
pursued for gain, profit or other pecuniary advantage, that
will interfere with the performance by the Executive of his
duties hereunder or the Executive’s availability to
perform such duties or that will adversely affect, or
negatively reflect upon, the Company.
(c)
The
duties to be performed by the Executive hereunder shall be
performed primarily at the office of the Company, which shall
be located in or within close proximity to New York
metropolitan area, or such other location as the Company and
Executive may mutually agree; provided, however, that the
Executive understands that his duties will require periodic
travel, which may be substantial at times.
4.
Members of Management . The Executive shall be given meaningful
input into the identification, recruitment, selection and retention
of a Chief Executive Officer, as well as other key members of
management. The Company agrees that it will not hire an oncologist
to serve as Chief Executive Officer of the Company without the
prior written consent of the Executive.
5.
Compensation . As full compensation for the performance by the
Executive of his duties under this Agreement, the Company shall pay
the Executive as follows:
(a)
Base Salary .
The Company shall pay the Executive a base salary (the
“
Base Salary ”)
equal to Three Hundred Forty Thousand Dollars ($340,000.00) per
annum, payable during the Term in accordance with the
Company’s normal payroll practices; provided, however, that
the Base Salary may be increased at the discretion of the Board of
Directors upon each anniversary of this Agreement.
(b)
Performance Bonus .
The Company shall annually pay the Executive a proportionate share
(based on the assigned weight of each of the Performance Milestones
(as defined below)) of One Hundred Twenty Five Thousand Dollars
($125,000.00) upon the successful completion of annual corporate or
individual performance milestones (the “
Performance Milestones ”)
at the “Baseline” metric. If Performance Milestones are
achieved at the “Exemplary” metric, the Company shall
pay Executive a proportionate share of One Hundred Fifty Thousand
Dollars ($150,000.00), and if achieved at the
“Pessimistic” metric, the Company will pay the
Executive a proportionate share of One-Hundred Thousand Dollars
($100,000.00). The Performance Milestones and the metrics for the
first year of the Term are as set forth on
Schedule 5(b) .
The Performance Milestones shall be amended each subsequent year
during the Term upon the mutual agreement of the Company and the
Executive no later than 30 days following the beginning of such
year. The Performance Bonus for each year shall be payable on or
before each anniversary date of
the
Effective Date
(c)
Change of Control Bonus .
The Company shall pay the Executive the applicable amount set forth
on
Schedule 5(c) upon
a Change of Control (as defined below) of the Company where the
Company is ascribed a valuation equal to or above those amounts set
forth on
Schedule 5(c) .
In the event of a Change of Control, the applicable bonus shall be
paid on the effective date of such Change of Control and all
unvested Employment and Performance Options shall vest and become
exercisable immediately and, unless all such options are cashed-out
in the Change of Control transaction, shall remain exercisable for
a period of not less than five (5) years, regardless of whether the
Executive’s employment is terminated.
(i)
For
purposes of this Agreement, a “
Change of Control ”
shall mean:
A.
a
private transaction (or series of related private
transactions) leading to a merger, acquisition, consolidation,
or sale of all or substantially all of the assets of the
Company;
B.
any
transaction as a result of which a single party (or group of
affiliated parties) acquires or holds capital stock of the
Corporation representing a majority of the Corporation’s
outstanding voting power ;
or
C.
the
disposition by the Company (whether direct or indirect, by
sale of assets or stock, merger, consolidation or otherwise)
of all or substantially all of its business and/or assets in
one transaction or series of related transactions (other than
a merger effected exclusively for the purpose of changing the
domicile of the Company).
(ii)
Notwithstanding
Section 5(c)(i)A and
5(c)(i)B above,
no transaction shall be considered a Change of Control under
this Agreement, and no bonus shall be paid or options vest,
pursuant to this Section 5(c) :
A.
if
the stockholders existing prior to such transaction(s) hold in
the aggregate more than fifty percent (50%) of the securities
or assets of the surviving or resulting company;
B.
in
connection with a private placement of equity securities of
the Company in connection with a financing of the
Company’s on-going operations; or
C.
for
any transaction ascribing a valuation to the Company of less
than Seventy Five Million Dollars ($75,000,000); provided,
however, that such a transaction may be considered as part of
a series of transactions that gives rise to a Change of
Control pursuant to Section 5(c)(i) .
(d)
Withholding .
The Company shall withhold all applicable federal, state and local
taxes and social security and such other amounts as may be required
by law from all amounts payable to the Executive under this
Section 5
.
