EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is made and entered
into as of July 1, 2004, by and between Bionovo, Inc., a Delaware corporation
(the "COMPANY"), and Isaac Cohen ("EXECUTIVE"). The parties agree as follows:
1. START DATE; TERM. This Agreement will be effective as of the date of this
Agreement, and the Executive's "TERM OF EMPLOYMENT" (as defined below) will
commence as of the date of this Agreement (the "START DATE").
2. POSITION AND DUTIES.
A. POSITION; DUTIES. The Company employs Executive as ACTING CHIEF
EXECUTIVE OFFICER AND CHIEF SCIENTIFIC OFFICER (the "POSITION")
commencing as of the Start Date for the TERM OF EMPLOYMENT.
Executive shall have the powers and shall perform the services
and duties that are customarily associated with the Position (the
"COMPANY MATTERS"). Executive shall comply with the Company's
policies and rules, as they may be in effect from time to time
during the Term of Employment with the Company. 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 the Executive deems appropriate for managing
Executive's own investment portfolio and may with the consent of
the Company be a member of the Board of Directors of non-profit,
civic or charitable organizations so long as it does not
materially interfere or conflict with the Position. Executive
shall not engage in any conduct that is actually in direct
conflict with the essential enterprise-related interests of the
Company or its affiliates for which Executive performs services,
and Executive acknowledges and agrees that a breach of this
provision will cause a material and substantial disruption of the
Company's or its affiliates' business. Executive shall perform
the duties assigned to Executive to the best of Executive's
ability and in the best interests of Company. Executive, in
Executive's capacity as an employee and officer of the Company,
will report to, and be responsible to and obey the reasonable and
lawful directives of, the Board of Directors of the Company (the
"BOARD"). Notwithstanding the foregoing, Executive's Position
will not be changed, and Executive's duties will not be
materially reduced, without the consent of Executive except (i)
pursuant to a termination as set forth in SECTION 5 or (ii) to
another senior executive officer level position of the Company,
with senior executive officer level responsibilities, as
determined by the Board.
B. PRINCIPAL EXECUTIVE OFFICES. Executive's principal executive
office will be located in EMERYVILLE, CALIFORNIA and WILL NOT BE
MOVED WITHOUT THE WRITTEN CONSENT OF EXECUTIVE.
3. COMPENSATION.
A. BASE SALARY. The Company will pay to Executive a base salary at
the annual rate of $180,000, less standard withholding and
authorized deductions, in accordance with the Company's regular
payroll policies. The Company agrees that such salary will be
reviewed annually by the Board and, if appropriate, will be
increased therefrom. Executive's annual salary, as set forth in
this SECTION 3(A) or as it may be increased from time to time as
set forth herein, will be referred to hereinafter as the "BASE
SALARY." At no time during the Term of Employment will
Executive's Base Salary be decreased from the amount of the Base
Salary then in effect without Executive's written consent.
B. BONUS. In addition to the compensation otherwise payable to
Executive pursuant to this Agreement, Executive will be eligible
to receive annual bonuses in cash and/or options to purchase
common stock of the Company to the extent, if any, awarded by the
Board in its sole discretion (the "BONUS").
C. STOCK OPTIONS. The Company will grant stock options to Executive
under the Company's stock incentive plan (the "PLAN") to purchase
shares of common stock of the Company as determined by the
discretion of the Board and subject to the terms and conditions
of the Plan and an option agreement between the Company and
Executive.
4. BENEFITS. During the Term of Employment:
A. BENEFITS. Executive will be eligible to participate in any life,
health and long-term disability insurance programs, pension and
retirement programs, stock option and other incentive
compensation programs, and other fringe benefit programs made
available to senior executive employees of the Company from time
to time, and Executive will be entitled to receive such other
fringe benefits as may be granted to Executive from time to time
by the Board.
