Verona Pharma, Inc. E-mail: info@veronapharma.com Website: www.veronapharma.com EXECUTION COPY May 1, 2017 Armi Desiree Elisabeth Luthman 306 Windy Run Road Doylestown, Pennsylvania 18901 USA Re: Offer of Employment Dear Desiree: On behalf of Verona...
Verona Pharma, Inc.
E-mail: xxxx@xxxxxxxxxxxx.xxx Website: xxx.xxxxxxxxxxxx.xxx
EXECUTION COPY
May 1, 2017
Xxxx Xxxxxxx Xxxxxxxxx Xxxxxxx
000 Xxxxx Xxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
XXX
Re: Offer of Employment
Dear Xxxxxxx:
On behalf of Verona Pharma, Inc. (the “Company” or “Verona Pharma”), I am pleased
to offer you the position of Vice President, Regulatory Affairs. This offer letter agreement (the
“Agreement”) sets forth the terms of employment the Company is offering you. If you accept
this offer, we anticipate that your first day of employment will be mid-June 2017
(“Commencement Date”).
1. DUTIES. As the Company’s Vice President, Regulatory Affairs, you will be responsible
for the development and implementation of regulatory strategy, and prepare, coordinate,
manage and maintain regulatory submissions in accordance with applicable regulations by
FDA, EMA and select countries; provide regulatory review of key documents; interface with
external regulatory groups and act as liaison between Regulatory Affairs and other functional
areas; represent Regulatory Affairs in cross-functional team meetings; author and review
standard operating procedures (SOPs) in area of expertise; ensure SOPs are in compliance with
current regulatory requirements and provide regulatory support for corporate quality assurance
efforts. You will also participate in the oversight of the currently outsourced
pharmacovigilance function and perform the other duties associated with this position. You
will report to the Chief Executive Officer (the “Manager”) of Verona Pharma plc, the
Company’s parent company (the “Parent”). You will perform your services at the Company’s
office in White Plains, New York and will attend such office on average not less than two full
days per week. In the event that the Company asks you to relocate, the Company will
reimburse your relocation expenses on terms to be mutually agreed upon prior to the
relocation. You shall devote your full time and attention to the business affairs of the
Company.
2. BASE SALARY. You will receive an annual base salary of $265,000 for all hours
worked, less payroll deductions and withholdings, earned and payable in substantially equal
installments in accordance with the Company’s payroll policy from time to time in effect.
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3. BONUS. You will be eligible to participate in the Company’s annual bonus plan, with a
target bonus of 25% of your base salary, subject to the terms of such plan and on such other
terms and conditions as may be determined by the Company. You must be employed on the
date of payment of the bonus in order to be eligible for the bonus.
4. STOCK OPTIONS. Subject to the approval of the board of directors of the Parent, and as
soon as reasonably practicable after the Commencement Date having regard to the Parent’s
Share Dealing Policy, you will be granted, pursuant to, and subject to, Xxxxxx’s equity incentive
plan, an option to subscribe for a total of 20,000 American Depositary Shares in the capital of
Parent (the “Stock Option”). The definitive terms of the Stock Option will be governed by the
equity incentive plan, which requires, as a condition of the grant, that you enter into a written
option agreement, which will contain the definitive terms of the Stock Option. The Stock
Option shall vest in equal proportions over three years from the date of grant, or earlier in the
event of a change in control of Parent (as defined in the equity incentive plan or option
agreement), in each case subject to your continued employment through such date or such
change in control.
5. BENEFITS. You will be entitled to participate in the Company’s 401(k) plan and
healthcare plan generally available from time to time to employees of the Company, subject to
the terms of such plans. In addition, the Company will procure short-term disability insurance
for you in accordance with New York state law. You will be entitled to four (4) weeks of paid
time off per year, earned and accrued on a pro rata basis throughout the year, provided that
except with the prior written approval of the Manager, you may carry over five days of accrued
but unused time into the first quarter of the subsequent year. You will not be paid for any
accrued but unused time upon termination of employment.
6. EXPENSES. You shall be entitled to reimbursement for all ordinary and reasonable out-
of-pocket business expenses which are reasonably incurred by you in furtherance of the
Company’s business and in accordance with the standard policies of the Company and Parent,
provided that you produce to the Company such evidence of actual payment as the Company
may require.
