Exhibit 10.1
Adolor Corporation
700 Pennsylvania Drive
Exton, Pennsylvania 19341
August 1, 2005
Mr. David Madden
Dear: Mr. Madden,
Adolor Corporation, a Delaware
corporation (the “Company”), is pleased to offer you a
position as the interim President and Chief Executive Officer of
the Company, commencing on August 8, 2005 (your “Start
Date”) for a period of up to one year, to serve at the
pleasure of the Company’s Board of Directors (the
“Board”). This offer and your employment with the
Company are subject to the terms and conditions of this offer
letter (the “Offer Letter”).
Positions and
Responsibilities
In respect of the positions set
forth above, commencing on your Start Date, you will have the
duties, responsibilities and authority normally associated with the
offices and positions of president and chief executive officer of a
corporation, including, without limitation, complete operational
and management authority with respect to, and complete
responsibility for, the overall operations and day-to-day business
and affairs of the Company. You will be expected to assist the
Board in the recruitment of a successor president and chief
executive officer.
Duties
During your employment as an at-will
employee of the Company, you will devote substantially all of your
business time to the business and affairs of the Company and you
will use your reasonable best efforts to perform faithfully and
efficiently the duties and responsibilities contemplated by the
Offer Letter, provided, however, that there will be no restriction
on your ability to (a) manage your personal, financial, and legal
affairs, and (b) serve on civic or charitable boards or committees
and other boards of entities that do not compete with the Company
upon prior notice to the Board. It is understood that you will be
not be relocating your primary residence and that you will
generally work from home at least two days per week.
Compensation and Stock Option
Grant
If you decide to take this position,
you agree to serve without a salary and the Board will grant to you
on the Start Date options to purchase 300,000 shares of the
Company’s Common Stock at an exercise price based on the
closing price of the Company’s Common Stock on the date
immediately preceding your Start Date (the
“Options”). The Options shall vest
on the first anniversary of their grant date; provided however that
the acceleration of vesting of the options shall occur on the
earlier of the following dates: (i) the date that a successor
president and chief executive officer is named by the Board; (ii)
the date that your employment as President and Chief Executive
Officer of the Company is terminated by the Board of Directors
without Cause (as defined below); or (iii) the date that you resign
as President and Chief Executive Officer of the Company with Good
Reason. In the event of your inability to serve as President and
Chief Executive Officer of the Company as a result of your death or
Disability, the Options shall vest ratably up to the date of such
termination. To the extent permitted, the Options will be Incentive
Stock Options and will be issued under the Adolor Corporation 2003
Stock-Based Incentive Compensation Plan (the “2003
Plan”) and any amount not permitted to be issued under the
2003 Plan will be issued under the Company’s Amended and
Restated 1994 Equity Compensation Plan (the “1994
Plan”). It is the intention of the parties that termination
of your service as interim President and Chief Executive Officer
provided that you continue as a Director of the Company shall not
be a termination of service under either the 1994 Plan or the 2003
Plan. The Options shall have a ten-year term from the date of
grant, subject to earlier termination pursuant to the terms of the
stock option plan under which the Options have been
granted.
Benefits
You will be entitled to participate
in all benefit programs maintained by the Company (including annual
vacation of at least four weeks and medical, dental, life insurance
and disability plans) that may be provided to the Company’s
senior executives from time to time.
Termination of Employment
In the event your employment is
terminated (i) by you voluntarily without Good Reason or (ii) by
the Company for Cause, you will only be entitled to receive from
the Company (a) immed
