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Exhibit
10.4
NEUROGESX,
INC.
EXECUTIVE EMPLOYMENT
AGREEMENT
This Executive Employment
Agreement (the “Agreement”) is made and entered into by
and between Susan Rinne (the “Executive”) and
NeurogesX, Inc., a Delaware Corporation (the
“Company”), effective as of September 24, 2007 (the
“Effective Date”).
RECITALS
WHEREAS: It is expected that the Company
from time to time will consider the possibility of an acquisition
by another company or other change of control. The Board of
Directors of the Company (the “Board”) recognizes that
such consideration can be a distraction to Executive and can cause
Executive to consider alternative employment opportunities. The
Board has determined that it is in the best interests of the
Company and its shareholders to assure that the Company will have
the continued dedication and objectivity of Executive,
notwithstanding the possibility, threat or occurrence of a Change
of Control of the Company.
WHEREAS: The Board believes that it is
in the best interests of the Company and its shareholders to
provide Executive with an incentive to continue his or her
employment and to motivate Executive to maximize the value of the
Company upon a Change of Control for the benefit of its
shareholders.
WHEREAS: The Board believes that it is
imperative to provide Executive with certain severance benefits
upon Executive’s termination of employment following a Change
of Control. These benefits will provide Executive with enhanced
financial security and incentive and encouragement to remain with
the Company notwithstanding the possibility of a Change of
Control.
WHEREAS: Certain capitalized terms used
in the Agreement are defined in Section 12 below.
AGREEMENT
NOW, THEREFORE, in
consideration of the mutual covenants contained herein, the parties
hereto agree as follows:
1. Term of Agreement .
This Agreement shall terminate upon the date that all of the
obligations of the parties hereto with respect to this Agreement
have been satisfied.
2. At-Will Employment
. The Company and Executive acknowledge that Executive’s
employment is and shall continue to be at-will, as defined under
applicable law. If Executive’s employment terminates for any
reason, including (without limitation) any termination prior to a
Change of Control, Executive shall not be entitled to any payments,
benefits, damages, awards or compensation other than as provided by
this Agreement, or by law.
3. Duties and Scope of
Employment .
(a) Positions and
Duties . As of the Effective Date, Executive will serve as Vice
President, Regulatory of the Company. Executive will render such
business and professional
services in the performance
of his or her duties, consistent with Executive’s position
within the Company, as will reasonably be assigned to him by the
Company’s Board.
(b) Obligations .
During such time as the Executive is employed by the Company,
Executive will perform his or her duties faithfully and to the best
of his or her ability and will devote his or her full business
efforts and time to the Company. During such time as the Executive
is employed by the Company, Executive agrees not to actively engage
in any other employment, occupation or consulting activity for any
material direct or indirect remuneration without the prior approval
of the Board.
4. Compensation
.
(a) Base Salary .
During such time as the Executive is employed by the Company, the
Company will pay Executive an annual salary as determined in the
discretion of the Board or any committee thereof. The base salary
will be paid periodically in accordance with the Company’s
normal payroll practices and will be subject to the usual, required
withholding. Executive’s salary will be subject to review and
adjustments will be made based upon the Company’s normal
performance review practices.
(b) Performance Bonus
. Executive will be eligible to receive an annual bonus and other
bonuses, less applicable withholding taxes, as determined by the
Board or any committee thereof in the Board’s or such
committee’s sole discretion.
(c) Equity
Compensation . Executive will be eligible to receive stock and
option grants, and other equity compensation awards, as determined
by the Board or any committee thereof in the Board’s or such
committee’s sole discretion.
5. Employee Benefits .
During the time that Executive is an employee of the Company,
Executive will be entitled to participate in the Benefit Plans
currently and hereafter maintained by the Company of general
applicability to other senior executives of the Company. The
Company reserves the right to cancel or change the Benefit Plans it
offers to its employees at any time.
6. Vacation .
Executive will be entitled to vacation in accordance with the
Company’s vacation policy, with the timing and duration of
specific vacations mutually and reasonably agreed to by the parties
hereto.
7. Expenses . The
Company will reimburse Executive for reasonable travel,
entertainment or other expenses incurred by Executive in the
furtherance of or in connection with the performance of
Executive’s duties as an employee of the Company, in
accordance with the Company’s expense reimbursement policy as
in effect from time to time.
8. Double Trigger Change
of Control and Termination . Upon the double trigger of a
Change of Control of the Company and termination of Executive as
defined in Section 9, Executive will be eligible for Severance
Benefits as described in Section 9.
9. Severance Benefits
.
(a) Involuntary
Termination Following a Change of Control . If within eighteen
(18) months following a Change of Control (X)(i) Executive
terminates his or her employment with the Company (or any parent or
subsidiary of the Company) for Good Reason or (ii) the Company
(or any parent or subsidiary of the Company) terminates
Executive’s employment for other than Cause, and
(Y) Executive signs and does not revoke a standard release of
claims with the Company in a form reasonably acceptable to the
Company, then Executive shall receive the following severance from
the Company:
(i) Severance Payment
. Executive will be entitled to (i) receive continuing
payments of severance pay (less applicable withholding taxes) at a
rate equal to his or her base salary rate, as then in effect, for a
period of six (6) months from the date of such termination, to
be paid periodically in accordance with the Company’s normal
payroll policies; and (ii) a lump-sum payment equal to 50% of
Executive’s target annual bonus as of the date of such
termination.