7. SEVERANCE BENEFITS.
(a) Termination By The Company Without Cause or Termination by the
Employee for Good Reason. If this Agreement is terminated by the Company without Cause
(as defined below) or by the Employee for Good Reason (as defined below), and if you sign an
agreement acceptable to the Company that (i) waives any rights you may otherwise have
against the Company and Parent, (ii) releases the Company and Parent from any actions, suits,
claims, proceedings and demands you may have relating to the period of your employment
with the Company and/or the termination of your employment, and (iii) contains certain other
obligations which will be set forth at the time of the termination, the Company shall provide
you with the following severance benefits: (1) continuation of your base salary less payroll
deductions and withholding for a period of eight (8) weeks; (2) continued payment, or
reimbursement, as the case may be, of your COBRA premiums at the rate in effect upon
termination for a period of eight (8) weeks; and (3) a pro-rated portion of the annual bonus you
otherwise would have earned for the year in which termination occurs, if any, based upon
actual performance for such year.
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(b) Termination By The Company With Cause, By Reason of Death or
Disability or By Resignation. If this Agreement is terminated by the Company at any time
with Cause, by reason of your death or disability, or if you terminate your employment with
the Company under this Agreement, you shall not be entitled to any severance pay, severance
benefits, accelerated vesting or any compensation or benefits from the Company whatsoever.
(c) Definitions:
A. Cause. “Cause” for purposes of this Agreement shall mean if you: (1)
shall have committed any felony or any other act involving fraud, theft, misappropriation,
dishonesty, or embezzlement; (2) shall have committed intentional acts that materially impair
the goodwill or business of the Company or Parent or cause material damage to Company’s or
Parent’s property, goodwill, or business; (3) shall have refused to, or willfully failed to,
perform your material duties hereunder; or (4) shall have violated any written policies or
procedures of the Company or Parent.
B. Good Reason. “Good Reason” for purposes of this Agreement shall
mean if (i) the Company moves or relocates the Employee and the Employee is unable to
achieve on reasonable terms approximately equivalent living circumstances to his situation in
the New York metropolitan area, (ii) the Employee is demoted or assigned duties of less
seniority than his duties under this Agreement, or (iii) the Company decreases by 15% or more
the Employee’s base salary and target bonus under this Agreement. In order for the Employee
to terminate his Employment for “Good Reason” under this paragraph, immediately after
becoming aware of the breach or other event giving rise to the Employee’s right to terminate,
the Employee must have provided the Company with written notice of his right to terminate
pursuant to this paragraph and the Company must have failed to cure the breach or other event
so specified, if curable, within thirty days after receiving such notice.
C. Release Requirement and Timing of Severance Payments. In order
to receive the severance benefits under paragraph (a) above, as applicable, you must sign and
tender the release as described above not later than sixty (60) days following your last day of
employment, or such earlier date as required by the Company, and if you fail or refuse to do so,
you shall forfeit the right to such termination compensation as would otherwise be due and
payable. If the severance payments are otherwise subject to Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), they shall begin on the first pay period
following the date that is sixty (60) days after your employment terminates and shall otherwise
begin on the first pay period after the release becomes effective (with the initial salary
continuation payment to include any unpaid salary continuation payments from the date your
employment terminated), subject to your executing and tendering the release on the terms as
set forth in the immediately preceding sentence. The pro-rated bonus, if any, shall be paid
when such bonus would have been paid absent the termination of your employment and in all
cases in the calendar year following the fiscal year to which the bonus relates.
8. COMPANY POLICIES AND CONFIDENTIALITY AGREEMENT. As an employee of the
Company, you will be expected to abide by all of the applicable policies and procedures of the
Company and Parent. As a condition of your employment, you agree to sign and to abide by
the terms of a Protective Agreement with the Company, which is attached hereto as Exhibit A.
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9. NEW YORK WAGE THEFT PREVENTION ACT NOTICE. Attached as Exhibit B a notice
containing certain information regarding your pay as required by the New York Wage Theft
Prevention Act.
10. AT-WILL EMPLOYMENT. As an employee of the Company, you may terminate your
employment at any time and for any reason whatsoever simply by notifying the Company.
Similarly, the Company may terminate your employment at any time and for any reason
whatsoever, with or without cause or advance notice. Your at-will employment relationship
with the Company cannot be changed except in writing signed by the Manager.
11. ENTIRE AGREEMENT. This Agreement, including Exhibit A, constitutes the complete,
final and exclusive embodiment of the entire agreement between you and the Company with
respect to the terms and conditions of your employment specified herein. If you enter into this
Agreement, you are doing so voluntarily, and without reliance upon any promise, warranty or
representation, written or oral, other than those expressly contained herein. This Agreement
supersedes any other such promises, warranties, representations or agreements. This
Agreement may not be amended or modified except by a written instrument signed by you and
the CEO.
12. GOVERNING LAW. This Agreement will be governed by and construed in accordance
with the laws of the State of New York.
