Exhibit 10.11
Execution Copy
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT (the “ Agreement ”) is
effective as of June 16, 2008 (the “ Effective
Date ”), between Clinical Data, Inc. a Delaware
corporation (the “ Company ”), and Carol Reed,
M.D. (the “ Executive ”).
W I T
N E S S E T H:
WHEREAS, the Executive is currently
employed as the Executive Vice President and Chief Medical Officer
of the Company pursuant to an Executive Employment Agreement
effective as of May 12, 2006, between Executive and the
Company (the “Prior Agreement”);
WHEREAS, the Company has offered to
continue employing the Executive on the terms set forth below;
and
WHEREAS, the Executive has agreed to
continued employment with the Company on the terms as set forth
below;
NOW THEREFORE, in consideration of
the foregoing, of the mutual promises contained herein and of other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. EMPLOYMENT
TERM . The Executive’s term of employment under this
Agreement shall be for an initial term commencing on the Effective
Date and shall end on June 30, 2009. The term of this
Agreement shall be automatically extended thereafter for successive
one (1) year periods unless, at least ninety (90) days
prior to the end of the initial term of this Agreement or the then
current succeeding one-year extended term of this Agreement, the
Company or Executive has notified the other that the term hereunder
shall terminate upon its expiration date. The initial term of this
Agreement, as it may be extended from year to year thereafter, is
herein referred to as the “ Employment Term .”
In all events hereunder, Executive’s employment is subject to
earlier termination pursuant to Section 7 hereof, and upon
such earlier termination the Employment Term shall be deemed to
have ended.
2. POSITION &
DUTIES .
(a) Except as provided in
Section 2(b) below, the Executive shall serve as the
Company’s Executive Vice President and Chief Medical Officer
during the Employment Term. As such, the Executive shall have such
duties, authorities and responsibilities commensurate with the
duties, authorities and responsibilities of persons in similar
capacities in similarly sized companies and such other duties and
responsibilities as the Company’s Board of Directors (the
“ Board ”) shall designate that are consistent
with the Executive’s position.
(b) During the Employment Term,
the Executive shall use her best efforts to perform faithfully and
efficiently the duties and responsibilities assigned to the
Executive hereunder and devote all of the Executive’s
business time (excluding periods of vacation and other approved
leaves of absence) to the performance of the Executive’s
duties with the Company, provided the foregoing shall not prevent
the Executive from participating in charitable, civic, educational,
professional, community or industry affairs or, with prior written
approval of the Board, serving
on the
board of directors or advisory boards of other companies. The
Executive shall not manage the Executive’s and the
Executive’s family’s personal investments in a manner
that creates a potential business conflict or the appearance
thereof. If at any time service on any board of directors or
advisory board would, in the good faith judgment of the Board,
conflict with the Executive’s fiduciary duty to the Company
or create any appearance thereof, the Executive shall promptly
resign from such other board of directors or advisory board after
written notice of the conflict is received from the Board.
(c) The Executive further agrees
to serve without additional compensation as an officer and/or
director of any of the Company’s subsidiaries and agrees that
any amounts received from any such corporation may be offset
against the amounts due hereunder. In addition, it is agreed that
the Company may assign the Executive to one of its subsidiaries for
payroll purposes, but such assignment shall not relieve the Company
of its obligations hereunder.
3. BASE
SALARY . The Company agrees to pay the Executive a base
salary (the “ Base Salary ”) at an annual rate
of $300,000, payable in accordance with the regular payroll
practices of the Company, but not less frequently than monthly. The
Executive’s Base Salary shall be subject to review by the
Board (or a committee thereof) and may be increased, but not
decreased, from time to time by the Board. The base salary as
determined herein from time to time shall constitute “Base
Salary” for purposes of this Agreement.
4.
BONUSES . The Executive shall be eligible to
participate in the Company’s bonus and other incentive
compensation plans and programs for the Company’s senior
executives at a level commensurate with her position for the fiscal
year during the Employment Term. The Executive shall have the
opportunity to earn an annual target bonus measured against
performance criteria to be determined by the Board (or a committee
thereof) of one hundred percent (100%) of Base Salary.
