AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit
10.7
AMENDED
AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
This
Amended And Restated Executive Employment Agreement
(“Agreement”), originally made by and between
Bionovo, Inc. (the “Company”) and Xxxx Xxxxxxxxxxx
(“Executive”), effective as of January 1, 2008 (the
“Effective Date”), is hereby amended
and restated in
its entirety effective as of January 1, 2008 to read as follows:
Recitals
Whereas,
Executive is currently employed by the Company as its President, Chief Medical
Officer and Chief Regulatory Officer;
Whereas,
Executive’s prior employment agreement with the Company, dated July 1, 2004,
expired as of July 1, 2007; and
Whereas,
the Company desires to continue to employ Executive as its President, Chief
Medical Officer and Chief Regulatory Officer, and Executive is willing to
continue such employment by the Company, on the terms and subject to the
conditions set forth in this Agreement.
Agreement
Now,
Therefore, in consideration of the mutual promises and subject to the
terms and conditions set forth herein, the parties hereto agree as
follows:
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1.
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POSITION;
DUTIES; LOCATION.
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Executive
agrees to be employed by and to serve the Company as its President, Chief
Medical Officer and Chief Regulatory Officer, and the Company agrees to employ
Executive in such capacities. Executive shall have the powers and
shall perform the services and duties that are customarily associated with
these
positions. Executive agrees to devote substantially all of
Executive’s time, energy and ability to the business of the
Company. Executive may devote such time that Executive deems
appropriate for managing Executive’s own investment portfolio and may with the
approval of the Board of Directors of the Company (the
“Board”) be a member of the board of directors of a
for-profit company, non-profit, civic or charitable organizations so long as
such service does not materially interfere or conflict with Executive’s duties
hereunder. Executive shall perform the duties assigned to Executive
to the best of Executive’s ability and in the best interests of
Company. Executive will report to, be responsible to and obey the
lawful directives of the Board. Executive shall be based in
Emeryville, California, except for required travel on the Company’s
business.
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2.
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COMPENSATION
AND OTHER BENEFITS.
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In
consideration of Executive’s employment, and except as otherwise provided
herein, Executive shall receive from the Company the compensation and benefits
described in this Section 2. Executive authorizes the Company to
deduct and withhold from all compensation paid to Executive any and all sums
required to be deducted or withheld by the Company pursuant to the provisions
of
any federal, state, or local law, regulation, ruling, or ordinance, including,
but not limited to, income tax withholding and payroll taxes.
2.1 Base
Salary. Subject to the terms and conditions set forth
herein, the Company agrees to pay Executive an annual base salary equal to
Three
Hundred Seventy-Five Thousand Dollars ($375,000), less standard payroll
deductions and withholdings, payable on the Company’s regular payroll schedule
(as may be adjusted pursuant to this Agreement from time to time, the
“Base Salary”). The Company agrees that
Executive’s base salary will be reviewed annually by the Board and, if
appropriate (as determined by the Board in its sole discretion), will be
increased therefrom.
2.2 Bonus. Executive
shall be eligible to earn a bonus for each calendar year in an amount up to
forty percent (40%) of Executive’s Base Salary. Whether Executive
receives any such bonus, and the amount of any such bonus, shall be determined
by the Board (or a committee thereof) in its sole discretion, based upon its
evaluation of Executive’s performance and the performance of the Company during
the year, and such other factors and conditions as the Board (or a committee
thereof) deems relevant. Any such bonus shall be payable within the
first sixty (60) days of the calendar year immediately following the year for
which the bonus has been awarded. Bonuses are not deemed earned and
payable unless Executive is employed by the Company on the payment
date. Accordingly, Executive will not earn any bonus (including a
prorated bonus) for the year if Executive’s employment terminates for any reason
before any bonus is paid.
2.3 Equity. Executive
shall be eligible for additional equity grants in the future from time to time
as shall be determined by the Board (or a committee thereof) in its sole
discretion, and subject to such vesting, exercisability, and other provisions
as
the Board (or a committee thereof) may determine in its sole
discretion.
2.4 Paid
Time Off. Executive shall be entitled to accrue four (4)
weeks of paid vacation during each calendar year, prorated for partial
years. Any accrued vacation not taken during the year may be carried
forward to subsequent years; provided that Executive may not accrue more than
ten (10) weeks of unused vacation at any time. Executive will be
eligible for twenty (20) sick days per calendar year. Sick days will
not be carried over to the following year, nor will they be paid out upon
termination.