13. DISPUTE RESOLUTION. To ensure the timely and economical resolution of disputes
that arise in connection with your employment with the Company, you and the Company agree
that any and all disputes, claims, or causes of action arising from or relating to the
enforcement, breach, performance or interpretation of this Agreement, your employment, or
the termination of your employment, shall be resolved to the fullest extent permitted by law by
final, binding and confidential arbitration, by a single arbitrator, in New York, New York,
conducted by Judicial Arbitration and Mediation Services, Inc. (“JAMS”) under the applicable
JAMS employment rules. By agreeing to this arbitration procedure, both you and the
Company waive the right to resolve any such dispute through a trial by jury or judge or
administrative proceeding. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof in the State of New York. In reaching his or
her decision, the arbitrator shall have no authority (a) to authorize or require the parties to
engage in discovery (provided, however, that the arbitrator may schedule the time by which the
parties must exchange copies of the exhibits that, and the names of the witnesses whom, the
parties intend to present at the hearing) (b) to interpret or enforce the Protective Agreement
(which shall not be covered by the dispute resolutions contained in this paragraph), (c) to
change or modify any provision of this Agreement, (d) to base any part of his or her decision
on the common law principle of constructive termination, or (e) to award punitive damages or
any other damages not measured by the prevailing party’s actual damages and may not make
any ruling, finding or award that does not conform to this Agreement. Each party shall bear
his, her or its own legal fees, costs and expenses of arbitration and one-half (½) of the costs of
the arbitrator.
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14. SECTION 409A. You and the Company intend that the payments and benefits provided
for in this letter either be exempt from Section 409A of the Code, or be provided for in a
manner that complies with Section 409A of the Code, and any ambiguity herein shall be
interpreted so as to be consistent with the intent of this Section 14. In no event whatsoever
shall the Company be liable for any additional tax, interest or penalty that may be imposed on
you by Section 409A of the Code or damages for failing to comply with Section 409A of the
Code. Notwithstanding anything contained herein to the contrary, all payments and benefits
under Section 7 above shall be paid or provided only at the time of a termination of your
employment that constitutes a “separation from service” from the Company within the
meaning of Section 409A of the Code and the regulations and guidance promulgated
thereunder (determined after applying the presumptions set forth in Treas. Reg. Section
1.409A-1(h)(1)). Further, if you are a “specified employee” as such term is defined under
Section 409A of the Code and the regulations and guidance promulgated thereunder, any
payments described in Section 7 above shall be delayed for a period of six (6) months
following your separation of employment to the extent and up to an amount necessary to
ensure such payments are not subject to the penalties and interest under Section 409A of the
Code. In addition, (i) in-kind benefits and reimbursements provided under this Agreement
during any calendar year shall not affect in-kind benefits or reimbursements to be provided in
any other calendar year, other than an arrangement providing for the reimbursement of medical
expenses referred to in Section 105(b) of the Code, and are not subject to liquidation or
exchange for another benefit and (ii) reimbursement requests must be timely submitted by you
and, if timely submitted, reimbursement payments shall be promptly made to you following
such submission, but in no event later than December 31st of the calendar year following the
calendar year in which the expense was incurred. In no event shall you be entitled to any
reimbursement payments after December 31st of the calendar year following the calendar year
in which the expense was incurred. The reimbursement provisions in this Section 14 shall only
apply to in-kind benefits and reimbursements that would result in taxable compensation
income to you.
15. AUTHORIZATION TO WORK AND BACKGROUND CHECK. Your employment with the
Company is contingent upon satisfactory results from any pre-employment background checks
that we may deem necessary, including, but not limited to, a credit check, criminal background
check, drug screening and confirmation of your legal authorization to work in the United
States. Our offer is also contingent upon you not being subject to any limitation, obligation or
agreement, whether imposed by contract, statute or otherwise, that would preclude your
employment by the Company or in any way restrict your ability to perform your duties as an
employee. If you have provided the Company with any false information with respect to your
employment history, educational background or other credentials, the offer of employment
contained herein shall be withdrawn or, if you have already been hired, your employment shall
be immediately terminated.
If you choose to accept this Agreement under the terms described above, please sign
below and return this letter to me no later than May 15, 2017.
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We look forward to your favorable reply, and to a productive and enjoyable work relationship.
Very truly yours,
Verona Pharma, Inc.
____________________________________
Name: Xxx-Xxxxxx Xxxxxxxx
Position: Director
Accepted and Agreed to by:
____________________________________
Employee Name: Xxxx Xxxxxxx Xxxxxxxxx Xxxxxxx
Date: __________________
Exhibit A
Protective Agreement
(attached)