(ii) Options; Restricted
Stock . Fifty percent (50%) of Executive’s then
outstanding options to purchase shares of the Company’s
Common Stock (the “Options”) shall immediately vest and
become exercisable (that is, in addition to the shares subject to
the Options which have vested and become exercisable as of the date
of such termination), but in no event shall the number of shares
subject to such Options which so vest exceed the total number of
shares subject to such Options. Additionally, all of the shares of
the Company’s Common Stock then held by Executive subject to
a Company right of repurchase (the “Restricted Stock”)
shall immediately vest and have such Company right of repurchase
with respect to such shares of Restricted Stock lapse (that is, in
addition to the shares of Restricted Stock which have vested as of
the date of such termination), but in no event shall the number of
shares which so vest exceed the number of shares of Restricted
Stock outstanding immediately prior to such termination.
(iii) Continued Employee
Benefits . Executive shall receive Company-paid coverage for
Executive and Executive’s eligible dependents under the
Company’s Benefit Plans for a period equal to the shorter of
(i) nine (9) months or (ii) such time as Executive
secures employment with benefits generally similar to those
provided in the Company’s Benefit Plans.
(b) Timing of Severance
Payments . Any lump-sum severance payment to which Executive is
entitled shall be paid by the Company to Executive in cash and in
full, not later than ten (10) calendar days after the date of
the termination of Executive’s employment as provided in
Section 9(a), and any other severance payments shall be paid
in accordance with normal payroll policies as provided in
Section 9(a). If Executive should die before all amounts have
been paid, such unpaid amounts shall be paid in a lump-sum payment
to Executive’s designated beneficiary, if living, or
otherwise to the personal representative of Executive’s
estate.
(c) Voluntary Resignation;
Termination for Cause . If Executive’s employment with
the Company terminates (i) voluntarily by Executive other than
for Good Reason or (ii) for Cause by the Company, then
Executive shall not be entitled to receive severance or other
benefits except for those as may then be established under the
Company’s then existing severance and Benefits Plans or
pursuant to other written agreements with the Company.
(d) Disability; Death
. If the Company terminates Executive’s employment as a
result of Executive’s Disability, or Executive’s
employment terminates due to his or her death, then Executive shall
not be entitled to receive severance or other benefits except for
severance amounts paid to Executive prior to the date of such
termination and except for those as may then be established under
the Company’s then existing written severance and Benefits
Plans or pursuant to other written agreements with the
Company.
(e) Termination Apart from
Change of Control . In the event Executive’s employment
is terminated for any reason, either prior to the occurrence of a
Change of Control or after the eighteen (18) month period
following a Change of Control, then Executive shall be entitled to
receive severance and any other benefits only as may then be
established under the Company’s existing written severance
and Benefits Plans, if any, or pursuant to any other written
agreements with the Company.
(f) Exclusive Remedy .
In the event of a termination of Executive’s employment
within eighteen (18) months following a Change of Control, the
provisions of this Section 9 are intended to be and are
exclusive and in lieu of any other rights or remedies to which
Executive or the Company may otherwise be entitled, whether at law,
tort or contract, in equity, or under this Agreement. Executive
shall be entitled to no benefits, compensation or other payments or
rights upon termination of employment following a Change in Control
other than those benefits expressly set forth in this
Section 9.
10. Conditional Nature of
Severance Payments .
(a) Non-Solicitation .
Until the date one (1) year after the termination of
Executive’s employment with the Company for any reason,
Executive agrees not, either directly or indirectly, to solicit,
induce, attempt to hire, recruit, encourage, take away, hire any
employee of the Company or any successor entity or cause an
employee to leave his or her employment either for Executive or for
any other entity or person. Additionally, Executive acknowledges
that Executive’s right to receive the severance payments set
forth in Section 9 (to the extent Executive is otherwise
entitled to such payments) are contingent upon Executive complying
with this Section 10 and upon any breach by Executive of this
Section 10: (i) Executive shall refund to the Company all
cash paid to Executive pursuant to Section 9 of this
Agreement; and (ii) all severance benefits pursuant to this
Agreement shall immediately cease.
(b) Understanding of
Obligations . Executive represents that he (i) is familiar
with the foregoing covenant not to solicit, and (ii) is fully
aware of his or her obligations hereunder, including, without
limitation, the reasonableness of the length of time, scope and
geographic coverage of such covenant.
11. Limitation of
Payments . In the event that the severance and other benefits
provided for in this Agreement or otherwise payable to Executive
(i) constitute “parachute payments” within the
meaning of Section 280G of the Internal Revenue Code of 1986,
as amended (the “Code”) and (ii) but for this
Section 11, would be subject to the excise tax imposed by
Section 4999 of the Code, then Executive’s benefits
hereunder shall be either:
(a) delivered in full,
or
(b) delivered as to such
lesser extent which would result in no portion of such severance
benefits being subject to excise tax under Section 4999 of the
Code,
whichever of the foregoing amounts,
taking into account the applicable federal, state and local income
taxes and the excise tax imposed by Section 4999, results in
the receipt by Executive on an after-tax basis, of the greatest
amount of severance benefits, notwithstanding that all or some
portion of such severance benefits may be taxable under
Section 4999 of the Code. Unless the Company and Executive
otherwise agree in writing, any determination required under this
Section 11 shall be made in writing by the Company’s
indepen
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