EXHIBIT 10.23
[ALGORX PHARMACEUTICALS, INC. LOGO]
September 16, 2004
Paul Hamelin
8369 Santaluz Village Green East
San Diego CA 92127
Dear Paul:
AlgoRx Pharmaceuticals, Inc. is pleased to offer you a position of President and
Chief Operating Officer starting on or before September 27, 2004. In this
position you will be reporting to Ronald M. Burch, President and Chief Executive
Officer, and will be working out of our corporate office in Secaucus, NJ.
The base salary offered for this exempt position is $12,500 per pay period (bi-
weekly pay cycle) and an Annual performance bonus of up to 40% (cash and/or a
grant of stock options at Board of Directors' discretion) payable, January 2005.
We also wish to extend a signing bonus of $100,000, of which $50,000 will be
rendered to you within the first pay period after commencing employment, and the
remainder based on the achievement of mutually agreed upon milestone(s) on June
1, 2005. This offer is not to be considered a contract guaranteeing employment
for any specific duration and is contingent on the signing of a confidentiality
agreement. As an at-will employee, both you and the Company have the right to
terminate your employment at any time. Should the company terminate your
employment for any reason other than "for cause" (see definition of "cause"
below) you will be eligible for severance consisting of your base salary for
twelve months, with continued vesting of your stock option grant for twelve
months.
On your first day of employment, we will provide additional information about
the objectives and policies, benefit programs, general employment conditions and
completion of employment and benefit forms. To fulfill federal identification
requirements, you should bring documentation to support your identity and
eligibility to work in the United States. The types of acceptable documentation
are listed on the Form I-9 of the Immigration and Naturalization Service
enclosed in the original offer letter. Please feel free to contact Debra Hopper
if you have any questions about which documents are acceptable to verify your
identity and eligibility to work in the United States.
Because you will play an important role in the operations and development of
AlgoRx, we would like to offer you the award of 5,250,000 shares of AlgoRx
common stock (equivalent to approximately 3% of the currently outstanding
shares), subject to the approval of the Company's Board of Directors. (Note that
the Board of Directors will need to approve a small increase in the total
outstanding shares to account for obligations, hence the term "approximately.")
These shares would be made available to you at the fair market value set by the
board of directors at its September 29, 2004 meeting, 25% on the first
anniversary of your employment, then 1/36th of the remaining shares pro rata
each month for three years (total vesting time, four years); provided, that all
options granted hereunder shall vest immediately if there is a (i) "change of
control" of the Company and (ii) your employment is thereafter terminated
without "cause" or "constructively terminated" within the twelve month period
following the change of control. For purposes of this agreement, "change of
control" shall mean (i) a sale of substantially all of the assets of the
Company; (ii) a merger or consolidation in which the Company is not the
surviving
500 Plaza Drive, Second Floor, Secaucus NJ 07094
201-325-6900
corporation (other than merger or consolidation in which the Company
shareholders immediately before the merger or consolidation have, immediately
after the merger or consolidation, own greater than a majority of the stock
voting power of the successor corporation); or (iii) any transaction or series
of related transactions in which in excess of fifty percent (50%) of the
Company's voting power is transferred, other than sale by the Company of stock
in transactions the primary purpose of which is to raise capital for the
Company's operations and activities.
In addition, "cause" shall mean misconduct, including: (i) conviction of any
felony or crime involving moral turpitude or dishonesty; (ii) participation in a
fraud or act of dishonesty against the Company; (iii) willful and material
breach of your employment agreement; intentional and material damage to the
Company's property or (v) material breach of the Proprietary Information and
Inventions Agreement or any employee policy of the Company. "Constructive
termination" shall mean any of the following actions taken without Cause by the
Company or a successor corporation or entity without your consent; (i)
substantial reduction of your rate of compensation other than in connection with
reductions to the rate of compensation of all officers; (ii) material reduction
in your duties, provided, however, that a change in job position (including a
change in title) shall not be deemed a "material reduction" unless your new
duties are substantially reduced from the prior duties; or (iii) relocation of
your principal place of employment to a place greater than 50 miles from your
then current principal place of employment.
You will have ten years in which to exercise the options from the date such
options vest. I would like to emphasize at present, the stock of AlgoRx is not
liquid.
We hope that you will accept this offer and look forward to you joining AlgoRx
and playing a major role in building AlgoRx into the preeminent analgesics
company.
Sincerely,
/s/ Ronald M. Burch
- -------------------------------------
Ronald M. Burch, M.D., Ph.D.
President and Chief Executive Officer
cc: D. W. Hopper
Please indicate your acceptance by your signature and return this offer letter
to me at your earliest convenience. Thank you.
/s/ Paul Hamlin 9/16/2004
- ---------------------- ----------------------
Signature Date
500 Plaza Drive, Second Floor, Secaucus NJ 07094
201-325-6900