2.5 Automobile. The
Company will pay for Executive’s leased vehicle in an amount not to exceed Seven
Hundred Fifty Dollars ($750) per month.
2.6 Other
Benefits. Executive shall be eligible to participate in such
of the Company’s benefit plans as may be made available to executives of the
Company, including, without limitation, health plans, dental plans, vision
plans
and retirement plans (if any), subject to the terms and conditions of such
plans. With respect to life insurance, the Company shall pay
Executive’s premiums for up to $1,000,000 in coverage, with Executive
responsible for paying the premiums for any coverage over that
amount.
2.7 Reimbursement
for Expenses. The Company shall reimburse Executive for all
reasonable out-of-pocket business expenses incurred by Executive for the purpose
of and in connection with the performance of her services pursuant to this
Agreement. Executive shall be entitled to such reimbursement upon the
presentation by Executive to the Company of vouchers or other statements
itemizing such expenses in reasonable detail consistent with the Company’s
policies.
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3.
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TERMINATION;
SEVERANCE.
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3.1 Termination. Either
the Company or Executive may terminate Executive’s employment at any time, with
or without Cause or Good Reason, subject to the terms and conditions set forth
herein.
3.2 Compensation
and Benefits upon Termination. Upon the termination of
Executive’s employment for any reason, the Company shall pay Executive all of
Executive’s accrued and unused vacation and unpaid Base Salary earned through
Executive’s last day of employment (the “Separation
Date”).
3.3 Termination
for Cause. The Company shall be entitled to terminate
Executive’s employment for Cause (as defined herein) immediately upon written
notice to Executive. In that event, the Company shall pay Executive
the compensation set forth in Section 3.2 of this Agreement, and Executive
shall
not be entitled to any further compensation from the Company, including
severance benefits.
3.4 Termination
Without Cause. The Company shall be entitled to terminate
Executive’s employment without Cause (as defined herein) immediately upon
written notice to Executive. In that event, and provided such
termination constitutes a “separation from service” (within the meaning of
Treasury Regulation Section 1.409A-1(h)), Executive shall be eligible for the
following severance benefits:
(a) Severance
Payments. The Company shall pay Executive severance in an
amount equal to (i) One year of Executive’s Base Salary, plus (ii) an amount
equal to Executive’s target bonus for the year, prorated for the number of
months during the calendar year that Executive was actually employed by the
Company. This amount shall be paid in substantially equal
installments on the Company’s regular payroll schedule (subject to standard
deductions and withholdings) over the twelve (12) month period following the
Separation Date; provided, however, that no payments will be made prior to
the
effective date of the release referenced in Section 3.8 below. On the
first payroll date following the effective date of the release, the Company
will
pay Executive the payments that Executive would have received on or prior to
such date in a lump sum under the original schedule but for the delay in the
effectiveness of the release, with the balance of the cash severance being
paid
as originally scheduled. Each such installment will be deemed a
separate “payment” for purposes of Section 409A of the Internal Revenue
Code.
(b) COBRA
Payments. If Executive timely elects continued coverage
under COBRA, then the Company shall pay the COBRA premiums necessary to continue
Executive’s health insurance coverage in effect for herself and her eligible
dependents on the Separation Date for a period of twelve (12) months following
the Separation Date, provided that such COBRA reimbursement shall terminate
on
such earlier date as Executive is no longer eligible for COBRA
coverage.
(c) Termination
Without Cause Following a Change in Control. If the Company
terminates Executive’s employment without Cause on or within twelve (12) months
after the effective date of a Change in Control (as defined herein), and
provided such termination constitutes a “separation from service” (within the
meaning of Treasury Regulation Section 1.409A-1(h)), then Executive shall
receive the severance payments set forth in Section 3.4(a) and (b), on the
schedules set forth in those Sections, provided, however, that the
target bonus amount described in Section 3.4(a) shall not be prorated, and
therefore Executive shall receive an amount equal to Executive’s target bonus
for the year in which Executive’s employment is
terminated. Additionally, the Company shall accelerate the
vesting of any unvested shares subject to any stock options granted to Executive
after the Effective Date such that all shares shall be deemed fully vested
and
exercisable as of Executive’s last day of employment.
3.5 Termination
upon Death or Disability. The Agreement shall terminate
immediately upon Executive’s death or Disability (as defined
herein). In that event, the Company shall pay Executive the
compensation set forth in Section 3.2 of this Agreement, and Executive shall
not
be entitled to any further compensation from the Company, including severance
benefits.