5. EQUITY
AWARDS . The Executive shall be subject to, and shall
comply with, the stock ownership guidelines of the Company as may
be in effect from time to time. If there is a Change in Control (as
defined in the attached Appendix C) or if the
Executive’s employment is terminated by the Company without
Cause (as defined in Section 7(c)), or by the Executive for
Good Reason (as defined in Section 7(e)), then all outstanding
unvested equity awards granted to the Executive listed on
Appendix D hereto shall become fully vested and the time
period that Executive may have to exercise each such option grant
shall be extended to the shorter of (i) three (3) years,
or (ii) the remaining term of the options (the “Extended
Exercise Period”) . The parties agree that the attached
Appendix D may be modified and updated upon a vote of the
Board of Directors, only in order for the Board to add to
Appendix D certain future awards that the Board agrees shall
also qualify for acceleration and the Extended Exercise Period.
Upon such a vote of the Board, the parties shall attach a revised
Appendix D to this Agreement, which shall include the
additional option grant(s) that the Board has expressly agreed
shall qualify for acceleration and the Extended Exercise Period,
and this Agreement shall not be deemed amended or modified in any
other manner as a result.
6. EMPLOYEE
BENEFITS .
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(a) BENEFIT PLANS . The
Executive shall be entitled to participate in all employee benefit
plans of the Company including, but not limited to, 401(k), profit
sharing, medical coverage, education, or other retirement or
welfare benefits that the Company has adopted or may adopt,
maintain or contribute to for the benefit of its senior executives
at a level commensurate with the Executive’s positions,
subject to satisfying the applicable eligibility
requirements.
(b) VACATION . The
Executive shall be entitled to four (4) weeks of paid vacation
per year, plus any amounts (up to a maximum of three
(3) weeks) rolled over from previous years. Vacation may be
taken at such times as the Executive elects with due regard to the
needs of the Company.
(c) BUSINESS AND
ENTERTAINMENT EXPENSES . Upon presentation of appropriate
documentation, the Executive shall be reimbursed in accordance with
the Company’s expense reimbursement policy for all reasonable
and necessary business and entertainment expenses incurred in
connection with the performance of the Executive’s duties
hereunder.
(d) LONG TERM DISABLITY
INSURANCE . The Company shall procure and maintain a long-term
disability insurance policy with reasonable coverages, which shall
include the payment of benefits equal to at least 60% of the Base
Salary during the disability coverage period, and the Company shall
pay the premiums or a portion thereof (as specified hereafter) for
such disability insurance policy up to the cost charged by the
insurer to insure a healthy female non-smoker on Executive’s
age. Executive shall be responsible for all taxes resulting from
the maintenance of this policy by the Company.
(e) INDEMNIFICATION .
The Company shall indemnify the Executive to the same extent that
its officers, directors and employees are entitled to
indemnification pursuant to the Company’s Certificate of
Incorporation and Bylaws for any acts or omissions by reason of
being an officer or employee of the Company as of the Effective
Date.
(f) CERTAIN AMENDMENTS .
Nothing herein shall be construed to prevent the Company from
amending, altering, eliminating or reducing any plans, benefits or
programs so long as the Executive continues to receive compensation
and benefits consistent with Sections 3 through 6
hereof.
7.
TERMINATION . The Executive’s employment and
the Employment Term shall terminate on the first of the following
to occur:
(a) DISABILITY . Upon
written notice by the Company to the Executive of termination due
to Disability, while the Executive remains Disabled. For purposes
of this Agreement, “ Disability ” shall be
deemed the reason for the termination by the Company of the
Executive’s employment, if, as a result of the Executive
incapacity due to physical or mental illness, the Executive shall
have been absent from fully performing her duties with the Company
for a cumulative period of three (3) months, the Company shall
have provided a notice of termination under this Section 7(a),
and, within thirty days after such notice being given, the
Executive shall not have returned to the full performance of her
duties hereunder.
