May 3, 2010 Dear Dr. Thomas Spector (“Employee”):
May 3,
2010
Dear Xx.
Xxxxxx Xxxxxxx (“Employee”):
On behalf
of the Board of Directors of Adherex Technologies, Inc. (“Adherex” or the
“Company”), I am pleased to make you an executable offer to join the Company as
its Chief Scientific Officer. The purpose of this agreement is to clarify the
terms of Employee’s employment with the Company, including Employee’s
compensation level and benefit entitlements.
1.
Employment
and Duties.
A. The
Company hereby agrees to employ Employee as Chief Scientific Officer (“CSO”) as
of May 3, 2010 (the “Effective Date”). In that position, Employee will report
directly to the Chief Executive Officer (“CEO”), and Employee hereby agrees to
accept such employment upon the terms and conditions hereinafter set
forth.
B.
Employee will perform the duties inherent in Employee’s position in good faith
and in a reasonable and appropriate manner. Employee is entitled to
continue his ongoing Xxxxxxx Consulting Services and his activities as a
professional meditation teacher. In return, the Employee agrees to
keep these activities at a reduced level, ensure that any such activities do not
interfere with or conflict with the Employee’s duties to the Company and not to
accept any major new contracts.
2.
Compensation.
A.
Employee’s initial base salary will be at the rate of $150,000 per year.
Employee has agreed to this low salary with the good faith understanding that it
will be made more equitable as the Company improves its financial condition. In
addition, Employee’s base salary will be subject to adjustment by the Company's
Board of Directors on an annual basis.
B.
Employee shall be entitled to receive an annual bonus based upon the Company’s
and Employee’s performance during the applicable year (the “Annual
Bonus”). The Annual Bonus shall be determined and paid by the
Company’s Board of Directors by no later than the close of the first quarter of
the calendar year.
C.
Employee’s base salary will be paid at periodic intervals in accordance with the
Company's payroll practices for salaried employees. The Company will deduct
and withhold, from the base salary and bonuses payable to Employee hereunder,
any and all applicable Federal, state and local income and employment
withholding taxes and any other amounts required to be deducted or withheld by
the Company under applicable statute or regulation.
3.
Employee
Stock Options.
A. Upon
execution of this Agreement and conditioned upon the approval of Adherex’s
shareholders, as required by applicable law and regulations, and upon
satisfaction of any other regulatory requirements, Adherex will grant Employee
an option (the “Equity Grant”) to purchase that number of Adherex
common shares that equals 5.00% of Adherex’s common shares estimated by the
Company to be outstanding (the “Company’s estimated shares outstanding”) upon
completion of the proposed rights offering announced by the Company on April 20,
2010 (the “Rights Offering”). These options will be immediately vested and shall
otherwise be subject to the terms and conditions of Adherex’s stock option plan,
as amended. For the avoidance of doubt, the Company’s estimated
shares outstanding shall be the same amount used in to calculate the proposed
option grants to directors’ Xxxxx, Bussandri and Xxxxxx.
B. At
the discretion of the Company’s Board of Directors, Employee may be granted
stock option awards in addition to the Equity Grant described in
3(A).
4.
Expense
Reimbursement. Employee will be entitled to reimbursement from the
Company for all customary, ordinary and necessary business expenses incurred by
Employee in the performance of Employee’s duties hereunder, provided Employee
furnish the Company with vouchers, receipts and other details of such expenses
within ninety(90) days after they are incurred.
5.
Fringe
Benefits. Employee will be eligible to participate in any group life
insurance plan, group medical and/or dental insurance plan, accidental death and
dismemberment plan, short-term disability program and other employee benefit
plans, including the Section 401(k) plan and the Employee Stock Purchase Plan,
which are made available to executive officers of the Company and for which
Employee otherwise qualify.
6.
Vacation. Employee
will accrue paid vacation benefits in accordance with Company policy in effect
for executive officers.
7.
Proprietary
Information. Prior to the commencement of Employee’s services as
CSO, Employee will sign and deliver to the Company the standard-form Proprietary
Information and Inventions Agreement required of all key employees of the
Company.
