AGREEMENT (the
"Agreement") dated as of September 13, 2005 (the "Effective Date")
by and between Vion Pharmaceuticals, Inc., a Delaware corporation
(the "Company"), with offices at 4 Science Park, New Haven, CT
06511, and Howard Johnson, (the "Executive").
WI
T
N E S SE
T H :
WHEREAS, the Board of
Directors of the Company (the "Board") recognizes the importance of
the past and current efforts of the Executive to the growth and
success of the Company; and
WHEREAS, the Board
wishes to provide the Executive with certain protections in the
event that the Executive's employment is terminated (under certain
circumstances) after Alan Kessman's retirement, resignation or
termination as Chief Executive Officer ("CEO") of the Company, in
order to induce the continued efforts of the Executive on behalf of
the Company.
NOW THEREFORE, in
consideration of the foregoing and of the premises set forth
herein, the parties hereto agree as follows:
1. Definitions
.
1.1
Cause . For purposes of this
Agreement, termination by the Company of the Executive's employment
for "Cause" shall mean termination (a) upon the willful and
continued failure by the Executive to substantially perform his
duties with the Company, after a written demand for substantial
performance is delivered to the Executive by the Board, which
demand specifically identifies the manner in which the Board
believes that the Executive has not substantially performed his
duties, (b) the willful engaging by the Executive in an act or acts
of dishonesty constituting a felony under the laws of the United
States or any state thereof and resulting or intended to result
directly or indirectly in gain or personal enrichment at the
expense of the Company, or the Executive's conviction of a felony
under the laws of the United States or any state thereof, or (c)
the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company, monetarily or
otherwise. For purposes of this Subsection, no act, or failure to
act, on the Executive's part shall be deemed "willful" unless done,
or omitted to be done, by the Executive not in good faith and
without reasonable belief that his action or omission was in the
best interest of the Company. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of not
less than a majority of the entire membership of the Board at a
meeting of the Board (after reasonable notice to the Executive and
an opportunity for the Executive, together with his counsel, to be
heard before the Board), finding that in the good faith opinion of
the Board the Executive was guilty of conduct set forth above in
this Subsection and specifying the particulars thereof in
detail.
2.
Termination Without Cause . If, at any time within one year
after the earlier of (i) the date of a public announcement by the
Company of the hiring of a new CEO and (ii) the date of hiring of
such new CEO as set forth in such public announcement (the "CEO
Hiring Date") the Executive is terminated by the Company without
Cause, as described in Section 1.1, the Executive shall be entitled
to the benefits provided in Section 3 unless such termination is
because of the Executive's death.
3.
Compensation Upon Termination . If the Executive qualifies
for benefits pursuant to Section 2 hereof, then the Executive shall
be entitled to the benefits provided below:
(a) the
Company shall pay to the Executive his full base salary through the
date of termination of employment, at the rate as in effect at the
time notice of termination is given, no later than the fifth day
following the date of termination of employment, plus accrued
vacation pay through the date of termination of
employment;
(b) all other
amounts to which the Executive is entitled under any compensation
plan of the Company through the date of termination of employment
shall be paid on the dates such amounts are due under such
plans;
(c) provided
that the Executive has executed a general release in favor of the
Company effective as of the date of termination of employment in
the form attached hereto as Exhibit A (the "Release"), not
later than the fifth day following the termination of
the
Revocation Period (as
defined in the Release) without the revocation of the Release, (i)
the Company shall pay to the Executive, a lump sum severance
payment equal to the sum of: (1) twelve months of the Executive's
monthly base salary at the rate as in effect as of the date of
termination of employment or immediately prior to such termination,
whichever is greater; and (2) the average of the last two cash
bonus payments made to the Executive prior to the termination of
the Executive's employment; and (ii) until the earlier of (1) 12
months after such termination of employment or (2) the date the
Executive has obtained new full-time employment and has become
eligible for health insurance benefits, the Company shall make all
payments due under COBRA to provide the Executive with group health
insurance benefits substantially similar to those which the
Executive was receiving immediately prior to the date of
termination; provided that the Executive has elected continuation
coverage in accordance with COBRA.
4.
Transition Period . If the Executive voluntarily resigns
from his position as President and Chief Financial Officer of the
Company within the first 90 days following the CEO Hiring Date, the
Executive shall be entitled to the benefits provided
below:
(a) no later
than the fifth day following the date of resignation, the Company
shall pay to the Executive his full base salary through the date of
resignation at the rate as in effect at the time notice of
resignation is given, plus accrued vacation pay through the date of
resignation;
(b) all other
amounts to which the Executive is entitled under any compensation
plan of the Company at the time of such resignation shall be paid
on the dates such amounts are due under such plans;
(c) provided
that the Executive has executed the Release and the Revocation
Period has ended without the Release being revoked, (i) the Company
shall continue to pay to the Executive his full base salary, at the
rate as in effect at the date of resignation, at such time as such
payments would have been due pursuant to the Executive's previous
salary arrangement, until the earlier of (1) 12 months after the
date of such resignation or (2) the date Executive has obtained new
full-time employment (the "Transition Period"), provided that the
Executive advises and consults by telephone, in writing or, at a
mutually agreeable time, in person regarding the affairs of the
Company with the officers and directors of the Company upon
requests for such services by such officers and directors during
the Transition Period; and (ii) until the earlier of (1) 12 months
after such resignation or (2) the date the Executive has obtained
new full-time employment and became eligible for health insurance
benefits, the Company shall make all payments due under COBRA to
provide the Executive with group health insurance benefits
substantially similar to those which the Executive was receiving
immediately prior to the date of termination; provided that the
Executive has elected continuation coverage in accordance with
COBRA.
5. No
Mitigation . Except as provided in Sections 3(c) and 4(c), the
Executive shall not be required to mitigate the amount of any
payment provided for in Sections 3 or 4 by seeking other employment
or otherwise, nor shall the amount of any payment or benefit
provided for in Sections 3 or 4 be reduced by any compensation
earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount
claimed to be owed by the Executive to the Compan