3.6 Resignation
Without Good Reason. Executive shall be entitled to resign
without Good Reason (as defined herein) at any time upon written notice to
the
Company thirty (30) days prior to the effective date of such resignation, which
date shall be specified in Executive’s notice of resignation. In that
event, the Company shall pay Executive the compensation set forth in Section
3.2
of this Agreement, and Executive shall not be entitled to any further
compensation from the Company, including severance benefits.
3.7 Resignation
for Good Reason. Executive shall be entitled to resign for
Good Reason (as defined herein) at any time. In that event, and
provided such termination constitutes a “separation from service” (within the
meaning of Treasury Regulation Section 1.409A-1(h)), Executive shall be entitled
to the compensation set forth in Section 3.2 of this Agreement, as well as
the
severance benefits set forth in Sections 3.4(a) and (b) of this
Agreement. If such resignation for Good Reason occurs within twelve
(12) months after the effective date of a Change in Control (as defined herein),
then Executive shall receive the severance benefits as set forth in Section
3.4(c).
3.8 Release. As
a condition to receipt of any severance benefits under this Agreement, Executive
shall be required to provide the Company with an effective general release
of
any and all known and unknown claims against the Company and its officers,
directors, Executives, shareholders, parents, subsidiaries, successors, agents,
attorneys and affiliates, in a form acceptable to the
Company. Executive must execute this release, and allow it to become
effective, within thirty (30) days after Executive’s last day of employment with
the Company.
3.9 Section
409A Compliance. Notwithstanding the foregoing, if the
Company (or, if applicable, the successor entity thereto) determines that the
severance payments and benefits provided above upon a separation from service
constitute “deferred compensation” under Section 409A of the Internal Revenue
Code (together, with any state law of similar effect, “Section 409A”) and if
Executive is a “specified employee” of the Company or any successor entity
thereto as of the separation from service, as such term is defined in Section
409A(a)(2)(B)(i) (a “Specified Employee”), then,
solely to the extent necessary to avoid the incurrence of the adverse personal
tax consequences under Section 409A, the timing of the severance (or any portion
thereof) shall be delayed as follows: on the earlier to occur of (i) the date
that is six months and one day after the date of separation of service or
(ii) the date of Executive’s death (such earlier date, the
“Delayed Initial Payment Date”), the Company (or the
successor entity thereto, as applicable) shall (A) pay to Executive a lump
sum
amount equal to the sum of the severance payments that Executive would otherwise
have received through the Delayed Initial Payment Date if the commencement
of
the payment of the severance had not been delayed pursuant to this paragraph
and
(B) commence paying the balance of the severance in accordance with the payment
schedule set forth above. It is intended that each installment of the
severance payments and benefits provided for in this Agreement is a separate
“payment” for purposes of Section 409A. For the avoidance of doubt, it is
intended that the severance satisfies, to the greatest extent possible, the
exemptions from the application of Section 409A provided under Treasury
Regulation 1.409A-1(b)(4) and 1.409A-1(b)(9).
3.10 Definitions. For
purposes of this Agreement, the following definitions shall apply:
(a) Disability. The
term “disability” shall mean a physical or mental
disability that renders Executive unable to perform one or more of the essential
functions of her job, as determined by the Board in its sole discretion, for
a
period of 180 days during any 365-day period.
(b) Cause. “Cause”
shall mean: (i) theft, forgery, fraud, misappropriation, embezzlement, moral
turpitude or any other act of material misconduct by Executive against the
Company or any of its affiliates which causes material damage to the Company;
(ii) willful and knowing violation by Executive of any rules or regulations
of
any governmental or regulatory body, which is or could reasonably be expected
to
be materially injurious to the Company; (iii) conviction of Executive of, or
plea of guilty or nolo contendere by Executive to, a felony or any crime of
theft, forgery, fraud, misappropriation, embezzlement or moral turpitude; (iv)
continued failure to perform substantially Executive’s duties for the Company;
provided, however, that Executive must receive reasonable written notification
of the Company’s intended actions specifically describing the alleged events,
activities or omissions giving rise thereto, and a reasonable opportunity (of
not less than fourteen (14) days) to cure such breach (if capable of cure);
or
(v) any breach by Executive of this Agreement or other agreements between
Executive and the Company that causes a material adverse consequence on the
business, properties, assets, results of operations, or condition (financial
or
otherwise) of the Company taken as a whole; provided, however, that Executive
must receive reasonable written notification of the Company’s intended actions
specifically describing the alleged events, activities or omissions giving
rise
thereto, and thirty (30) days to cure such breach (if capable of
cure).