B. VACATION; SICK DAYS. Executive will accrue vacation benefits at
the rate of four weeks of paid vacation per calendar year up to a
maximum accrual of 10 weeks. If at any time Executive accrues 10
weeks of unused vacation benefits, Executive shall cease accruing
any vacation benefits until Executive uses some of Executive's
accrued vacation at which point Executive will begin accruing
vacation benefits again up to the 10-week maximum. Executive will
be eligible for 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. In addition, during any period that
Executive is unable to perform the essential functions of
Executive's Position with or without reasonable accommodation as
a result of incapacity due to physical or mental illness,
Executive will continue to receive Executive's
Base Salary, any earned and unpaid Bonus and other benefits
provided hereunder, together with all compensation payable to
Executive under the Company's disability plan or program or other
similar plan during such period, until Executive's employment
under this Agreement is terminated pursuant to SECTION 5(D).
C. FAMILY CARE LEAVE. Executive will be entitled to take a total of
8 work-weeks of paid leave during any 12-month period for one or
more of the following: (i) because of the birth of a son or
daughter of the Executive and in order to care for such son or
daughter, (ii) because of the placement of a son or daughter with
the Executive for adoption or foster care, or (iii) in order to
care for the spouse, domestic partner, or a son, daughter, or
parent, of the Executive, if such spouse, domestic partner, son,
daughter, or parent has a Serious Health Condition. The
entitlement to leave under this Section for a birth or placement
of a son or daughter shall expire at the end of the 12-month
period beginning on the date of such birth or placement.
Executive may use family care leave under this Section
intermittently or on a reduced leave schedule for the purposes
set forth in 29 C.F.R. ss. 825.203. Executive shall be entitled,
on return from such leave, to be restored by the Company to the
position of employment held by Executive when the leave
commenced. For purposes of this Section, "Serious Health
Condition" means an illness, injury, impairment, or physical or
mental condition that involves (i) inpatient care in a hospital,
hospice, or residential medical care facility; or (ii) continuing
treatment by a health care provider, as such terms are defined in
29 C.F.R. ss. 825.114. The 12-month period is measured on a
"rolling" system, backward from the date Executive uses any
family care leave.
D. BUSINESS EXPENSES. The Company will reimburse Executive for
reasonable business expenses incurred in performing Company
Matters, including, but not limited to, reasonable entertainment
expenses, travel and lodging expenses, long distance and cellular
telephone expenses, and approved professional memberships,
following presentation of documentation in accordance with the
Company's business expense reimbursement policies.
E. AUTOMOBILE. The Company will secure a leased vehicle for
Executive with an initial down payment of no more than $4,000 and
monthly payments that do not exceed $550.
F. INDEMNIFICATION. Executive will be added as an additional named
insured under all liability insurance policies covering any
officer or director of the Company in his or her capacity as an
officer or director. Company will indemnify Executive in
Executive's capacity as an officer or director and hold him
harmless from any cost, expense or liability arising out of or
relating to any acts or decisions made by Executive on behalf of
or in the course of performing Company Matters to the maximum
extent provided
by the Company's Certificate of Incorporation and Bylaws and by
applicable law.
5. TERM. As used herein, the phrase "TERM OF EMPLOYMENT" will mean the period
commencing on the Start Date and ending three years from the Start Date;
[PROVIDED that, unless either the Company or Executive provides at least
one (1) month notice to the contrary, the Term of Employment will
automatically be extended at the end of each Term of Employment for an
additional one (1) year period;] PROVIDED, FURTHER, that the Term of
Employment will terminate earlier on the first to occur of any of the
events specified in this SECTION 5 (any such date of termination pursuant
to this SECTION 5, the "TERMINATION DATE").
A. TERMINATION WITHOUT CAUSE OR WITH GOOD REASON.
(i) Notwithstanding anything to the contrary in this Agreement
whether express or implied, the Company may terminate the
Term of Employment at any time, for any reason other than
Cause (as defined below), Disability (as defined below), or
Executive's death, by giving Executive at least [ninety
(90)] days' prior written notice of the effective date of
termination following any applicable cure period. Executive
may terminate the Term of Employment at any time with Good
Reason (as defined below) by giving the Company at least
[thirty (30)] days' prior written notice and the 30-day cure
period set forth below.