(b) DEATH .
Automatically on the date of death of the Executive.
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(c) CAUSE . Immediately
upon written notice by the Company to the Executive of a
termination for Cause. “ Cause ” shall mean
(i) the willful failure of the Executive to render services to
the Company in accordance with her assigned duties consistent with
this Agreement, and such failure continues for a period of more
than 30 days after written notice has been provided to the
Executive by the Board which itemizes the reasons for such failure
of performance; (ii) reckless misconduct, bad faith or gross
negligence of the Executive in connection with the performance of
her assigned duties or breach of the material terms of this
Agreement which results in material loss, damage or injury to the
Company or materially and adversely affects the business
activities, reputation, goodwill or image of the Company;
(iii) the conviction of the Executive of any felony or a crime
of moral turpitude, either in connection with the performance of
her obligations to the Company or which adversely affects the
Executive’s ability to perform such obligations, or which
adversely affects the business activities, reputation, goodwill or
image of the Company; (iv) dishonesty or breach of fiduciary
duty, which results in material loss, damage or injury to the
Company or materially and adversely affects the business
activities, reputation, goodwill or image of the Company;
(v) the commission by the Executive of an act of fraud,
embezzlement or deliberate disregard of the rules or policies of
the Company which results in material loss, damage or injury to the
Company or materially and adversely affects the business
activities, reputation, goodwill or image of the Company; or
(vi) the unauthorized and intentional disclosure by the
Executive of any trade secret or confidential information of the
Company or any of its clients or customers, which results in
material damage or injury to the Company, or materially and
adversely affects the business activities, reputation, goodwill or
image of the Company or its clients or customers.
(d) WITHOUT CAUSE . Upon
written notice by the Company to the Executive of an involuntary
termination without Cause and other than due to death or
Disability.
(e) GOOD REASON . Upon
written notice by the Executive to the Company of a termination for
Good Reason, unless the reasons for any proposed termination for
Good Reason are remedied in all material respects by the Company
within 30 days following written notification by the Executive
to the Company, that the Executive intends to terminate the
Executive’s employment hereunder for one of the reasons set
forth below. “ Good Reason ” shall mean, without
the Executive’s express written consent, the occurrence of
any of the following events:
(1) During
the Employment Term,
(A) an
adverse change in the Executive’s position as Senior Vice
President and Chief Medical Officer as a result of a material
diminution in the Executive’s duties or responsibilities or
the assignment to the Executive of any duties or responsibilities
that are inconsistent in any material respect with the
Executive’s position, authority, duties or responsibilities
as contemplated by this Agreement; provided, however, that
“Good Reason” shall not exist under this
Section 7(e)(1) solely because (i) the Company’s
stock is no longer publicly traded on an established securities
exchange or (ii) the Company has restructured, sold or
spun-off any of its businesses, products or services;
(B) any
material breach of this Agreement by the Company that is adverse to
the Executive;
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(C) the
failure of the Company to obtain an agreement from any successor to
all or substantially all of the assets or business of the Company
to assume and agree to perform this Agreement within fifteen
(15) days after a merger, consolidation, sale or similar
transaction; or
(D) the
Executive’s termination of employment at any time during the
thirty-day period beginning on the last day of the Employment Term,
as determined solely for this purpose under Section 1,
following the Company’s notice of nonrenewal.
(2) Notwithstanding
the foregoing, (i) a suspension of the Executive’s title
and authority while on administrative leave due to a reasonable
belief that the Executive has engaged in misconduct, whether or not
the suspected misconduct constitutes Cause for employment
termination, shall not be considered “Good Reason”,
(ii) an event shall not be considered Good Reason if the
Executive fails to deliver notice of termination for Good Reason
specifying such event in detail within 90 days of her actual
knowledge of such event, and (iii) changes to compensation and
benefit plans not specifically targeted to the Executive shall not
be considered Good Reason.