(c) Good
Reason. “Good Reason” shall mean
the Company: (i) materially reduces Executive’s responsibilities without
Executive’s consent; (ii) materially reduces Executive’s Base Salary or
materially and adversely affects the working conditions of Executive; or (iii)
materially breaches a material term of this Agreement; provided, however, that
Executive must provide the Company with written notification of the alleged
events, activities or omissions providing the basis for Executive’s resignation
within thirty (30) days following the first knowledge of such events, activities
or omissions, allow the Company thirty (30) days to cure such events, activities
or omissions (if curable) and resign no later than thirty (30) days after the
expiration of the cure period.
(d) Change
in Control. A “Change in Control”
means the consummation, in a single transaction
or in a series of related
transactions, of any one or more of the following events:
(i) a
sale,
lease or other disposition of all or substantially all of the assets of the
Company, other than a sale, lease or other disposition of all or substantially
all of the assets of the Company to an entity, more than fifty percent (50%)
of
the combined voting power of the voting securities of which are owned by
stockholders of the Company in substantially the same proportions as their
ownership of the outstanding voting securities of the Company immediately prior
to such sale, lease or other disposition;
(ii) a
merger,
consolidation or similar transaction involving (directly or indirectly) the
Company and, immediately after the consummation of such merger, consolidation
or
similar transaction, the stockholders of the Company immediately prior thereto
do not own, directly or indirectly, either (A) outstanding voting securities
representing more than fifty percent (50%) of the combined outstanding voting
power of the surviving entity in such merger, consolidation or similar
transaction or (B) more than fifty percent (50%) of the combined outstanding
voting power of the parent of the surviving entity in such merger, consolidation
or similar transaction, in each case in substantially the same proportions
as
their ownership of the outstanding voting securities of the Company immediately
prior to such transaction; or
(iii) any
“Exchange Act Person” becomes the owner, directly or
indirectly, of securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company’s then outstanding securities
other than by virtue of a merger, consolidation or similar
transaction. An “Exchange Act Person” means any natural person,
entity or “group” (within the meaning of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended), except that “Exchange Act Person”
shall not include (1) the Company or any subsidiary of the Company, (2) any
employee benefit plan of the Company or any subsidiary of the Company or any
trustee or other fiduciary holding securities under an employee benefit plan
of
the Company or any subsidiary of the Company, (3) an underwriter temporarily
holding securities pursuant to an offering of such securities, (4) an entity
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company;
or (5) any natural person, entity or “group” (within the meaning of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended) that, as
of
the effective date of this Plan, is the owner, directly or indirectly, of
securities of the Company representing more than fifty percent (50%) of the
combined voting power of the Company’s then outstanding securities.
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4.
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PROPRIETARY
INFORMATION AND INVENTIONS
AGREEMENT.
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Executive
shall be required to continue compliance with her obligations under the
proprietary information and inventions agreement that Executive previously
executed with the Company.
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5.
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COMPANY
POLICIES.
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Executive
shall be required to continue compliance with the Company’s policies and
procedures established by the Company from time to time.
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6.
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ASSIGNABILITY.
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This
Agreement is binding upon and inures to the benefit of the parties and their
respective heirs, executors, administrators, personal representatives,
successors and assigns. The Company may assign its rights or delegate
its duties under this Agreement at any time and from time to
time. However, the parties acknowledge that the availability of
Executive to perform services and the covenants provided by Executive hereunder
are personal to Executive and have been a material consideration for the Company
to enter into this Agreement. Accordingly, Executive may not assign
any of Executive’s rights or delegate any of Executive’s duties under this
Agreement, either voluntarily or by operation of law, without the prior written
consent of the Company, which may be given or withheld by the Company in its
sole and absolute discretion.
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7.
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NOTICES.
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All
notices and other communications under this Agreement shall be in writing and
shall be given by facsimile, first class mail (certified or registered with
return receipt requested), or Federal Express overnight delivery, and shall
be
deemed to have been duly given three days after mailing or twenty-four (24)
hours after transmission of a facsimile or Federal Express overnight delivery
(if the receipt of the facsimile or Federal Express overnight delivery is
confirmed).