(ii) For purposes of this Agreement, "GOOD REASON" will mean the
Company: (1) terminates Executive's employment without
Cause, (2) materially reduces or changes Executive's
Position or responsibilities without Executive's consent,
except as set forth in SECTION 2(A), (3) reduces Executive's
Base Salary or materially and adversely affects the working
conditions of Executive, or (4) otherwise materially
breaches a material term of this Agreement (including
without limitation its obligations under SECTION 2 hereof);
PROVIDED, HOWEVER, that with respect to the events specified
in SUBSECTIONS 5(A)(ii)(2), (3) and (4) the Executive must
provide the Company with (a) reasonable written notification
of such alleged events, activities or omissions, and (b) 30
days to cure such events, activities or omissions, if
curable.
B. TERMINATION FOR CAUSE. The Company will have the right to
terminate Executive's employment at any time for Cause by giving
Executive written notice of the effective date of termination
(which effective date may, except as otherwise provided below, be
the date of such notice). For purposes of this Agreement, "CAUSE"
will mean:
(i) theft, forgery, fraud, misappropriation, embezzlement,
moral turpitude or other act of material misconduct by
Executive against the Company or any of its affiliates;
(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,
moral turpitude or other act of material misconduct;
(iv) failure to devote substantially all of Executive's full
professional time, attention, energies and abilities to
Executive's employment for the Company; PROVIDED,
HOWEVER, that Executive must receive (A) reasonable
written notification of the Company's intended actions
and specifically describing the alleged events,
activities or omissions giving rise thereto, and (B) with
respect to a breach for which a cure is possible, a
reasonable opportunity (of not less than fourteen (14)
days) to cure such breach;
(v) a material violation by Executive of any fiduciary duty
owed by Executive to the Company; or
(vi) 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 (A) reasonable
written notification of the Company's intended actions and
specifically describing the alleged events, activities or
omissions giving rise thereto, and (B) with respect to a breach
for which a cure is possible, thirty (30) days to cure such
breach.
C. TERMINATION ON ACCOUNT OF DEATH. Upon Executive's death,
Executive's employment under this Agreement will terminate
immediately.
D. TERMINATION ON ACCOUNT OF DISABILITY. To the extent not
prohibited by The Americans with Disabilities Act of 1990, or the
California Fair Employment and Housing Act, or any other
applicable law, if, as a result of Executive's physical or mental
impairment (as determined in good faith by Executive's
physician), Executive is unable to perform the essential
functions of the Position with or without reasonable
accommodation for more than 12 weeks out of any consecutive
12-month period, then
Executive's employment may be terminated for "DISABILITY."
Thereafter, Executive's benefits will be determined under the
Company's retirement, insurance, and other compensation and
benefit plans and programs then in effect, in accordance with the
terms of such programs.
E. CONCLUSION OF THE TERM. Upon the conclusion of the Term of
Employment, Executive's employment under this Agreement will
terminate.
F. OBLIGATIONS UPON TERMINATION.
(i) If Executive's employment is terminated pursuant to
SECTION 5(A)(i), Executive will continue to receive
Executive's Base Salary under SECTION 3(A), earn and
receive any unpaid Bonus under SECTION 3(B), and accrue
vacation benefits under SECTION 4(B), that Executive
would have received, earned or accrued during the period
commencing on the effective date of such termination and
ending six months thereafter (the "SALARY CONTINUATION
PERIOD").
(ii) During the Salary Continuation Period, Executive and
Executive's spouse, dependents and beneficiaries, as
applicable, will also be entitled to continue at the
Company's expense to be covered by all group medical,
health and accident insurance or other such health care
arrangements at the same coverage level and on the same
terms and conditions which applied immediately prior to
the effective date of Executive's termination of
employment pursuant to this SECTION 5(A), until Executive
obtains alternative comparable coverage under another
group plan, which coverage does not contain any
pre-existing condition exclusions or limitations, but in
no event more than six months. At the termination of the
benefits coverage under the preceding sentence, Executive
and Executive's spouse, dependents and beneficiaries, as
applicable, may elect to continue health care coverage
under the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended, and under any other applicable law,
to the extent required by such laws, as if Executive had
terminated employment with the Company on the date such
benefits coverage terminates.
