EXHIBIT 10.49
June 26, 1998
Roger Newton, Ph.D.
1425 Bardstown Trail
Ann Arbor, MI 48105
Re: "Esperion Therapeutics, Inc."
Dear Roger,
On behalf of the founders and prospective venture investors of Esperion
Therapeutics, Inc. (hereinafter, "Esperion" or "The Company"), I am very pleased
to propose a means of working with you in the organization of the Company and
for recruiting you to be the CEO. The following represent a series of proposed
terms:
1. The position is President, Chief Executive Officer, and a member of the
Board of Directors of the Company.
2. Cash compensation will consist of a base salary of $200,000 per year
plus a bonus of up to 30% of the base salary. The magnitude of the
bonus, if any, will be determined by the Company's Board of Directors,
based upon achievement of a series of mutually agreed upon performance
milestones. A proposed series of milestones is contained in Exhibit A
to this letter.
3. A benefits package will be provided to you which is equivalent to that
offered to any other member of the senior management team of the
Company, including health benefits. The details of the benefits package
will be worked out between you, other members of the startup management
team, and the Company's Board of Directors.
4. A performance review will be conducted on an annual basis, which will
include a determination of potential adjustment of base salary, along
with bonus. Also to be considered by the Board of Directors on an
annual basis will be the grant of incentive stock options, in
recognition of your performance for the preceding year.
5. You will be provided 800,000 shares of common stock, representing 20%
of the Company's outstanding stock prior to the infusion of venture
capital (i.e., 4 million shares) inclusive of a pool of as yet
unallocated shares (i.e., management pool) which is satisfactory in
magnitude to the Company's prospective investors. You will acquire
these shares in the form of founder's stock, purchased at $0.001 per
share. These shares will be subject to a repurchase agreement between
you and the Company, which provides for the functional equivalent of a
four-year vesting schedule. These shares will be subject to repurchase
by the Company at your cost, with such right lapsing ratably on a
quarterly basis over four years (i.e., at a rate of 50,000 shares per
quarter).
6. As a means of assisting you in your tax liability associated with the
exercise of your WLA options, the Company will provide you with a one
time signing bonus of 25% of the value of your tax liability in cash,
and a loan in the amount of 25% of the value of your tax liability. The
remaining 50% of the tax obligation, in any event, will be your
responsibility. The loan will be for four years, bearing an interest
rate of 1% over prime, with one fourth of the aggregate principal and
interest payments forgiven on each anniversary of your employment
subject to your continued employment with the Company. If your
employment with the Company is terminated, all of the remaining
principal and accrued interest on the outstanding balance will be
due immediately.
7. In the event that your employment with the Company is terminated by the
Company for reasons other than cause, you will be provided a severance
package of 6 months of salary, with continuation of benefits during
this period, and the Company will provide accelerated vesting such that
25% of your as yet unvested founders' stock and options will
immediately vest. In the event that you become disabled with a
catastrophic illness, or decease while a full-time employee of the
Company, you will receive the same continuation of salary and benefits
for your family, along with the accelerated vesting of the 25% of the
aggregate of your then unvested founders' stock and options. If you
terminate your employment with the Company voluntarily, you will
forfeit the severance package, as well as any of your unvested stock,
or stock options. With respect to any vested options, in the event that
you voluntarily terminate your employment with the Company, you will
have 90 days to exercise these options, or otherwise they will be
forfeited.
8. You will be asked to execute a standard confidentiality and patent
assignment agreements. You will also agree that in the event that you
sever your relationship with the Company, for a period of 12 months,
you will not engage in professional activity which will be directly
competitive with the business of the Company (anti-atherosclerosis drug
discovery and development). In the event of involuntary termination for
other than cause, your non-compete obligation will be waived.
If the terms of this proposal are acceptable, please so indicate by executing on
the line provided below.
I look forward to working with you on building a successful venture which will
be a dominant player in the development of therapeutic agents which can safely
and effectively intervene in atherosclerosis, and related metabolic diseases.
Sincerely,
David I. Scheer
cc: Annie Lamont/Oak Investment Partners
Christopher Moller/TL Ventures
ACCEPTED AND AGREED TO:
/s/ Roger S. Newton 7/6/98
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Roger Newton, Ph.D. Date
Appendix A. Milestones
1. Complete an updated business plan.
2. Complete the recruitment of key members of the startup management team.
3. Identify and secure in the form of lease and improvements, facilities
for the Company.
4. Complete the initial financing of the Company.
5. Recruit a finance and administration resource, and install financial
controls and reporting system.
6. Demonstrate diligence on the development plan of the Company's lead
product.
7. Identify and integrate other desirable projects which are of value
either in product, technology, or business development.
8. Prepare and achieve ratification of a business development strategy.
9. Secure a corporate partner for one or more projects.
10. Identify and recruit members of the Company's Scientific Advisory Board.
11. Identify and recruit (if needed) additional outside Board members.