(f) WITHOUT GOOD REASON
. The Executive shall provide forty five (45) days’
prior written notice to the Company of the Executive’s
intended termination of employment without Good Reason (the “
Transition Period ”). During the Transition Period,
the Executive shall assist and advise the Company in any transition
of business, customers, prospects, projects and strategic planning,
and the Company shall pay the pro rata portion of the
Executive’s annual salary and benefits through the end of the
Transition Period. The Company may, in its sole discretion, upon
five (5) days prior written notice to the Executive, make such
termination of employment effective earlier than the Transition
Period, but it shall pay the pro rata portion of the
Executive’s salary and benefits through the earlier of: the
balance of the Transition Period, or such time during the
Transition Period as the Executive accepts employment or a
consulting engagement from a third party.
8. CONSEQUENCES
OF TERMINATION . Any termination payments made and benefits
provided under this Agreement to the Executive shall be in lieu of
any termination or severance payments or benefits for which the
Executive may be eligible under any of the plans, policies or
programs of the Company or its affiliates as may be in effect from
time to time. Except to the extent otherwise provided in this
Agreement, all benefits, including, without limitation, stock
options, stock appreciation rights, restricted stock units and
other awards under the Company’s long-term incentive
programs, shall be subject to the terms and conditions of the plan
or arrangement under which such benefits accrue, are granted or are
awarded. Subject to Section 9, the following amounts and
benefits shall be due to the Executive.
(a) DISABILITY . Upon
employment termination due to Disability, the Company shall pay or
provide the Executive (i) any unpaid Base Salary through the
date of termination and any accrued vacation (up to a maximum of
seven (7) weeks); (ii) any unpaid bonus earned with
respect to any fiscal year ending on or preceding the date of
termination; (iii) reimbursement for any unreimbursed expenses
incurred through the date of termination; (iv) all other
payments and benefits to which the Executive may be entitled under
the terms of any applicable compensation arrangement or benefit,
equity or perquisite plan or program or grant or this
Agreement,
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including but not limited to any applicable insurance benefits
(collectively, “ Accrued Amounts ”). Executive
will also be paid a pro-rata portion of the Executive’s
annual bonus for the performance year in which the
Executive’s termination occurs (the “ Pro Rata
Bonus ”), payable in accordance with the last sentence of
Section 8(e) (determined by multiplying the amount the Executive
would have received based upon actual performance had employment
continued through the end of the performance year by a fraction,
the numerator of which is the number of days during the performance
year of termination that the Executive is employed by the Company
and the denominator of which is 365). Upon such termination, all
stock options, stock appreciation rights and restricted stock
awards will fully vest and become non-forfeitable. Notwithstanding
anything contained herein to the contrary, the Pro Rata Bonus shall
not be paid in the event the Executive voluntarily resigns from
employment with the Company or otherwise voluntarily terminates
employment without Good Reason.
(b) DEATH . In the event
the Employment Term ends on account of the Executive’s death,
the Executive’s estate (or to the extent a beneficiary has
been designated in accordance with a program, the beneficiary under
such program) shall be entitled to any Accrued Amounts, including
but not limited to proceeds from any Company sponsored life
insurance programs. Executive’s estate (or beneficiary) will
also be paid a pro-rata portion of the Pro Rata Bonus. Upon the
Executive’s death, all stock options, stock appreciation
rights and restricted stock awards will fully vest and become
non-forfeitable.
(c) TERMINATION FOR CAUSE OR
WITHOUT GOOD REASON . If the Executive’s employment
should be terminated (i) by the Company for Cause, or
(ii) by the Executive without Good Reason, the Company shall
pay to the Executive any Accrued Amounts only, and shall not be
obligated to make any additional payments to Executive.