(iii) If Executive's employment is terminated pursuant to
SECTION 5(B), (C) or (D), upon the Termination Date, the
Company shall pay Executive all earned but unpaid
compensation (i.e, Base Salary and Bonus), all accrued
but unused vacation benefits, and any other benefits that
are due as determined by and in accordance with the
Company's retirement, insurance, and other compensation
and benefit plans and programs then in effect. The
Company has no further obligations under this Agreement
to Executive.
6. CONFIDENTIAL INFORMATION; OWNERSHIP. As a condition of Executive's
employment, Executive agrees to and executes the Company's Proprietary
Information and Inventions Agreement, which is hereby incorporated by
reference as if set forth fully herein.
7. MITIGATION. If Executive's employment is terminated pursuant to SECTION
5(A), Executive will have a duty to mitigate any damages under this
Agreement by seeking other comparable employment. If Executive accepts
employment elsewhere after termination pursuant to SECTION 5(A), the
Company will have the right to offset any amounts paid to Executive from
such other employment against any amounts owed to Executive by the Company
pursuant to SECTION 5(A) during the Salary Continuation Period.
8. DESIGNATED BENEFICIARY. Upon the death of Executive while in the employ of
the Company, or at any time thereafter during which amounts remain payable
to Executive under SECTION 5, such payments (other than the right to
continuation of welfare benefits) will thereafter be made to such person or
persons as Executive may specifically designate (successively or
contingently) to receive payments under this Agreement following
Executive's death by filing a written beneficiary designation with the
Company during Executive's lifetime. Such beneficiary designation will be
in such form as may be prescribed by the Company and may be amended from
time to time or may be revoked by Executive pursuant to written instruments
filed with the Company during Executive's lifetime. Beneficiaries
designated by Executive may be any natural or legal person or persons,
including a fiduciary, such as a trustee or a trust or the legal
representative of an estate. Unless otherwise provided by the beneficiary
designation filed by Executive, if all of the persons so designated die
before Executive on the occurrence of a contingency not contemplated in
such beneficiary designation, then the amounts payable under this Agreement
will be paid to Executive's estate.
9. ARBITRATION. Any controversy or claim arising out of, relating to, or
connected with this Agreement, its enforcement, arbitrability or
interpretation, or because of an alleged breach, default, or
misrepresentation in connection with any of its provisions, or arising out
of, relating in any way to, or connected with Executive's employment or
termination of employment, including, for example, any alleged violation of
statute, common law or public policy, shall be submitted to final and
binding arbitration, to be held in Alameda County, California, before a
single arbitrator, in accordance with the then-current JAMS Arbitration
Rules and Procedures for Employment Disputes, as modified by the terms and
conditions contained in this paragraph. The arbitrator shall be selected by
mutual agreement of the parties or, if the parties cannot agree, then by
striking from a list of arbitrators supplied by JAMS. The arbitrator shall
issue a written opinion stating the essential findings and conclusions upon
which the arbitrator's award is based. The Company will pay the
arbitrator's fees and arbitration expenses and any other costs unique to
the arbitration hearing (recognizing that each side bears its own
deposition, witness, expert and attorneys' fees and other expenses to the
same extent as if the matter were being
heard in court). If, however, any party prevails on a statutory claim,
which affords the prevailing party attorneys' fees and costs, then the
arbitrator may award reasonable fees and costs to the prevailing party as
provided by applicable law. The arbitrator shall resolve any dispute as to
who is a prevailing party and/or the reasonableness of any fee or cost.
10. LIMITATION ON CLAIMS. Executive agrees that no claim against the Company
will be valid if asserted more than 12 months after termination of
employment with the Company, and Executive waives any statute of
limitations to the contrary.