8. Termination
of Employment.
A. Employee’s
employment shall commence as of the Effective Date and shall continue for a
period of one (1) year unless terminated by either party, provided, however that
the term of this Agreement shall be extended automatically for additional
one-year periods (the “Renewal Term”).
B. The
Company may terminate Employee’s employment under this agreement at any time for
any reason by providing Employee with at least thirty (30) days prior written
notice. However, such notice requirement is not required if Employee’s
employment is terminated for cause as described in subparagraph 8(D)
below.
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C. If
Employee’s employment is terminated by the Company other than for cause pursuant
to Subsection 8(B) or the Company’s breach of this employment agreement, and
such termination is not for any of the reasons set out in Subsections 8(D),
then, following such termination, Employee shall be entitled to continue to
receive the following as severance (the “Severance Benefits”): (i) an amount
equal to Employee’s Base Salary, minus any federal, state and local payroll
taxes and other withholdings legally required or properly requested by Employee,
for a period of one (1) year, payable in full within five (5) days of
termination; (ii) a pro rata share of any Annual Bonus earned by Employee for
the year in which the termination takes place, minus any federal, state and
local payroll taxes and other withholdings legally required or properly
requested by Employee; and (iii) acceleration of vesting of stock options as a
result of such termination; provided, however, Employee
shall receive no Severance Benefits under this Paragraph 8(C) unless Employee
executes and delivers to the Company, in a form acceptable to the Company and
its counsel, a general release of claims against the Company (the “Release”),
which Release is not revoked within any time period allowed for revocation under
applicable law.
D. The
Company may at any time, upon written notice, terminate Employee’s employment
hereunder for cause as described in i and ii below. Such termination will be
effective immediately upon such notice.
For
purposes of this agreement, Employee’s employment with the Company will be
deemed to have been involuntarily terminated for cause if Employee’s services
are terminated by the Company for one or more of the following
reasons:
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i.
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acts
of fraud or embezzlement or other intentional misconduct which adversely
affects the Company's business,
or
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ii.
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misappropriation
or unauthorized disclosure or use of the Company's proprietary
information.
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E.
Employee’s employment shall automatically terminate in the event of Employee’s
death on the date of his death. However, all the “Severance Benefits”
described in Section 8(C) shall be extended to Employee's beneficiaries for a
period of 12 months.
F.
Employee may terminate employment under this agreement at any time for any
reason upon thirty (30) days prior written notice to the Company.
.. If the employee terminates his employment for "good reason", the
employee is entitled to receive the “Severance Benefits” described in Section
8(C) and acceleration of vesting of stock options as a result of such
termination. "Good reason" means: a material decrease in the
employee’s title, duties, responsibilities, and/or compensation and benefits; a
requirement to relocate to a facility or office location that is not within
twenty (20) miles of his residence as at the date of this Agreement; the
Company’s material breach of the employment agreement; or a change in control of
the development of eniluracil.
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9. Governing
Law. This
agreement shall be governed by and construed according to the laws of the State
of North Carolina, without reference to the choice of law or conflict of law
provisions of such laws.
10. Entire
Agreement. This agreement
(inclusive of the Confidentiality and Intellectual Property
Agreement incorporated herein) contains the entire agreement and understanding
by and between the Company and Employee with respect to the terms described
herein, and any representations, promises, agreements or understandings, written
or oral, not herein contained shall be of no force or effect. No
change or modification hereof shall be valid or binding unless the same is in
writing and signed by the parties hereto.
Please
indicate your acceptance of the foregoing provisions of this employment
agreement by signing the enclosed copy of this agreement and returning it to the
Company.
Very
truly yours,
Adherex
Technologies, Inc.
By /s/
Xxxxxxxxx Xxxxxx
Title:
Chief Executive Officer
ACCEPTED
BY AND AGREED TO
Signature:
/s/ Xxxxxx Xxxxxxx
Dated:
May 3, 2010
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