1
EXHIBIT 10.40
June 30, 2000
Seenu V.Srinivasan, Ph.D.
5806 Trailridge
Parkville, MO 64152-6065
Dear Seenu:
I am pleased to present for your consideration the following proposal to join
Aronex Pharmaceuticals, Inc. as Vice President, Pharmaceutical Development and
Operations. In this position, you will report directly to me and you will be a
member of the Executive Committee. A starting date of August 7, 2000 is
anticipated.
Compensation for the position would include the following:
Base Salary: $170,000 annually, paid in accordance with normal
payroll practices.
Stock Options: You will be granted an option to purchase 60,000
shares of Aronex Pharmaceuticals, Inc. Common Stock
under Aronex Pharmaceuticals, Inc. 1998 Stock Option
Plan, subject to formal approval of the Board of
Directors. The exercise price of the options will be
equal to the fair market value of Aronex
Pharmaceuticals, Inc. Common Stock on the date of
grant. The options shall vest at the rate of 25% per
year on your anniversary date.
Bonus: The final amount of each annual bonus shall be
discretionary. To the extent a bonus is payable, the
target annual bonus of 20% of base salary, may be
paid in cash, stock grants and/or stock options,
dependent upon you meeting both personal and Company
goals and Board approval. This bonus will be prorated
and guaranteed for the year ending December 31, 2000.
Benefits: Benefits will include medical, dental, life, long and
short term disability, and AD&D. Insurance on the
same basis as is made available to other similar
Aronex Pharmaceuticals, Inc. employees. You will
2
also be entitled to four (4) weeks paid vacation per
year. (See attached benefits summary)
Relocation: You will be reimbursed for reasonable expenses
incurred in one house hunting trip for you and your
family to select new housing. You will also be
reimbursed for reasonable moving costs of personal
property and closing costs associated with the
purchase of a new home in the Houston area and cost
associated with selling your home in Kansas City. Six
months of interim housing will be provided if needed
and will be re-evaluated at the end of six months
should this become necessary. Aronex will also pay up
to $5,000. for storage of personal property if
needed. Aronex will provide for grossing up
relocation costs for tax purposes.
Term/Severance: Subject to the severance payments provided herein,
your employment is "at-will," which means either you
or Aronex Pharmaceuticals, Inc. may terminate the
employment relationship at any time, with or without
"Cause" (as herein defined).
If your employment is terminated by Aronex
Pharmaceuticals, Inc. without Cause or in connection
with a "Change of Control" (as herein defined), you
will be entitled to a salary continuation benefit
equal to your then base salary and benefits for a
period of 12 months following the date of
termination. Such payments will be made in accordance
with Aronex Pharmaceuticals, Inc. normal payroll
practices.
For purposes hereof, "Cause" shall mean (i) repeated
failure, neglect or refusal to perform your duties,
(ii) gross negligence or willful or intentional
wrongdoing or misconduct, (iii) a breach of the
Proprietary Information and Inventions and
Non-Competition Agreement or other confidentiality
agreement with Aronex Pharmaceuticals, Inc., or (iv)
the conviction of a felony or any crime involving
moral turpitude.
For purposes hereof, a "Change of Control" shall
include:
(i) the acquisition by any third party or group
of 50% or more of Aronex Pharmaceuticals,
Inc.
3
Common Stock or combined voting securities
provided that an acquisition directly from
Aronex Pharmaceuticals, Inc., an acquisition
by Aronex Pharmaceuticals, Inc. or an
acquisition by an employee benefit plan of
Aronex Pharmaceuticals, Inc. shall not cause
a Change in Control; or
(ii) The consummation of a merger,
consolidation, reorganization or sale of all
or substantially all of Aronex
Pharmaceuticals, Inc. assets unless
following such transaction (a) the holders
of Aronex Pharmaceuticals, Inc. Common Stock
and other voting securities continue to own
more than 50% of common stock and other
voting securities of the entity surviving
such transaction (including, without
limitation, a corporation which owns all or
substantially all of Aronex Pharmaceuticals,
Inc. assets) in substantially the same
proportion of their prior ownership, and (b)
at least a majority of the directors of the
surviving corporation were directors of
Aronex Pharmaceuticals, Inc. at the time the
transaction was originally approved.
I believe this package is very reasonable and reflects the importance of the
position and the value we perceive you will bring to Aronex Pharmaceuticals,
Inc.
I hope you find this proposal acceptable, and if the terms are acceptable,
please sign this letter agreement in the space provided below and return it to
me. I look forward to you joining Aronex Pharmaceuticals, Inc. as early as
possible.
Best regards,
Geoffrey F. Cox, Ph.D.
Chairman and CEO
Accepted and agreed upon this day of August 16th,
2000 by
/s/ Seenu V. Srinivasan.
Seenu V. Srinivasan