(d) TERMINATION WITHOUT
CAUSE OR FOR GOOD REASON . If the Executive’s employment
by the Company is terminated by the Company other than for Cause
(and not due to Disability or death) or by the Executive for Good
Reason, then the Company shall pay or provide the Executive
with:
(1) Accrued
Amounts;
(2) the
Pro Rata Bonus;
(3) subject
to compliance with Section 11(a)-(g) inclusive, continued
payment of the Executive’s Base Salary as in effect
immediately preceding the last day of the Employment Term for a
period of 6 months after the last day of employment;
(4) continued
participation at the Company’s expense in all medical, dental
and vision plans which cover the Executive (and eligible
dependents) upon the same terms and conditions (except for the
requirements of the Executive’s continued employment) in
effect for active employees of the Company, for a period of twelve
(12) months following the last day of the Employment Term. In
the event the Executive obtains other employment that offers
substantially similar or improved benefits, as to any particular
medical, dental or vision plan, such continuation of coverage by
the Company for such similar or improved benefit under such plan
under this subsection shall immediately cease. The continuation of
health benefits under
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this
subsection shall reduce the Executive’s rights and the
Company’s payment obligations under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended (“ COBRA
”).
(e) The parties acknowledge and
agree that all calculations of bonuses by the Company are based on
targets, goals and objectives established by the Board of Directors
for each fiscal year, and that any bonus plans, as well as the
Executive’s rights to receive bonus payments, are conditioned
on an assessment by the Board of Directors (or a committee thereof)
of the satisfaction of performance targets for the applicable
fiscal year in which the bonus is to be paid. The parties
acknowledge that calculations of applicable bonuses have
historically been made within 90 days following the conclusion of a
fiscal year for which the bonus may be due or accrued, and payment
of the applicable bonus has been historically made within 10
business days following the Board of Directors’
determination. Accordingly, the parties recognize and agree that
the right to receive any payment to which the Executive may be
entitled under the terms of any applicable bonus arrangement or
benefit, including any bonus-related portion of the Accrued Amount,
or the Pro Rata Bonus, can only be established after the review and
calculations of the applicable fiscal year bonus entitlements are
made by the Board of Directors (including any committee thereof).
Once such calculations are made by the Board of Directors
(including any committee thereof), the Executive’s right to
receive the Pro Rata Bonus (or any applicable bonus-related portion
of the Accrued Amount) shall be accrued and paid as promptly as
practicable following a determination of the bonus by the Board of
Directors (or any committee thereof) in the event the Executive is
entitled to be paid such bonus under the preceding provisions of
Section 8(a)-(d) above. Notwithstanding the foregoing, if the
Executive is terminated by the Company without Cause, or by the
Executive for Good Reason, the Board of Directors (including any
committee thereof) shall use its best efforts to meet as promptly
as practicable within 30 days following any notice of such
termination by the Company without Cause, or by the Executive for
Good Reason, in order to make a good faith determination of the Pro
Rata Bonus, and to pay such Pro Rata Bonus (if earned) within
30 days of such determination by the Board of Directors
(including any committee thereof).
9.
CONDITIONS . Any payments or benefits made or
provided pursuant to Section 8 (other than Accrued Amounts)
are subject to the Executive’s (or, in the event of the
Executive’s death, the beneficiary’s or estate’s,
or in the event of the Executive’s Disability, the
guardian’s):
(a) compliance with the
provisions of Section 11 hereof;
(b) delivery to the Company of
the executed Agreement and General Release (the “ General
Release ”), which shall be in the form attached hereto as
Appendix A (with such changes therein or additions
thereto as needed under then applicable law to give effect to its
intent and purpose) within 21 days of presentation thereof by
the Company to the Executive; and
(c) delivery to the Company of a
resignation from all offices, directorships and fiduciary positions
with the Company, its affiliates and employee benefit plans.
Notwithstanding the due date of any
post-employment payments, any amounts due following a termination
under this Agreement (other than Accrued Amounts) shall not be due
until after the expiration of any revocation period applicable to
the General Release without the
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Executive having revoked such General Release, and any such amounts
shall be paid or commence being paid to the Executive within five
(5) days of the expiration of such revocation period without
the occurrence of a revocation by the Executive (or such later date
as may be required under Section 409A of the Code).
