July 28, 1997
Ms. Janet M. Walter
225 W. 20th Street, Apt. 4W
New York, NY 10011
Dear Janet:
I am pleased to present for your consideration the following proposal to join
Aronex as Vice President, Marketing and Business Development. In this position
you will report directly to me. Your responsibilities will include defining
strategy and implementing commercialization plans for the Company's products.
Additional responsibilities include directing new business development
activities, corporate partnering, and in-licensing and out-licensing activities.
Directly reporting to you will be Larry Hope. Joe Wyse, who oversees contracts
and patents will report to you once his current Pharmaceutical Development
responsibilities are completed. A starting date of August 15, 1997 is
anticipated, although I would prefer an earlier start date, if possible.
Compensation for the position would include the following:
Base salary: $13,333.34 monthly
Stock Option: 100,000 options at fair market value, 30,000 to
vest upon joining Aronex. The balance will vest
over four years at a rate of 1/48 per month.
Bonus: A target annual bonus of 20% of base salary in
cash and/or stock options, dependent upon you
meeting Company goals and Board approval.
Benefits: Benefits would include medical, dental, and
disability, 401K plan, stock purchase plan,
medical benefits, cafeteria plan, three weeks
annual vacation, and all other Company benefits
defined in the Company's Benefits Summary which is
enclosed.
Relocation: Up to two trips to Houston to select new housing.
Moving costs of personal property. In order for
you not to have to pay for two residences during
transition, Aronex will pay up to two months rent
for temporary housing in the Houston area if there
is overlap in your rent costs between New York and
Texas. The Company will also cover gross-up costs
related to your relocation expenses that are not
tax deductible.
Ms. Janet M. Walter July 28, 1997
Page 2
Goals and Incentive Milestones:
o In-license product which has in-vitro and
in-vivo activity and is within one year of
clinical testing. The incentive is 25,000
options at fair market value at the time of
issuance when the milestone is met for each
compound in-licensed.
o Successfully launch AtragenTM within three
months of NDA approval, or consummate a
licensing agreement which provides the
Company with a minimum of $5M in cash or
equity investment. The incentive is 25,000
options at fair market value at the time of
issuance when the milestone is met.
If AtragenTM is launched by Aronex, generate
a minimum of $2M sales within 12 months of
launch. The incentive is 25,000 options at
fair market value at the time of issuance
when the milestone is met.
o Out license NyotranTM to corporate partners
in Europe and Asia and arrange co-promotion
deal in North America which guarantees a
minimum of $20M with $15M in cash or equity
investment. The Incentive is 50,000 options
at fair market value at the time of
issuance when the milestone is met. In the
event deals are done with regional
companies rather than a multinational,
incentive payouts are as follows:
>=$1M=5,000 options at fair market value at
the time of issuance when the milestone is
met; >=$3M=10,000 at fair market value at
the time of issuance when the milestone is
met; >=$5M=25,000 options at fair market
value at the time of issuance when the
milestone is met. Excluded are
Rhone-Poulenc Rorer, Pharmacia-Upjohn,
Fresenius and Sanofi.
In addition to the above milestones,
following are several objectives that are
high priority:
- Define market potential,
positioning, and competitive
challenges for each of the
Company's products.
- Assist in increasing product
awareness for the Company's product
ongoing opinion leading clinicians.
- Assure that development programs
for each product isadequate for
competitive marketing positioning.
Ms. Janet M. Walter July 28, 1997
Page 3
Employment
Agreement: A one year severance package of base salary and
benefits if terminated by the Company for reasons
other than cause.
I believe this package is very reasonable and reflects the importance of the
position and the value we perceive you will bring to Aronex.
I hope you find this proposal acceptable. I look forward to you joining Aronex
as early as possible
Best regards,
By:/S/JAMES M. CHUBB, PH.D.
James M. Chubb, Ph.D.
President
JMC/cc
Enclosure
Accepted and Agreed upon this 28TH day of July, 1997 by
By:/S/JANET M. WALTER
Janet M. Walter