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8.
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ARBITRATION.
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To
ensure
the timely and economical resolution of disputes that may arise in connection
with Executive’s employment with the Company, Executive and the Company agree
that any and all disputes, claims, or causes of action arising from or relating
to the enforcement, breach, performance, negotiation, execution, or
interpretation of this Agreement, Executive’s employment, or the termination of
Executive’s employment, shall be resolved to the fullest extent permitted by law
by final, binding and confidential arbitration, by a single arbitrator, in
San
Francisco, California, conducted by JAMS under the then applicable JAMS
rules. By agreeing to this arbitration procedure, both Executive and
the Company waive the right to resolve any such dispute through a trial by
jury
or judge or administrative proceeding. The arbitrator shall: (a) have
the authority to compel adequate discovery for the resolution of the dispute
and
to award such relief as would otherwise be permitted by law; and (b) issue
a
written arbitration decision, to include the arbitrator’s essential findings and
conclusions and a statement of the award. The arbitrator shall be
authorized to award any or all remedies that Executive or the Company would
be
entitled to seek in a court of law. The Company shall pay all JAMS’
arbitration fees in excess of the amount of court fees that would be required
if
the dispute were decided in a court of law. Nothing in this Agreement
is intended to prevent either Executive or the Company from obtaining injunctive
relief in court to prevent irreparable harm pending the conclusion of any such
arbitration.
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9.
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MISCELLANEOUS.
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9.1 Entire
Agreement. This Agreement contains the full, complete, and
exclusive embodiment of the entire agreement of the parties with regard to
the
subject matter hereof and supersedes all prior communications, representations,
or agreements, oral or written, and all negotiations, conversations or
discussions between or among the parties relating to this
Agreement. Executive has not entered into this Agreement in reliance
on any representations, written or oral, other than those contained
herein. Any ambiguity in this document shall not be construed against
either party as the drafter.
9.2 Amendment. This
Agreement may not be amended except by an instrument in writing duly executed
by
the parties hereto.
9.3 Applicable
Law; Choice of Forum. This Agreement has been made and
executed under, and will be construed and interpreted in accordance with, the
laws of the State of California.
9.4 Provisions
Severable. Every provision of this Agreement is intended to
be severable from every other provision of this Agreement. If any
provision of this Agreement is held to be invalid, illegal or unenforceable,
in
whole or in part, such invalidity, illegality or unenforceability shall not
affect the other provisions of this Agreement; and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never
been
contained herein except to the extent that such provision may be construed
and
modified so as to render it valid, lawful, and enforceable in a manner
consistent with the intent of the parties to the extent compatible with the
applicable law as it shall then appear.
9.5 Non-Waiver
of Rights and Breaches. Any waiver by a party of any breach
of any provision of this Agreement will not be deemed to be a waiver of any
subsequent breach of that provision, or of any breach of any other provision
of
this Agreement. No failure or delay in exercising any right, power,
or privilege granted to a party under any provision of this Agreement will
be
deemed a waiver of that or any other right, power or privilege. No
single or partial exercise of any right, power or privilege granted to a party
under any provision of this Agreement will preclude any other or further
exercise of that or any other right, power or privilege.
9.6 Headings. The
headings of the Sections and Paragraphs of this Agreement are inserted for
ease
of reference only, and will have no effect in the construction or interpretation
of this Agreement.
9.7 Counterparts. This
Agreement and any amendment or supplement to this Agreement may be executed
in
two or more counterparts, each of which will constitute an original but all
of
which will together constitute a single instrument. Transmission by
facsimile of an executed counterpart signature page hereof by a party hereto
shall constitute due execution and delivery of this Agreement by such
party.
9.8 Indemnification. In
addition to any rights to indemnification to which Executive is entitled under
the Company’s Charter and By-Laws, the Company shall indemnify Executive at all
times during and after Executive’s employment to the maximum extent permitted
under applicable state law.
In
Witness Whereof, the parties hereto have caused this Agreement, as
amended and restated herein, to be duly executed on the dates below, effective
as of the Effective Date.
Bionovo,
Inc. Xxxx
Xxxxxxxxxxx
By: /s/
Xxx Xxxxxxxxxx,
MBA By:/s/ Xxxx
Xxxxxxxxxxx
Name: Xxx
Xxxxxxxxxx, MBA
Title:
Senior Vice President
Chief
Financial Officer,
Secretary
Date:
12.31.08