11. NAME AND LIKENESS. Executive consents to the use and publication, without
further consideration, of Executive's name, picture and image in training
and promotional materials and other materials relating to the business of
the Company, regardless of whether such use or publication is in the form
of printed matter, photographs, audio tape, video tape, computer disk,
electronic transmission, or otherwise. Such consent applies both to the use
and publication of such items during the Term of Employment with the
Company and during a reasonable time thereafter, such reasonable time
thereafter to depend upon the nature of the use.
12. MISCELLANEOUS.
A. SEVERABILITY. If any provision of this Agreement or any portion
thereof is declared invalid, illegal, or incapable of being
enforced by any court of competent jurisdiction, the remainder of
such provisions and all of the remaining provisions of this
Agreement will continue in full force and effect, and the parties
agree to limit (and to replace, if necessary) such invalid,
illegal, or incapable provision with a provision that
accomplishes substantially the same intent but that is limited to
the maximum extent permitted by law. By way of clarification but
not limitation, the unenforceability or invalidity of any term or
provision of this Agreement will not by virtue thereof render any
other term or provision contained herein unenforceable or
invalid.
B. CHOICE OF LAW. This agreement will be construed and interpreted
in accordance with the internal laws of the State of California.
C. ASSIGNMENT. The Company may assign this Agreement to any direct
or indirect subsidiary or parent of the Company or joint venture
in which the Company has an interest, or any successor (whether
by merger, consolidation, purchase or otherwise) to all or
substantially all of the stock, assets or business of the
Company, and this Agreement will be binding upon and inure to the
benefit of such successors and assigns. Otherwise, this Agreement
may not be assigned without the prior written consent of the
other party.
D. NO ABROGATION. Any rights of Executive hereunder will be in
addition to any rights Executive may otherwise have under benefit
plans, agreements, or arrangements of the Company to which
Executive is a party or in which Executive is a participant,
including, but not limited to, any Company- sponsored employee
benefit plans. Provisions of this Agreement will not in any way
abrogate Executive's rights under such other plans, agreements,
or arrangements.
E. NOTICE. All notices (including other communications required or
permitted) under this Agreement must be in writing and must be
delivered (i) in person; (ii) by registered or certified mail,
postage prepaid, return receipt requested; (iii) by a generally
recognized courier or messenger service that provides written
acknowledgement of receipt by the addressee; or (iv) by facsimile
or other generally accepted means of electronic transmission with
a verification of delivery. Notices are deemed delivered when
actually delivered to the address for notices. Notices must be
given to parties at the address set forth below, although any
party may furnish, from time to time, other addresses for notices
to it.
IF TO EXECUTIVE: Isaac Cohen, OMD, LAc
361 La Salle Avenue
Piedmont, CA
IF TO THE COMPANY: Bionovo, Inc.
2200 Powell Street, Suite 675
Emeryville, CA 94608
Attention Board of Directors
WITH COPIES TO: John A. Laco, Esq.
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, California 90071
F. HEADINGS. Section headings in this Agreement are included herein
for convenience of reference only and will not constitute a part
of this Agreement for any other purpose.
G. NO WAIVER. Failure to insist upon strict compliance with any of
the terms, covenants, or conditions hereof will not be deemed a
waiver of such term, covenant, or condition, nor will any waiver
or relinquishment of, or failure to insist upon strict compliance
with, any right or power hereunder at any one or more times be
deemed a waiver or relinquishment of such right or power at any
other time or times.
H. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which will be deemed to be an original but
all of which together will constitute one and the same
instrument. A facsimile signature page will be deemed an
original.
I. ENTIRE AGREEMENT; AMENDMENT. This Agreement along with the PIIA
(i) contains a complete statement of all the arrangements between
the parties with respect to Executive's employment by the
Company, (ii) supersedes all prior and existing negotiations and
agreements between the parties concerning Executive's employment
and the matters contained herein, and (iii) can only be waived,
changed or modified pursuant to a written instrument duly
executed by each of the parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
[EXECUTIVE'S NAME]
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Name:
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BIONOVO, INC.
By:
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Name
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Title:
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