(e)
Equity .
(i)
Employment Options .
The Company shall grant to the Executive stock options (the
“
Employment Options ”),
pursuant to the Company’s 2005 Stock Option Plan, to purchase
that number of shares of common stock of the Company, par value
$0.001 per share (the “
Common Stock ”)
representing two percent (2%) of the outstanding shares of Common
Stock of the Company on a Fully Diluted Basis (as defined below in
Section 5(e)(iii)C) immediately
following the Effective Date. The Employment Options shall vest and
become exercisable in two (2) equal installments on the day before
each anniversary of this Agreement at an exercise price equal to
Two Dollars ($2.00) per share (the “
Exercise Price ”).
(ii)
Performance Options .
The
Company shall grant to the Executive stock options (the
“
Performance Options ”),
pursuant to the Company’s 2005 Stock Option Plan, to purchase
that number of shares of Common Stock representing two percent
(2.0%) of the outstanding Common Stock on a Fully Diluted Basis
immediately following the Effective Date. The Performance Options
shall vest and become exercisable upon the successful completion of
corporate and individual performance milestones to be agreed upon
annually between the Company and the Executive, which such
milestones shall be set forth on
Schedule 5(b) attached
hereto at the Exercise Price.
(iii)
Technology Options .
In the event that the Company acquires by license, acquisition or
otherwise, an additional biotechnology product or series of
biotechnology products (a “
Technology ”)
for development that is first identified by the Executive, then the
Company shall grant to the Executive options (the “
Technology Options ”)
to purchase a number of shares of Common Stock, as
follows:
A.
One
percent (1%) of the then outstanding shares of Common Stock of
the Company on a Fully Diluted Basis on the date the
Technology is acquired for a Technology that is in
pre-clinical development; and
B.
Two
Percent (2%) of the shares of Common Stock of the Company on a
Fully Diluted Basis on the date the Technology is acquired for
a Technology that is in human clinical trials.
C.
For
purposes of this Agreement, “
Fully Diluted Basis ”
shall mean the number of shares of Common Stock that would be
outstanding upon the conversion of all outstanding shares of
Preferred Stock outstanding from time to time, plus the shares of
Common Stock issuable upon conversion or exercise, as the case may
be, of all issued and outstanding securities of the Company
convertible into, exercisable for, or exchangeable for, directly or
indirectly, shares of Common Stock of the Company, including but
not limited to, options and warrants to purchase Common Stock that
are currently exercisable by the holder thereof or which will
become exercisable within 90 days of determining event
D.
Any
such Technology Options issued to the Executive shall vest
immediately upon the date of grant and shall be exercisable
for a period of five (5) years at an exercise price equal to
the Fair Market Value (as determined under the Company’s
2005 Stock Plan) of the Common Stock on the date of the grant
of such Technology Options.
(f)
Expenses .
The Company shall reimburse the Executive for all normal, usual and
necessary expenses incurred by the Executive in furtherance of the
business and affairs of the Company, including reasonable travel
and entertainment, upon timely receipt by the Company of
appropriate vouchers or other proof of the Executive’s
expenditures and otherwise in accordance with any expense
reimbursement policy as may from time to time be adopted by the
Company.
(g)
Insurance .
The Company shall pay the premiums relating to personal life
insurance coverage for Executive in an amount equal to One Million
Dollars ($1,000,000.00), naming Executive’s heirs as
beneficiaries. In the event that the Company does not have
appropriate medical, dental and vision plans in place on the
Effective Date, the Company shall reimburse the Executive for the
cost of COBRA premiums associated with his continued coverage under
the plans of his prior employer.
(h)
Other Benefits .
The Executive shall be entitled to all rights and benefits for
which he shall be eligible under any benefit or other plans
(including, without limitation, dental, medical, vision, medical
reimbursement and hospital plans, pension plans, employee stock
purchase plans, profit sharing plans, bonus plans and other
so-called “fringe benefits”) as the Company shall make
available to its senior executives from time to time.
(i)
Vacation .
The Executive shall, during the Term, be entitled to four (4)
non-consecutive weeks of vacation per annum ,
in addition to holidays observed by the Company .
6.
Confidential Information and Inventions .