Nevertheless (and regardless of whether the General Release has
been executed by the Executive), upon any termination of
Executive’s employment, Executive shall be entitled to
receive any Accrued Amounts, payable after the date of termination
in accordance with the Company’s applicable plan, program,
policy or payroll procedures.
10. SECTION 4999
EXCISE TAX .
(a) If any payments, rights or
benefits (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement of Executive with the Company
or any person affiliated with the Company) (the
“Payments”) received or to be received by Executive
will be subject to the tax (the “Excise Tax”) imposed
by Section 4999 of the Code (or any similar tax that may
hereafter be imposed), then, except as set forth in Section 10(b)
below, the Company shall pay to Executive an amount in addition to
the Payments (the “Gross-Up Payment”) as calculated
below. The Gross Up Payment shall be in an amount such that, after
deduction of any Excise Tax on the Payments and any federal, state
and local income and employment tax and Excise Tax on the Gross Up
Payment, but before deduction for any federal, state or local
income and employment tax on the Payments, the net amount retained
by the Executive shall be equal to the Payments.
(b) Notwithstanding anything in
this Agreement to the contrary, if the amount of Payments that will
be subject to the Excise Tax does not exceed four times the
“Base Amount” (as defined in Section 280G(d)(2) of
the Code), then Executive’s taxable cash-based benefits under
this Agreement will first be reduced in the order selected by
Executive, and then, if necessary, Executive’s equity-based
compensation (based on the value of such equity-based compensation
as a “parachute payment” as defined in Treasury
Regulations promulgated under Section 280G of the Code and IRS
revenue rulings, revenue procedures and other official guidance)
shall be reduced in the order selected by Executive, and then any
other Payments shall be reduced as reasonably determined by the
Company, to the extent necessary to avoid imposition of the Excise
Tax. If Executive does not select the amount to be reduced within
the time prescribed by the Company, the reductions specified herein
shall be made by the Company in its sole discretion from such
compensation as it shall determine. Any amount so reduced shall be
irrevocably forfeited and Executive shall have no further rights to
receive it.
(c) The process for calculating
the Excise Tax, determining the amount of any Gross-Up Payment and
other procedures relating to this Section 10 are set forth in
Appendix B attached hereto. For purposes of making the
determinations and calculations required herein, the Accounting
Firm (as defined in Appendix B) may rely on reasonable, good
faith interpretations concerning the application of
Section 280G and 4999 of the Code, provided that the
Accounting Firm shall make such determinations and calculations on
the basis of “substantial authority” (within the
meaning of Section 6662 of the Code) and shall provide
opinions to that effect to both the Company and Executive.
11.
POST-EMPLOYMENT OBLIGATIONS
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(a) CONFIDENTIALITY .
The Executive agrees that the Executive shall not, directly or
indirectly, use, make available, sell, disclose or otherwise
communicate to any person, other than in the course of the
Executive’s employment and for the benefit of the Company,
either during the period of the Executive’s employment or at
any time thereafter, any nonpublic, proprietary or confidential
information, knowledge or data relating to the Company, any of its
subsidiaries, affiliated companies or businesses, which shall have
been obtained by the Executive during the Executive’s
employment by the Company. The foregoing shall not apply to
information that (i) was known to the public prior to its
disclosure to the Executive; (ii) becomes known to the public
subsequent to disclosure to the Executive through no wrongful act
of the Executive or any representative of the Executive; or
(iii) the Executive is required to disclose by applicable law,
regulation or legal process (provided that the Executive provides
the Company with prior notice of the contemplated disclosure and
reasonably cooperates with the Company at its expense in seeking a
protective order or other appropriate protection of such
information). Notwithstanding clauses (i) and (ii) of the
preceding sentence, the Executive’s obligation to maintain
such disclosed information in confidence shall not terminate where
only portions of the information are in the public domain.
(b) NON-SOLICITATION .
During the Executive’s employment with the Company and for
the twelve (1
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