(a)
The
Executive recognizes and acknowledges that in the course of
his duties he is likely to receive confidential or proprietary
information owned by the Company, its affiliates or third
parties with whom the Company or any such affiliates has an
obligation of confidentiality. Accordingly, during and after
the Term, the Executive agrees to keep confidential and not
disclose or make accessible to any other person or use for any
other purpose other than in connection with the fulfillment of
his duties under this Agreement, any Confidential and
Proprietary Information (as defined below) owned by, or
received by or on behalf of, the Company or any of its
affiliates. “
Confidential and Proprietary Information
”
shall include, but shall not be limited to, confidential or
proprietary scientific or technical information, data, formulas and
related concepts, business plans (both current and under
development), client lists, promotion and marketing programs, trade
secrets, or any other confidential or proprietary business
information relating to development programs, costs, revenues,
marketing, investments, sales activities, promotions, credit and
financial data, manufacturing processes, financing methods, plans
or the business and affairs of the Company or of any affiliate or
client of the Company. The Executive expressly acknowledges the
trade secret status of the Confidential and Proprietary Information
and that the Confidential and Proprietary Information constitutes a
protectable business interest of the Company. The Executive agrees
not to:
(i)
use
any such Confidential and Proprietary Information for strictly
personal use or for others; and
(ii)
permanently
remove any Company material or reproductions (including but
not limited to writings, correspondence, notes, drafts,
records, invoices, technical and business policies, computer
programs or disks) thereof from the Company’s offices at
any time during his employment by the Company, except as
required in the execution of the Executive’s duties to
the Company, provided; however, that the Executive shall not
be prevented from using or disclosing any Confidential and
Proprietary Information:
A.
that
Executive can demonstrate was known to him prior to the
effective date of that certain Confidential Disclosure
Agreement entered into between the Parties dated January 23,
2007, or which becomes generally known to the public through
no fault of the Executive;
B.
that
is now, or becomes in the future, available to persons who are
not legally required to treat such information as confidential
unless such persons acquired the Confidential and Proprietary
Information through acts or omissions of Executive; or
C.
that
he is compelled to disclose pursuant to the order of a court
or other governmental or legal body having jurisdiction over
such matter.
(b)
The
Executive agrees to return immediately all Company material
and reproductions (including but not limited, to writings,
correspondence, notes, drafts, records, invoices, technical
and business policies, computer programs or disks) thereof in
his possession to the Company upon request and in any event
immediately upon termination of employment.
(c)
Except
with prior written authorization by the Company, the Executive
agrees not to disclose or publish any of the Confidential and
Proprietary Information, or any confidential, scientific,
technical or business information of any other party to whom
the Company or any of its affiliates owes a legal duty of
confidence, at any time during or after his employment with
the Company.
(d)
The
Executive agrees that all inventions, discoveries,
improvements and patentable or copyrightable works, relating
to the Company’s Business (as defined below).
(“
Inventions ”)
initiated, conceived or made by him, either alone or in conjunction
with others, during the Term shall be the sole property of the
Company to the maximum extent permitted by applicable law and, to
the extent permitted by law, shall be “works made for
hire” as that term is defined in the United States Copyright
Act (17 U.S.C.A., Section 101). For purposes of this Agreement,
“
Company’s Business ”
shall be the development of novel therapeutics for the treatment of
cancer and other human disease, and which are listed on the
attached
Schedule 6(d) (which
Schedule 6(d) may
be amended from time to time to include additional therapeutics),
and in the future, any other business in which it actually devotes
substantive resources to study, develop or pursue. The Company
shall be the sole owner of all patents, copyrights, trade secret
rights, and other intellectual property or other rights in
connection therewith. The Executive hereby assigns to the Company
all right, title and interest he may have or acquire in all such
Inventions; provided; however, that the Board of Directors of the
Company may in its sole discretion agree to waive the
Company’s rights pursuant to this Section 6(d)
with
respect to any Invention that is not directly or indirectly related
to the Company’s business. The Executive further agrees to
assist the Company in every proper way (but at the Company’s
expense) to obtain and from time to time enforce patents,
copyrights or other rights on such Inventions in any and all
countries, and to that end the Executive will execute all documents
necessary:
(i)
to
apply for, obtain and vest in the name of the Company alone
(unless the Company otherwise directs) letters patent,
copyrights or other analogous protection in any country
throughout the world and when so obtained or vested to renew
and restore the same; and
(ii)
to
defend any opposition proceedings in respect of such
applications and any opposition proceedings or petitions or
applications for revocation of such letters patent, copyright
or other analogous protection.
(e)
The
Executive acknowledges that while performing the
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